Case study: Marketing strategy of Air Arabia

Kalpesh m.

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Case study: Marketing strategy of Air Arabia

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Abstract

When Air Arabia was launched a few years back, the main competitors in the airline industry in the region were Emirates Airlines, Etihad Airways and Gulf Air. Emirates Airlines had the biggest share in the market since it had already been established and was known for its high quality service. Gulf Air was the other competitor but since it wasn't an official airline of the United Arab Emirates it did not pose as many threats and Etihad Airways had just started operations.

There were two particular segments in the market which had been overlooked, one being the low budget airline and the other being the airlines targeted at the niche market. Air Arabia decided to target the former and came up with the strategy of "Pay less. Fly more." Air Arabia enabled customers to make the smart travel choice; those who have been unable to afford air travel in the past to start travelling throughout the region and those who do travel to do so more frequently, benefiting both business and leisure travellers. [2]

Introduction
Competitor analysis
The success of the launch of Air Arabia
Target passengers
Five forces analysis
Market analysis
Demand by region
Marketing strategy
Environmental analysis
1. Improving environmental performance
2. Relieving congestion and addressing resource requirements
Situations in the Middle East
Situations in the United Arab Emirates
Internal analysis
SWOT analysis
PEST analysis
References

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Extract

[...] The United Arab Emirates is one of the world's fastest growing tourist destinations, hence proving that there is a huge market for the airline industry to grow. Emirates Airlines also showed a keen interest in growing its fleet, and its buying of more high-end aircrafts also proved that they were not keen on targeting the low-budget traveller, but more towards the Economy, Business and First Class passengers. This does show a void in the industry for operating a budget airline in the region. [...]

[...] Marketing Strategy Price Low price is a key element of the brand. Uses differential pricing; off-peak travelling and booking in advance makes a ticket less expensive. Discounts for tickets booked online. Product Point-to-point air services Place/distribution Internet booking system Telephone reservation system. Promotion Highlights its advertising through its cheap fares Environmental Analysis Improving environmental performance To continue improving the environmental performance of air transport, airlines are focusing on more efficient operations with newer airplanes. At the same time, the industry is actively determining which of the possible future sources of fuel provide the lowest life-cycle CO2 emissions. [...]

[...] The pace of implementation of large-scale structural change in facilities such as air traffic control is largely driven by political considerations. While the assumption is made that all necessary additional airports and skilled personnel will be available over the course of the forecast period, short- term growth rates underlying the forecast fully consider the rate at which these resources will become available. In the Middle East The Middle East will need 869 aircraft, valued at $ 115.1 billion for the next 20 years, of which 85 per cent will be between 100 and 400 seats, according to Boeing's estimates. [...]

[...] Air Arabia The Middle East aviation sector is poised for significant, sustained growth, says the Chief Executive Officer of Air Arabia, the first and largest low-cost carrier (LCC) in the Middle East and North Africa. Currently accounting for eight per cent of the global air transport industry, Middle East-based airlines are collectively growing at 10 per cent annually, double the global average of five per cent, according to the Arab Air Carriers Organization (AACO) latest report. Pointing out that, worldwide, one in every eight commercial flights is now flown by an LCC, Adel Ali adds that the Middle East will experience especially strong growth in the low-cost sector in the coming years. [...]

[...] No support from the Government since they are not an official airline of the United Arab Emirates 2. No strong regulations in the aviation industry to protect rights of the airlines 3. No nationality given to the expatriates, and hence no stability in the population Economic 1. Inflation of the fuel prices 2. The per capita income of the people are increasing, and their purchase power as well 3. Long term prospects of the economy are looking good. Sociocultural 1. [...]

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