Category: Airlines

Executive Summary

Turkish Airline is the major carrier that operates in Europe, Africa, Asia, and North American markets. It has experienced impressive performance in the market because of its market strategies. Easy Jet is currently one of the leading low-cost carries based in London but operates internationally. The airline companies operate in a highly competitive global market that has numerous other plays.

To achieve competitive advantage over their local and international rivals, these two firms have come up with several strategies. In this project, the researcher focused on the strategic analysis of Turkish Airline, comparing its operations to that of Easy Jet. First, both have differentiated its services from that of its competitors based on the safety and customer friendliness. Easy Jet goes a step further in ensuring that its clients are safe and comfortable when using the products. Easy Jet also charges a relatively low price for its services. The PESTEL analysis also identifies several environmental forces that have a direct impact on the operations of the two firms. The paper also looks at how the firms have used Blue Ocean Strategies to develop new paths in the market and come up with their niche in the market.

Key Areas of Research and Sources

In this study, the researchers had to identify key areas of research before commencing the study. The first area of interest was the internal environment of Turkish Airline (Aaker 2014). Using SWOT analysis, the researchers investigated to determine the firms strengths and weaknesses. The researchers looked at the strategies that the management of the company is using to manage the external threats and take advantage of the external opportunities.

The researchers also looked at the external environment of the firm both in their local and international market using PESTEL analysis. Political, economic, social, technological, ecological, and legal environmental forces both at national and international levels have been critically analysed in this study (Hawkins, Mothersbaugh, & Best 2012). The researchers used reliable sources of information to conduct this study. Books, journals, and other online sources were used to conduct this study.

Strategic Models

When conducting this study, it was important to come up with strategic models to help in the comparative analysis of the two airline companies. The global airline industry is highly competitive, and firms are trying to use different ways to gain market share against their rivals. The airline industry is also very unique compared with other industries because it is easily affected by numerous other environmental forces within the market. According to Aghazadeh (2015), each airline often tries to find ways of being unique to differentiate their products from that of their rivals, using various models of analysis made it possible to evaluate the two firms and make some fundamental comparisons critically.

SWOT Analysis

This was the first model that was used in this study. According to Alagöz and Ekici (2014), this model is often very critical when analysing a firms core competencies and resources that make it unique in the market. This model made it is possible to determine the core competencies of the airline. In our analysis, we realised that the airline had various strengths in its operations. The analysis revealed that while Turkish focused on comfort and safety of the passengers as its core competencies, unlike Easy Jet that focused on price competitiveness with the view of expanding its global operations.

It was also noticed that while the main weakness of Easy Jet was to its inability to capitalise in the rapidly expanding African market, the main issue at Turkish Airline is the limited capacity of the airline to have a successful penetration of the Asia-Pacific markets which are dominated by firms such as Emirates Airways.

Using this model, it was noted that the two firms face almost similar opportunities in the global market. For instance, the emerging technologies gave both firms impressive opportunity to improve their service to their customers in the market (Loon, Evans, & Kerridge 2015).

For instance, these firms can now make their air tickets available to their clients through their websites. The clients only need to visit the website, identify their route, book for the ticket, pay online, and they will be ready to make their travel on their chosen dates. It was also confirmed from the analysis that these two firms face almost similar threats in their national and global operations (Acar & Karabulak 2015). It was noted that stiff market competition is an issue that affects both Turkish Airline and Easy Jet because of the high number of airlines operating in the global market. The geopolitical issues such as the political instability in the Middle East were posing more threats to the operations of the Turkish Airline than they did to the Easy Jet.

Blue Ocean Strategy

Blue Ocean Strategy was another model that was reviewed in our study to find out how this firm was managing competition. According to Barbot, Alfonso, Malighetti and Redondi (2013, p. 11), Blue Ocean Strategy is a new way of thinking, a new strategic mind-set that charts a bold new path to winning the future. It goes beyond the competitive strategy tenets and demands for a shift from focusing on competition to the creation of new markets (Barney & Barney 2013).

The strategy renders competition irrelevant by creating a special niche for a firm that other competitors cannot attack. From the analysis, it was noted that both Turkish Airline and Easy Jet have been trying in their different ways to create new market space for themselves in the flooded aviation market. As Davies (2013) says, creating a niche in a market where products are almost similar is not easy. All the airline companies in the aviation market offer travel services as the primary product to their clients. Creating a niche means trying to find a new way of offering this standard product but in a very different manner. From our analysis, we noticed that Easy Jet has been trying to differentiate its products in several ways (Kim & Mauborgne 2015).

The first approach that this firm has taken is a low market price. Easy Jet charges the lowest price for its domestic air tickets. This is meant to help the firm create a pool of loyal customers. For the international travellers who are often forced to spend a lot of time on the planes, this firm has improved comfort for the travellers to reduce fatigue. It has also introduced entertainment services to ensure that clients do not get bored when they are on their long trips. For Turkish Airline, the main focus has been to enhance the security of its travellers, especially due to the terror concerns common in the region.

PESTEL Analysis

In our research, it was important to conduct an external environmental analysis of Turkish Airline. According to Daft and Albers (2015), PESTEL model is one of the most effective frameworks that help in analysing the external market. The political environment that affects the firm in the local environment was slightly different in the international environment. In the European and Americas markets, Turkish Airline enjoyed a stable political environment that does not directly interfere with the business community. However, in Turkey, it was noted that there were some political interferences (Airlines 2016).

Economically, Turkish Airline enjoyed a stable market where purchasing power in the local and international client was high because of the economic growth that has been witnessed in the recent past. The social environment favoured, especially the increasing popularity of tourism in the Middle East, has been of great benefit for this firm as it seeks to expand its operations.

Turkish Airline has benefited a lot from emerging technologies, as witnessed in our research. It was clear that Turkish Airline was taking advantage of the emerging technologies to lower its cost of operations, reach out to its clients more easily, and improve the entertainment for its customers. Ecologically, our study revealed that clients are becoming very keen on using airlines that are deemed to be environmentally friendly (Halpern & Graham 2015).

As such, it becomes necessary for the airline to embrace environmentally-sensitive strategies in its operations. The legal environment is another force that Turkish Airline has had to deal within the market. It has been necessary to ensure that it abides by the rules and regulations in each of the countries where it operates (Jamali 2015). This is to help avoid cases on litigation. Each country has specific regulatory policies that must be respected by every airline company that uses its space (Çelikdemir & Tukel 2015). Turkish Airline is forced to understand these regulations and abide by them.

Individual Key Conclusions and Findings Related to Strategic Theories and Models and the Practical Implications

This research project critically analysed the operations of Turkish Airways, making some comparisons with how Easy Jet operates. One of the major conclusions made was that the growing relevance of Istanbul as a regional hub offers this firm an impressive growth opportunities that it should learn how to take full advantage of to enhance its growth. This firm indeed has a bright future as a regional carrier, but the management can do more to improve its current performance. The strategic theories and models used have identified several strengths and weaknesses of this firm, as discussed above.

The management of Turkish Airline should find a way of taking advantage of its strengths to overcome its weaknesses, manage environmental threats, and take advantage of the existing opportunities (Airlines 2015). The external environmental scan done using PESTEL has revealed that other than the economic fluctuations and the geopolitical threat posed by the increasing instability in the Middle East, Turkish Airline has a highly supportive external environment. The size of the rich and the middle class in most of the regions where it operates continue to expand, offering it the opportunity to grow.

From the project, it was concluded that Turkish Airline needs to embrace sustainable growth. According to Gemici and Alpkan (2015), sustainable growth goes beyond experiencing rapid expansion in the market. It also involves having well-laid plans that will ensure that the current growth of the firm does not come to a sudden drop shortly. It focuses on how the firms strategies in the current market can protect its existence in the future market.

The firm currently uses low air ticket price as a way of attracting customers to its products. However, this strategy cannot be used as a long term strategy because it harms the profitability of the firm. Instead of this strategy, this firm can focus more on low-cost operations, as indicated in our analysis based on the models used. In this context, this firm will need to identify costs which do not translate to profitability and consider eliminating them as a way of streamlining the firms operations.

Through the reduction of the cost of operations, this firm will be increasing its profit margin in the market. The practical implications of these findings are that this firm will need to re-strategise its operations in the market and come up with mechanisms that will give it an edge over its rivals. It will need to embrace the emerging technologies, especially those that enable it to reduce its number of employees. For instance, it may emphasise more on online booking instead of having the clients coming physically to the firms premises to make their bookings. It will also be necessary, as identified in our study, for the firm to find celebrity endorsement or engage in sponsoring popular sports such as football to promote its brand in the market.

Key Issues and Conclusions and the Success or Failure of the Group-Team Endeavours

Our team did an excellent job of undertaking this research. It is important to identify several key issues, conclusions, successes and possible failures that the team had when undertaking this study. The main issue that the team faced was assigning tasks to individual members when starting the project. However, this issue was addressed after the initial meeting, where members freely expressed how they felt the project should be undertaken.

The main strength of this group was the interactive ability to listen to each members views and discuss them objectively. Everyone was committed to the group in terms of time and effort. Team members were able to understand one another and work as a unit in addressing various tasks in this project. We met several challenges, but the unity and determination of the members made it easy to overcome them.

It is important to appreciate that the team had some failures which are worth noting, although the weaknesses did not affect the outcome of the study (Paksoy 2015). The team was unable to get to interview one of the current or former employees of this firm. Since the data used were from secondary sources, the team wanted to have a simple interview with one of these current or former employees of Turkish Airline. Unfortunately, we did not succeed in achieving this. It meant that the team had to rely on the secondary sources of data from the literature that were reviewed. The team concluded, based on the analysis using various models, that Turkish Airline has the opportunity to grow. Still, sustainable development could only be achieved if the firm embraced the strategies and recommendations made in the project.

Way In Which Individual Contribution Impacted On Group Discussion

The success of the group project was primarily because of the contributions made by the individual group members. It is important to note that all the members were involved actively in the final discussions of all the components of the entire paper. However, during the data collection stage, tasks were divided among individual members. One member was tasked with the role of reviewing the background of both Turkish Airline and Easy Jet to help in providing the basis of the analysis. This was done by collecting relevant literature and reviewing the reports from the companies available on their websites or through any other relevant source. This participant had to prepare a report of the findings from this activity. Another member was assigned the task of conducting a review of Turkish Airways using SWOT model.

The analysis was to be conducted using available literature in the library and other reliable online sources. This firms core competence was to be determined about the performance of Easy Jet. This group member had to write a detailed report of the findings.

Another group member was assigned the role of conducting an environmental scan of this firm using the PESTEL model. This was an important analysis that required the participant to go beyond analysing the industry to analysing the entire forces that may affect operations of any firm in this industry. Just like the other group members, this student had to use available literature in the library and online sources. The student had to collect data from recent sources because these environmental factors keep changing. The student also wrote a detailed report about the findings from the external environmental scan.

It is from these individual contributions made by the group members that the team was able to have all the information that was needed for the discussion and in concluding the report. In the group, each of the members was allowed to present the findings to the members. After each presentation, members engaged in a debate to discuss these findings and ask relevant questions with the view of developing a comprehensive report. Each member had to support the findings with literature during the discussion to validate the claims. After a convincing discussion and harmonising of the information from all the members, the team proceeded to write the entire report. All the team members had to participate in this sensitive process of writing the final report.

According to Dursun, OConnell, Lei, and Warnock (2014), the success of a given team largely depends on the success of individual members in their respective areas of assignment. If the team members can coordinate closely and work as a unit, then chances of them achieving success are high. However, if the team fails to understand and appreciate the need to work together, then it may not possibly be successful (Evansb 2015). The success of our team is attributed to the ability of the members to work together and approach every task from a united front. The team faced challenges, but through the commitment, we were able to overcome them and develop a report that was based on facts from the available literature. Openness to members ideas was also important because it motivated objective debate.

Introduction

Emirates airline is a (relatively) new full-service network carrier in Dubai, United Arab Emirates (UAE). Despite being a relatively new company, the airline has become among the fastest growing companies in the Gulf region (The Emirates Group 2014). In fact, globally, the airline is the most profitable aviation company. Furthermore, Nataraja & Al-Aali (2011) say it operates among the longest non-stop flights around the world. Under The Emirates Group (2014), the airline has won several service excellence awards, and now stands out as the most profitable entity in the groups two business sub-sectors (Dnata is the other business group). Although the UAE government owns the company, the Dubai-based Airline operates as an independent business entity that does not experience government interference in its business operations.

Emirates Airline provides different services to its customers, including passenger and cargo transport (Joseph 2013). The company also provides other airlines with technical support at its Dubai hub. Despite its success, the airline is struggling to manage high operational costs, increased competition, and an increasingly uncertain business environment. This report proposes some strategic options for overcoming these challenges. Similarly, it offers recommendations for overcoming todays uncertain economic times. These findings would benefit the airlines managers and give valuable lessons for similar airlines that experience the same challenges. However, to gain a deep understanding of the available strategic options for the company, it is important to understand its current strategies. This effort involves explaining the political, economic, social, technical and environmental factors that underlie its strategies.

PESTE Analysis

This PESTE analysis provides an overview of how external factors (macroeconomic factors) of the Emirates Airline affect its performance. Therefore, this tool is important for understanding the airlines market growth. The same tool is useful in understanding its business position, potential for further growth, and strategies for overcoming future operational challenges.

Political

Experts say Emirates Airline has benefitted from a favourable political environment in the Middle East (Nataraja & Al-Aali 2011). Indeed, this environment has benefitted the airline locally and internationally. For example, the company benefitted from political cooperation agreements between Asian countries and European countries. The same agreements have helped the organisation to fly to several European, Asian, and American destinations. Similarly, they have provided it with ready markets for expanding its operations, globally (Nataraja & Al-Aali 2011). Locally, the UAE government has provided Emirates Airline with infrastructure support for complementing the airlines existing and future operations (Nataraja & Al-Aali 2011, p. 472). Comprehensively, favourable political conditions have helped Emirates Airline to grow within a short time.

Economic

Many Middle East economies have experienced several years of economic progress. Particularly, the UAE has benefitted in this regard because it has diversified its economy from being exclusively dependent on oil to include new economic sectors, such as tourism and construction. These economic conditions complement Emirates operations because they have increased peoples disposable income, thereby making it easier for them to afford air transport. Besides the growth of per capita income, Nataraja & Al-Aali (2011) also say inter-government partnerships (especially in the gulf region) have increased economic cooperation among states, thereby making it easy for local airlines to exploit the opportunities that come with it.

Statistics show that more than three billion people can fly using Emirates Airlines in eight hours, or less (Nataraja & Al-Aali 2011). This means the company has experienced a sustained demand for passenger transport throughout the years. This demand, coupled with increased economic policy streamlining (in markets that the airline serves), has contributed to the Airlines growth in the past few years.

Social

The airline industry is (mainly) a service-oriented business that relies on social factors for its success. Therefore, regardless of how an airline restructures its business operations, it has to consider the impact of employee issues across its strategic objectives. Emirates Airline has a huge pool of human capital. Since there is a significant wage difference between the UAE and western countries, the airline has reduced its labour costs by employing local and cheap labour. Consequently, labour costs only account for about 10% of the airlines operating cost (Nataraja & Al-Aali 2011). Comparatively, western-based airlines use up to 40% of their revenues to pay their employees (Nataraja & Al-Aali 2011). This cost-reduction strategy has contributed to the companys success.

Technological

The aviation sector (mainly) relies on technology to undertake its operations. Furthermore, many airline companies compete because of technological development (Joseph 2013). Since Emirates Airline serves different types of customers, in multiple locations, it uses technology to localise its operations. For example, the company operates one technological platform that serves its customers using 14 languages (Nataraja & Al-Aali 2011). Similarly, the same platform supports payments through 40 currencies (Joseph 2013). Technology also supports other aspects of its operations, including inventory control and product optimisation. Therefore, the airline meets the societal preference of every market.

Environmental

Nataraja & Al-Aali (2011) say global organisations have a duty to formulate their strategies after considering the environmental safety of their operations. In this regard, many companies follow environmental regulations when formulating their organisational strategies. Emirates airline is no exception. For example, the company engages in environmental conservation initiatives around the world. Similarly, the airline has reduced its carbon footprint by reducing pollution from its aircrafts. This is why the company has undertaken many eco-friendly initiatives in the last two decades (Nataraja & Al-Aali 2011). Such efforts have created a positive image for the company. Consequently, the company has received immense support from governments, the business community, and well-wishers.

Emirates Current Plans and how it should overcome Future Turbulent Times

Current Strategic Plan

Fuel is the main operation cost of Emirates Airline. The company can improve its profits by reducing this cost. Moreover, experts predict that in the 2013/2014 financial year, the global price of jet fuel would further increase to more than US$130 per barrel (The Emirates Group 2014). This is why the company intends to buy fuel-efficient aeroplanes. For example, in the 2013/2014 financial year, the company plans to buy 20 new fuel-efficient aircrafts (The Emirates Group 2014). Unlike other financing models where airline companies seek bank loans to do so, Emirates Airline plans to issue different types of bonds, with different investment models to meet the same goal (OECD 2011). This approach reflects the companys diverse financing options. So far, the plans have been successful.

Future Plans

Despite the challenges that affect Emirates Airline, the company aims to overcome future turbulent times by investing in its future operations. This strategy translates to increased investments in its machinery and equipment. For example, in the 2012/2013 financial year, the company invested in its airline fleet by purchasing 34 wide-bodied aeroplanes (The Emirates Group 2014). Consequently, the company has accumulated among the highest number of wide-bodied aircraft fleets, globally. In line with its customer service needs, and increased operational demands, Emirates Airline also increased its employee numbers by 5,000 people, globally (Joseph 2013).

As part of its future strategy, the airline has collaborated with other companies to decrease competition and improve its operational network. For example, Australian authorities recently approved the airlines partnership with Australias Qantas Airline (The Emirates Group 2014). This partnership should increase Emirates future performance through integrated network collaboration. Similarly, the company should benefit from aligned frequent flyer programs, and shared sales and scheduling models. Besides pursuing profitable partnerships, part of the airlines future involves adding its capacity for more cargo and passenger numbers.

During the 2012/2013 financial year, alone, the company pursued this strategy by adding ten new destinations in its flight map (The Emirates Group 2014). These destinations include Adelaide, Algiers, Barcelona, Erbil, Ho Chi Minh City, Lisbon, Lyon, Phuket, Warsaw and Washington, DC as well as six dedicated freighter routes  Chicago, Chittagong, Djibouti, Hanoi, Liege and Tripoli (The Emirates Group 2014, p. 18). Comprehensively, the plans of Emirates Airline involve pursuing network expansion programs, capacity increments, and mutual partnerships.

Financial Performance

Generally, Emirates Airline has had a positive financial performance in the last three years. For example, it has experienced a long period of profitability within this time. The company has always reported huge profits since 2011. For example, in 2011/2012 financial year, the airline reported a profit of AED 62, 287 million (The Emirates Group 2014). In 2012/2013, this figure increased to AED73, 113 million.

Its operating profit similarly increased from AED1, 813 million to AED2, 839 million during the same period (The Emirates Group 2014). This figure represents a 56.6% change in revenue collection. Similarly, it shows that the companys profit margin increased from 2.4% to 3.1%. Part of the companys profitability stems from its high passenger and cargo numbers during the above periods. For example, operating statistics show that the airline carried 33,981,000 passengers during the 2011/2012 financial year. This figure increased to 39,391,000 during the 2012/2013 financial year (The Emirates Group 2014). The volume of cargo carried by the airline also increased in the same way. For example, in the 2011/2012 financial year, the company carried 1,796,000 tonnes of cargo. During the 2012/2013 financial year, this number increased to 2,086,000 tonnes (The Emirates Group 2014).

This means there has been a direct correlation between the companys profitability and increased cargo and passenger numbers. The diagram below shows how the profitability figures correlate with increased cargo and passenger numbers.

As mentioned in this paper, Emirates Airline is a profitable company. The above statistics affirm this fact because they show that the airline has never made a loss for many years. The Dubai-based company has managed to report positive financial figures despite increased operation costs that emerge from increased prices of jet fuel. For example, in the 2012/2013 financial year, the global price of jet fuel was more than US$127 a barrel (The Emirates Group 2014). Although this cost was the highest operating expense for the airline, political and economic instability also affected the companys performance. For example, the Euro-zone crisis affected the companys profitability from 2011 to 2013. These statistics show that although the company has reported positive financial results, it still experiences several macroeconomic challenges.

Which Year did Emirates Adopt the Best Business Model?

Emirates airline adopted the best business model in 2013 when it started pursuing joint venture strategies. The aviation industry is becoming increasingly competitive and it is more difficult for such airlines to wade through the challenges alone. Although joint ventures and partnerships are common phenomena in the aviation sector, Emirates Airline has benefitted from improved pricing plans and expanded transport networks through recent partnerships with other successful airline companies, such as Qantas. This strategy promises to safeguard the airlines long-term business growth.

Emirates Marketing Strategy

Since 2011, Emirates Airline has adopted a consistent marketing strategy, which premises in three pillars. The first pillar involves marketing the companys hub (Dubai) as a trade-free zone. This strategy has made sure that the company gets business throughout the year. In fact, IBP (2014) says the plan has brought a lot of business to the UAE (it now stretches Dubais airport capacity). The same marketing strategy has increased the flow of passenger numbers to the UAE-based airport. Dubai airport now handles more than 50 million passengers, annually (IBP 2014). Quality is the second pillar of the above-mentioned marketing strategy.

Emirates Airline has made sure that it provides excellent customer services to different customer groups, across its international destinations. Furthermore, it has bestowed its customers with the best services and an unmatched operational network (Joseph 2013). Consequently, although the company is Islam-based, it appeals to a non-Muslim market too. Some of the quality services they give to their customers stem from the companys investments in modern aircrafts that offer many social amenities and luxury items to its customers. Therefore, the company has marketed itself as a quality brand. This strategy has attracted many customers. Comprehensively, the above marketing strategy has improved the airlines load factors and enhanced its financial performance. Similarly, it has improved the companys competitive position.

For example, its passenger numbers have made Dubai airport among the busiest airports in the world. Similarly, other airlines, such as Qantas, have shifted their key Asian operational bases to Dubai. Emirates Airline greatly capitalises on this fact.

Recommendations

Improving its Value Chain

Emirates Airline has many competencies that span across its marketing strategies, operational competencies, and business diversification strategies. However, the company needs to review its value chain process because of the rising cost of doing business and increased competition. This is true because the company depends on this competence to improve the quality for its market success. The airlines value chain process adopts a vertical integration plan that distinguishes itself through improved technology, and marketing competencies (IBP 2014).

For example, the airline uses advanced technology to operate different business segments, including pilot training programs, an engineering centre, hotels and resorts, and a catering department (Nataraja & Al-Aali 2011). Although these diversified business segments have accounted for most of the companys business success, there is a huge potential for the airline to improve its value chain processes through value addition. This strategy would increase its passenger and cargo numbers because it could improve its cost-effectiveness, productivity, and managerial efficiency. This strategy would also improve the companys key competency areas.

Cost Reduction

Poor economic conditions and a slowdown in the market uptake of airline services in some key markets, such as China, Europe, and America, highlight the need for Emirates Airline to adopt a cost-reduction strategy for its long-term growth (Nataraja & Al-Aali 2011).

Although the company has partly adopted this strategy by buying cost-efficient aircrafts, it needs to reduce its bureaucracy costs and restructure its organisations resources. Similarly, the company should renegotiate its employment terms with the employees to reduce its operational costs, further. However, the company needs to complement this strategy with an outsourcing business model for cutting the companys operational costs. For example, it could outsource some of its catering, engineering, and maintenance services to third parties, as a cost-reduction measure. Lastly, the company needs to re-evaluate its operations in low-profit markets by withdrawing from them and increasing its dominance in profitable routes. Furthermore, its marketing campaigns should focus on boosting the companys image in these (profitable) markets.

Price Sensitivity

Although the need to adopt a cost-reduction strategy is urgent, Emirates Airline needs to adopt a price differentiation strategy because customers are becoming more price-sensitive (The Emirates Group 2014). This push comes from the increased dominance of low-cost airlines in the aviation sector. Particularly, there is an urgent need for the company to reconsider its decision to compete with low-cost airlines because it already has unmatched competencies that that low-cost airlines cannot compete with. For example, the company could exploit its immense experience and economies of scale to eliminate such competition in the market.

Summary

This paper has highlighted the different types of strategies that could make Emirates Airline sustainable. To manage uncertain economic conditions, the Dubai-based airline needs to implement some of the strategies proposed in this paper. Consolidation and strategic alliances are also beneficial strategies because competition from low-cost airlines is bound to increase. The company also needs to restructure its route network, focus more on profitable markets, and withdraw from less profitable ones. The airline could easily sustain its strategic advantages if it exploits its key competencies (such as its political connection with the UAE government) and eliminate its core weaknesses.

However, it is important to highlight the need to focus on cost-reduction as a key strategy because Emirates Airline is a capital-intensive enterprise and needs to survive by minimising its operation costs. Therefore, it is important for the companys value-chain to show cost-reduction principles. These strategies should increase the companys profitability and help it to overcome the challenges of doing business in uncertain economic times.

References

IBP 2014, UAE: How to Invest, Start and Run Profitable Business in the UAE Guide  Practical Information, Opportunities, Contacts, Intl Business Publications, London. Web.

Joseph, C 2013, Advanced Credit Risk Analysis and Management, John Wiley & Sons, London. Web.

Nataraja, S & Al-Aali, A 2011, The exceptional performance strategies of Emirate Airlines, Competitiveness Review, vol. 21, no. 5, pp.471  486. Web.

OECD 2011, Smart Rules for Fair Trade 50 years of Export Credits: 50 years of Export Credits, OECD Publishing, Washington. Web.

The Emirates Group 2014, Annual Report. Web.

Introduction

Based in Dubai, Arabian adventure is part of Leisure Management division and destination of Emirates airlines. It has major offices in Abu Dhabi and Fajita with associate companies based in the gulf.

The company has more than 300 qualified and professional staff employees who provide professional services ranging from planning, transfers, giving contracts to hotels, resort arrangements and arrivals.

Dubai stop over

Dubai stop over was the original name of Arabian airline before it was re branded. The name however is still used to refer to short visit to Dubai. Arabian adventure has services for people transiting via Dubai for few days. They have stop over terminal 1 and 3 at Dubai international airport. Arrangements can be made to transfer clients to and from airport and hotels. Arabian adventures operates a 96 hour transit visas, tourist visa and arrangement can be made by Arabian adventure to organize a hotel of clients choice or serviced apartment. The main aim of this package is to promote and market Dubai as a tourist destination.

Services

Arabian airline has specialized in leisure travel services, meetings, Incentives and events, Cruise services and cooperate events.

Leisure travel services

Its a business unit that is managed by experts who understand the needs of groups and addresses them accordingly. The unit has well trained guides and drivers who are multi lingual and highly professional. The professionals assist in booking facilities for tours and safaris. The Unit has 5 campsites with capacity ranging from 10 to 500 people. Bespoke option is also provided in this package. The staffs at leisure service have been commended for having an in-depth knowledge about the locality of United Arab Emirates and this has been helpful in providing in-depth information to clients. Fleet and liveried vehicles have been useful in providing quality service.

Under Leisure and travel services, several packages have been designed to suite customers needs. Single application solution is an example of this package. The package comprises of visa application and processing, hotel reservation, arrivals, contraction resort and hotels, excursions and safari operation. Event management falls under this department. Size and support also falls under this service and it involves sight seeing tours, safaris, overland explorations excursion and interesting activities.

Incentive travel

Arabian airline has a creative approach in ensuring that it delivers high level services. Incentive travel is meant to for cooperate travel derive pleasure as they enjoy cooperate activities. This programme is ideal for companies rewarding their employees for hard work or for team building exercises. The programme has tailor made packages which is meant to reduce the expenditure of cooperate organization on tour.

Cooperate events

This category creates innovative programmes for small firms and large cooperate institutions. This category comprises of Gala dinner, Team building activities, VIP visits and launches.

Cooperate events has a team of professionals involved in searching for appropriate venues and locating sites. They assist in logistic management and administer creative input during the outdoor activities. They also provide professional assistance in budget control as well as arranging for accommodation.

Types of events in this programme include Bespoke, product launches, Annual staff parties, Gala events, Family days and executive meetings. The ranges of services include Event management, Venue and location scouting, Catering, accommodation, meetings and incentive events.

The package involves creative approach due to high profile clients who turn up for meetings and schedules. Quality and safety is always guaranteed while these activities are planned. This facility comprises high standard fleet of 100 vehicles. These include Mercedes Benz, Luxury touring coaches, Toyota land cruisers, Chevrolet Talue off road vehicles and private sedans.

Popular tours and approximate budgets

Most popular tourist attraction centers include Sand riders, Boating adventure, Adventure at the Atlantis, Silks spice and Gold. Boating ride would cost an adult an average of AED 200 and AED 150 for a child. Sand rider on the other hand, depending on the size would cost a tourist between AED 495 and 695.Depending on the depth of water, Dolphin encounter ranges fro AED 170 to 950 for adults and 150 to 800 for children.

Customer care

An Arabian adventure has one of the leading customer care services and has won some prestigious awards for the same. Customer care service handles complains and irregularities rose by customers and provides necessary solutions. It has a customer feedback programmes which ensures that the company is aligned to customers satisfaction and requirements. The unit also ensures that the safety and health standards are high.

Recommendation

With a wide range of leisure activities, United Arab Emirates stands a better chance of being the best tourist destination in the world. Arab Adventures has done much in marketing United Arab Emirate.

The organization and strategies used at Arabian adventures is one of the best. The strategies have marketed United Arab Emirates in a positive way. The programme has improved tourism in the United Arab Emirates which has become a choice for many tourists.

Introduction to Skyward

Also known as Origin destination is a reward programme for Emirates. The programme was established in 2000 with an aim of rewarding loyal customers to Emirates and partners. The programme has attracted over members across the globe with more than 200 countries being represented.

Objectives

Rewards: Any client using Emirate, partner companies or those who participate through leisure, hotels and financial institutions or car hire and rentals is eligible for skyward award. All members begin at Skyward blue levels at no charge. A member is eligible to one card only. A customer gets membership pack after two return trips in the economy class. The same is also possible when a customer has had one return trip in business or first class. This is in Emirate Flight Company and partners.

Coordinating travels: Skyward manages travels arrangements on behalf of the client. The client is required to nominate a travel coordinator who manages skywards related travel plans, check stored flight itineraries, keep ay to day record of mileage balance and update the customers seating, meals and drinks.

Facilitating Earning of Miles: Skywards facilitates earning of miles when client travels using Emirates flight or with partner airlines

Rewards and programmes

Skyward has a rewarding system here a clients earns Skyward miles. These miles are redeemable after a certain period of time. The skyward miles are attained and earned by counting the fares purchased, Cabin and zone of travel. They are also earned by through leisure, car rental, airlines, hotels and financial partners.

One requires to key in the 9 digit membership number at the time of making reservation. These digits must match the names on the credit card and account number.

There is a provision for accelerators on this package which enables customers points to rise faster. One can nominate up to 8 members of the family and 20% of their miles can be added to the customers card.

A tier mile is another reward system that enables the client move and maintains a higher status of Skyward rewards system. A tier client has exclusive rewards and benefits which help him move to skyward Gold and Silver level. These units of rewards are valid for 13months.Silver reward is attained when a client has attained 25 000 miles in a period of 12 months while Gold is reached when a client has attained 50 000 miles in 12 month consecutive window. This rewards apply to when a customer uses partner airlines like Japan airlines, Jet airways, Korean air, King fisher airlines and south African Airways.

Communication

Communication plays an important role in ensuring that a client is well informed. This usually occurs on daily basis. Communication to members is done to inform them on new products and upcoming events. It is done to customers to encourage those who may have not joined to so. Communication is also done to the whole world so as to market the skyward programmes. It is mainly done through the official website of Skyward. Skypedia is a communication system which plays a big role in keeping the client informed. It has all features related to Skywards products, news and events. One is required to create an account for him to be able to access the site. Magazines and journals on skyward have been published to market skyward products. These pass vital information to the skyward members, and potential clients.

Events

Skyward has tailored made programmes and events for its members and clients. They range from simple to complex events. Some of the events are community outreach programmes like sporting events, while others are Company events like launch of new products. Some of the being events ever organized by skyward programmes include Thanks to a million at Dubai World cup, Card design completion for the world, Skyward Jazz festivals. Launch of new products included the launch of Airbus 380.Some Skyward members are given the privilege and priority to attend some of these events at no cost or at a subsidized cost

Invitation only (I.O.)

This is the greatest and highly prestigious tier in skyward programme. As skyward organizes for events and rewards, Preference are given to few chosen clients who have the highest skywards miles. These members are invited in highly prestigious functions with high status guests and few chosen media houses. They are entitled to business class seat on Emirate airline flights and upon arrival, they are picked and dropped in a chauffeur driven Range rovers which are flagged by High Value Customer (HVC) tag.

Service delivery

Skyward has specific services offered by skyward journey management. These services ensure that a member enjoys to the maximum. These services are rendered before the flight, during the flight and at arrival.

Before the flight, skyward member is assisted in planning for the trip. Seat reservation is guaranteed in the airline of customers choice. Skyward member before the fight, can book Emirates rewards online, be entitled to special member offers which are not available to non member and can access global partner at no cost. Redeeming points from partners is also allowed.

Upon arrival at the airport, a member is entitled to E gate privileges, instant upgrades, lounge access, priority check in and excess luggage allowance.

At Skyward member destination, a member is entitled to priority luggage delivery where he is able to collect his luggage business class member.

Partners

Emirates have a rich clientele network. This is due to partner companies who are resourceful in providing rich network. Some partner airlines that provide 1 skyward mile per Mile flown include Alaska airlines, Korean air, Jet blue, South African airways and King fisher.

Hotels which render skywards services include Hilton, Emirates Wolgan, Hyatt Hotels, Rezidor, Tay and Swiss hotels.

Leisure and travel also play an important role in rewarding customers. Arabian adventure

Car rental examples are Budget and Sixt car rentals and Hertz car hire.

Financial institutions include Citibank, Abu Dhabi bank Al Ahli bank, Commercial bank and Standard chartered bank of Dubai,

Finance

The nucleus of Emirates group is the finance department. It is a department with advanced technological system.

Finance team manages reports and statistical data for Emirates team including skyward programmes. It initiates projects, design annual budgets for Emirate group and partner companies. Financial reports have shown that Banks are the leading in revenue collection of over 90% of Skywards Company.

Reports

The financial department plays an important role in showing the position of skyward group. Figures generated from sales, Miles travels clearly indicate whether the company is operating at a profit or not. The figures show exactly the number of customers who are members of skyward team. This is helpful in planning and coming up with strategies and plans for the next course of action.

Auditing

As the finance department is working on the financial analysis, the audit department authenticates the report. This audit team helps the finance department in laying down strategies and advices on how points should be redeemed. The audit analyses the all the transactions at the offices, banks, partner companies and the web site to determine the accuracy of the figures given by the finance department. Fraud is usually detected at this point.

Arab community team

This is a group of specialist in the community who work hand in hand with customer care department to the welfare of skyward members is safeguarded. This team handles complains forwarded by Casa, a skyward member. Usually offer to assist skyward members settle in there clubs or hotels. They break communication barrier by translating letters in proper Arabic. They also ensure that data is of high quality by performing clerical duties like checking name changes, ensuring that names on the cards are clear and add emails to skyward members.

Relationship management

A unit in skyward team that ensures quality service and relationship between skywards members and the company is good. The team comes with ideas on how to attract and maintain customers by initiating more business opportunities to bring more benefits to members.

Conclusion

Emirates airline is one of the leading companies in the world and this has been enabled by Skyward rewarding System. Customers have the value for their money and research as shown that most clients are happy with the services rendered by Skyward.

Introduction

Saudi Arabian Airlines is a flagship airline, headquartered in Jeddah. The company is focused on passenger transportation, cargo transportation, and delivery of government delegations to meeting venues. The airlines customers are wealthy customers who prefer high-quality flights. Tunisair, Kenya Airways, and Emirates SkyCargo are the companys three main competitors. This paper will analyze in detail the marketing strategy of Saudi Airlines. This will include an analysis of the advantage of the air carrier and ways to improve the firms performance.

Marketing Mix

Concept 1  Price

The products price is responsible for the final profit of the company. It is composed of production costs and expected profit. The price is influenced by consumers perception of the goods and the place of the goods on the market (Abdelhady, Fayed and Fawzy, 2018, p. 246). The availability of a flexible price formation system due to several service classes is an absolute advantage of the company. Thus, it is possible to satisfy both the needs of well-to-do customers and those whose income is not so high. However, the program of bonuses for clients is not so developed, which can be corrected by using competitors experience.

Concept 2  Product

The product is what the company opens for, so it should be given a lot of attention. Design originality, assortment, functionality, and quality are key aspects of this element of the marketing mix. The company performs flights to more than one hundred destinations and has an impressive fleet of aircraft (Saudia ranked fastest growing airline brand in the Middle East, 2022, para. 10). Saudi Arabian Airlines offers services in first, business, and economy classes. Accordingly, each client can choose any type of service depending on their income. The disadvantages can be considered a small variety of services provided by the company. It would be worth differentiating the scope of the companys activities by opening branded hotels.

Concept 3  Place

An essential aspect of the marketing mix model is the accessibility of the product to the consumer. The potential buyer must see the product immediately and become interested. This means that it is necessary to think about where and how to place it. The airlines fleet of over 150 aircraft is considered the third-largest in the Middle East region (Hardiman, 2021, para. 1). The company has destinations on five continents, reflecting Saudi Arabian Airlines extensive presence in the international market. However, there are still not enough destinations, which means it is necessary to expand them by establishing cooperation with those cities and countries where the companys airplanes do not yet fly.

Concept 4  Promotion

Product promotion in the 4P marketing model is such activities that attract the potential buyers attention. Activities to market a new product begin with the creation of a portrait of the target audience. It is necessary to determine the needs of potential buyers and, based on this data, create a product advertisement (Firdausy and Idawati, 2017, p. 43). Numerous celebrities have repeatedly participated in advertising the services of Saudi Arabian Airlines, and the company has also sponsored various events both within the country and abroad. In its marketing strategy, this aviation company promotes the idea that customers belong to the royal class. However, the lack of inclusiveness may keep the company from increasing the number of passengers. The philosophy of Saudi Arabian Airlines should be changed in such a way as to demonstrate the availability of the carriers services to a large number of people.

Differentiation & Competitive Advantage

First of all, differentiation in a company manifests itself in the fact that several types of services are offered. The various displays of this strategy can help the company gain a competitive advantage over other air carriers. However, the uniqueness of the product means that it will cost more, and thus the services of Saudi Arabian Airlines will remain available only to wealthy customers. At the same time, the total product, namely airline services, remains at a high level, as shown by positive feedback and the companys profit growth dynamics. As noted above, a possible solution could be to change the philosophy of the company in order to attract more customers. However, this would mean that the goals of differentiation would not be fully achieved.

Coping with Commoditisation

Commoditization is the process of transforming a product from elite to public. The product or service loses its uniqueness and is simplified, and consumers easily switch to the producer who offers a lower price. As noted, such a strategy can have a positive impact on a companys performance. So far, flights by Saudi Arabian Airlines are perceived by customers as something available only to people with high incomes, which cuts off a large portion of potential customers. The process of commoditization will run the risk of losing some loyal customers due to the change in the companys philosophy. However, it is possible to retain them through a loyalty system and unique offers and by improving service and launching new projects. Not only the need to increase revenue but also the overall market situation is forcing Saudi Arabian Airlines to commoditize.

Segmentation

Faced with fierce market competition, Saudi Arabian Airlines encounters a crisis of lost passengers, reduced competitiveness, and underutilization of aviation resources. In creating a reasonable customer value model, customers are divided into groups, and customers from different customer groups are analyzed and accordingly segmented. Traditional segmentation is carried out in airlines by class of service (Waguespack and Ambrose, 2021, p. 51). The high price elasticity of demand characterizes economy class, and business class means high margins. There is also segmentation based on customer preferences, which is also present at Saudi Arabian Airlines. For the airline under analysis, there is an opportunity to simultaneously maintain product segmentation and commoditize. For example, the class system can be retained, while the number of flights with many seats for passengers with limited budgets can be expanded.

Conclusion

In general, Saudi Arabian Airlines maintains its leading position in the market, standing out for its unparalleled quality of service among its competitors. However, the coronavirus epidemic has destroyed the success of many air carriers. This situation has affected Saudi Arabian Airlines as well, and therefore it is essential to change some marketing strategies in order to maintain the leadership position. In particular, greater priority should be given to the implementation of flights. That is, more flights for passengers with little money should be organized. At the same time, it will be critical to retain the loyalty of premium passengers, which can be achieved by providing them with unique offers.

Reference List

Abdelhady, M., Fayed, H. and Fawzy, N. (2018). The influence of the 4Ps on passengers purchasing decision-making: the case of LCCs, International Journal of Heritage, Tourism and Hospitality, 12(1), pp. 246-270.

Firdausy, C. and Idawati, R. (2017). Effects of service quality, price and promotion on customers purchase decision of Traveloka online airline tickets in Jakarta, Indonesia, International Journal of Management Science and Business Administration, 3(2), pp. 42-49.

Hardiman, J. (2021). SkyTeams largest middle eastern airline: the Saudia fleet in 2021. Simple Flying, Web.

Saudia ranked fastest growing airline brand in the Middle East (2022) Web.

Waguespack, B. and Ambrose, S. (2021). Fundamentals of airline marketing. New York: Taylor & Francis.

Operations strategy entails the process of developing long-term plans that aim at utilizing the key resources of any organization. These efforts focus on linking the organizations long-term corporate strategies with the key resources. Operations strategy addresses ways on how to utilize major or key resources to achieve the required or desired corporate goals and objectives. The organizations operations strategy lays a framework for determining how the organization utilizes its resources to gain a competitive power and advantage in the market. There are many external factors that affect the operations strategy. They include globalization of business that leads to more competition in the market as every product or service has to meet the demands and tests of customers (Nigel 2009, p.34).

Every organization has to meet the needs and preferences of its customers in order to maintain a good share in the market. These efforts aim towards beating the competition and meeting goals and targets the organization may have laid down. Another thing to put into consideration is the advent of technology. New technology means better ways of goods production and the better the quality of goods produced the greater the power in convening and winning customers. Every technology adopted has cost implications that the operations strategy and other efforts have to put into considerations. Therefore, the operations strategy aims at keeping the organization in a better position to meet market demands while making profits (Slack & Lewis 2011, p.25).

Basing on the needs and aims of Ryanair management, there exist strategies that an organization has laid in place to achieve its objectives and maintaining low costs. To do this well, Ryanair does it by focusing on various key strategies. To begin with, the airline provides frequent point-to-point services that are mainly short-haul routes. These short-haul routes join or mainly target secondary airport and other regional airports in major population centers where there are many people. This move guarantees the airline low operation cost in terms of revenue for using the secondary and regional airports. This is simply because secondary airports location is usually away from the busy central business district of many cities that Ryanair majors its operations. To cut unnecessary costs, Ryanair focuses its operations on short-haul routes allowing it to offer frequent travel services and eliminating certain services like frill services that are usually offered on long-haul travel (Waters 2006, p.19).

Short-haul or point-to-point services that Ryanair majors in helps the airline to offer direct services. The direct services are associated with non-stop routes which to Ryanair, greatly helps it to cut or avoid many costs like through service for connecting passengers which includes; transit passenger assistance costs and baggage transfer costs. This effect gets translated to its costs for ticketing as there are no loss selling tickets at a low price and the cost of maintaining the airports and the aircraft is catered for, at the end of the day Ryanair keeps maintaining low costs at all times. With all these, things put together, Ryanair achieves low costs ticketing and service delivery while focusing on making profits. Thus, the operation strategy of achieving low costs has no hindrance whatsoever (Waters 2006, p.22).

Moreover, Ryanair aims at maintaining its cost-effectiveness strategy while focusing on the operations strategy by considering aircraft equipment costs. From its initial strategy, Ryanair controlled aircraft acquisition costs by purchasing used aircraft of one type. This idea helped Ryanair in those days to cut costs ultimately and maintain its low-cost strategy. In the late nineties, Ryanair experienced a shortage in the supply of used aircraft in the market. This phenomenon forced Ryanair to recalculate its strategy to keep its operations at low costs. To this end, Ryanair focused on buying a new fleet of new generation Boeing 737-800 aircraft of a single type from one manufacturer. This strategy aims at limiting costs associated with; personnel training, maintenance, and the purchase and storage of spare parts. This advantage does not stop at that as theyre an easy and flexible crew and equipment scheduling program. All the advantages and cost cuts in the strategy aim at keeping the aircrafts costing plans low. This eventually translated into the mode of ticketing and the prices offered at Ryanair. All this reflect on Ryanairs overall low travel costs that keep it the best low-cost airline in the whole of Europe (Waters 2006, p.33).

The other thing that Ryanair focuses on maintaining its low costs is the way of handling personnel productivity. Ryanair maintains its initial labor force by looking for ways of improving its production capability. This has translated to improved production per employee thus boosting the overall sales at minimal costs. Another thing that helps Ryanair so much is the mode of compensation for employees. Every employee gets compensated basing on productivity-pay incentives that majorly include; commissions for onboard sales of products basically for flight attendants. Another effort by the airline to cut costs bases on paying pilots and cabin crew personnel depending on the number of hours and the sector they flow in. This setup goes in line with the industries standards for fixing maximum hours for working thus no exploitation and inhibition posed by this move by Ryanair in trying to control costs. Overly, Ryanair has managed to cut costs using this strategy and thus maintaining its low costs over the whole of Europe and beating the competition at the same time (Waters 2006, p.41).

Another thing for consideration is the agreements that Ryanair has made with third-party contractors to handle; ticketing, aircraft, and passengers at selected airports. This move became cost-effective when the management opted to negotiate long-term contracts that mostly have fixed costs that are subject to revision or periodic increases only under inflation situations. This way the airline cuts more costs and at the end of the day comes up with low costs for its air travel tickets. This goes in line with the elimination of travel agency strategies that were costly to run and maintain. This has come with the introduction of the airlines own internet booking facility and reservation center. This has had an impact on the sales of the airline as direct sales revenues increased significantly owing to the new way of booking through the internet. On the other hand, Ryanair maintains its low-cost strategy by controlling airport access and service charges associated with it. The airlines record of delivering a high constant volume of the customer of passenger traffic growth at most of the airports it majors its services has helped the airline to negotiate good and favorable contracts (Waters 2006, p.27).

Ryanair has other various ways of maintaining its high performance while focusing on reducing costs through the provision of ancillary services, core air passenger services, and scheduled services that are usually non-flight services, these are; food, merchandise, and internet-related services and beverages. The other thing is the provision or rather distribution of accommodation services, travel insurance, and car rental through the websites of the airline, which reduces costs while boosting sales. This strengthens the operations strategy of the airline in achieving its corporate goals and aims (Waters 2006, p.38).

What would you describe as the market qualifiers and order winners in the low-cost airline market?

To begin with, we look at the difference between the market or order qualifiers and order winners. To start with, order qualifiers are the minimum characteristics or elements that an organization or its products must-have for their consideration and potential to satisfy the suppliers as their source. Order qualifiers make an organization be in a better place of overcoming competition. On the other hand, order winners are such characteristics as high customization or an outstanding service delivered to customers in a unique way. When this order winner becomes the trend of many other organizations as a way of attracting and satisfying potential customers, then it becomes automatically a market qualifier or order qualifier. This is a minimum acceptable level for operation in any given line of industry such as the airline industry (Waters 2006, p26).

For low-cost Ryanair, there are market qualifiers and order winners that have helped the airline to cope with competition and attract more customers in the market. To begin with, we look generally at both the qualifiers and market winners at the same time. Ryanair has introduced the mode of ticketing and direct calling services that has enabled the airline to handle customers faster and deliver services at the expected time. This achievement is through the establishment of the website ticketing system. This ticketing system has ultimately increased the mode of sale as customers spend much less time confirming and reserving their flight seats that include paying capability on spot. All this is enhanced by having a different contractor handling the whole process for Ryanair. The separation of services from Ryanair helps the management have a good follow-up plan and increases the speed of service delivery as the whole process has a different set of management under the contractor whose main job is to provide that service without mix up (Waters 2006, p.29).

The other thing that has attracted customers so much and acted as an order winner for the past few years bases itself on the quality of services offered. This starts with the way of handling customers using the new ticketing strategy that has won the trust of customers as they rely on the company for its daily travel needs. The quality of service ranges from quality of aircraft used as the organization decided to buy aircraft from one company thus increasing the level of performance to boost the quality of services offered by Ryanair. The other thing that assures quality is the level of maintenance that the company offers to its customers, at this time Ryanair offers contracts to the best airline maintainers across Europe to guarantee the quality of service through safety. This explains why for more than twenty years of service, Ryanair has not had any injury or records of accidents thus it becomes the order winner for the airline due to quality and most importantly safety for its passengers.

This has been moving between order winner and order qualifier depending on the type of customer handled by the organization. Ryanair as the pioneer of the low-cost airline had so many things that it put in place to ensure cost-effectiveness, this starts with, the choice of using secondary airports that allows the airline to charge its customers lowly. The other thing is with used aircraft that guarantee the management of the airline to maintain a low-cost ticketing strategy. Ryanair also maintains its existing staff while improving their performance thus improving both quality and increasing sales as customer handling techniques get improved every time. The improvement of staff performance reduces the cost of recruiting and training new personnel, thus this reduced cost of production translates to the low-cost ticket strategy, which wins more and more customers (Waters 2006, p20).

How does Flextronicss operation strategy help the company satisfy customers?

Operations strategy entails the process of developing long-term plans that aim at utilizing the key resources of any organization. These efforts focus on linking the organizations long-term corporate strategies with the key resources. Operations strategy addresses ways on how to utilize major or key resources to achieve the required or desired corporate goals and objectives altogether. The organizations operations strategy lays a framework for determining how the organization utilizes its resources to gain a competitive power and advantage in the market. There are many external factors that affect operations strategy, these include; globalization of business that leads to more competition in the market as every product or service has to meet the demands and tests of customers (Slack & Lewis 2011, 23).

Every organization has to meet the needs and preferences of its customers in order to maintain a good share in the market. These efforts aim towards beating the competition and meeting goals and targets the organization may have laid down. Another thing to put into consideration is the advent of technology. New technology means better ways of goods production and the better the quality of goods produced the greater the power in convening and winning customers. Every technology adopted has cost implications that the operations strategy and other efforts have to put into considerations. Therefore, the operations strategy aims at keeping the organization in a better position to meet market demands while making profits (Nigel 2009, p.32).

To begin with, Flextronics Company satisfies its customers through various ways as per the operation strategy. The first thing to look at is; reduction of variability, waste, and cost by the incremental improvement of existing processes, products, and systems. By focusing so much on how to improve the production both in quality and speed, Flextronics management aims at using the best available techniques to venture into the production market and come up with better ways to utilize that technique to meet the required standards of the market. These techniques need to eliminate wastes while improving the quality of production. These innovative ways have resulted in two goals; new products and new processes. These new products have over and again helped the company meet market demands and therefore satisfy customers as these new products are produced based on the needs and requirements of the market. With these new processes at Flextronics disposal, everything that entails producing products efficiently and at affordable costs translates to the companys low product costs at high quality thus customer satisfaction guaranteed (Pan & Polishuk 2008, p.30).

Discuss the progression of operation contribution and identify the level of the contribution made in Flextronics

The operation strategy of Flextronics Company has contributed to many things in the market. To begin with, the companys strategic supply chain management has progressively contributed to the organization through cost reduction that is of importance and advantage to the customers. This goes on in continued level of supply and the improvement of time-to-market. The cost reduction process always bases on current market pricing. The strategy also focuses on helping customers with the utilization procedure of Flex services. Through the operations strategy, the company monitors and analyses the market trends together with monitoring customer material supply agreements to ensure adherence. The operations strategy helps the company in coordinating new product forecasting of new products, demand shifts, and technical requirements for developing good products meeting the market requirement. This has raised the level of operation in that the company competes favorably with other multinational companies (Foscht 2007, p.25).

Operation strategy

Operation strategy of Ryanair and how it helps it to maintain low costs

To begin our discussion, Ryanairs operations strategy focuses on maintaining low costs while increasing customer traffic, to attain this, Ryanair puts more focus on containment and operation efficiency. Every aspect of operation regarding customers and the whole business is given total concentration. Cost containment comes in every new strategy that the management of Ryanair lays down. First and foremost, the airline purposed to reduce costs through the adoption of new ways of ticket selling. To this end, the costs that were incurred during the time of the airlines agency ticket selling were eliminated as the ticket access was made easier through the airlines website. Customers or passengers book their travel reservations online; this led to increased sales as the customers paid promptly on the request on seat reservation. There are no charges for maintaining offices in various destinations to handle customer requirements (Kahawatte 2010, p.35).

Eliminating the agency charges and the associated commissions mean that the airline can still offer low-cost tickets without incurring any losses as the inhibiting factors get more and more reduced with improvised operation strategies. The strategy by Ryanair management to set fares according to the demand of particular flights and the remaining time for departure, keeps the customers contented as they themselves determine the number of fares they will pay depending on the time they reserve their seats ensures that the airlines keep fares low (Kahawatte 2010, p.40).

The other important factor about Ryanairs operations strategy that helps them to maintain low costs is the decision by the management to improve the performance of the existing workforce other than recruiting and training new workers. The management has focused itself on ensuring that the services delivered by all employees at all levels meet and exceed the usual customer handling procedures. In doing so, the management has cut down on costs of recruiting and training new personnel and at the same time, the move helps the company increase its sales as more and more customers get satisfied by the services delivered by the employees and the whole airline at all levels. Pilots and cabin crews get their pay on a commission basis and based on the route operated. This way, the salary is not fixed which ensures that minimal finances are wasted. With these cost cuts, the airline can offer low costs for its services without any impediments for a long time (Kahawatte 2010, p.42).

Definition and a list of six market qualifiers and six order winners

Order-winners are things with direct influence to winning business. These are the key things that customers consider before purchasing a product or service. Market qualifiers are aspects of competitiveness, which determines the operations performance at certain levels that customers regard as the best for the product for business consideration. Below the qualifying levels makes the customers neglect the products of that company as of low quality required. The list of order winners and market qualifiers is given below. Order winners are; price, range, flexibility, quality, specialization, and speed, and for qualifiers they are; quality, customization, cost, speed, quality, dependability, and mode of servicing (Roh 2009, p.15).

Critical analysis of Flextronics operations strategy

The operation strategy of Flextronics aims at making the company the worlds number one consumer choice by focusing on procurement, material management, and quality procedures that keep on being refined every time to meet and exceed the customers expectations. This, not only ensures good profits but it also focuses on its grip in the market and winning off its competitors by far to gain a good market share that would ensure the firms stability. The firms operations strategy highly focuses on employee teamwork that helps the company to realize its continual improvement in both customer handling and quality production processes that results in good products and services that keep improving every time. This teamwork aims at meeting challenges presented to the company by customers. By doing this, the company improves its customer focus initiative that keeps better as time goes by this is one of the things about the operations strategy that keeps the competitors of Flextronics at bay (Simchi-Levi 2010, p.23).

Critical evaluation of stages in Hayes and Wheel rights model of operation related to Flextronics

In any organization, a good operations strategy results in good production as well as good customer handling, the two are key factors that may ensure good market share ownership by the company practicing these two important factors. Looking at Hayes and Wheelwrights model of operation strategy, it is clear that the model operations strategy focuses on building a good foundation in terms of production processes that will help any particular company to meet the market demands and satisfy customers beyond their expectations. This, not only improves product performance and profit-making but it also increases the companys power in the market. This helps a company to overcome competition (Russell & Taylor, 2005).

The model of operation strategy in Hayes focuses on employing the best there is of technology and processes that would give the best quality of products and minimizes costs or damages. This leads to customer satisfaction just like Flextronics who has grown from nothing to the worlds leading contracting firm in manufacturing. Flextronics quality of production at minimal costs has been the winning point for the company on a world full of competition and changing market trends in terms of customer tests and preferences. The mode of supply chain should be focused on expanding the acquisition of good suppliers and increase the customers just as Flextronics power in finding the best suppliers, Hayes model has applied this to keep operations high in the market. The other thing that Hayes model strategy has handled excellently just like Flextronics is the mode of introducing new products, the model operations strategy of Hayes allows it to introduce new products basing on market trends and also basing on customer needs.

List of References

Focht, I 2007, Reverse psychology marketing: the death of traditional marketing and the rise of the new pull game, Palgrave Macmillan, Chicago.

Kahawatte, U 2010, Ryanairs strategy from a perspective of core competencies, GRIN Verlag, London.

Nigel, S 2009, Operations strategy, Pearson Education, London.

Pan, H & Polishuk, P 2008, Photonics components & subsystems, Information Gatekeepers Inc., Washington.

Roh, J 2009, From responsiveness strategy to market responsiveness: A pursuit of responsive supply chains, ProQuest, Chicago.

Russell, R & Taylor, B 2005, Operations management: quality and competitiveness in a global environment, John Wiley, Washington.

Simchi-Levi, D 2010, Delivering customer value through flexible operations, MIT Press, Michigan.

Slack, N & Lewis, M 2011, Operations strategy, Pearson, New York.

Waters, D 2006, Operations strategy, Cengage Learning EMEA, New York.

Introduction

In modern times, the field of tourism continues to develop and improve actively. Moreover, the number of trips over long distances is significantly growing, leading to the increased popularity of air travel. One of the companies providing such a service is Emirates, founded in 1985. Despite its short existence, the United Arab Emirates national carrier has been a market leader for nearly twenty years. The dynamically developing airline has earned an excellent reputation in the global aviation industry. It is a worthy competitor to such giants of European aviation as Air France-KLM, British Airways, and Lufthansa. Defining the geo-economic development strategy of Emirates Airlines in the world air transport market as the primary future monopolist is especially relevant during globalization.

The Companys Background

The Emirates flight map is constantly expanding with new destinations. The company is positioning itself as a global carrier, offering intercontinental flights with connections via its hub at Dubai Airport. Emirates is the world leader among airlines worldwide in fleet renewal; it does not use leasing companies as it has funds to purchase aircraft. It is the worlds largest operator of Airbus 380 and Boeing 777 aircraft, and its current order book includes more than 400 aircraft worth approximately $166 billion as of November 2021 (Taneja, 2021). Stating that the firm already has the youngest and one of the most modern fleets in commercial aviation, the company aims to make Dubai a significant hub for air travel.

To simplify government services and facilitate transactions, the Emirates will aim to play an essential role in supporting decision-making and providing decision makers with up-to-date statistics on population demographics by developing reliable, advanced systems integrated with civil records institutions in the UAE. It, in turn, makes it possible to update information in the population system registry automatically. Thus, it is evident that the company has become one of the most popular air transportation options in the UAE and other states due to the rapid pace of development. At the same time, even though Emirates is a favorite of foreigners, the company began its journey and continues to focus on the UAE, which makes it necessary to study the peculiarities of the aviation sector in the state.

Introduction of the Country

The United Arab Emirates represents seven independent and entirely autonomous entities. Each Emirate has its specifics and economic features for business. The state is located at the crossroads of trade routes from the West to the East and Asia. Due to this advantageous location, the UAE has become a major international business center. For the relatively short time it has existed, this wonderful country has become the dream of numerous tourists. It attracts with its unique, multifaceted culture, grandeur and beauty, high standard of living, the populations high culture, excellent service level, warm sea, and numerous luxury resorts.

Moreover, the Emirates has become a leader in international tourism. Investment capitals, flowing into the Emirates from all over the world, are involved in the realization of many grandiose projects, which contribute to the countrys active development of the economy. The increasing domestic consumer demand likewise plays an essential role in establishing a business in the Emirates annually (Taneja, 2021). This factor and the indicators of the constant dynamic development of all sectors of the economy are the direct and most obvious proof of the success of the conditions offered by the UAE.

Introduction of the Service

One of the most common modes of tourism is air transport. Its popularity can be attributed to the significant expansion of travel geography and the reduction of journey terms in favor of their frequency (growth of short-term tours over long distances). These trends cause immediate attention of the entire tourism business to regional and international air transportation. The air market is an aggregate supply and solvent demand for the conveyance of people and things by air. Air cargo delivery is a fast service, reliable method of guaranteed suppliance of goods, luggage, and an entire batch anywhere. Aircraft have a large carrying capacity; there is no risk of delay due to traffic congestion. Shipment is virtually immune to the encroachment of fraudsters. The passenger transportation service is no less popular, which proves that it is air services  the fastest and most suitable option to get where ones need (Taneja, 2021). They are characterized by distinctive innovations and a practical choice for consumers, which makes air service the foremost opportunity to move in the modern world.

SWOT Analysis for the Emirates Airlines

Table 1. SWOT of Emirates Airlines

The airlines have been proving their efficiency and viability for a long time. From the above analysis, one can conclude that Emirates is a promising company with considerable advantages (Table 1). For several years, it has been offering its customers high-quality service and transport efficiency indicators higher than its competitors. Customers can get fast service and the support of employees. Moreover, the company actively pursues marketing strategies, attracting more and more clients and sponsors. Thus, Emirates is a recognizable brand that acts following the law and gets the support of both managers and consumers.

Despite this, the company has registration deficiencies, which significantly hinder the ability to accommodate many people. It is crucial to note a relatively low level of internal communication, which often becomes a reason for the lack of coordination. The company is not represented in the U.S., which significantly affects the profitability because the number of flight coverage is less than potential. The biggest threat to Emirates is the pandemic, which led to a drop in financials and uneven traffic. Competition is increasing, but at the same time, investments and improvements are threatening the potential growth of the airlines. Despite this, Emirates has tremendous potential to expand partnerships, infrastructure, and R&D. Ongoing work on the ID system could be an excellent opportunity to overcome the crisis.

SWOT Analysis of the State

Table 2. SWOT Analysis of UAE

To analyze the company itself, it is essential to understand that the country in which the organization operates has a considerable role in its activities. Based on the analysis of the UAE, it can be concluded that the state has almost no weaknesses or risks for the operation (Table 2). Even though there have been stereotypes about the difficulties of doing business in the Emirates and the complexity of the culture for a long time, the facts are not valid. The UAE can now be considered one of the most promising countries for business and tourism. It rapidly develops economically and is the most prominent object of interest among tourists and investors. The geographical position of the UAE is likewise favorable in the proper placement of service centers, despite the remoteness from the world centers. It is evident that the UAE is a suitable option for developing airlines and their operations with the proper marketing strategies.

National Features

The United Arab Emirates is the epicenter of the latest technology and all the most delinquent global developments, whether in real estate, cultural centers, marinas, or transport links. The UAE has become a living example of creating a comfortable oasis among the dunes, the experience other desert countries are now trying to emulate. In implementing all projects, there is always a local zest  intertwining Oriental culture with futuristic architecture, mind-boggling luxury with desolate desert. Not surprisingly, this has also affected transport development in the Emirates.

As in most countries of the world, the UAE airports are the calling card that introduces the foreigner to the country from the first steps on the territory of the country. There are eight airports in the Emirates, among which only one does not serve civil aviation. Of course, the model for the country is Dubai International Airport, which began construction more than half a century ago, but finally, the work was completed only in 2009 (Taneja, 2021). It is not because the local builders work long hours but to the constant modernization and expansion of the originally conceived solutions. For all its merits, Dubai Airport has become the largest transportation hub connecting the Middle East with different parts of the world  in the pre-pandemic times. It serves about 150 airlines and 60 million passengers annually. It provided flights from 220 cities across six continents, making it the largest airport in the world. The Oriental traditions and culture of the UAE significantly influence the appearance of the facilities and make them even more attractive for tourists.

The UAE is a cosmopolitan country, and its cultural particularities are, in a sense, a mixture of cultures. It is especially valid for Abu Dhabi and Dubai, as they are the two cities where most expatriates live (Taneja, 2021). The unique beauty of Dubai lies precisely in the fact that it embodies the fusion of different cultures. Although ex-pats are likely to experience some culture shock when they come to Dubai, there is still a good chance of finding a niche where they will feel at home. Nevertheless, in the UAE, there is a strong foundation of Arab and Islamic culture that permeates all aspects of daily life, especially in the smaller towns and rural parts of the country. One of the essential features of this culture is the acceptance of things as they are.

The development of the tourism sector is inextricably linked to the modernization and development of the transport infrastructure. The UAE is a global transport center, connecting the West and the East trade routes (Taneja, 2021). The Emirates are leaders in the world in terms of passenger and freight traffic. The leading role in international communications is played by air transport. Because of the many different cultures, a distinctive feature of the UAE, air services are the easiest to promote.

The countrys culture can be used to attract more tourists from abroad who will use the air travel service and thus improve the companys popularity. Moreover, the features of the UAE show extraordinary opportunities for business people, and this indicator can also be used to introduce the service. Improving business travel and onboard options will help to make Emirates airlines the most convenient way for people wishing to build a business in the UAE. The main competitive advantage of Emirates airlines  the low cost of operations along with unlimited investment opportunities provided by shareholders  allows them to grow at double-digit rates per year. The UAEs cultural characteristics can control costs in a resource-based economy in a state-owned company while ensuring effective strategic management. The countrys openness stimulates the inflow of cheap labor and highly qualified specialists and managers from abroad. From this, one can conclude that the UAE culture is particularly suitable for promoting airline services.

Marketing Mix

The marketing strategy of Emirates will be analyzed with the mix of the 4Ps (Product, Price, Place, Promotion). It can be used to comprehend more deeply what advantages the company has and what approaches it uses. This information can be analyzed to propose possible development options and implement new strategies. The product is the first component that helps a brand achieve its goals and results and occupy a niche in the end market. The airline offers flight services and serves passengers with Boeing and Airbus, which uses a mixed fleet. The size of the companys aircraft is more significant than that of other competitors in the market, simplifying their operations peculiarities.

The organization offers services to customers at several personal and professional levels, which means that flights are offered in three classes: Economy, First, and Business. It proves the diversity of the companys approach to each client and provides services for people with different needs and income levels. Emirates offers its customers the opportunity to use mini-bar, bed, and shower cabins. All this indicates a high level of service and the possibility of complete passenger comfort. Moreover, the airline offers a lot of in-flight entertainment and a wide variety of meals, which allows customers to stay satisfied with its services. This information can be used to emphasize the type of services and the need to find additional ways to develop.

Emirates allows its customers to purchase tickets at a wide variety of fares. Fares rely on the course and type of service, may have seasonal discounts, and depend on the time of stay at the goal. For example, when booking tickets on the airlines website, customers can get a promo code or coupon that guarantees a discount on an airline ticket (Taneja, 2021). Emirates airlines have a distinct pricing strategy in its marketing mix. It has developed shorter, less costly routes with no stopovers. Although the prices on these routes are lower, the company generates revenue through volume (Taneja, 2021). With direct flights, Emirates has an effective pricing policy on shorter routes. To achieve flexible seat pricing and maximize profits, the company also has a dynamic pricing policy, charging the highest cost per seat.

Emirates operates from Dubai, strategically located at the center of all international routes connecting the eastern and western cities of the world. Well known for its long courses, Emirates Airlines has also introduced new short ways that benefit its customers. The airline connects 150 cities in 80 countries and six continents around the globe (Taneja, 2021). Its distribution strategy includes selling tickets through travel agencies and tour operators. Airlines engage in various promotional activities, placing ads in magazines, newspapers, television, and radio. It often presents promotional discounts during the off-season, offering tickets at reasonable prices, which draws tourists to Dubai from all over the world (Taneja, 2021). The airline provides programs for frequent flyers and rewards for regular customers: discounts, access to lounges, and free tickets. It indicates that the marketing strategy is chosen precisely and contributes to the companys growth.

Conclusion and Recommendations

Thus, it can be concluded that the UAE  is an up-and-coming country, with the aviation sector developing rapidly. Emirates, as one of the airlines of this state, can be considered the most competitive and attractive for tourists. It offers excellent service, and innovation makes it even more appealing. In developing a strategy, Emirates Airlines should seek to define its operating model for current operations and identify future changes in its operations. The first phase of the operating model could focus on registering the entire UAE population and gradually shift towards providing ID-card-based services to both public and private institutions. ID cards will eventually become the primary mechanism by which people are identified and authenticated in physical and virtual forms and will be integral to accessing public services. Emirates will use the base of the scorecard as an approach to control management and performance measurement, as well as a tool for internal and external communication. In this way, these recommendations will simplify operations and help the company retain its leadership position.

Reference

Taneja, N. K. (2021). Airlines in a post-pandemic world: Preparing for constant turbulence ahead. Routledge.

Executive Summary

The COVID-19 pandemic has represented a significant hit on the airline industry, including Singapore Airlines, which has relied heavily on the Chinese market. As the world begins to open new destinations, it is essential that the company attracts customers and communicates value and dedication to high-quality service. Due to the increased competition and the crisis that the airline industry has encountered, service excellence in combination with price competitiveness are the recommended strategies for the organization. By increasing its online presence, Singapore Airlines will be more proactive when communicating with clients and creating a platform for returning clients.

Introduction

The Strategic Marketing Plan chosen for the current assessment concerns Singapore Airlines (SIA), which has been tremendously affected by the restrictive rules associated with the COVID-19 pandemic. The aim of the plan is to help the organization recover from the long periods of restricted operations as countries have been shutting down travel destinations. Even though the company has been an exemplary performer throughout the years, during the pandemic, SIA has limited capacity by 96% and grounded the majority of its fleet (Pangarkar, 2020). The strategic plan for the organization will include considerations of restarting operations as air travel begins being accessible, deals for customers traveling for work or family visits, as well as deals for customers who have received a vaccine and those traveling to tourist destinations.

Company Background

The airline began as Malayan Airways back in 1947 before becoming an independent organization under its current name. Currently, SIA has stakes in two low-cost airline carriers such as Tiger Airways Holdings and Scoot (NIKKEI Asia, 2020). At the present time, SIA engages in passenger and cargo air transportation and operates through such segments as Singapore Airlines, SilkAir, SIAEC, and Budget Aviation (NIKKEI Asia, 2020). Under the Singapore Airlines brand, the company provides full-service passenger air transportation for both short- and long-term flights. For regional markets, full-service passenger flights are covered by the SilkAir brand, while Scoot focuses on the low-cost customer segment (SilkAir and Scoot, 2021). Finally, the SIAEC segment offers airframe maintenance and overhaul services, line maintenance, fleet management, and technical ground handling (SIAEC, 2015). Thus, the organizations operations are extensive and cover different areas of service that should be considered in the strategic marketing plan.

Environmental Analysis

PESTEL

The analysis considers the political, economic, social, technological, legal, and environmental factors that Singapore Airlines and the industry faces. In terms of political factors, SIA faces a stable local political environment with solid backing from the government. However, there are some political developments leading to economic uncertainty. As to the economic factors, the company is challenged by the financial downfall of the country due to the COVID-19 pandemic, with Singapore registering negative GDP growth of -6% in 2020 (The economic context of Singapore, 2021). Also, unemployment is a significant issue that has appeared due to structural economic changes, such as the outsourcing of low-skilled labor and the COVID-19 crisis (The economic context of Singapore, 2021).

When it comes to social factors, Singapore is a highly traditional country, with SIA having to share the national values of the nation (Heracleous and Wirtz, 2014). Its population is hard-working and aims to work hard to fulfill its materialistic desires, which increases national productivity and enables the business sector to expect higher purchasing power from customers. As to the technological factors, the latest trends in the area of technological advancement have driven the quality of life in the country, with the Internet easing the communication and connectivity within the population. Environmental factors that are relevant to the countrys analysis are concerned with the recent work of Singapores Ministry of Sustainability and the Environment and the Anti-Pollution Unit that aims to maintain good air quality and other environmental factors (MSE, 2021). For SIA, environmental factors are especially relevant because of the need to comply with the national regulations regarding air quality and the emissions from the airline industry. Finally, the legal factors are important to consider; Singapore is highly focused on electronic commerce that enables transparent market regulations. Overall, the PESTEL analysis of the country has shown that the overall environment is favorable for doing business in the sphere of air travel. The customers show a high purchasing power and holds demand for full-service air transportation. Considering the broad demographic of Singapore and its neighboring countries, the company can target both low-cost and the premium segment.

Micro-Environmental

The cultural factors that influence consumer behaviors are embedded into the Eastern traditions associated with family values, respect for one another, and high quality. Therefore, SIA customers look for a high quality of services at competitive prices and expect the company to share the same values that they share. Social factors play an important role because they allow SIA to segment its clients based on their status. While higher income customers look for premium services at high prices, customers of a lower social status will choose affordable prices for good-quality services. Personal factors such as age, the choices lifestyle, occupation, and income will help define customer behaviors and their choice of the services that they choose from SIA. Finally, psychological factors such as the fear of air travel during the pandemic will define the likelihood of SIA gaining profit.

Competitive Strategy

In the airline industry, SIA is a market leader for the quality of services it provides as well as the focus on differentiating their services based on the unique needs of its diverse range of clients. Because of this, the recommended competitive strategy is to protect the market share with the help of responsive anticipation, especially since air travel is currently in a critical position. SIA should strengthen its ties with loyal customers in the sphere of passenger air travel as well as continue its operations in cargo air transportation. The customers represent a young demographic that can be attracted with the help of affordable deals and higher-income passengers who value premium services. Online advertisement can be used broadly to expand the total market because of the possibility to reach a broad audience of customers.

Marketing Strategies

SMART Marketing Objectives

The first marketing objective is concerned with increasing the online sales of tickets by 30% within the next six months as the population begins receiving the vaccine against COVID-19. The second objective is to increase online marketing coverage on social media by 50% within the next six months. Increasing social media presence is required to increase customer engagement as well as target services to potential clients, especially the younger demographic that may be interested in low-cost flights. The third objective is to increase the companys Corporate Social Responsibility (CSR) efforts to help populations affected by coronavirus as well as educate the public regarding the safety measures on flights. By showing the dedication to CSR in the light of the pandemic, the company will position itself as a responsible contributor to the local community.

STDP Analysis

Segmentation

Geographically, segmentation of SIA entails capturing airline customers over the world, which means that the needs to which the company will have to cater. Because of the coverage of a wide range of flights, SIA will manage different air travel requirements of different destinations on six continents. As to the demographic segmentation, SIA will maintain its strategy of differentiating services into full service and low-cost flights because of the varied income and occupation of customers. In the pandemic context, it is important to focus on low-cost flights because of the economic crisis as well as the need to fill as many seats on flights as possible. The psychographic segmentation of the company entails appealing to different customer profiles that perceive the services of SIA differently. Therefore, younger and less wealthy customers should find SIA services that are targeted to them so they can see that the company is not only focused on the premium segment but also offers affordable flights to different destinations. Finally, behavioral segmentation intends to divide customers based on their knowledge, attitude, and uses and responses to different services (DeAsi, 2018). Therefore, SIA will segment its customers based on the benefits they seek and loyalty status. For example, the priority customers can enjoy the additional amenities such as extended access to lounges in different destinations covered by SIA. Customers who fly using low-cost options will also get benefits when flying with the company, such as mile bonuses, online check ins, and more.

Targeting

The target market of SIA consists of clients that share common needs that the company serves, such as passenger air travel and cargo services (Rozario, 2015). Differentiated target marketing is used by the organization to target different target segments and designs separating different needs and goals to achieve higher sales a stronger industry position. Both high- and low-income customers are covered in the targeting of the company, which is concerned with offering several classes of flights between which clients will choose. For instance, suites, first class and business class flight tickets are aimed at customers with higher salaries who are more willing to spend more money on their flights.

Differentiation

SIA is considered an airline specializing in premium services which prides itself on quality and differentiates itself from rapidly growing low-cost airlines. Therefore, the fully branded service differentiation enables the organization to pursue continuous quality improvement, innovation, and cost leadership. Compared to other enterprises in SIAs market, few have been able to execute the dual strategy profitably. While the company continues serving its loyal customers who pay premium prices for high-quality services, it has also figured out how to get new opportunities in both middle and low ends of the market.

Positioning Map

The positioning of Singapore Airlines in relation to its competitors is illustrated below.

Market Research

Competitors

The main competitors of Singapore Airlines include AirAsia, SkyWest, and Republic Airways. Throughout all of the competitors, there has been a noticeable decrease in net income as a result of the temporary suspension of flights to many destinations. Compared to SIA, AirAsia has greater social digital coverage across such platforms as Twitter and Instagram, showing high levels of engagement with its customers (Singapore Airlines competitors, 2017). However, SIA has been transporting the largest number of customers over the years, which shows high levels of trust.

Consumers

The customers targeted by Singapore Airlines are divided into two core segments. The first customer demographic that the company serves includes high-income individuals that can afford purchasing flight tickets at premium prices for high-quality services. The marketing efforts of the company have long been dedicated to showing the organizations commitment to service excellence that is being delivered consistently to its clients. The Singapore Girl is a marketing message implemented by SIA specifically to represent the airlines care, graciousness, efficiency, and warmth when it comes to delivering unique in-flight experience (Singapore Airlines  an excellent, iconic Asian brand, 2021). Moreover, over the years, the Singapore Girl has become an icon for the country, showing the commitment of the nation to quality and service.

The second customer demographic that SIA considers in its operations includes the clients who travel through low-cost options and value affordable services without the frills of the premium class. With the help of the low-cost carrier Scoot, SIA covers multiple destinations across the globe at affordable prices (Singapore Airlines, 2021). Scoot provides good quality services and places emphasis on spontaneous discovery of new destinations, increased connectivity, as well as fresh experiences (Aviareps, 2018). Middle- and lower-income customers are attracted to Scoots business model because the company allows to pay for amenities that matter to their clients. For example, a customer has a choice of whether to purchase inflight meals.

Industry

Both global and Singapores aviation and tourism industry has been significantly impacted by the spread of the coronavirus (Uur and Akb1y1k, 2020). China has been the most significant source market for Singapores industry of air travel and tourism as one of the most relevant markets for the country (Singapore tourism statistics, 2021). Chinas routes accounted for approximately 11% of SIA Groups passenger traffic before the emergence of the coronavirus, which resulted in all but a few of the companys Chinese roots being suspended or cut by half (Sobie, 2020). Similar to SIAs experience in the airline market, its competitors in the region have also suspended the majority of their operations as a result of the pandemic (Lin, 2020). Most of the airlines globally have been forced to stall their fleets, which has been associated with increased expenses.

Marketing Mix

Product: the product strategy and mix in Singapore Airlines is explained by the company being one of the leading companies in the world, which is known for its high-quality services (Singapore Airlines  an excellent, iconic Asian brand, 2021). The main product and service strategy is offering comfortable flights and related services to its clients. They include suites (available on Airbus380-800), first-class flights, business class, premium economy class, and economy class.

Pricing: The pricing strategy of Singapore Airlines has been focused on offering variable pricing in accordance with customer classes. The company offers opportunities for their customers to book online tickets through the website and offers price discounts on special occasions. The prices of Singapore Airlines are competitive and help the company cater to a wide variety of clients from different financial backgrounds.

Place: The organization covers flights in more than sixty destinations worldwide. Based at Changi Airport in Singapore, the company depends on the geographic locations of its fleet because of the restrictions associated with the pandemic.

Promotion: The company promotes its brand through a multi-dimensional advertising strategy that includes TV advertisements, printed ads, as well as online resources such as Google Ads and social media marketing.

Detailed Marketing Mix

Within the detailed marketing mix, the focus of the strategy should be placed on promotional efforts. In the light of the pandemic, it is important to attract customers from both targeting demographics to meet the SMART objectives identified previously. The company should invest in social media marketing more to increase the reach of consumers (Nelson, 2018). It is important for the company to engage in a multi-dimensional promotional effort to improve customers interest in air travel once the restrictions associated with the COVID-19 pandemic are lifted (Borko, Geerts, and Wang, 2020). Working on brand reputation and loyalty is especially valuable for the company, which is why the promotional strategy entails effective social media marketing (Iaorait, 2016). It is necessary for SIA to develop strong relationships with customers that pay premium prices because loyalty is highly important for ensuring that clients return to the company as the restrictions on air travel get lifted. As to the customers that purchase low-cost flights with SIA, promotions are especially relevant because they are on the look for competitive prices for tickets. By allowing this segment of customers to have access to promotions, sales, and other deals, SIA will show dedication to its clients.

Conclusion

In conclusion, even though Singapore Airlines have been a significant player in the airline industry over the years, the limitations brought by the COVID-19 pandemic has placed the majority of its operations on halt. Even when destinations have been open, customers have shown fear to fly because of the potential to get the disease. Due to the volatility brought by the pandemic, it is highly important for Singapore Airlines to engage in a promotional marketing strategy to offer customers the best deals in the region so that they choose the company. As flight restrictions get lifted, SIA will be dedicated to work with deals and offers to facilitate price differentiation.

Reference List

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Borko, S., Geerts, W. and Wang, H. (2020) The travel industry turned upside down. Web.

DeAsi, G. (2018) 10 powerful behavioural segmentation methods to understand your customers. Web.

Heracleous, L. and Wirtz, J. (2014) Singapore Airlines: achieving sustainable advantage through mastering paradox, The Journal of Applied Behavioral Science, 50(2), pp. 150-170.

Iaorait, M. (2016) Raising awareness through the Internet marketing tools. Independent Journal of Management & Production, 7(3), pp. 320-339.

Lin, L. (2020) Airlines are facing tough times, but we explain why some will spread their wings through disruptions. Web.

MSE. (2021) Our energy policy in a nutshell. Web.

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Introduction

With the rapid growth of modern society, the aviation industry is considered the most commonly used means of transportation for travel destinations or business purposes. However, such development of aviation promotes the increased number of challenges for the industry workers and consumers. Aviation security is a significant issue concerning safeguarding fundamental passenger rights. More specifically, flight security encompasses all the possible risks and dangers to the safe air travel that can be of different nature and a root cause. According to Pozzo (2018), airline safety confronts such critical cases, wherein the integrity of a flight can be threatened by the actually performed or merely planned “unlawful acts against civil aviation” (p. 43). With that said, this study examines the leading causes of airline hijacking or unlawful interference, as well as the motives behind such events that jeopardize international air security.

Defining the Issue of Unlawful Interference Offence

Airline hijacking or unlawful seizure of aircraft is the most crucial area of international civil aviation law, which lays the groundwork for the major safety concern and produces constant research on its potential control. The first recorded occurrence of the airline hijacking took place in Peru in 1930 (Abeyratne, 2018). It is important to note that any ideas of the possible aircraft crimes were solely imaginary. However, since that instance in Peru, the notion of airline offense was defined as seizure by force, control of an aircraft in flight by a person on board, aircraft piracy, or aircraft hijacking. The offense of unlawful interference with international civil air transport is a broader concept that encompasses:

• airline hijacking,
• aviation sabotage that leads to explosions in flight or on the ground,
• missile attacks against airplane,
• armed assaults on airports, passengers, or other aerial property,
• illegal transportation of narcotics by air and the criminal implications behind it.

The matter of serious concern implies that despite the enhanced methods of combating international air security, acts of unlawful interference with civil aviation continue adversely affecting the safety and efficiency levels of international airlines. More importantly, such cases endanger the lives of aircraft passengers, as well as the flight crews, who are involved in air travel. Therefore, the international community should be primarily focused on dealing with unlawful interference with civil aviation that undermines the airline safety and security on the global level. As a rule, the crux of the offense is dignified with the key issue of legitimacy as long as the actions of the offender are justified. Another critical aspect is that the security of international civil aviation is inherent to the global economy and international co-operation, which is why it has to be protected for the common good.

The Analysis of the Problem and its Judicial Recognition

The problem of aviation security covers a broad spectrum of international connections, economic and political factors, and human safety. To be more specific, the global community is connected by air transportation with the aid of “advanced communications technology” that establishes the primary linkages between people (Abeyratne, 2018, p. 99). The airline hijacking attacks engage the variety of underlying reasons and, thus, requires political, legislative, and operational initiatives to get involved in the public policy. These reasons include the promotion of terrorist goals to achieve traditional criminal gain, escape from the criminal proceedings within a country, or the consequences of the behavioral reaction of the deranged mind of the offender. Considering the broad context of the mentioned causes, it is essential to provide an in-depth analysis of unlawful interference in terms of the highly competitive and evolving airline industry.

Since the first wave of airline hijacking in 1947 in Turkey and all the following events, the international policies must change the existing status quo and consider the universal standards of conduct on a multilateral basis. Over the past three decades, the issue of aviation terrorism dramatically increased and expanded its impact within the political arena. Regarding the legislative recognition of aviation security, the ICAO member states (International Civil Aviation Organization) implemented and ratified several international conventions. They include “the Tokyo, The Hague, and the Montreal Conventions” (Blum, 2017, p. 10). The very beginning of the aviation hijacking happened after World War II when the unlawful interference was mainly caused by the way of political asylum in a foreign country. However, the aircraft seizure and hijacking climate unexpectedly changed after the 1960s with the new motives behind it.

Fundamental Reasons for Targeted Civil Aviation Hijacking

From the beginning of commercial aviation, terrorists used the aviation system for committing their attacks and offense unlawful seizures of the system as a target on its own behalf. It should be emphasized that the airports were previously considered relatively easy targets for terrorist attacks regarding the scope of the public area. As a result, the international aviation system faced a significant number of minor and major aircraft hijacking starting from the 1910s that reoccurred every decade. However, due to critical technological advancements and progress, the aircraft systems were strengthened as targets during the past decades. This implies the improved security measures, although airports remained the public-oriented areas that are, to a certain extent, accessible to anyone, hence making them preferred objectives for the offenders.

Some of the terrifying hijacking instances cover the period from the second half of the 1960s to the end of the twentieth century, which can be explained by the insufficient air security systems and international recognition of the problem. Nevertheless, the modern safety systems and enhanced control of air transport security only provoke new methods for unlawful interference attacks. Regarding its prolonged history, aviation terrorism is defined as a political act against civil air transportation performed by non-state actors. They systematically jeopardize the civilians, consciously use violence for terror, and sometimes pressure the authorities for personal demands.

The Reasons for Targeting the Civil Aviation

Understanding the root causes of aviation terrorists is vital for developing countermeasures to improve system protection and decrease the number of successful terrorist attacks. With that said, Duchesneau & Langlois (2017), who take leading positions at Aviation Strategies International, identified “seven fundamental reasons” that clarify why terrorists have targeted civil aviation (p. 343). While they explain the motives behind the airline hijacking, they also describe the events that follow such threatening events. The reasons imply that such acts of unlawful interference:

• design a global reach, even if it has a local nature,
• promote the fast transmission of information, increasing audience and impact,
• devalue the manifestation of the state power that the airlines and airports represent,
• result in the powerful economic consequences beyond civil aviation,
• with high lethal potential, they have a strong likelihood of affecting residents of different nationalities,
• prevent interconnectivity by disordering the global air transport,
• provide the ability to make a powerful statement to world leaders instantly.

The Deep-Rooted Causes of Airline Hijacking

The predominant part of the air security research literature is explaining the linkage between the stimulus and offenders’ motivation to commit unlawful interference. Moreover, most researchers agree on two possible links that provoke individuals to engage in aircraft hijackings. One of the most common root causes of such unlawful acts against aviation safety is grounded in the issue of the mental illness of oneself and the desire for publicity. There is a shared assumption that publicity encourages the increased number of hijacking instances and is often associated with the statement that hijackers are mentally ill. To be more specific, many authors assume that hijackers are individuals who pursue publicity, which is caused by psychological instability or low self-confidence. Thus, the publicity itself is one of the significant motives for airline hijackings. As a result, mental problems are considered as a prerequisite to the impact of news media coverage. Such perception of the air safety threat is part of a general opinion that aircraft hijackers are people with mental disorders.

Given that air transport and travel have a strong international nature, airline hijacking and unlawful interference act adversely influence the interests of many states and various nationalities. Therefore, it is of the utmost importance for the common legislative framework to be conducted at the international level to identify and prevent these criminal activities. This highlights the need for specific initiatives developed to impede acts of unlawful interference. Such initiatives are dated back to the 1960s when the hijackings of the in-flight air cargos were primarily committed by politically motivated groups or individuals with mental illnesses (Pozzo, 2018). For example, on 19 July 1960, a man hijacked the Trans Australia Airlines Flight 408 and threatened to blow up the airplane. Fortunately, his attempt resulted in no harm to the aircraft or the passengers on board as the offender was disarmed successfully by a crew member and a passenger.

The other critical condition for the airline hijacking and unlawful interference acts implies the goal-seeking approach. Such a statement means that there is no point in presupposing that aviation security offenders are mentally ill individuals or that they have the publicity motive to predict provoking effects of media exposure. It cannot be excluded that aircraft hijackers behave rationally in trying to achieve particular goals or to address specific types of personal or political problems. As an example, based on the statistics, a considerable number of aircraft hijackers from the United States to Cuba were of Cuban origin. Hence, their hijacking motives were, without a doubt, a solution to returning to a home, which was complicated to reach by conventional means. With that said, the news media coverage serves as both the advertising approach of hijacking and a possible means of solving their problems and, therefore, encouraging the attempts. Despite the numerous acts of hijacking and bombings, the year 1968 is considered a turning point in airline hijacking history.

Political Motive

It is possible to say that, before this period, the criminal acts against aviation security were implemented for individual motives based on two types. The first type implied that the reason for airline hijacking involved escaping to a better life from behind the “iron curtain” or from Cuba. The second type of hijacking included the attacks committed by individuals with personal motives, such as the robbery or the collection of insurance. However, Pozzo (2018) discusses a very different motive for the criminal interference offense that resulted in the hijacking of an El Al Flight by three members of PFLP (Popular Front for the Liberation of Palestine). The instance occurred on 23 July 1968 and had a strong political nature of the motive. After negations that lasted for forty days, passengers and aviation crew aboard were released with the established precedent. In addition to personal goals, revenge, or money, criminal attacks on airplanes can be planned to reach political objectives. They are conducted in order to attract attention to the event and achieve the release of the political prisoners.

As it became evident that aircraft seizures could facilitate the political targets, it was unavoidable for aviation security to face the enhanced violent attacks and criminal operations by the terrorist organizations. In December 1988, the tragic incident happened to the Pan Am 103 over Lockerbie, Scotland, with the loss of lives of 259 passengers and a crew, and 11 local people. Such a terrifying airline hijacking marked another turning point defined by the political goal. As described by Pozzo (2018), the primary aim was to sow terror and impose psychological and economic damage. However, the new era in aviation security was significantly impacted by the 9/11 attack on the twin towers of the World Trade Center in Manhattan and the Pentagon in Washington, DC. By coming at a high cost of thousands of innocent lives and harsh political consequences for the entire world, the 9/11 disaster revealed the extent to which terrorists can seize the aviation system. The dramatic events only furthered the terrorists’ goals and also forced the United States, as well as other leading states, to focus on multiple weak points that characterized the existing air transportation system.

Conclusion

The aviation system and the benefits of air travel represent the extensive sector of international connections and global activity. However, such critical basics of the air transport industry, including passengers, air cargo, and general aviation, serve as the primary target for horrifying terrorist attacks and airline hijackings. Since the 1960s, air hijackings became a preferred tactic of many revolutionary groups (Phillips, 2016). Understanding the common ground of the unlawful interference acts against civil aviation is indeed a complex issue to examine with regard to the number of such instances per year despite the enhanced aviation security. It might be ironic, but the modified and strengthened air security measures provoke new complicated hijacking operations. Notwithstanding the in-depth approach of the following analysis, it is yet hard to cover all the aircraft hijacking events that occurred since the 1930s.

Many researchers come into agreement about three general causes and motives for the airplane attacks. They include individual purposes, such as robbery or escape, mental illness diagnosis of the offender, or acts committed by politically motivated groups. As the events changed the mindset of society and increased international awareness, people currently face more aggressive security control and response from aircrew and passengers. With the broad scope and global nature of aviation, it is essential to recognize that every criminal act against air transport safety is different. However, airline hijackings shaped the current aviation system and security measures that aim to preserve civil liberties.

References

Abeyratne, R. I. R. (2018). Aviation security: Legal and regulatory aspects. Routledge.

Blum, A. M. (2017). Aviation terrorism with particular reference to the air carrier’s liability for personal damages resulting from hijackings pursuant to Art. 17 of the Warsaw Convention [Master’s thesis, Lancaster University]. GRIN Verlag.

Duchesneau, J., & Langlois, M. (2017). Airport attacks: The critical role airports can play in combatting terrorism. Journal of Airport Management, 11(4), 342–354.

Phillips, K. (2016). How hijackings and bombings have shaped the way we fly. ABC: Rear Vision.

Pozzo, F. R. D. (2018). International and EU legal frameworks of aviation security. In J. S. Szyliowicz & L. Zamparini (Eds.), Air transport security (pp. 43–62). Edward Elgar Publishing.

Introduction

In the recent past, a lot of changes have taken place in the New Zealand domestic airline market. There have been changes in the volume of travellers plying the domestic route, changes in the number of players in the market, and changes in sales volume among others.

It is estimated that in the year 2007, revenue from this sector amounted to about 1.6 billion New Zealand dollars. Industry experts are of the view that for a period of seven years from the year 2000, the domestic market was dominated by two key players. These were Air New Zealand and Qantas. It is only much later that new entrant in the market started challenging this dominance.

For example, the entry of Pacific Blue in the market in November 2007 brought with it a lot of changes to the market. Faced by this financially strong new competitor, Air New Zealand and Qantas had to change their strategies. This saw the reduction in air fares and increased flight frequency among others.

This development brings into fore the issue of strategic groups in this market (Leask & Parker 398). This is because the various players in this market make use of identical business models and strategies (Leask & Parker 398).

This is especially so in the case of the three major players; Air New Zealand, Qantas and pacific Blue. This essay is going to look at several issues surrounding this strategic group in New Zealand’s domestic airline market. The essay will include a strategic group map and analysis of the market using the Porter’s Five Forces Model.

Strategic Group Map for Air New Zealand, Pacific Blue and Qantas

A strategic group map is the location of different strategic organisation’s or competitors in an industry within a two axis plane (Olusoga, Mokwa & Noble 155). The X and Y axis of the plane is made up of two variables within which the organisation’s compete. Pricing and geographical coverage will be the two variables for this map. The following is the strategic group map for the three strategic groups:

Figure 1: Strategic Group Map

Pricing and geographical coverage were the two variables selected for the map because they are main platforms on which the three operators compete on. It is notable that the three competitors have differently sized circles in the map. The size is determined by the position they occupy in the market and their share of the same (Scholes & Whittington 79).

Air New Zealand, according to this map, is the leader in the market. This is because it has the largest share in the market. For example, it is estimated that seventy percent of ticket sales between 2000 and 2007 was attributed to this company (Atkinson 22). The company has the largest geographical coverage with fourteen Boeing 737 air buses and fifty daily flights on the domestic routes (Atkinson 23).

In terms of geographical coverage, Qantas is second while Pacific Blue is third. Qantas has a fleet of four Boeing 737s and has thirteen daily flights. Pacific Blue has a fleet of two air buses and makes ten daily flights along the domestic route (Atkinson 22).

In terms of pricing, Pacific Blue appears to be uncompetitive to the two competitors, occupying the third position. This is especially so for those tickets booked within a short notice. Air New Zealand charges about $NZ 57 and $NZ 145 cheaper than Pacific Blue (Atkinson 25). Qantas is the cheapest, charging between $NZ 74 and $NZ 148.

Pacific Blue’s Strategic Group and Organisational Focus

As earlier indicated, Pacific Blue is one of the major strategic groups in New Zealand’s domestic airline market. A link is discernible between the group and its organisational focus.

To remain competitive, this group uses a two-pronged strategy which it has employed since its entry in November 2007. This is the combination of low costs with high quality and professional services to the customer. The crew is both friendly and professional, making the experience of the traveller more satisfying. The group has also focused on the main trunk routes. These are Wellington, Auckland and Christchurch.

As far as operating costs are concerned, Pacific Blue focuses on bringing them down to the minimum. It out-sources ground handling, engineering, crew support and infrastructure such as hangars.

However, the organisational focus of this company is challenged by some inherent limitations, endangering its competitive advantage. For example, while Air New Zealand has about fifty daily flights, Pacific Blue has a meagre ten. The domestic network can not be compared with that of Air New Zealand; it is far too modest.

Air New Zealand and Mobility Barriers in the Market

Khemani & Shapiro (19) gives a working definition of mobility barriers in a market. They conceptualise them as factors that hinder the movement of an organisation from one strategic segment of the market to the other (Khemani & Shapiro 19).

Geroski, Gilbert & Jacquemin (66) goes a step back and view mobility barriers as hurdles that makes it hard or impossible for an operator to enter or leave a market. This position is supported by Balogun & Hailey (108) and Ghosn (38).

Air New Zealand has mobility barriers that pose a threat to effective operations of Pacific Blue and Qantas in New Zealand’s domestic airline market. The barriers also hinder the movement of Pacific Blue and Qantas from one strategic group to the other (Pascale & Sternin 80).

For example, Air New Zealand has monopolised terminal facilities in the New Zealand market. Any new player must first get through air new Zealand to gain access to these facilities. A case in point is when Qantas built t its own terminal facilities in three chief airports before it started operations. This monopoly by Air New Zealand also hinders the expansion of Pacific Blue and Qantas.

Air New Zealand also monopolises the supply of services such as maintenance, spares and parts, ground handling and equipment. This is especially so given the geographical isolation of this country. For them to move from one strategic group to the other, Pacific Blue and Qantas must enter into commercial agreements with this monopoly.

Market supremacy of Air New Zealand is another mobility barrier to Pacific Blue and Qantas. The monopoly is able to control prices and other charges in most of the domestic airports.

The monopoly also enjoys nationalistic support from patriotic New Zealander’s, given that it is their local pride. All of these factors, coupled with an extensive coverage and high frequency, make it hard for the other two to progress in the industry.

Competitive Conditions for Pacific Blue in the Market: Porter’s Five Forces Model Analysis

According to Rainer & Turban (37), the Porter’s Five Forces model can be used to assess the level of competition in a market and in extension, the attractiveness of the same both to new comers and to incumbents. The following diagram represents a graphical view of the model that will be used to analyse the competitive conditions for Pacific Blue in New Zealand’s domestic airline industry:

Figure 2: Porter’s Five Forces for Pacific Blue

Source: Rainer & Turban (38)

Threat of New Entrants into the Market

Rainer & Turban are of the view that new investors have a high affinity for markets that are profitable (40). As such, a profitable market has the risk of being highly competitive due to the new entrants.

Pacific Blue faces a low level threat from competition from new entrants. This is given the fact that there are already barriers to entry into this market in existence. These barriers include the dominance of air New Zealand as earlier explained. The latter, given the iron control it has over the industry, deters new entrants. The industry is not very profitable.

Experts are of the view that the volume of travellers in the country can not support the existence of more than one operator profitably. Other operators in the past, for example Ansett New Zealand and Origin Pacific, have recorded heavy losses in the market. The former made losses of about $NZ 250 million before it exited. These factors make the industry less attractive to new entrants, posing a lower level of threat to Pacific Blue.

Threat of Substitute Products

The threat of substitute products is at a high level for Pacific Blue. This is given the number of operators in the market. Travellers can switch from the use of Pacific Blue services to that of Air New Zealand or Qantas at no extra cost. This is especially so given that some of the charges are identical.

But differentiation of the services offered by Pacific Blue reduces this threat, albeit with a small margin. The airline offers professional services that are also friendly, given the qualification of the staff.

Threat of Rivalry

This is the threat that Pacific Blue faces from the established players in the market such as Air New Zealand and Qantas. The competition from these players is stiff, given that all of them are competing for the relatively small number of travellers in New Zealand. Competitors such as Air New Zealand have also started online booking and aggressive marketing campaigns. This makes more visible and formidable competitors to Pacific Blue.

Bargaining Power of Travellers

The travellers, who are the consumers of the services offered by Pacific Blue, have a lot of bargaining power. The existence of Air New Zealand and other competitors have saturated the market, making the consumers to go to those airlines offering low costs. This has led to the reduction of air tickets as the competitors elbow for the small number of travellers. This has reduced Pacific Blue’s competitive advantage.

Bargaining Power of Suppliers

Supply of services and products to the airlines in this country is dominated by air New Zealand. This is given the geographical isolation of the country. As such, Air New Zealand, as the sole supplier of most products and services to Pacific Blue, has a lot of bargaining power. This makes it possible for the supplier to dictate the price, making the market less attractive.

Attractiveness of New Zealand’s Domestic Airline Market: An Analysis

The attractiveness of this market will be analysed on the basis of the five forces evaluated above.

The market can be described as unattractive both to new entrants and to incumbents. This is given that there are barriers to entry, given the monopoly of Air New Zealand. There are also mobility barriers, given that new entrants and incumbents are not able to move within the industry with ease. This is also attributable to the dominance of Air New Zealand.

There is stiff rivalry among the players in the industry. This is evidenced by the price wars that were especially stoked by the entry of Pacific Blue. This rivalry makes the industry less attractive. Ease of substitution, where consumers can move from one airline to the other, also makes the industry less attractive. This is given the high concentration of the operators as opposed to the low concentration of consumers.

The suppliers and the customers also wield a lot of bargaining power. This is attributed to the fact that air New Zealand monopolises most of the supplies, and the stiff competition between the operators works to the advantage of the bargaining power of the consumers.

The only thing that makes this market attractive is the low threat from new competition, given the existence of many entry barriers. However, this makes the market attractive only to incumbents, while acting as a turn off to new entrants. From this analysis, it can be concluded that New Zealand’s domestic airline market is less attractive.

Works Cited

Atkinson, Brown. Australian Airline Market since 2000: A Critical Analysis. Sidney: Sidney University Press, 2009.

Balogun, John, and Hailey, Hope V. Exploring Strategic Change. 2nd ed. Harlow, Essex: Financial Times Prentice Hall, 2004.

Geroski, Paul, Gilbert, Richard J., and Jacquemin, Alex. Barriers to Entry and Strategic Competition. Sidney: Harwood Academic Publishers, 2000.

Ghosn, Charles. “Saving the Business without Losing the Company”. Harvard Business Review, 80.1 (2002).

Khemani, Ray S., and Shapiro, David M. “Glossary of Industrial Organisation Economics and Competition Law.” Australian Journal of Fiscal and Enterprise Affairs, 35.8 (2002).

Leask, Graham, and Parker, David. “Strategic Group Theory: Review, Examination and Application in the UK Pharmaceutical Industry”. Journal of Management Development, 25.4 (2006).

Olusoga, Ade S., Mokwa, Michael P., and Noble, Charles H. “Strategic Groups, Mobility Barriers, and Competitive Advantage: An Empirical Investigation.” Journal of Business Research, 33.2 (2010).

Pascale, Richard T., and Sternin, John. “Your Company’s Secret Change Agents”. Harvard Business Review, 83.5 (2005).

Rainer, Turner, and Turban, Michael. Introduction to Information Systems. 2^nd Ed. New York: Wiley & Sons, 2009.

Scholes, Johnson G., and Whittington, Richard. Fundamentals of Strategy. Harlow, Essex: Pearson Education Limited, 2009.

Legacy and non-legacy carriers

Legacy carriers are airlines that have a large route network. These are airlines that existed prior to the deregulation act (Mellat-Parast, 2015). Such carriers are obsolete in terms of service delivery and their operational procedures. Therefore, by the standards of the current trends, the legacy carriers’ industry model is outdated. This means that they still exist and they are still utilized but they are obsolete (Mellat-Parast, 2015). Non-legacy carriers on the other hand are newer airlines characterized by new technologies. Such carriers have the most modern electronic devices and their business models are up to date. Non-legacy carriers do not utilize the conventional airlines’ business models and they are mostly run on new and highly innovative business strategies.

I have flown on non-legacy airlines but I have never been into a legacy airline. However, it is common knowledge of how the older generation of flight used to operate. The new generation airline services are more liberal and easy to use. This includes booking protocols and other aspects such as safety measures, fare pricing, onboard catering among other differences (Mellat-Parast, 2015). Legacy airlines are more reserved and they seem to hold on to outdated airline’s practices while the non-legacy seems to break the rules of operations by creating new easy to follow procedures.

What differentiates a legacy carrier from a flag carrier?

A legacy carrier is an old modeled form of the air travel business and it is majorly made of different airlines serving a large route network. Mostly, such airlines are privately owned. They serve a specific market and they are not recognized as national or state carriers. On the other hand, the flag carriers are partly owned by the government. Such airlines are state-owned and they represent the country in the airline business. They are the official state airlines and they mostly bear the name of the nation and the flag. Such airlines include British Airways, the American airlines among others.

A business decision that set the Latin airlines apart

The business decision that set the Latin airline apart from the rest of the airlines was the agreement to merge. The merger between American airlines with the US airways was announced in December 2003 and this caused a shift in the operations procedure of the Latin airline market (Flottau& Buyck, 2014). This merger allowed the Latin airways to run its operations through the American headquarters in Fort Worth, Texas. This was a major breakthrough for the airline.

Effect on passengers’ load factor

The merger was like a business expansion to the Latin airline. Therefore, the passengers’ load factor was not negatively affected. It was an advantage to the business since the number of customers increased significantly.

Benefits of Alliance membership

Alliance membership increases the number and scope of operation for an airline. It also increases the customer base. As the number of customers increases, the probability of making profits rises.

Six observations of the airlines in this chapter

1. None of the airlines have cheap fares.
2. All of them offer luxurious treatment to customers onboard.
3. They all have different classes and onboard customer categories.
4. Most of these airlines are in alliance memberships either as a legacy or non-legacy airlines.
5. They all have new and old business models considering their time and error of operation.
6. They are all interstate airlines.

References

Flottau, J., & Buyck, C. (2014). Stopping the slide: Scandinavian legacy airlines hope new aircraft revive their fortunes. Aviation Week & Space Technology, 176(41), 15-27.

Mellat-Parast, M. (2015). An institutional theory of quality outcomes in strategic supply chain partnership. International Journal of Quality & Reliability Management, 32(4), 11-13.