Final Project Air Blue Airline: Submission Date: 24 December, 2018

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FINAL PROJECT

Air Blue Airline

Submission Date: 24 December, 2018

Introduction:

Air blue is a private Pakistani airline with its head office on the 12th floor of the Islamabad
Stock Exchange (ISE) Towers in Islamabad. It started its operations on May 24, 2004. It is
Pakistan's second largest airline with over 30% share of the domestic market. Air blue operates scheduled
flights operating 30 daily services linking four domestic destinations and international services to Dubai,
Abu Dhabi, Sharjah, Muscat and Manchester. It carried1.4 million passengers on domestic flights in
the 2006-07 fiscal year. Its main base is Jinnah International Airport, Karachi. During the first year the
airline became very popular, which allowed the airline to compete directly with the PIA and
Shaheen.This allowed the airline to expand into more cities in Pakistan including Peshawar and
Nawabshah. On 14August 2005 (Pakistan's 58th Independence Day) Air blue launched its first international
flight from Karachi to Dubai.

 VISION STATEMENT

The vision statement of air blue is given as under:

“To provide exceptional customer service at low prices”


 MISSION STATEMENT

“Enjoy The difference - Freedom, Flexibility and Savings”

Air Blue Competitors:


 Pakistan International Airlines (PIA)
 Shaheen Airways.
PIA:

PIA is the oldest airline in Pakistan and has the first mover’s advantage. It flies to 82
destinations.

Shaheen:

Shaheen is the second national airline after PIA. It is mainly focus on International
customers.

SWOT Analysis:
Strength:
 98% punctuality of on-time flight departures
 More technology oriented.
 Leading market position
 Efficient e-ticketing and wireless e-check.
 Lesser workforce because of extensive technology usage.
 Package for students and special children.
 Air blue showed a record operating profit of over Rs 150 million for year 2006.

Weakness:
 Air blue 2010 plane crash.
 Do not offer business class travel.
 Not having its own repair and maintenance facilities.
 Less number of staff.
 It connects only 7 cities of Pakistan.
 Not operating flights for Hajj Pilgrims, which could be a major source of
income.
 Weak Promotion.

Opportunities:
 Introducing new domestic and international routes like India, China, Gulf etc.
 Business class travel and high quality services
 Better training programs
Threats:
 Fluctuating petrol prices.
 Terrorism
 Accidents
 Incapability of national airport runways to handle big crafts.

Pest Analysis:
Political factors:
 Increased competition.
 Directly influenced by political conditions.
 Pakistan’s Civil Aviation Authority (CAA) rules and regulations.
 Tax rates.

Economic factor:
 Increase of interest rates
 Rise in GDP
 Prices of the competing airlines.
 Inflation rate

Social factors:
 Increased awareness among passengers
 Privacy concerns
 Increase travel lifestyle
 Fluctuating consumer preferences
 Increase in number of people for Hajj and Umrah.

Technological factors:
 E-Ticketing (SABRE system)
 automated check- in systems
 In flight entertainment
 SMS services.
 Efficient aircraft.

Reason behind Decline:


A number of factors have caused the current decline in the airline industry . The
main reason behind their decline was “Crash incident” Air blue flight 202 was crash on 28
july 2010 near Islamabad Margalla Hills, inbound from Karachi to Islamabad. Killing all 152
people on board, 146 members and 6 crew members. It is the deadliest air accident to occur in
Pakistan to date. Air traffic controllers lost contact with the flight crew during its attempt to
land. The flight crashed during in dense fog and heavy monsoon rain. Air blue announced
compensation of Rs 500,000 to the family of every victim. Air blue announced plans to fly a
relative or friend of each victim to Islamabad.Then,130 relatives of the victims were flown
out. In this way, Air blue had to suffer heavy loss due to the loss of aircraft, monetary and
travel compensations for victims and insecurity of people. Accident adversely affect
customer confidence in AirBlue and result in declined revenues intensifying competition.
This incident have caused passenger numbers to fal l.

Ansoff’s Matrix

 Market penetration Matrix:

Market penetration occurs when a company adopts a low cost strategy to induce
customers to try its product or service. It is important to note
here that market penetration strategy begins with existing customers of
t h e organization. This strategy is used airlines to increase sales and market
share without drifting from the original product/market strategy.
 Air blue tried to entice its current customers to use more of the company’s services
by offering various discounts and schemes such as student and old citizen discounts
and Blue Miles.

 Air blue has used a rare but attractive combination of low-cost,all-frills


strategy which is rarely used in the airlines industry. It has managed to successfully
attract and retain customers by superior services at the same or lower fares. This
gives it a competitive advantage of having strong brand equity and has helped it
attract new and retain old customers.

 Horizontal Market System:

A horizontal marketing system is a distribution channel arrangement whereby two or more


organizations at the same level join together for marketing purposes to capitalize on a new
opportunity.
Under the project, Careem users will be able to win free Dubai Return Tickets funded by
Airblue. Customers will also be able to take discounted rides upon using AIRBLUE promo
code and new customers will be able to enjoy free rides

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