Air Blue Airline

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FINAL PROJECT
Service & Direct Marketing
Air Blue Airlines


Submitted by:
Marium Butt - 26752
Maria Mohammed - 21926

Submitted to:
Dr. M.A.K Chishty

Air Blue Airline


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TABLE OF CONTENT

Acknowledgement 3
Introduction to Airblue 4
Mission Statement 4
Vision Statement 4
Overview 4
Perspective of Airblue 5
Technical Information 5
Focus of Airblue 6
CSR 6
Airblue Airline Services 6
Airblue Cargo 8
SWOT Analysis 9
Values Of AirBlue 10
Types Of planning 10
Service Marketing 11
Promotional Mix 11
Advertising 11
IN-FLIGHT ENTERTAINMENT
AIRBLUE
12
Marketing Objectives 13
Marketing Mix Strategy 13
Pricing approaches 14
COMPETITIVE MARKETING
STRATEGIES
14
Positioning of Airblue 15
Recommendations 16



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ACKNOWLEDGEMENTS


First of all we would really like to thank the Almighty Allah who gave me the
strength to work on the report and to complete the report on time without any
hurdles. We would also like to thank our teacher who gave us the confidence and
guidance on every step of our research. This project helps us know more about
Service & Direct Marketing and have insights on the Service Marketing techniques
used by the company for its products and services.













Air Blue Airline


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AIRBLUE- "Expect Excellence"
Airblue, styled as airblue, is a private airline based in Karachi, Pakistan. It is Pakistan's second
largest airline with over 30% share of the domestic market.. Airblue operates scheduled flights
operating 30 daily services linking seven domestic destinations and international services to
Dubai, Abu Dhabi, Sharjah, Muscat and Manchester. It carried 1.4 million passengers on
domestic flights in the 2006-07 fiscal years. Its main base is Jinnah International Airport,
Karachi.

MISSION STATEMENT
We will offer our customers cost effective transportation service within geographical areas and
market segments that can benefit from our services and will insure a return on investment and
growth rate consistent with current management guidelines.
VISION STATEMENT
Our vision is to make Air blue the most admired airline in the world.
Ensuring safety comes first.
Providing Service Straight from the Heart.
Encouraging product leadership.
Delivering superior financial returns.

OVERVIEW
Airblue Limited is a private airline with its head office on the 12th floor of the Islamabad Stock
Exchange (ISE) Towers in Islamabad, Pakistan. It is Pakistan's second largest airline with a
growing share of the domestic market.
Airblue's fleet consists of next-generation Airbus A319, A320 and A340 aircraft.
Led by a team with decades of experience in the industry, airblue embodies a new era in
passenger air travel. The company's shareholding structure includes a group of investors
including Mr. Tariq Chaudhary with majority stake. Mr. Chaudhary also serves as CEO and
Chairman of the Board.
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Airblue operates scheduled flights linking four domestic destinations Islamabad, Lahore, Karachi
and Peshawar with international destinations of UAE airports Dubai, Sharjah and Abu Dhabi, as
well as Muscat, Oman, Manchester and Birmingham UK, and most recently Jeddah, Saudi
Arabia.
Airblue has integrated unique innovations to ensure security and affordability. Among these are
complete online reservation systems, online reservation hold/in person payment at various
locations, electronic document handling, and mobile airport check in procedures. Airblue was the
first airline in Pakistan to introduce e-ticketing, wireless check-in and self-check-in kiosk
facilities.
Leadership
Airblue is led by a team of of highly qualified leaders and managers, with years of experience
and a commitment to excellence.
Perspective of Airblue
AirBlue shall offers business and economy classes and will be the first airline in private sector to
havePakistani pilots and engineering staff trained according to international standards.The airline
in this regard had already entered into agreements with Airbus, a dazzling carrier,
beingmanufactured by France.

Technical information
AirBlue has acquired 3 new generations Airbus A-320 aircraft on dry lease each of it has 20
Business Classseats and 126 Economy class seats. AirBlue would help generate over 2,400 jobs
400 direct and 2,000indirect for an all Pakistan crew. AirBlue which have already hired 25 field
crews which were gettinghands-on training in Europe while it has also hired 50 cabins crew
which are also undergoing trainingoverseas.

Focus of AirBlue
AirBlue aims to focus passenger comfort at prices that offer value for money and that explains
itsdecision to have leather-upholstered seats in the Business class and offering in-flight
entertainment notoffered by any other airline, including the PIA, on the domestic sector. The
airline has also madearrangements with quality caterer outside to serve what it calls "exquisite
cuisine" to the travelers.Initially, it will operate 3 flights on the Karachi-Lahore sector and
similar number of flights on the Karachi-Islamabad sector daily.AirBlue has introduced the
concept of total e-ticketing for the convenience of passenger which wouldalso help it to eradicate
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the back-dating system associated with manual ticketing that costs airlines,including its
competitors, millions in losses every year. The absence of manual ticketing and theintroduction
of computerized check-ins by hand-held computers would help AirBlue offer quality-conscious
travelers value for their money by offering quality product and consistent scheduling.In addition
to 3 daily flights each on the Karachi-Lahore and Karachi-Islamabad sectors AirBlue also
hasplans to operate one circular Karachi-Sukkur-Multan-Karachi flight daily.The total frequency
of which adds up to 15 flights a day. The AirBlue is aiming to provide world-classservice on new
generation aircraft which are comparatively newer than those used by the other privateairlines,
AirBlue's aircraft are just about 5-year-old, without compromising on quality, service or fare.
Corporate social responsibility
In March 2008, Airblue launched the Plant-A-Tree program. It involved planting of 1 million
trees throughout Pakistan in the year. In May 2009, Airblue, launched a relief campaign to
collect donations at its sales points and check-in counters for the victims of Swat valley conflict.
The airline joined hands with HelpCounts.org to provide relief to people displaced from Swat
valley due to the military operation against militants.

AIR BLUE AIRLINE SERVICES
Air blue currently operates a mixture the Airbus A321, A320 and A319. Allaircraft are in a 3 x 3
all-economy layout. There are several screens overhead arranged for several rows. The airline
dropped the business class section by exogenous economic factors. The layout is 2 x 2 with
onboard TV and leather seats.
Cabin
Airblue currently operates a mixture of Airbus A321, A320 and A319s. All aircraft are in a 3 by
3 all economy layout. There are several overhead screens located after several rows. The airline
dropped its Business class section due to exogenous economic factors. The layout was 2 by 2
with inflight televisions and leather seating
E Ticketing
Air blue was the first airline in Pakistan to introduce e-ticketing, wireless check-in and self-
check-in kiosk facilities. The airline was also a member of the Sabre system, which is used by
more than a hundred airlines to help it with ticket automation services.
On Air Deal
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On Air has signed an agreement with Air blue, Pakistan FASB growing airline, announced at
Mobile on Air voice and data services to up to 12 launches of the Airbus A320 aircraft from
2009.
Frequent Flyer Program
Air blue frequent flyer program is called Blue Miles. Passengers are able to initially start on the
base level where you sign up for free. Once passengers earn enough miles, are the upgrades to
the Blue Card, followed by the Platinum Card. In May 2009, the airline formed an alliance with
the Royal Bank of Scotland Limited (RBS) to start their summer promotion on their credit card.
Lounges
Air blue inaugurated own premium lounge at Jinnah International Airport, Karachi in November
2008. Nicknamed the Blue Lounge International, it was designed for business class passengers,
for credit cards and privileged customers. The lounge offers a range of Internet, cable television,
newspapers and magazines, massage chairs and a snack bar. It is the international wing of the
airport.
Joint venture with Air JS
To comply with the Civil Aviation Authority (CAA) regulations of the airline increased its
operation to the socio-economic lines Nawabshah in central Sindh fly but the service was soon
suspended due to low load factors, and the unsuitability of the A320 for this route. The
suspension means that Airblue compliant with CAA regulations and had therefore incurred
penalty fees.
To overcome the issue of non-compliance Airblue in a joint venture with start-up charter airline
JS Air to enter, to operate flights on their behalf on socio-economic routes. This is the first time
introduced in Pakistan's aviation history that two carriers entered into a joint venture agreement.
The first objective of this agreement, the port city of Gwadar, which the network Air blue 17
June was joined and served twice daily, except Fridays, from Karachi. The flights were
performed using JS Air 19-seat Beech 1900C aircraft which are designed to serve low yield
commuting destinations. This service was suspended in 2007 due to lack of demand despite the
use of suitable aircraft
Saving measures
To address the fuel price hike worldwide are converting their fleet to Air blue all economy class.
This applies also to their new aircraft to be delivered from 2009 applied. They are also provided
with solid food and replaced them with sandwiches and pastries. In 2006 admitted Air blue with
china service for meals in economy class to save cost and weight and replaced it with plastic
products according to standard practice. Sometime scheduled flights is to be canceled for
austerity measures.
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Ground Services
Passengers can check in two to 48 hours prior to departure. This can be done over the counter or
at the self-service kiosks. Currently, self-service kiosks are available at Jinnah International
Airport. Dnata Aviation Services acquires the company ground and passenger handling at all
airports for the airline from the airline. Gate Gourmet provides food and beverages to the airline.
Customer Service
At AirBlue, the airline strives to provide you with the best tools to help you with your online
travelreservations. This includes online help resources, such as answers to "Frequently Asked
Questions" andemail assistance.It also staff a 24-hour call center to book travel and answer
questions.

AIR BLUE CARGO
Cargo operations
Airblue have launched e-Cargo service to cater to air freight markets of Pakistan, UAE and UK.
According to a press release, e-Cargo will broaden the base of cargo and permit certified agents
to book freight directly online opening the inventory through the web.
Orders and deliveries
In November 2007, Airblue signed an agreement to purchase eight more A320 aircraft bringing
the airline's total order up to 14. The deal is worth $520 million at catalogue prices. The aircraft
will be configured to seat 157 passengers in two classes configuration. The delivery of the first
aircraft is expected in the first quarter of 2010 from Airbus.
PRICING STRATEGIES OF AIRBLUE
There are four types of pricing strategies
Premium pricing
Penetration
Skimming
Economy


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SWOT ANALYSIS OF AIR BLUE
Strengths
Air blue is a Low-cost carrier (LCC)
98% punctuality of on-time flight departures.
Innovative e-ticketing and wireless check-in technologies.
Leading market position
Air Blue has high brand recall. It is recognized by travelers all over the country.
Air Blue has successfully incorporated latest technology in all its systems, giving it an
edge over competitors.
Weaknesses
Engaged only in passenger service, whereas its competitor PIA is also providing cargo
services (SPEEDEX).
The fares on which you make reservations are un-guaranteed
Not having its own repair and maintenance facilities.
High dependence on passenger revenues
Opportunities
Low fares enable market share growth.
Introducing new domestic and international routes like Gulf, UK, Jordan, India etc.
New aircrafts will be used for additional frequencies and destinations on domestic and
regional routes.
Expansion of freight business
Threats
High interest rates
Accidents
Strong competition
Threat of terrorism.
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Incapability of national airport runways to handle big crafts.

VALUES OF AIRBLUE
Exceptional Customer Service
Convenience
Customer satisfaction
Retention
Fast and Easy Access
Employee
Customer Convenience
Service Quality
High quality services at low prices

TYPES OF PLANNING
Strategic Plans
Apply to the entire organization.
Establish the organizations overall goals.
Seek to position the organization in terms of its environment.
Cover extended periods of time.
Operational Plans
Specify the details of how the overall goals are to be achieved.
Cover short time period




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SERVICE MARKETING:
Internal Marketing:
Marketing by a service fir to train and effectively motivate its customer-contact employees and
all thesupporting service people to work as a team to provide customer satisfaction.
Interactive Marketing:
Marketing by a service firm that recognizes that perceived service quality depends heavily on the
qualityof buyer-seller interaction.
PROMOTIONAL MIX
It consists of the specific blend of advertising, personal selling, sales promotion, public relations,
anddirect marketing tools that the company uses to pursue its advertising and marketing
objectives.
Advertising:
AirBlue promoted its airline by showing commercials on major television channels like GEO
TV, ARY TVwhich was for a very short time and extensive advertising in major newspapers like
Dawn, The News, andDaily Jang.
Sales Promotion:
AirBlue gave special discounts to its customers up to 50% when it started its operations, they
also gavespecial discounts on the occasion of 14th August up to 50% and they are also giving a
regular discounton certain proportion of seats in every flight ranging from 15-25%.
Direct Marketing:
Direct connections with carefully targeted individual consumers to both obtain an immediate
responseand cultivate lasting customer relationships.

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ADVERTISING
Advertising Objective

A specific communication task to be accomplished with a specific target audience during a
specificperiod of time. There are three types of advertising objectives Informative, Persuasive
and Reminder.

Persuasive Advertising:
It is basically used to build brand preference, to encourage switching of brand and to change
customer perceptions of product attributes.

AirBlue is using Persuasive advertising because there are already other airlines established and
AirBlueis convincing its customers to travel in their airline because they are promising best
quality and servicesthat other airlines are not.

Selecting Advertising Media
AirBlue has Newspapers, Television and Radio as its major advertising media.
Newspapers vehicles include: Dawn, The News and Daily Jang
Television vehicles include: GEO TV and ARY TV
Radio vehicles include: Apna Karachi FM 107


IN-FLIGHT ENTERTAINMENT AIRBLUE:
It refers to services provided on board of AirBlue planes during a flight. The services in some
cases may be free of charge and in other cases offered by AirBlue. In-flight entertainment
AirBlue is included in order to upgrade quality of life on board and at the same time fulfills the
needs of the passengers during AirBlue flight as far as possible.

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AirBlue provides in-flight video programs on its flights with approximately movies translated
into up to languages available on screen. Channels are offered to watch news, bulletins, cultural
information and other programs. Up to radio programs and newest cds are offered on board of
AirBlue flights, allowing the passengers to listen to the latest songs, soundtracks and news.
AirBlue offers different types of games on flights.

On AirBlue flights duty free shopping is available. Worldwide satellite communications are
available for in-flight communication for passengers to receive and make calls during a flight.
The price on board AirBlue flight for in-flight communication is approximately pounds per
minute. In-flight Internet is available to passengers on board of AirBlue for emailing, VOID and
conferencing.

Marketing Objectives:

Before setting price the company must decide on its strategy for the product. If the company
haselected its target market and positioning carefully the price will be fairly simple. At the same
time thecompany may seek additional objectives such as survival, profit maximization, market
share leader ship and product quality leadership.
Air Blue is currently using product quality leadership as its pricing goal they are charging a
higher price than other domestic (Private) airlines because of their excellent service quality
which is evident in their food, cabin crew, seating comfort, and on board entertainment, But on
the other hand their price is equivalent to PIAs price which gives them an edge over other
airlines and PIA itself.

At the same time they are also striving for market share leadership by offering a price equal to
PIA, but quality and services far better than PIA.

Marketing Mix Strategy:

Price is only one of the marketing mix tools that a company uses to achieve its marketing
objectives. Price decisions must be coordinated with product design, distribution and promotion
decisions to form a consistent and effective marketing program.
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For AirBlue price is a crucial product positioning factor that defines the products market,
competition and design. AirBlue has set its price higher than other Domestic (private) airline
because of their high standard quality and services. The main reason for their high price is
because of their quality which is catering by world class on board caterers Gate Gourmet
which is providing catering services to world class airlines like Emirates, Swiss Air, Lufthansa
etc. Overall seats in their aircraft are 146, 20 business class seats and 126 economy class seats.
They have installed leather seats in business class with the latest in-flight entertainment in
business and economy class with drop LCD screens after every four rows. They justify their high
price by giving travel agents a healthy amount of commission so that the travel agents suggest
people to choose AirBlue to travel domestically rather than any other airline.


Pricing Approaches
The price the company charges will be somewhere between one that is too low to produce a
profit and one that is too high to produce any demand.

AirBlue has set its prices according to the value it is providing to its customers for e.g. catering,
seating capacity, comfort, entertainment, etc. it has also set its price according to its competitors
price i.e. PIA. It has kept its price similar to that of PIA so that it can attract a large market share
of PIA. Therefore it is using a combination of Value Based Pricing Approach and Competition
Based Approach.

COMPETITIVE MARKETING STRATEGIES
AirBlue has efficiently implemented the two out of the three winning competitive strategies,
which are:

Overall Cost Leadership:

Under this strategy the companies work hard to achieve the lowest costs of production and
distribution so that it can price lower than its competitors and win a large market share. Even
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though, AirBlue at its launch gave the passengers up to fifty percent discount, the regular fare is
exactly similar to what PIA charges. Nonetheless, AirBlue has a certain number of seats offering
25 percent and 15 percent discounts on all flights as already mentioned.

Differentiation:
Here the company concentrates on creating a highly differentiated product line and marketing
programs so that it comes across as the class leader in the industry. This is an area where AirBlue
has taken a very calculated step and we believe, AirBlue has completely differentiated its airline
from PIA and other competitors. AirBlue has a fleet of airbuses which all have a greater seat
space and a far better catering service. Apart from differentiating its product, its services are also
distinguished from the other airlines in the market. It employs well-trained staffs who
communicate very effectively and in a very polite manner to give the customer a sense of
superiority unlike other airlines staff that is not properly trained to interact with customers and
passengers.

Focus:
Here the company focuses on its effort on serving a few market segments well rather going after
the whole market. AirBlue, even though caters to every segments needs and tries to supply the
best product and services to them, has focused its effort on passengers who travel a lot and carry
light luggage. It has started a free-flyer scheme under which the travelers gain points the more
they travel and these points yield them free tickets.

Air Blue also has focused on passengers who carry light luggage. They realized that passengers,
carrying little or no luggage, had to stand in long queues to get their boarding done. To overcome
this problem Air Blue came up with the idea of mobile boarding (explained earlier) through
which these passengers get their boarding pass instantly from the Air Blue staff roaming in the
boarding lounge.

.

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COMPETITIVE POSITION OF AIRBLUE IN THE MARKET

Firms competing in a market, at any point in time, differ in their objectives and resources. Some
firms are large, others are small. Some have many resources, others are strapped for funds. Some
are old and established and others are new and fresh. Basically, the firms occupy different
competitive positions in the target market. Air Blue occupies the competitive position of market
challenger.

Market challenger Market challenger is a runner-up firm in an industry that is fighting hard to
increase its market share. A market challenger can adopt one of the two competitive strategies:
either it can challenge its competitor aggressively for more market share or it can play along with
the competitor.

Air Blue has launched a full frontal attack, by offering the better product than its competitor and
by matching the price. PIA had better carriers than Aero Asia and Shaheen (the other two airlines
in the industry) before the advent of Air Blue, but Air Blue explicitly attacked this strength of
PIA by bringing carriers equivalent to that of PIA but with more spacious seats than PIA. Air
Blue also provides better service on-board and off-board than does PIA.

RECOMMENDATIONS
Consistent hiring policies should be administered and should not change from time to
time.

People should be encouraged to exercise expert power.

New venture teams should be incorporated to develop new ideas based on the feedback
taken from customers and employees.


Total quality management should be catered to within the work groups and
implementation of various skill enhancement programs for quality and productivity
improvements such as Six Sigma should be provided to its executive employees.