KUSOM/MBA/HR/HRS

Buddha Air

Buddha Air is a dominant player in the domestic airlines industry. It has

registered a continuous and impressive growth since it started business in
1997. Its present market position is as much the result of carefully crafted
and skillfully executed business strategies as due to the increased demand
for air transport services created by internal security environment during
the decade-long Maoist insurgency but also the company’s marketing and
operational efficiency.

Business Goals of Buddha Air are:

1. Be the market leader in domestic air services by increasing the market

share to 80 percent from the present 60 percent in the existing routes;
2. Remain a dependable airline offering comfortable, convenient, and quality
services to its customers;
3. Achieve higher and more consistent profitability than achieved in the
past;
4. Achieve high staff productivity and be known as an organization with high
responsibility towards its employees and social cause; and
5. Expand the present business line for long-term sustainability and growth.

Corporate, Business and Functional Strategies are:

1. Diversification into new business lines in related or unrelated fields

(travel and trekking business and finance companies);
2. New market development by expansion into the regional market;
3. Introduction of new products (STOL in new routes);
4. Expansion of fleets with new category of aircrafts;
5. Investment in infrastructure development (physical, technological and
human resources) and their maintenance to the appropriate standards;
6. Timely adoption of new technology and maintenance of existing equipment;
7. Continuation of aggressive marketing activities both in-country and out-
country;
8. Streamlining and strengthening of organization structure as well as
management and operational systems;
9. Adoption of information technology for operating major functions and
systems; and
10. Close co-ordination with organizations such as the Nepal Tourism Board
(NTB), various business houses, universities, and the Civil Aviation
Authority of Nepal (CAAN).

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Staffing Pattern is as follows:

Executive Manager Officer Supporting Attendant Total
Band
Organisational Units
1. Marketing 1 7 23 73 57 161
2. Corporate Mgmt 1 2 8 10 43 64
3. Finance 1 2 9 14 - 26
4. Operations 3 16 21 27 - 67
5. Engineering 1 14 13 22 18 68
Total 7 41 74 146 118 386

Corporate Performance has been summarized in a report as follows:

Buddha Air has performed fairly well in the market until recently,
considering a number of financial and market performance indicators as well
as institutional growth measures. However, experts view and comparative
analysis of performance suggest that Buddha Air could have done even better
given the huge market for airlines operators during the last decade and
comparatively weak competitors. But now the demand for air services is not
growing as fast and the market has become more competitive with some strong
competitors operating in the airlines industry. Buddha is already
experiencing tough challenges maintaining its position while facing severe
constraints for further growth.

Some of the major comments inferred from a consulting report that looked into
the organizational structure and HR systems of the company are reproduced
below:

 No corporate management structure, culture and practices.

 Shortage of human resources mainly in terms of quality and competency
required for jobs but also in number (particularly in the recent years).
 Induction of employees mostly on personal or urgency basis.
 Only average or below average performance by most employees.
 Critical gap in functional leadership and management levels.

In the face of the emerging market situation the company has recently taken
some initiatives as below:

 Plan to procure in near future two new aircrafts with more seating
capacity.
 Plan to start cross-border flights in near future.
 Plan to start financial services in the Eastern Terai.
 Computerization of business information (including financial, marketing
and employee performance information).

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Issues

1. What are the core issues facing Buddha Air from the perspective of
maintaining and strengthening its competitiveness?
2. What are human resource strengths and weaknesses of Buddha Air? Why?
3. How human resources can be converted into a strategic advantage to the
company?
4. How human resource weaknesses can be addressed?
5. What role human resource selection plays in it?

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