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AIR BLUE PAKISTAN

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Group Members
JAVERIA LIAQAT SIDRA KOUSAR ZUBAIR MUSHTAQ WAJHEE UL HASSAN ALI HUSNIAN
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INTRODUCTION

Air blue is a private Pakistani airline based at Jinnah International Airport Karachi. Air blue started its operations on May 24, 2004. It was the first private carrier of Pakistan to operate the Airbus A320 when it initially started.
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MISSION STATEMENT

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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.

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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.

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MARKETING MIX

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MARKETING MIX 4 Ps;

 Product  Price  Place  Promotion

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Product

Levels of products Core Product

The actual level of product Augmented Level of Product

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Range of services

The range of service means the number of services provided. Airblue provides the transport as well as cargo services

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Cargo services
Air blue offers more than 70,000 kgs cargo space on more than 18 fleet everyday  Faster  More reliable

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Price Pricing objectives of air blue:

 Profitability  Customers ability  Support positioning  Cost determination

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PRICING STRATEGIES OF AIRBLUE

There are four types of pricing strategies

 Premium pricing  Penetration  Skimming  Economy

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FACTORS FOR SETTING PRICES

Internal factors affecting pricing decisions:

 Marketing Objectives  Marketing Mix Strategy  Cost  Organizational consideration

External Factors affecting Pricing Decisions:

 Nature of the Market and Demand  Competition  Promotional and special-event pricing
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Place
They place there product throw following channels: Distribution channels Number of Channel Levels
 Direct Marketing Channels  Indirect Marketing Channels

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Intermediary selling
 Company Sales Force  Manufacturers Agency  Industrial Distributors

Number of intermediaries Three strategies are available:

 Intensive Distribution  Exclusive Distribution  Selective Distribution

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Air blue routes

 The following are the different routes of air blue:

Air blue Domestic Routes:

 Karachi Islamabad  Karachi Lahore  Karachi Peshawar  Karachi Dubai  Lahore Dubai  Islamabad Dubai  Peshawar Dubai  Islamabad Manchester
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Airblue International Routes:

 Islamabad - Abu Dhabi  Islamabad Sharjah  Lahore Sharjah  Lahore - Abu Dhabi

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Promotion
The major methods of promotion are:
 Advertising  Personal selling  Sales promotion  Publicity  Public relations

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Advertising
AirBlue promoted its airline by showing commercials on major television channels like GEO TV, ARY TV extensive advertising in major newspapers like Dawn, The News, and Daily Jang.

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Sales promotion

 Cash Refund Offer (Rebates

 Advertising specialties

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Air Blue Positioning Strategy

A cordial and reliable escort, Air Blue provides world class services through state-of-the-art technology at very low cost.

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SWOT ANALYSIS AIR BLUE

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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.
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Weaknesses
 Engaged only in passenger service, whereas its competitor PIA is also providing cargo services (SPEEDEX).  The fares on which you make reservations are unguaranteed  Not having its own repair and maintenance facilities.  High dependence on passenger revenues  AirBlues sustainability, growth and revenues directly depend on oil prices. A steep rise in oil prices can seriously damage the long term viability of any airline.
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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  AirBlues BlueMiles (frequent flyer program) was established to develop passenger loyalty by offering awards and services to frequent travelers.
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Threats
 High interest rates Accidents Strong competition Threat of terrorism.

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PEST ANALYSIS AIRBLUE

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Political Factors
Airline industry is significantly affected by political stability
 If the management of Air Blue believes that the present government will perform well, then there will be more investment in terms of airplanes.  If the military takeover government, policies have become more liberal.  Pakistans Civil Aviation Authority had a Restriction that companies could not operate as airlines unless they own their aircrafts.
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Economical Factors

An increase in interest rates has negatively impacted the airline industry. Due to the devaluation of rupee, attractiveness of the Pakistani market has been reduced for foreign investors.

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Social Factors
 The social and cultural influences on business vary from country to country.  The trend is now changing as the general public is educated and is pursuing professional goals.  Air Blue has untapped market potential as consumers are unaware of its services because of ineffective marketing efforts.

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Technological Factors
 Technology is vital for competitive advantage and is a major driver of the airlines industry.  Major technological changes are taking place in the airlines industry with innovations  Internet plays a key role in e-ticketing as consumer can easily reserve tickets or check the status of the flight.  Air Blue has led the path of technological innovations by introducing new technologies such as its auto check-in counters, In-flight entertainment systems
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PORTERS FIVE FORCES ANALYSIS

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Threats of new Entrants

 PIA enjoyed a complete monopoly in the domestic sector and preferential treatment in the overseas sector.  The initial investment required for starting an airline is quite large  Capital expenditure is very large and most new entrants come in the market with few leased air crafts.  So threats of new entrants is low in airline industry.
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Threat of Substitutes
 Likely substitutes for air travel include other transportation modes such as trains, buses and cars.  Driving on shorter routes provides a cheaper substitute Buyers may use personal cars or buses for such trips.  Air travel can, save both time and money for longer routes  The threat of substitutes in the air travel industry will vary for each customer segment.
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Bargaining Power of Supplier

The price of jet fuel is directly related to the cost of oil. This price is determined by international markets and an individual company does not have the power to influence it. There is cut throat competition among suppliers The oil suppliers have high bargaining power.
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Bargaining Power of Buyer Buyers now have a number of options when choosing an airline

Pricing information is less fragmented and easier to compare This industry has lower bargaining power.

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Intensity of Rivalry

The Pakistani airline industry is fiercely competitive. There are substantial exit barriers in the industry. Due to high rivalry airlines generally earn low returns because competition drives down prices
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COMPETITORS ANALYSIS

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AirBlue Competitors Pakistan International Airlines (PIA)

International Aero Asia Shaheen Airways

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PIA
It is the oldest airline in Pakistan and has the first movers advantage it flies to 82 destinations. It still claims percent market share and is the largest airline in the country by all standards
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International Aero Asia

 Aero Asia is a private Pakistani airline.  Aero Asia was previously owned and operated by the Tabani Group, which sold it to the UK based Regal Group  It has total of 11 destinations, 7 domestic and 4 international.  Within Pakistan it currently provides services at Karachi, Lahore, Islamabad, Peshawar, Multan, Faisalabad and Sukkur.
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Shaheen Airways
 Shaheen Airways is the second national airline after PIA.  It mainly covers Karachi, Lahore and Islamabad and the Gulf  It is mainly focusing on international customers.  It currently operates in Islamabad, Karachi, Lahore, Peshawar,, Abu Dhabi, UAE, Doha, UK, Kuwait and Oman.
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ANSOFF MATRIX

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ANSOFF MATRIX
There are four Possible product/market combinations:
1. Market penetration (existing markets, existing products) 2. Product development (existing markets, new products) 3. Market development (new markets, existing products) 4. Diversification (new markets, new products)
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AirBlues Position
 AirBlue is in the Market Penetration Matrix.  Market penetration strategy begins with existing customers of the organization  Market penetration occurs when a company adopts a low cost strategy to induce customers to try its product or service.  This strategy is used airlines to increase sales and market share without drifting from the original product/market strategy
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AirBlues Position (cont.) AirBlue penetrated the Pakistan market applying a three strategies 1. attracting competitors customers 2. providing superior services 3. targeting non-user segments

 It has managed to successfully attract and retain customers by superior services at the same or lower fares.
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PRODUCT LIFE CYCLE

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PRODUCT LIFE CYCLE

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Stages of Product Life Cycle

There are four stages of PLC Introduction Growth Maturity Decline

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Introduction
Launch:

Airblue was launched on 18th June 2004. Airblue carried out a very soft launch strategy aiming at promoting the company mainly through word-of-mouth

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Promotional Spending: Advertisement on television and FM 107 Travel agents & seminars Billboards Word of mouth

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Customers attraction They are mainly targeting to capture the customers of PIA Shaheen air Aeroasia

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Growth

In the growth period both sales and profits rise at a rapid rate
Sales

Increase in sales Totally e-based  e-ticketing everything new

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Growth(Cont.)
Prices

Airblue offered their fares at 50% discounts on the first 3 days of their launch. And now they are offering 25% and 15% discounts on the available seats. Best services at low price In-flight entertainment

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Distribution network:

Airblue launch itself in  Sukkar, Faisalabad, Quetta, Gawadar, Multan and Peshawar.

Its international expansion plans include flights to Jordan, the UK, the US, and Saudi Arabia
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Competitors

There is so much competition in domestic market There are five careers already Royal Airlines Safe Air PIA, Saheen airline Aero Asia
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Maturity

A mature service is well established in the marketplace Sales may still be increasing but at a much slower rate Firms are trying to determine ways to hold on to their market share
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Maturity Air Blue

Sales

As for the future, Airblue is expecting their sales to be at the peak.
Profits

With the increasing sales, the profits are also expected to increase.

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Prices:

It also has plans to offer heavy discounts for the senior citizens and students as well as operating night coach at discounted fares.
Competitors:

Many competitors New entrants

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Decline

Many services remain in the maturity and saturation stage for years New products are introduced to replace old ones demand drops, advertising expenditures are lower, and there are usually a smaller number of competitors
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Decline Airblue

Airblue is on maturity level Its improving service So its not coming towards declining stage still

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Porters Generic Strategies

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Porters Generic Strategies

Cost leadership Differentiation Focus

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DIFFERENATION

AIRBLUE carved a special place in the consumers minds Air Blue strategy is to promote tourism in Pakistan. AirBlues focused is on good quality service.
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