SWOT analysis of air

blue
 2
Introduction
Airblue is a private Pakistani airline based at Jinnah International Airport Karachi. Itstarted its operations on May
24, 2004. It was the first private carrier of Pakistan tooperate the Airbus A320 when it initially started. Airblue has
been expanding rapidlydespite experiencing competition from the other three airline operators in
Pakistan.The airline mainly flies on domestic routes plus internationally to Dubai InternationalAirport and also
has plans to fly to the Gulf, UK, and USA
Mission Statement
Airblue will be recognized as the most progressive enterprise in the transportationbusiness. We will offer our
customers cost effective transportation service withingeographical areas and market segments
that can benefit from our services and willinsure a return on investment and growth rate consistent with
current managementguidelines.
Vision Statement
Our vision is to make Airblue the most admired airline in the world.* Ensuring safety comes first* Providing
Service Straight From the Heart* Encouraging product leadership* Delivering superior financial returns*
Providing rewarding career opportunities
The SWOT analysis
is the process of analyzing organizationsand their environments based on their strengths,
weaknesses,opportunities and threats. This includes the environmentalanalysis, the process of scanning
the business environment forthreats and opportunities, which is considered as externalfactors, and the
organizational analysis, the process of 
analyzing a firm’s strengths and weaknesses as internal
factors.SWOT analysis was carried out for AirBlue and the results aresummarized as follows:
Strengths
1.
 
Second largest air-carrier of Pakistan, enjoying almost 30 percent marketshare on domestic routes.2.
 
Airblue is a Low-cost carrier (LCC).
The reason behind air blue’s low fares is
that it uses Dynamic Pricing Model. Airblue puts its entire ticket inventory onthe Net and direct internet booking
accounts for 15% of its sales. It beginsselling tickets at a 40% discount to full service carriers (FSCs),
but closer tothe date of your travel, you may end up paying up to 30% premium over theprice charged by
FSCs.3.
 
98% punctuality of on-time flight departures.4.
 
Innovative e-ticketing and wireless check-in technologies.5.
 
Operational efficiency.6.
 
Airblue is using latest technology for the airline's advantage and its valuedcustomers. Many
corporate entities tried to create a paperless workenvironment, in order to minimize its costs and maximize its
efficiency, butonly Airblue had been successful to the extent that its management does notneed offices to
function.7.
 
The airblue aircraft are the latest fly-by-wire technology Airbus A320's andA321's. This allows
the airline more flexibility and scales of economy in crewplanning and maintenance capability,
adding directly to bottom-lineprofitability.8.
 
Lesser workforce because of extensive technology usage.9.
 
AirBlue is the first among public and private sector airlines in South-Asia andsecond after
Emirates in the region to introduce latest self check-in system atKarachi airport. The self check-
in system will facilitate the passengers carrying baggage with them, to get boarding card through the new
touch screensystem without reporting at the counter.10.
 
Package for students and special children.11.
 
Good food, good entertainment, spacious seats, most exciting hospitality,elegant and charming hostesses.12.
 
Year 2006 witnessed exceptional performance in the short term financingwhich was reduced from Rs 206
million to Rs 48 million, showing a decreaseof 330 percent.13.
 
Airblue showed a record operating profit of over Rs 150 million for year 2006while providing a high quality
product to the consumers.14.
 
Airblue outsources most of its secondary tasks to third parties. It helps airlineto cut costs.
Weaknesses
1.
 
Difficulty in developing brand-awareness as a startup company.2.
 
Engaged only in passenger service, whereas its competitor PIA is alsoproviding cargo services
(SPEEDEX).3.
 
Not having its own repair and maintenance facilities.4.
 
Doing less on the advertising and promotion of air line.5.
 
Not operating flights for Hajj Pilgrims, which could be a major source of income.6.
 
Small fleet of air crafts.7.
 
Two aircrafts are acquired on dry lease and one on wet lease.8.
 
It connects only seven cities in Pakistan.9.
 
Very tight schedule of flights, which puts extra burden on pilots, cabin crewand hostesses
Opportunities
1.
 
Year 2007 is being celebrated as “Visit Pakistan Year”. So, the number of 
foreign visitors is likely to increase and complimentary tourism industry willincrease demand for
airline service.2.
 
Agreement with Airbus Industries for the purchase of eight airbus A320-200and two airbus A330-200 aircrafts for
an estimated cost of $ 790 million. Newaircrafts will be used for additional frequencies and destinations on
domesticand regional routes.3.
 
Low fares enable market share growth.4.
 
Introducing new domestic and international routes like Gulf, UK, Jordan, India etc.
Stable economy and growing GDP.6.
 
The air transport sector of Pakistan would also get a boost from newlydeveloped Port of Gwadar in the
Balochistan province. The development of the Gwadar Port, the third deep sea port of the country and the first
of Balochistan, would serve as a link with the Central Asian States. Thegovernment is upgrading the Gwadar
International Airport at a cost of 480million rupees. Once upgraded, the airport will be able to handle wide-
bodyaircraft such as Airbus and Boeing 747 aircraft.7.
 
Poor performance & red tapism in PIA.8.
 
Worldwide deregulation makes the skies more accessible, Open Skies.9.
 
Excellent credit rating allows Air Blue to purchase its expansion strategy.
Threats
1.
 
Escalating jet fuel prices.2.
 
Low-
cost Chinese airlines planning to enter into Pakistan’s domestic air
market.3.
 
Cutthroat price war among airlines.4.
 
Buses business continuously improving speed in service in mid and longdistant routes, attracting passengers
away from air service.5.
 
PIA is also procuring 10 new Boeing planes.6.
 
Threat of terrorism.7.
 
No level-playing field for private airlines, as government always rescues PIAfrom risks.8.
 
Incapability of national airport runways to handle big crafts.9.
 
Competition is heating up as four new local airlines are going to start theiroperations very soon.10.
 
High insurance costs for aircrafts and passengers.
Comments
AirBlue has performed very well so far. It has tried to build strategy on genuine
understanding of the customers’ true needs. It identified key customer satisfaction
drivers, and then turned into a foundation to shape company developmentstrategies and innovations. The
objective is to realize the quality-strategyintegration.1.
 
AirBlue should adopt an aggressive marketing strategy to promote airblue as acustomer-driven airline.2.
 
It should continue to be innovative in introducing latest technologies to reduce
its costs and enhance customers’ ease, satisfaction and its profits as well