Airblue history
Airblue Limited (styled as airblue) 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 over 30% share of the domestic market. Airblue operates scheduled flights operating 30 daily services linking four domestic destinations and international services to Dubai, Abu Dhabi, Sharjah, Muscat and Manchester. It carried 1.4 million passengers on domestic flights in the 2006²07 fiscal year. Its main base is Jinnah International Airport, Karachi. The airline was established in 2003 and started operations on 18 June 2004 with 3 leased Airbus A320-200 aircraft serving Karachi-Lahore and Karachi-Islamabad with three daily flights in each direction. During the first year the airline became very popular, which allowed the airline to compete directly with the flag carrier PIA and the two other private carriers. This allowed the airline to expand into more cities in Pakistan including Peshawar and Nawabshah. On 14 August 2005 (Pakistan's 58th Independence Day) Air blue launched its first international flight from Karachi to Dubai. On June 4, 2007, Air blue launched its inaugural flight to Manchester using the Airbus A321. Air blue has been expanding rapidly despite experiencing competition from the other three airline operators in Pakistan. Destinations Currently Airblue serves the following destinations: City Abu Dhabi Dubai Faisalabad Gwadar Islamabad Karachi Lahore Manchester Muscat Nawabshah Peshawar Sharjah Country United Arab Emirates United Arab Emirates Pakistan Pakistan Pakistan Pakistan Pakistan United Kingdom Oman Pakistan Airport Abu Dhabi International Airport Dubai International Airport Faisalabad International Airport Gwadar International Airport Benazir Bhutto International Airport Jinnah International Airport Allama Iqbal International Airport Manchester Airport Muscat International Airport Nawabshah Airport

Peshawar International Airport Pakistan United Arab Emirates Sharjah International Airport


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.

Air blue is credited as the first private carrier of Pakistan to operate the Airbus A320 and introduce e-ticketing, wireless check-in and self check-in kiosk facilities. 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, and mobile airport check in procedures. The major departments include: Human Resource, Marketing, Sales, Finance, Operations and Systems Support and IT.The size of the organization is not as huge as PIA and mostly comprises of young employees. It is the first airline to have employees trained according to international standards. It is technologically advanced though the size of the fleet is not comparable to that of PIA. The fleet size of Air blue is eight



Airblue will be a cost effective airline aiming to provide affordable and convenient air travel with luxury and eleganceµ.


Mission Statement

´Enjoy The Difference ² Freedom, Flexibility And Savings.µ


MANAGEMENT TEAM Name/Title Previous Experience Airline Industry Shahid Khaqan Abbasi Chairman & Chief Executive COO Officer At PIA from ¶97-·99 3 Years In

Captain Morgan S. Felix Director Flight Operations, Senior Director Operations Line Captain And Flight Instructor at PIA and CAA inspector. 40+ Syed Nasir Ali General Manager Marketing With Director Commercial Extensive International And Domestic Experience At PIA. 31 Athar H. Ansari Director Engineering & Maintenance Director Engineering And Chief Engineer At PIA & CAA 40 Inspector.


Products and Services Cabin Airblue currently operates a mixture of Airbus A321 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 Karachi is the hub for most of Airblue's domestic operations Airblue was the first airline in Pakistan to introduce e-ticketing, wireless check-in and self check-in kiosk facilities. The airline also became a member of Sabre system that is used by over a hundred airlines to help it with ticket automation service.

OnAir deal OnAir has announced an agreement with Airblue, Pakistan·s fastest growing airline, to launch Mobile OnAir voice and data services on up to 12 of its Airbus A320 aircraft beginning in 2009. Frequent flyer program Airblue frequent flyer program is called Blue Miles. Passengers are able to initially start on the base level where sign up is free. Once passenger earns enough miles, they are 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 launch its summer promotion on its credit cards. Lounges Airblue inaugrated its own premium lounge at Jinnah International Airport, Karachi in November 2008. Nicknamed, the Blue Lounge International, it was designed for business class passengers, credit card holders and privileged customers. The lounge offers a number of internet facilities, cable television, newspapers and magazines, massage chairs as well as a snack bar. It is located in the international wing of the airport. Joint venture with JS Air To comply with Civil Aviation Authority (CAA) regulations the airline started operating on socio-economic routes by flying to Nawabshah in central Sindh however the service was soon suspended because of low passenger load factors and the unsuitability of the A320 aircraft for this route. The suspension meant that Airblue was not compliant with CAA regulations and therefore had to incur penalty fees. To overcome the issue of non-compliance Airblue entered into a joint venture with start-up charter airline JS Air to operate flights on its behalf on socio-economic routes. This represented the first time in Pakistani aviation history that 2 air operators entered into a joint venture arrangement. The first destination under this agreement was the port city of Gwadar which was connected to the Airblue network on 17 June and was served twice daily, except Fridays, from Karachi. The flights were operated using JS Air's 19 seater Beech 1900C aircraft (which was crashed in nov 2010 just after take off at karachi airport) which are specifically suited to serving low yield 'commuter' destinations. This service was also suspended in 2007 due to insufficient demand despite using suitable aircraft.

Cost cutting measures To deal with the fuel price hike worldwide, Airblue is converting their fleet to all economy class. This will also be applied to their new aircraft. They are also ending full meal services and replacing it with sandwiches and pastries. In 2006 Airblue did away with chinaware crockery service for meals in economy class to cut costs and weight, replacing it with plasticware as per normal industry practice. Ground services Passengers may check-in between two to 48 hours prior to flight departure. This may be done over the counter or at the self-service kiosks. Currently self service kiosks are available at Jinnah International Airport and Allama Iqbal International Airport. Dnata the aviation services company handles the ground and passenger handling for the airline at all of the airports. Gate Gourmet provides food and beverage services to the airline.


Cargo operations Airblue have launched e-Cargo service to cater to air freight markets of Pakistan, UAE and UK. e-Cargo will broaden the base of cargo and permit certified agents to book freight directly online opening the inventory through the web. Airblue offers more than 70,000 kgs cargo space on more than 18 flights everyday. Certified Airblue eCargo Agents book cargo directly on-line, saving time and cutting costs. Airblue is proud to help businesses to ship goods faster and more reliable then ever before. Pickup and dropoff centers are conveniently located near city airports. Fleet As of December 2010, the Airblue fleet consists of the following aircraft with an average age of 7.1 years.

Airblue fleet Aircraft Airbus A319-100 Airbus A320-200 Airbus A321-200 Total In Service Passengers Notes 4 2 2 8 144 146 195

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 156 passengers in two classes· configuration. The delivery of the first aircraft was expected in 2009 from Airbus, but thereafter the whole deal has been shrouded in mystery and secrecy with rumors of the whole deal having been cancelled. This is supported by the fact that of the 14 aircraft ordered, to date; only 1 has received airblue markings, that too over a year ago, and has since been parked at Tolouse, in France citing conflicts with insurance providers. The remaining 13 aircraft are said to have been shifted to Qatar Airways' order book.


Perspective AirBlue shall offers business and economy classes and will be the first airline in private sector to have Pakistani pilots and engineering staff trained according to international standards. The airline in this regard had already entered into agreements with Airbus, a dazzling carrier, being manufactured by France. Technical information AirBlue has acquired 3 new generations Airbus A-320 aircraft on dry lease each of it has 20 Business Class seats and 126 Economy class seats. AirBlue would help generate over 2,400 jobs ³ 400 direct and 2,000 indirect ³ for an all Pakistan crew. AirBlue which has already hired 25 cockpit crew which are getting hands-on training in Europe, while it has also hired; 50 cabin crew which are also undergoing training overseas. Paperless Operation Operation of the AirBlue will be paperless; any person who has access to Internet can get reservation from our web-site with PNR numbers and get out the print.

AirBlue·s Special Incentives to Customers AirBlue ³ has offered a wonderful package to its clients and travelers. Besides a lot of other facilities, the incentives, not extended by any other airline in Pakistan ³ so far includes: Plan Ahead and Save Earn discounts for booking your travel plans early. AirBlue online flight reservations system automatically rewards you for planning ahead. 14 day advance and 7-day advance fares will be reflected in the fares presented when you book online. Save up to Rs.300 every time you purchase your AirBlue ticket through Airblue·s website. There is no limit to the number of times you may take advantage of this discount. Rules Frequent Flyer Membership not required. Discount is applied after full fare (including taxes and applicable fees) is calculated, and will total 2% (up to Rs.300). Discount also applies to reservations held and paid-for at a ticketing office within 24 hours. There is no limit to the number of times you may take advantage of this discount while this special is offered.


Customer Service At AirBlue, the airline strives to provide you with the best tools to help you with your online travel reservations. This includes online help resources, such as answers to "Frequently Asked Questions" email assistance and website i.e www.airblue.com It also staff a 24-hour call center to book travel and answer questions. In-Flight Entertainment Option

Apple iPadsΠAre Now Available on Select Flights Pre-Purchase Only. Reserve yours when making your reservation. (Rs. 500 per device on Domestic Flights) The iPad comes preloaded with Movies, Music, Games, Books, etc. Achievements and recognitions 
First airline in Pakistan and only the third carrier in the region behind Emirates and 


Royal Jordanian to introduce the state-of-the-art self-service check-in facilities at Jinnah International Airport, Karachi. First private airline in Pakistan to initiate long-haul services on (Islamabad-Manchester) sector. First private airline within Pakistan to place an order for new aircraft. First airline in Pakistan to start e-ticketing. First airline in Pakistan to start self check in kiosks (Karachi) Airblue makes a fuel stop at Trabzon in Turkey when flying to and from Manchester. This route is the longest route operated by an Airbus A321 aircraft in the world, and the longest scheduled route operated by an Airbus narrow body aircraft.

Note :-

These all data we get form net



The macro-environment comprise of all factors influencing a company that are not in its control, which include political social, economic and technological factors. A technique of analysis of the macro environment is PEST analysis. Environmental analysis should be continuous and precede all aspects of planning. Since the airline industry is very much influenced by changes taking place in the environment and has undergone rapid and dramatic changes during the last decade, this analysis is especially important for Air Blue. As it is going to re launch in Quetta it is the most important factor to consider before re launching.

Political factors always have a great influence, on the way businesses operate in the airline industry and the spending power of customers. Governments intervene in the airline industry for various reasons, including: According to quetta political situation there is very poor condition of law and Oder there a not safety of even for chief minister then what for a common man««. In traveling view point it·s also not save to by road and by train. In by road people life and luggage are not save .so the people are so tense due to the poor situation of political factor««. Mean while air blue to a chance to launch the it·s services at Quetta region again what else to make sure with air blue traveling is save This means that new firms will need humongous investment even to enter the market. As a subject to Quetta market it has been seen that there is a lack of interest in the airline industry as a whole on account of the government part but it can be neglected as the company wants its profit so the political issue doesn·t matters a lot.

Some of the prove of bad condition of quetta


ECONOMIC FACTORS As inflation rate is stable in Pakistan, spending power of consumers is not effected in the long term. In fact growth in Pakistani economy has resulted in an increase in spending power and has positively impacted the airline industry. As far as the Quetta Market is concerned the target market is being satisfied with both the economy and business class so that it suits the needs of customers more cost effectively.PIA because of its monopoly in the market had been dictating policies and prices. So that reduce the monopoly of PIA in Quetta Air Blue has to move to come in Quetta.it is now suitable to it and they has also pervious past experience to be at Quetta. However, this cost advantage will not be significant on domestic routes.

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 in the reservations and booking systems. In-flight entertainment systems and auto check in counters are two examples of such innovations. PIA. Pakistani Airlines have to be abreast of the technological developments in e-commerce and aircraft manufacturing technology in order to gain a competitive advantage. That why air blue has to come with new technology to provide the best service to Quetta travelers. Air Blue has led the path of technological innovations by introducing new technologies ahead of its competitors such as its auto check-in counters, which has helped it gain market share.Balochistan government now introduce the night time landing facilities at Quetta Air Port which increase the competition b/w PIA and Air blue«««««««««««


Failure reasons in Quetta 
Technical issues regarding availability of good aviation engineers and airport support staff.  Flight cancelation and flight delays.  Dissatisfied travel agents due to flight cancelation and customers refund issues.  CAA (Civil aviation authority) issues regarding greater service charges as compared to PIA and priority given to PIA in every aspect of Airport services.  Limited flights and coverage.  Customer services.  Lack of promotional activities.


Marketing mix y y y y y y y Product Price Promotion Place Processes People Physical evidence


Product 1.1 Levels of products y The Core Product Which is the most basic level of the product i.e. the benefit that the product offers, the basic of using the Air blue services are the convenient, fast and high quality mode of traveling? y The actual level of product, The actual product is Air blue airlines, and having the following characteristics: 1. Quality level: They are maintaining their quality mainly through all the competitive advantages gaining strategies namely, their product differentiation, service differentiation channel differentiation, image differentiation and people differentiation. 2. The Augmented Level of Product: They provide high service augmentations to their product i.e. product classification, individual product design etc. 1.2Range of services The range of service means the number of services provided. So, Air blue provides the transport as well as cargo services and y e-Ticketing

Air Blue has introduced the concept of total e-ticketing for the convenience of passenger, first time in Pakistan. E-Ticketing System is an online seat reservation service


which facilitates all the travelers that they can reserve their seats and also they can retrieve their seat reservation and they can also postpone their reservation e-ticketing needs a lot of high tech infrastructure and skilled employees which increases their cost and providing high valued services. y Product attributes

Product attributes like Branding, Packaging, Labeling and product support services. Air Blue aims to focus passenger comfort at prices that offer value for money and that explains its decision to have leather-upholstered seats in the Business class and offering in-flight entertainment not offered by any other airline, including the PIA, on the domestic sector. The airline has also made arrangements with quality caterer outside to serve what it calls "exquisite cuisine" to the travelers. y Cargo services:

Air blue offers more than 70,000 kgs cargo space on more than 18 fleet everyday. Their certified Air blue cargo Agents book cargo directly on-line, saving time and cutting costs. Air blue is proud to help businesses to ship goods faster and more reliable than ever before. Pickup and drop-off centers are conveniently located near city airports. To participate as an agent of cargo of air blue we have to fill the form on this website address:



Generally price is the amount of money for which the customer is willing to pay. From the marketers· point of view, an efficient price is a price that is very close to the maximum that customers are prepared to pay. In economic terms, it is a price that shifts most of the consumer surplus to the producer. The effective price is the price the company receives after accounting for discounts, promotions, and other incentives.


PRICING OBJECTIVES A well chosen price should be planned to achieve some specific objectives; Pricing objectives of air blue are given as under; 1. 2. 3. 4. Achieve financial goals of the firm (i.e. profitability) Fit the realities of the marketplace (will customers buy at that price?) Support positioning and be consistent with the other variables in the marketing mix. Cost determination

Fit the realities of the marketplace (Will customers buy at that price?) The prices set by Air Blue targeted the elite class including the business travelers and vacationers. Its differentiated and quality services generated loyal and satisfied customers. The prices by Air Blue have been set keeping in view the competitive environment and customer buying patterns. The tickets by Air Blue are affordable and economical to every customer and set by them after analyzing their potential customer needs. Support positioning (Be consistent with the other variables in the marketing mix) As Air Blue aimed to position itself as a high end service provider, it offered premium prices to the customers. This fit well with the image the company was trying to portray viz. high quality services at a premium price. This is evident from Air Blue·s consistent success despite its high prices. This shows that the target market of Air Blue is the upper and middle class of the society that can afford luxuries.


Cost determination Cost set the floor for the price that the company can charge for its product. The company wants to charge a price that both covers all its costs for producing distribution and selling the product and delivers a fair rate of return for its effort and risk. A company·s cost may be an important element in its pricing strategy. The Planes that Air Blue is using are all reconditioned so that helps reduce the cost much but on the other hand they have been providing high quality catering and efficient cabin crew with high language skills which tend to increase their costs. Other factor affecting their cost is the e-Ticketing System which is an online and paperless seat reservation service which needs a lot of high tech infrastructure and skilled employees which increases their cost. PRICING STRATEGIES OF AIRBLUE: Air Blue is using the following pricing strategies.

1. Premium pricing
Premium pricing also called prestige pricing, is the strategy of pricing at, or near, the high end of the possible price range. People will buy a premium priced product because they believe the high price is an indication of good quality. They believe it to be a sign of self worth ² ´They are worth it.µ It authenticates their success and status and acts as a signal of people·s· status and success. They require flawless performance in this application, the cost of product malfunction is too high to buy anything but the best. In the airline industry, PIA and Air Blue are offering a premium price as compared to their competitors. Air Blue is a ¶full frill· service despite its image as the contrary and superior quality of their services is what differentiates them from competitors.

2. Penetration
Penetration pricing is the pricing technique of setting a relatively low initial entry price, a price that is often lower than the eventual market price. The expectation is that the initial low price will secure market acceptance by breaking down existing brand loyalties. Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume, rather than short term profit maximization. Air Blue initially offered a penetration price. The ticket fares were relatively low, whereas the quality of services was high when the company entered the market. The prices were then increased as the company established a brand image.


3. Skimming
Price skimming is a pricing strategy in which the marketer sets a relatively high price for a product or service at first, and then lowers the price over time. It is a temporal version of price discrimination/yield management. Until a few years back, PIA was offering skimmed prices where the quality of services was not equivalent to the price being charged for the tickets. Most of the customers did not receive a value for the money they paid. Now, however, PIA has improved the quality of the services and is offering a premium price. This kind of strategy is usually implemented when an organization position itself in the mind of potential customers. FACTORS TO CONSIDER WHEN SETTING PRICES: Before setting prices here are some major factors which should be considered during setting prices:

1. Internal factors affecting pricing decisions:
The internal factors are:     Marketing Objectives Marketing Mix Strategy Cost Organizational consideration

2. External Factors affecting Pricing Decisions:
In considering prices we should also considered some external factors which are given as under:    Nature of the Market and Demand Competition Other External Factors like promotional and special-event pricing


AIRBLUE FARES Air blue Airfares depend on the time you are making your reservation. Earlier you make the reservation cheaper fare you will get. To get the current fares for the trip of your choice, you will need to provide date and flight details and you have to visit online reservations centre and select flight options to see the available fares. You save when you buy early: Save 10 to 90% on air blue flights just by planning ahead and booking in advance.



Place refers to the location of service providers and their accessibility, which is not related to only physical place but it also relates to distribution channels and other means of contact and communications. For example, travel agents and other intermediaries etc


Distribution channels

A distribution channel is a set of inter dependent organization involved in the process of making a product or a service available for consumption by the final consumer. Like other organizations Air Blue also uses intermediaries (TRAVEL AGENTS) to bring their products to the market. Running an Airline is a kind of business which also needs a distribution channel.


Number of Channel Levels

Air Blue is using direct Marketing Channels as well as Indirect Marketing Channels. Where direct marketing channel has no intermediary levels but direct relationship of customer and service provider, while indirect marketing channels containing one or more intermediary levels.


Air Blue uses an indirect marketing channel to reach its customers. It sells its products to its consumer directly as well as through Travel Agents in all the major areas of Quetta city.

C. Number of intermediaries
Air Blue Uses Exclusive Distribution which is, giving a limited number of dealers the exclusive rights to distribute the company·s products in their territories.

D. Air blue routes
Air Blue is currently operating in Karachi, Islamabad, Peshawar and Lahore as frequent fleet and also daily fleet to Sukkur, Faisalabad, Gwadar, and internationally Dubai, Abu Dhabi, Sharjah, Muscat, Manchester, Oman and UK. And planning to start fleet to Saudi Arabia, Qatar etc

Air blue Quetta Routes Quetta _ Karachi Quetta ² Lahore Quetta ² Islamabad Quetta- Multan



This includes various methods of communicating with markets. The major methods of promotion are: 1. Advertising 2. Personal selling 3. Sales promotion 4. Publicity 5. Public relations

Since, air blue uses the following two methods of promotions; Sales promotion Sales promotions are rebates or discount of money during purchasing of services or products. Major sales promotion tools are: Cash Refund Offer (Rebates) Air Blue offers a complete cash refund on cancellation of tickets prior to 24 hours of departure; the refund will be shown in full as a separate item in passenger sales history report. And within 24 hours of flight departures, a penalty of Rs. 300 applies. Advertising specialties Useful article imprinted with an advertiser·s name, given as a gift to consumers. Air blue gives key chains and toys as souvenirs to their passengers during the flight.



Two types of people are included in service organizations which are;  Service producers  Administration personnel It is the first airline to have employees trained according to international standards. It is technologically advanced. The organo-gram of the organization shows that the employees report to their divisional heads that in turn are answerable to the Chief Executive Officer.



Physical evidence

This includes the following elements like: Physical environment Furnishings, colors, layout, noise of airplanes as well as offices are all very best provided by Air blue to position their image in the mind of prospects. Facilitating goods It enables the services to be provided like the food provided music during flight etc Other tangible goods It includes packaging, tickets formats etc.



It includes the following terms: y y y Policies and procedures adopted The degree of mechanization Operational management

Air blue control its flight operations by well-trained employees either pilots or other related staff. Air blue uses full-computerized soft wares of sales management and reservation through every customer can buy ticket through 24/7 means twenty four hours a week.

Operational Plan Physical Location The physical location of Air Blue will be on two places. Firstly, its office will be located at Quetta International Air port, where the fights related operations will be handled accordingly. The second office will be located at Main Zarghoon road Quetta near Ufone Office. Previously, Air Blue was located at Swiss Plaza, Shop No S 5 / S37, Hali Road, Quetta The Production Process The Air Blue acquired aero planes on lease from IFC. So, Air Blue purchased readymade planes that are Air bus made A320 family aircraft. Airbus requires about eight months to build an A320 jetliner. Components from various Airbus plants are transported to the final assembly plant at Hamburg Finkenwerder for the A318/A319/A321 and to Toulouse Blagnac for the A320. Nearly all assemblies are moved using Airbus' A300-600ST 'Beluga' outsized transporters.


The Airbus A320s sold to China to be delivered between 2009 and 2012 will be assembled in the People's Republic of China in Tianjin. Airbus intends to relocate Toulouse A320 final assembly activity to Hamburg for the next generation of short range as part of its Power8 organization plan begun under ex-CEO Christian Streiff. Facilities The Following facilities will be given at re-launch of Air Blue in Quetta. Physical Distribution E-Ticketing Cargo/e-Cargo I-pod in Flights Wireless check-in & Self check-in kiosk facilities

Scheduling Schedules of Flights from Quetta to Islamabad/Karachi/Lahore Destination From Qta Qta Qta Qta To Kar Lhr Isb Multan Flight No A321 A321 A321 A321 Days Timing Mon 4:00 pm 5:10pm 6:00 pm 7:20pm 11:00 am 12:15pm 11:00 12:30     Tues  Wed     Thrs  Fri      Sat  Sun  


Capacity In one Air Blue Plane, Total capacity of passenger is 185 (standard) to 220 (high density) and average 203 passengers are effectively served that also compensate the overall cost. There are two major classes in Air Blue, Business Class and Economy Class. Business Class, having limit of 61 passengers per flight; and Economy Class, having 142 passenger limits per flight.

AIR BLUE FARES Business Class Destination (Starting Rates) (Rs.) Economy Class (Starting Rates) (Rs.)

Quetta ² Karachi Quetta ² Lahore Quetta ² Islamabad Quetta-Multan

7000 7500 8,900 8500

6000 7000 7,600 7500


PIA FARES Business Class Destination (Starting Rates) (Rs.) Economy Class (Starting Rates) (Rs.)

Quetta ² Karachi Quetta ² Lahore Quetta ² Islamabad Quetta-Multan

11,280 11,680 12,100 8900

8,300 8,820 9,500 8000

Schedules of Flights from Quetta To Islamabad/Karachi

Air Blue 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 development strategies and innovations. The objective is to realize the quality-strategy integration. 1. Air Blue should adopt an aggressive marketing strategy to promote Air Blue as a customer-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. 3. Air Blue is doing well against PIA, but it should adopt proactive strategies to compete with Chinese airlines. 4. There is a huge potential in domestic market because it·s operating flights for only seven cities. So, Air Blue should expand its network.


Re-Launch strategies 
Hiring well trained and competent technical staff at Quetta airport.  Negotiation and new agreements with CAA.  Increase in number of travel agents and there profit margin (commission).  Humble and caring customer services and sales staff in airblue reservation offices Quetta.  Daily / alternative flights between major cities.  Timely departure and arrival of flights. Re-launch and promotional campaign of airblue both in print and electronic media

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 On the whole Air Blue has implemented their strategies very tactically and it seems that these strategies have started paying-off very early as was evident from the positive response that we received from the regional manager of Air Blue when asked how Air Blue has performed since its launch. It has neither become competitor-centered nor customer-centered company but it is market-centered company- a company which pays balance attention to both its customers and


competitors in designing its marketing strategies and not focusing profusely either on customers or competitors.

AIR BLUE ² COMPETITVE ADVANTAGE  It is the first private airline of Pakistan to have Pakistani pilots and engineering staff trained according to international standards  Air blue offers value and comfort at low price 
Air blue is adopting measures for cutting its costs  Air Blue has a flexible passenger management solution by using Sabre Airline Solutions  Air blue offers discounts for early booking of travel plans and special discount on online

purchase of tickets  Air blue holds a social image by introducing special packages for students, special children etc.  First airline in Pakistan and only the third carrier in the region behind Emirates and Royal Jordanian to introduce the state-of-the-art self-service check-in facilities at Jinnah International Airport, Karachi  First private airline in Pakistan to initiate long-haul services


Product & Services Offered on re-launch 1. Description of the product: Air blue on the re-launch will try to provide a wide array of products to capture the various segment of the target market. Following contains some major products offered by Air blue: a. Business Class The undeniable pleasure of business class travel with Air Blue includes: y y y y Dedicated check-in Business class lounge, offering privacy and comfort Priority booking and baggage retrieval Fast-track facilities

b. Economy Class The warm on-board atmosphere runs right through economy class too with advantage of lesser payment. Our flight attendants are dedicated to looking after you, giving you a friendly welcome and sincere hospitality; it·s all in the nature of the Air Blue. It·s all in the nature of our flights. 2. Product Distinctiveness: Air Blue provides the best & luxurious service at the most reasonable & economical rate. This provides an excellent opportunity for the customer to live their dreams at most economical manner.

3. Analysis of the Competitor Product & Services: The detail analysis of the Airblue as compare to its competitors can easily be explained as below: PIA: PIA offers a very wide range of services by capturing number of cities and international countries. PIA mainly focuses on providing quality service and doesn·t consider prices.


Shaheen: Shaheen on the comparison provide a very low range of service, but targeted low income class by providing cheaper service at low price. 4. Product Development Areas For the development of Air blue following strategies will be in focus: y y y y Providing luxurious environment at most economical price Continuous effort will be done in increasing technology Focus will be given on providing home comfort environment Increase customer care through promotion of e-ticketing

Following new features are suggested for implementation in near future: a. Advance Seat Selection In every class, you can select exactly where you wish to sit reserving a seat up to 06 months before you fly. It·s your choice and our pleasure to make it happen. b. Meal Selection As long as you let us know in advance, we can cater for special dietary needs, namely diabetic and vegetarian c. Entertainment Information: Follow the progress of your flight, or take in the view from the aircraft·s external cameras. Keep in touch with live business, news and sport headlines from BBC News, and read up on the world. Communications: Phone, SMS and email from your seat, or call friends and family seated elsewhere on the aircraft. Television: The latest and best movies, television, audio and games from around the world. d. Children center Children will be entertained by great rewards such as free flights, books, toys. In addition to rewards, your child will enjoy other member benefits, such as preferred seating. Market 1. Size & Expected Growth  The size of the expected customers in Quetta is less as compare to other major cities mainly because of population constraints. However, increasing in per


capita income & increasing consumer preference has gradual increase the air usage within said city. In addition, poor law & order situation has increased the air usage. Keeping in view the above facts, if economical package with quality service is offered, there is a huge chance of success in the targeted market of Quetta city. There is a great Potential in Quetta market and its surroundings areas like Khuchlak, Pashin, chaman, mastung and sibi etc. 2. Market Segmentation On the basis of data gathered, the Quetta market can be segmented in the following groups and segmentation will be done on the basis of various segmentation variables i.e, Geographical, demographical, psychographic and product usage the target market ( groups) covered under these segments include: a. Luxurious Class: People who can afford high prices for luxurious services b. Economical class: People with quality service at relatively low price c. Business Class: for entertaining business professionals d. Families and students: students and families traveling to desired cities Targeting approach of air blue Differentiated marketing Air blue promote multiple products with different marketing mixes designed to satisfy smaller segments. Instead of marketing one product with a single marketing program, air blue markets a number of products designed to appeal to individual parts of the total market By providing increased satisfaction for each of many target markets, air blue can produce more sales by following a differentiated marketing approach Despite higher marketing costs, air blue may be forced to practice differentiated marketing in order to remain competitive Positioning Positioning is the act of designing the company·s offer so that it occupies a distinct and valued place in the target customers· minds. Air blue position its offers on the following basis, there can be many factors but main are:


By benefit positioning by which a derived benefit is highlighted as the unique selling propositioning By quality/price positioning by which the product is positioned as the best value for money.

3. Distribution channel strategy For the distribution of tickets following channels will be used for airblue re-launch: y y y y Selling tickets through Travel Agencies Online reservation Dedicated team in Quetta city reservation office /Airport reservation office e-ticketing

Promotional plan
This includes various methods of communicating with markets. The major methods which will be used for promotion by air blue are: 1. 2. 3. 4. 5. Advertising (ATL) Personal selling Sales promotion Publicity Public relations


Strengths LEADING MARKET POSITION Air Blue is one of Pakistan·s leading air carriers, with more than 15 daily flights to 12 destinations. Around 100,000 passengers a month fly on AirBlue. It is the second largest air carrier of Pakistan which enjoys almost 30% market share on domestic routes.

SUPERIOR OPERATING STRUCTURE Air Blue has maintained its position as the low cost carrier for the last two years. It has one of the lowest operating cost structures, being first in the Pakistani market to use the latest technology. Good food, good entertainment, spacious seats, most exciting hospitality, elegant and charming hostesses. HUB AIRPORT AT KARACHI Air Blue operates from its hub in Jinnah International Airport, Karachi. Jinnah International is one of the world·s busiest airports in terms of number of passengers carried.

BRAND RECOGNITION Air Blue has high brand recall. It is recognized by travelers all over the country. Air Blue commenced operations in 2004, and reached the milestone of serving one million customers within two years.

Air blue is a Low-cost carrier (LCC)
The reason behind air blue·s low fares is that it uses Dynamic Pricing Model. Air blue puts its entire ticket inventory on the Net and direct internet booking accounts for 15% of its sales. It begins selling tickets at a 40% discount to full service carriers (FSCs), but


closer to the date of your travel, you may end up paying up to 30% premium over the price charged by FSCs. It outsources most of its secondary tasks to third parties. It helps airline to cut costs.


Weaknesses 1. High Dependence on Passenger Revenue Cargo services allow airlines to generate additional revenues from existing passenger flights. In addition, cargo revenues are usually counter cyclical to passenger revenues and have lower demand elasticity than passenger business, which allows airlines to pass on fuel price hikes to customers. 2. DEBT Air Blue has a significant amount of debt. It has short term financing of Rs. 254 million. Current and future debts could have important consequences for stakeholders of the company. 3. Outsourcing Air blue has often outsourced its maintenance and repair facilities. So the cost effectiveness is low on these grounds. 4. Promotion The company is doing less on the advertising and promotion of air line. It is not focusing on the promotional activities enough to compete in the market. 5. Limited Route & Tight Schedule Air blue only facilitates its customers to the 6 cities in Pakistan, which is very limited and the consumer has a very limited choice regarding destination.

Opportunities GROWING DEMAND FOR LOW COST AIRLINES The growing demand for air travel is driven by lower fares and consumer confidence. EXPANSION OF FREIGHT BUSINESS


Though a late starter, Air Blue·s cargo revenue is developing. The current growth in Air Blue·s freight segment is aided by recent introduction of scanning technology, which meets the requirements private courier service providers operating in Pakistan. Equipped with the right technology, . SHIFTING CUSTOMER NEEDS The needs of air passengers are increasingly changing, as they are becoming more and more price sensitive. The effect of this has been that traditional airlines such as PIA have struggled

1. HIGH INTEREST RATES The past few years have seen State Bank of Pakistan impose high as well as low interest rates to check inflation and the overheating of Pakistani economy. Inflation in Pakistan may see another raise in the short-term. A slowdown in the US economies could lead to reduced demand from corporate travelers. 2. ACCIDENTS Accidents can adversely affect customer confidence in Air Blue and result in declined revenues intensifying competition. As the incident of Margalla hills occurred the Air blue has been suffering a great risk for the time being and have to reduce the risk of consumer safety. It has to take precautionary measures to cope with such a threat. 3. STRONG COMPETITION Air Blue is now competing against more credible low cost carriers such as Shaheen Air line and PIA Exp ress. PIA




Airblue Sales Manager Quetta Reservation officer city office Assistant Reservation officer Airport Assistant Reservation officer city office Reservation officer Airport


Suggestions and Recommendations
Airblue should consider the following suggestions and recommendations:  Air blue should start flights to more routes domestically.  Air blue should increase its daily flights operations.  Air blue should include more aircrafts in their fleet like Boeing 111 and Boeing 747.  Air blue should spend more on advertising and promotion because mostly people don·t know about this airline.  Air blue should maintain its current standards of service and catering.  Air blue should build awareness and educate the people about e-ticketing system.  Air blue should make plans to cover international destinations from Quetta after Re-launch of air blue domestically. Especially Dubai and direct Hajj flights should be started from Quetta airport.


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