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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 2006–07 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 Country Airport

Abu Dhabi  United Arab Emirates Abu Dhabi International Airport
Dubai  United Arab Emirates Dubai International Airport
Faisalabad  Pakistan Faisalabad International Airport
Gwadar  Pakistan Gwadar International Airport
Islamabad  Pakistan Benazir Bhutto International Airport
Karachi  Pakistan Jinnah International Airport
Lahore  Pakistan Allama Iqbal International Airport
Manchester  United Kingdom Manchester Airport
Muscat  Oman Muscat International Airport
Nawabshah  Pakistan Nawabshah Airport
Peshawar  Pakistan Peshawar International Airport
Sharjah  United Arab Emirates Sharjah International Airport
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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
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CORPORATE VISION

“Airblue will be a cost effective airline aiming

to provide affordable and convenient air
travel with luxury and elegance”.
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Mission Statement

“Enjoy The Difference – Freedom,

Flexibility And Savings.”
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MANAGEMENT TEAM

Name/Title   Previous Experience    Years In

Airline Industry

Shahid Khaqan Abbasi  Chairman & Chief Executive

COO    Officer At PIA from ‘97-’99   3

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.      

 
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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
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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
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and cutting costs. Airblue is proud to help businesses to ship goods faster and more reliable
then ever before. Pickup and drop-off 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 In Service Passengers Notes

Airbus A319-100 4 144

Airbus A320-200 2 146

Airbus A321-200 2 195

Total 8

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
— 400 direct and 2,000 indirect — for an all Pakistan crew. AirBlue which has already hired 25
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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 — 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 — 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

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  Apple iPads™
Are 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

MARKETING AUDIT

PEST ANALYSIS

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
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Air Blue. As it is going to re launch in Quetta it is the most important factor to consider
before re launching.
POLITICAL FACTORS
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.
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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.

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 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.
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 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

 Product
 Price
 Promotion
 Place
 Processes
 People
 Physical evidence
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I. Product

1.1 Levels of products

 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?

 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

 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.

 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
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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.

 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:

II. Price

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. Achieve financial goals of the firm (i.e. profitability)

2. Fit the realities of the marketplace (will customers buy at that price?)
3. Support positioning and be consistent with the other variables in the
marketing mix.
4. Cost determination
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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.
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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 – “They are worth it.” 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:

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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.
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III. Place

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

A. 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.

B. 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
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Dhabi, Sharjah, Muscat, Manchester, Oman and UK. And planning to start fleet to Saudi
Arabia, Qatar etc

Air blue Quetta Routes

Quetta _ Karachi
Quetta – Lahore
Quetta – Islamabad
Quetta- Multan

IV. Promotion
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
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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.

V. People
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.
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VI. 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

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It includes packaging, tickets formats etc.

VII. Process
It includes the following terms:

 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.
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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
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Scheduling

Schedules of Flights from Quetta to Islamabad/Karachi/Lahore

Destination Flight Days

Timing
From To No Mon Tues Wed Thrs Fri Sat Sun

Qta Kar A321 4:00 pm– 5:10pm       

Qta Lhr A321 6:00 pm– 7:20pm       

Qta Isb A321 11:00 am– 12:15pm       

Qta Multan A321 11:00 12:30  

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 Economy Class

Destination (Starting Rates) (Starting Rates)

(Rs.) (Rs.)
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Quetta – Karachi 7000 6000

Quetta – Lahore 7500 7000

Quetta – Islamabad 8,900 7,600

Quetta-Multan 8500 7500

PIA FARES

Business Class Economy Class

Destination (Starting Rates) (Starting Rates)

(Rs.) (Rs.)

Quetta – Karachi 11,280 8,300

Quetta – Lahore 11,680 8,820

Quetta – Islamabad 12,100 9,500

Quetta-Multan 8900 8000

Schedules of Flights from Quetta To Islamabad/Karachi

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Strategies
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

 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.
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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 – 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.
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 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:

 Dedicated check-in
 Business class lounge, offering privacy and comfort
 Priority booking and baggage retrieval
 Fast-track facilities
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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:

 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
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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
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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:

 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. Advertising (ATL)
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2. Personal selling
3. Sales promotion
4. Publicity
5. Public relations

SWOT ANALYSIS

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.
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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.
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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

Threats
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
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Air Blue is now competing against more credible low cost carriers such as Shaheen Air
line and PIA Exp

ress. PIA

QUETTA INTERNATIONAL AIRPORT

AIR BLUE QUETTA MANAGEMENT HIRARECHY

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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.
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 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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