Fly Dubai Essay

IntroductionDubai is considered one of the close important trade hubs in the mettle East sphere. Its quick ripening in its study(ip)(ip)(ip) infrastructure ele work stormts had attracted some(prenominal) multi field companies across the world to open their regional attainices in the city. This had its positivist effects on Dubai scotch developing as it became a golden gate for regional Middle East business community to trade with other international companies. As a result of this, the indispensability for a first-class honours degree bell air hose that provides its services for business men at bottom the region had adjoind.The city experience with the airline business industry is non immature as it is the home city of Fly Emirates, which is considered one of the surpass airlines in the region. This industry had its great effect on Dubai economical bring outth in the past 20 years and leave have its intemp sequencete impact in shaping the emirate later on life. In March 2008, the second let bring out cost airline was lunched under the name of Flydubai and started its operations in Dubai internationalist bank lineport Terminal 2 in June 2009. (For more learning on Flydubai and its operations, please observe to Appendix 1).We have gear upd our germane(predicate) grocery store for Flydubai as a misfortunate cost carrier (LCC) inwardly the growth form aim. Being positioned as a dispirited cost national airline carrier, its facing a high competition from other national airlines which force the relevant grocery store to be within the harvest form. (For more instruction on the relevant market please refer to appendix 2).This paper forget focus on presenting an environmental scan of the airline industry within the Middle East region during the m frame of 3 years (2009-2012). In order to do so, we al economic crisis for identify the significant trends and their consequent implications on Flydubai relevant market. This repo rt go forth include an in depth review of the macro, micro analysis and its implications of Flydubai relevant market in the nigh three years.BodyIn identifying the major backbone trends in the macro environment of Flydubai, we have addressed several(prenominal) issues that include the political, social and economical trends.Flydubai was established by His Highness dude Mohammed bin Rashid Al Maktoum, UAE Prime Minister and Vice-President, and Ruler of Dubai orders in butt against 2008 and started its operation in its first flight to Lebanon on June 1st 2009.Being salutaryy owned by Dubai giving medication and enjoy the full facilities offered in storehouse 2 at Dubai International propagateport, the society is having a agonistical reward comp bed to its rivals in the market as it enjoy the full government backup man and airport services.Furthermore, the f deplorableing government trend in the labor force is towards emiratization and protecting labors rights. Being a p art of the Fly Emirates Group, the organization bequeath face no problem in emiratization as it will copy Fly Emirates emiratization scheme. The major challenge that Flydubai will face is being equal to(p) to offer high paid jobs and reduce its operational costs as it is considered a humble cost airline company.Living in the real financial crises era, Flydubai was established in one of the most difficult succession the country economy had faced in the last 25 years. locomote oil prices, cooling real estate and construction markets, together with a slowdown in the tourism sector, especially in Dubai, federal agency the UAE is pass judgment to post low or possibly negative GDP growth in 2009, according to analysts (Arabian Business, 2009). This information may be considered negative to umpteen airline companies but it may be positive to a low cost airline like Flydubai as people atomic upshot 18 without delay focusing more in reducing their expenses as the incomes be re duced. This means their tendency of consumers focusing more on prices is increasing.Furthermore, consumer behavior is changing towards low cost airlines especially in the Middle East region as consumers atomic number 18 persuaded by low prices and a better service offered by low cost airlines. According to a study done by Arabian Business website, it was found that 83 percent of the respondents would switch their favorite(a) airline carrier, for a cheaper price, while 17.6 percent believed they would consider alternatives and trade off between the discount and lost air miles. It can thus be inferred that price plays a significant utilization in consumer behaviour and the end making process especially in the current economic downswing era (Glass, 2008).According to Dubai department of Tourism and commerce marketing 3.85 million tourists had visited the emirate in the first half of 2009, a five percent add on the same period of 2008. This figure strongly shows the current touris m industry market and how attractive it became compensate though of the current economical downturn. Other figures expect that the amount of tourists will fall compared to 2008 figures but most figures have stated that there will be a positive growth in 2010. This figure shows that Flydubai will realize a future growth rates in the advent 3 years as terrorism sector restore its high figures after over attack the current downturn.As observed by Andrew Cowen, CEO of SAMA Airlines, the market is shifting from the traditional major airlines business travel towards low cost carriers for trips within the GCC. Business travelers are changing their perception of low cost carriers, supported by the current economic downturn and the increase number of orthogonal businesses within GCC countries ingress the UAE. This shows a trend of an increasing demand for low cost carriers in the next three years (High time for low cost carriers, 2008).(For in depth information on the analysis of the macro environment of the airline industry please refer to Appendix 3)In identifying the major key trends in the micro environment the following aspects that includes, Customers, Employees, media, share obligeers, challengers and suppliers.Customers who are price intended are concerned with low cost airlines. Flydubai has focused on pricing outline and flexibility because these both divisors play a big role in determining the clients decision process on which airlines they choose to travel with. Moreover, the number of tourist from around the world including the region will grow more than 40% in the next 3 years in Dubai (www.realtyna.com). This shows that there will be increased number of customers who will use Flydubai airlines within the next three years overdue its successful use of pricing strategy and flexibility.The Employees of Flydubai have good experiences and they were conservatively selected from twelve different nationalities. According to Kenneth Gile, chief oper ating officer of Flydubai give tongue to We are exceedingly pleased with the talent of the pilots we have on board. On average, they each have more than 4,000 hours serving as captain in similar aircraft and a total experience of more than 8,000 go awaying hours this is grandiose by any standard (Sambidge, 2009).Flydubai is fully owned by the government of Dubai and its considered as a part of its mother company the Emirates Group.The main strategy that Flydubai is willing to use for their marketing strategy is through word of let out (buzz). This is because Flydubai is a low cost airline they tend to set low budgets for their advertisements to keep their prices low.The direct competitors of Flydubai are Air Arabia and Al Jazeerah airlines because these two airlines are also low cost airlines in the same country as Flydubai. However, the major competitor of Flydubai is Air Arabia because, first of all, they are the first to call about low cost airlines in the Middle East regi on. Moreover, they hold the highest market share in the relevant market as determine before. Our market share comparing to those two carries are low because Flydubai unspoilt recently launched to the market.But, within the next three years we expect rapid growth in the market share because Dubai is a destination for tourists. The major indirect competitor is Fly Emirates which stands as the leader in airline industry in the relevant market and it will keep its exercise in the next three years. The second indirect competitor is Etihad Airlines which is exploitation fast because of the unlimited support from Abu Dhabi government. In addition, those airline carriers make low price offers for the same destination that we have flight lines to.The supplier of Flydubai is Boeing. Flydubai announced an order of 50 next generation 737 aircraft from Boeing. Sheikh Ahmed bin Saeed al Maktoum said The Boeing Next-Generation 737 is ideally suited to our mission to bring some two billion regi onal inhabitants affordable, efficient and flexible travel options to and from Dubai.(For more information on the micro environment analysis, please refer to Appendix 4). Implications primary quill demandLow cost airlines are focusing on customers who are price conscious. The number of customers using the LCC airlines is increasing and it will quell evolution in the next three years (www.gulf-daily-news.com). This is because, first of all, the percentage of tourists will increase by 40% within the next three years which shows that the market share of LCC will increase as well. Secondly, because of the economic condition, many people tend to save money and spend it on low cost airlines to travel more to the desired destinations. Users of Low cost airlines choose all different ages and nationalities. Moreover, cost is one of the main factors that affect customers ability to buy. The costs of these carriers are low and will continue to remain low in the next three years. This will i ncrease customers ability and willingness to buy.Selective demandWe can define the consumer decision making process as an extensive problem puzzle out take aim, where they are introduced to a complete new soil with low brand knowledge. So, Flydubai should infusive more on their brand identity through the media and other colloquy types in order to enrich consumers knowledge. Once Flydubai had increased the level of consumer knowledge, we expect huge increase in market share in the next three years because the decision making process is deviation to shift from extensive problem solving to routine which is low information search about the company. Therefore, we expect major change within the next three year upon the factors we mentioned above.SegmentationAs for class we expect to see a rise in the population of the UAE in the following 3 years. According to the electronic portal of Gulf News the population of UAE is approach cardinal million as of now and it is evaluate to esca late even further by the end of this year. An increase in construction in the coming years requires more labor to be imported from foreign countries, thus increasing the number of potential customers (low income and middle-class lifestyles) who might urgency to use our services.Moreover, economic boom can also be a factor for business community to travel to and from Dubai more frequently. In addition, the number of students travelling to the UAE for education is expected to increase in the near future this implies that they will most probably select Flydubai as their primary mode of ictus to travel to and from the UAE, since the economic condition shows very little signs of improvement in the near future.More tourists are expected to arrive in the UAE within the near future out of which a section of them are extremely price sensitive travelers.Another scenario would be that the current economic downturn continues to effect economies world-wide within the coming three years incre asing the number of price-sensitive customers in the eight markets we operate in.To keep up with the projected demand, Flydubai is provision to increase its fleet size from 5 (currently) to 54 aircrafts in the coming years. An increase in fleet size would allow Flydubai not lonesome(prenominal) to accommodate a large number of clients but also cover its reach in terms of destinations.Conversely, the announcement of the new GCC cut earnings which is the new transportation class in our relevant market is expected to have a slight negative effect on Flydubais operations in terms of loosing clients that fall in our target segmentation. The GCC running network and Flydubai have one common destination which is Qatar. Once the GCC rail network begins its operations there is a high possibility of losing out on our current and potential clients. (For more information on segmentation please refer to appendix 5).Competitor analysisOur major competitive in our relative market is Air Arabi a and then Al Jazeera Airlines. Air Arabia is holding major market share because they are the first to hire about launching first low cost airlines in Middle East region. However, Flydubai can compete with those two direct competitors when we focus on our competitive advantage which is price leadership. Also, location is another important factor due the number of travelers that are using Dubai Airport comparing to Sharjah Airport. In addition, being part of the Emirates Group will add more cherish to Flydubai brand equity which will make it easier to make customers shift toward our company within the next three years. (For more information on competitor analysis, please refer to Appendix 6)ConclusionIn conclusion after analyzing the environmental micro and macro trend for Flydubai, we observed that there are two major changes in our relevant market. commencement, the increase of the tourism level in Dubai as we expect the current economic downturn era to change its direction towa rds positive figures in the next three years. Also, the companies holders and businessmen attitude towards low cost airlines is changing by using it as these airlines are providing business men services aboard such a business class and wireless internet connection.The number of competitors within the low cost airline industry is going to increase in the coming years as new airlines such as Bahrain Airlines starts its operation this year. Secondly, full service airlines are expanding their market towards low cost airline by introducing low price tickets that attract price sensitive consumers. We expect that within the next ten years a new class level will enter the market in the GCC region which is trains transportation. Also, a new form level will emerge in the relevant market which is a combination between full services and low cost carriers. Finally, within the next three years we expect those changes in the relevant market to be reshaped affecting the primary and selective demand .Bibliography(2009, October 18). 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