1. PAY LESS, FLY MORE…
--AIR ARABIA
For more information, visit:
airarabia.com/en
2. Some Insights on AIR ARABIA..
Founded on 3rd February, 2013
115 destinations using 4 aircrafts
Headquarters: Sharjah
International Airport
3. “Best Low-Cost Carrier” at World
Tourism Forum Awards in Istanbul.
“Best Low Cost Airline” at the Aviation
Business Awards 2015
“Airline of the Year—Middle East” at the
Aviation Business Awards 2015
Awarded for Customer Innovation at first
Aviation Achievement Awards.
4. Pay less, Fly more
Despite other LCC market
competitors, AIR ARABIA has not at all
lost its human touch.
It has consistently had low priced
airline services and its customer
oriented
Crew members are dedicated
View passenger’s comfort as key to
company’s success.
5. Pricing is an essential part of Business success.
So lets see what is Pricing..
Price is the one element of the marketing mix that
produces revenue; the other elements produce
costs.
Pricing decisions are complex and must take into
account many factors: the company, the customers,
the competition, and the marketing environment.
6. Adapting the price
Types of pricing strategies used:
Geographical Pricing
Price Discounts and
Allowances
Promotional Pricing
Differentiated Pricing
7. Purchase decisions are based on how
consumers perceive prices and what they
consider the current actual price to be—not
on the marketer’s stated price. Customers
may have a lower price threshold , below
which prices signal inferior or unacceptable
quality.
Thus managing the CONSUMER
PSYCHOLOGY and PRICING is and very
important criteria for a brand or a company.
8. Strategies accepted by Air Arabia for its
SUCCESS:
Great Flying Experiences
Low Ticketing Cost
Good Customer Service
Pioneering Technologies to
Boost Efficiency and Reduced Fuel Costs
9. Selecting the Pricing Objective
This step of setting the price involves the following steps:
Survival Maximum Current Profit Maximum Market
Share
The Pricing objective of Air Arabia is a very strategic one and it aims to
expand its target consumers by providing low cost flying experience.
It maximizes its profit by improving its pricing strategy so as to increase the
number of consumers.
Its plan is to achieve 85% of the market share who will be among the
potential regional customers who cannot afford normal flying expenses.
10. What is the reason for Air Arabia’s
low pricing strategy and
maintenance?
Careful and Plucky choice of the airbus
A320 combined comfort
Universal aircraft model lowered their
training expenditure.
Opting for brand new fuels has reduced
fuel costs.
11. Some positives for Air Arabia:
Large Cabin space and wider
aisle allowing shorter boarding
time and reduced in flight
congestion.
Best leg space offered by
generous width.
Fuel hedging strategy
12. Pricing in digital world
•It involves term form
both the buyers, sellers
and both.
•It is an important
strategy and companies
often go for digital
pricing and services.
13. oAir Arabia offers its own online booking
system as a method of its pricing strategy
and also as a method of pricing in the digital
world.
oUser friendly online service
oReduces turnaround time at airports
keeping planes in the air.
oUp gradation of its online presence with a
cutting edge mobile website that provided
travel information on the move
14. Intense competition from other potential airline companies such as the
Emirates, Fly Dubai , the Rotana Jet and the Flynas.
Maintaining the low ticket price with the hike in fuel prices.
Bigger airports and routes may lead to higher turnaround time.
Fuel Hedging during declining fuel market
The revenue from the fuel hedging cannot suffice with the Fuel price
hikes.
15. A competitive analysis
Targets the discounted segment
those who cannot afford normal
flying prices.
Targets the luxury segment of
the target consumers.
V
S
17. Air Arabia is succeeded in profitably challenging big
established airlines companies in the Middle East and North
Africa. Why don't all others airlines apply the same business
model as Air Arabia?
Air Arabia targets the discounted segments and aim at achieving a 85% market share
among the potential regional customers who cannot afford normal flying expenses.
But other airlines like Emirates tries to target the luxurious segments and thus cannot
follow this business model.
Quality maintenance along with low prices which are not opted by other airlines due
to increased rate of profit needs.
Pricing strategy of having low costs was a key player in establishing a base for its
brand.
Intelligent brand extension methods to rise profits and brand value.
Factors such as fuel hedging were foreseen.
Turnaround times cannot be reduced and revised by other competent airlines.
This brand prefers cultures over numbers which is not applicable for other airlines.
Employee and customer satisfaction are a priority.
The universal aircraft model lowered their training expenditure.
18. What challenges does Air Arabia face? Do you think that the company
will be able to maintain its leadership position in the LCC market in the
Middle East and North Africa? What will happen if other airline apply
the same business model as Air Arabia?
Challenges faced:
•New competitors such as Emirates and others are constantly giving some close competitions to
its brand.
•Bigger airports and routes may lead to higher turnaround time.
•Fuel Hedging during declining fuel market
•Boeing A320s can be improved for brand extension purposes.
•Dip in profit levels due to huge loss in aviation industry in 2008.
•Increasing Fuel and Operating costs will be a factor.
•The revenue from the fuel hedging cannot suffice with the Fuel price hikes.
•Striking right balance between price and value is a key factor.
•Loss of market share and reduction in profits.
Maintaining the Leadership position will depend upon the perfect balance
between PRICE, VALUE and QUALITY
19. We had insight of the airline AIR ARABIA.
What is Pricing?
Adapting Pricing Methods
Consumer Psychology and Pricing
Strategies Accepted by Air Arabia
Challenges Faced
Pricing in Digital World
Competitive Analysis
Air Arabia’s plus points
Mini case studies solution.
