Oman Air is the flagship carrier of the Sultanate of Oman and an Official 4 Star Airline. It was founded in the year 1993, the airline has since witnessed massive growth in the recent times and it has played a major role in making Muscat an important traffic hub in the Middle East, supporting the commercial, industrial and tourism sectors. The airline currently operates direct international flights from Muscat to Abu Dhabi, Bahrain, Doha, Dubai, Jeddah, Riyadh, Dammam, Madina, and Kuwait, in the Gulf region, as well as Cairo (Aissa and Goaied 2016), Amman, Tehran, Mashhad, Najaf, Zanzibar and Dar Es Salaam within the wider Middle East/Africa region.The Oman Air too flies in India (Goa, Mumbai, Chennai, Kochi, Thiruvananthapuram, Hyderabad, Delhi, Lucknow, Bangalore, Kozhikode and Jaipur); Karachi, Islamabad and Lahore in Pakistan; Kathmandu in Nepal; and Colombo in Sri Lanka. The airline also flies to Bangkok, Kuala Lumpur, Manila, Jakarta, and launched Guangzhou in China since December 2016.
Its European destinations are London, Milan, Munich, Frankfurt, Paris and Zurich. The most recent destinations of Oman Air are Nairobi in Kenya and Manchester in the UK.Oman Air’s domestic destinations are Salalah, Khasab and Duqum. It also serves 5 additional domestic points for The Duqm Special Economic Zone Authority (SEZAD), Petroleum Development Oman (PDO) and Occidental, which are JNJ (Duqm), OMM (Marmul), RNM (Qarn AlAlam), UKH (Mukhaizinah) and FAU (Fahud).Oman Air has code share agreements with a number of airline partners. These are: Lufthansa, Qatar Airways, Ethiopian Airlines, Royal Jordanian, Turkish Airlines, Sri Lankan Airlines, KLM, Garuda Airlines, Thai Airways, Saudi, Malaysia Airlines and Kenyan Airways offering travelers better connectivity and increased choice (Akhter and Shrivastava 2014).
The Airline business is an industry which provides for an incredibly unique facility to its clients. It carries people with a high level of expediency and effectiveness which other business cannot grant. The Airline businesses have a pride in themselves on the way they treat their client during the air travel. They provide their customers with the exclusive stuff such as food, drinks, amusement, and a hospitable staff (Bahri-Ammari and Nusair 2015). They provide the customers with their customized products and do not allow the outsiders since they want to serve their customers appropriately. The geographic scope of the airline trade is at a important level. There are few airlines which fly their aircraft throughout the Earth and some focus on the smaller geographic area. The five forces model is one method in strategic management;
The airline industry is made up of two groups of buyers. First, there are individual flyers. They buy plane tickets for a number of reasons that can be personal or business related. This group is extremely diverse; most people in developed countries have purchased a plane ticket (Dursun and Caber 2016). They can do this through the specific airline or through the second group of buyers; travel agencies and online portals. This buyer group works as a middle man between the airlines and theflyers.
The cost of switching between the firms is very low, because most of the people travel in flight based on the cost, the time consumed and the destination to be reached. Each of the customers’ needs proper information and they need the timing of the flight and the safety aspects of flying in general. The service they provide is unique. Each airline has a niche. Some airlines focus on cost, while others focus on having the best amenities (Kapiki, Mu and Fu 2014). Overall the bargaining power of buyers has an extremely low threat in this industry.
In case of the bargaining power of the suppliers, the major suppliers are the airplane manufacturers. The top two manufacturers in the world currently are Boeing and Airbus (Odell,Mark). In the airline industry the inputs are extremely standardized. The airline companies seem to differentiate with amenities. Currently there are some manufacturers who are trying to make their plans more eco friendly (Laudon and Laudon 2016).
In the Airline industry the companies cannot easily switch their suppliers. Most of the firms have long term contracts with their suppliers. It is difficult for the companies to enter the plane manufacturing industry because the capital needed is very huge. The amount of money and expertise needed to make even one plane is around 200 million dollars. This is the reason for few suppliers in the airline industry (Milovanovi? 2014). Airline firms are their only buyers so their business is extremely important. Based on these things the bargaining power of suppliers has a low threat as well.
Threat of new entrants is another major aspect in the porter’s five forces. The treat is low for the airline industry. Irrespective of it, there are two causes that raise the level of treat firstly, there are extremely low switching costs and secondly, there are no proprietary products or services involved.
Even those aspects the industry has very low threat thus there is cost advantage to the existing firms. This industry needs a lot of capital and good customer base thus in the initial years there will be very less profit (Mohammed and Obeleagu-Nzelibe 2014). Existing firms can and will use their high capital to retaliate against newer firms with whatever means necessary such as lowering prices and taking a loss.
There is switching cost between the brands but the customers choose to fly only in the well-known names. The tickets of Airline tickets are expensive so people buy tickets only when they trust the brand. There is also a huge safety aspect involved and most consumers feel safer with firms that have been around for a long period of time. This industry requires plane and flying experience which also lowers the threat of entry. When a firm enters the market, it becomes licensed in the first year and then they are constantly being regulated by several organizations such as the Federal Aviation Administration and the Department of Transportation. The time and money spend to solely open an airline company is enough to prevent most people from entering the industry (Pearlson, Saunders and Galletta 2016).
After looking at the threat of entry it is important to also consider the threat of substitutes. This industry has a medium substitute risk level. There are substitutes in the airline industry. Consumers can choose other form of transportation such as a car, bus, train, or boat to get to their destination. Some means of transportation can be more costly than a plane ticket. The main cost is time which this industry focuses on (Rahimi and Kozak 2017). The planes are the fattest mode of transport available to the consumers when it comes to cost, convenience, and sometimes service.
The last area in the porter’s five forces is the rivalry among existing players. The rivalry in this airline industry is very intense. This industry is in the mature stage in the business cycle. The number of competitors stays the same in the long run and it doesn’t seem to be under or over capacitated. The fixed costs are extremely high in this industry. This makes it hard to leave the industry since they are the long term loan agreements which are required to stay in business. The products involved or the planes are highly complex which also heightens the competition (Homburg, Vollmayr and Hahn 2014).
The competition is lessened by the brand identities of different firms. For an example, Jetblue is known for their amenities and Southwest which is known for its low prices. The market share seemed to be equally distributed because each of the company has its own part of the market and because of the switching costs which are low none of the firms can really hold a large percentage of the market.
After looking at the Five Forces Model firms should make dealing with the competition their main priority. The other areas in the model seem to have an overall low threat so existing firms don’t have to focus on those areas as much in their business strategy.
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Example: Customers all over the World abode the flight to fly from one destination to the other |
Example: A level & people including the Business people, the University Students and even the families including old people and the kids travel in plane |
Example: Customers wanting the comfort and the luxury and the most important is to travel from one place to the other at a very less time. Since the flight tickets are costly they look for value and only book brands which are trusted |
Example: Customers who prefer to buy either the tickets for the business classs or the tickets for the economy class.People travelling for work or business purposes book those seats whereas people travelling for other purposes usually book the economy class tickets. |
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Customer Location Urban/Rural ACORN Classification |
Age Gender Occupation Socio economic group |
Rate of usage Benefits sought Loyalty status Readiness to purchase |
Personality Lifestyles Attitude Class |
In order to determine the segmentation, Oman airline are now covering huge range of customers they are targets people who have the trust in brands and is generally brand consciousness. The company targets all the people including people going for business as well as for leisure and the tickets are available at discounts if people purchase it before
In order to continue their Journey, the Oman Air made strategy to ‘Become the Best’. The company came out with many marketing strategies so as to attract the customers. The CEO of Oman Air as well as the Deputy CEO and Executive Vice President – Commercial, Abdulrahman Al Busaidy have introduced in their marketing strategy a special baggage so as to attract the customers during the Ramadan period since this a holy month and it helps to meet the needs of the valued guests (Melikoglu 2014). As an airline they said that they are giving importance and listening to their guests and responding to their opinions as they continue the journey to ‘Become the Best’. They will advertise special policy to the public through the multiple channels so as to ensure that the message is clearly conveyed and that everyone can take advantage of this great offer.
The befits given by the Airline range from partnership of the airline through ticketing, through check-in of baggage, through check-in with boarding passes and seat assignment for the connecting flights. There are benefits given to the customers for Frequent Flyer rewards on the partner carriers, mutual recognition of Frequent Flyer members and lounge privileges in select carriers. Thus the privileges are given to the customers so that they feel comfortable and avail those benefits (Naughton and Tsai 2015).
Recently there have been some changes. Some airplane manufacturers have been making eco friendly planes, which is a change in the manufacturing of the planes. This would differentiate the products, raising the suppliers. Another recent change is the use of web portals such as Expedia to book flights. This positive change creates a whole new group of buyers and makes purchasing flights faster and easier (Rugman and Nguyen 2014).The increase in gas prices has also been a positive change for the industry because few companies compete in this industry. People are more willing to fly to their destination if driving would be more expensive.
The profit in this industry is high because for most people flying in necessary. It is not a trend which makes this industry profitable for the long term. Airlines that are more profitable are in a better position because they usually have more planes and a larger variety of flights which provides further convenience for the consumer (Swoboda, Elsner and Olejnik 2015).
The SMART techniques
Specific: The target should be specific and the company shall set the objective so as to improve their inventory and they should check that the amenities in the plane are proper.
Measurable: Some aspects of performance might be difficult to measure, but efforts must be made. Customer satisfaction is important to most businesses and indications could be obtained by arranging customer surveys, repeat business and so on.
Achievable: The objectives are achieved by people and those people must accept and agree that the objectives are achievable and important (Cortez et al. 2015).
Relevant: The objectives and the aims and the goals should be relevant to the organization and the person to whom the objectives are given. It is important that people understand how achieving an objective will help organizational success.
Time-limited: all objectives have to be achieved within a specified time period and time plays a very important factor in the airline industry (Harutyunyan, Jiang and Narasimhan 2016).
Premium Pricing –This strategy was followed by Oman Airline whenever they launch a new customization of the plane when they launched any new mobile phones.
Value for Money- It is another marketing strategy which succeeds in being a leader. Oman Airline is a loyal brand in all its products is thus able to compete with rest of the competitors in the market (Ernst and Fischer 2014). They make the pricing of the ticket which allows them to give discounts on the customers and which includes the commission, surcharge and the extras. This is the pricing strategy in the Samsung marketing mix.
Oman Airline is a brand which sells it’s the tickets to the consumers through its distributors and there are many distribution channels for the company throughout the World. Thus the Airline is able to have a coverage throughout the World and it have its distribution in almost all the location it provides services (Giachetti and Torrisi 2017). They are the ones responsible corporate sales. They have a huge distribution channel which act as a major strength for the Airline.
Promotion is used by the Airline. It has the best promotional strategy so that it is able to engage its potential customers in the positioning of the brand. Oman Airline promotes its brand by advertising in the newspapers and digital media (Guri, Mirsky and Elovici 2016). In order to attract the number of consumers, it takes the advantage of the followers of celebrities and thus they do their publicity and salesmanship for their plane.
The airline advertisers have kept in mind about the needs and image of the Country, the scenic beauty and the tourist attraction and the rich culture of the heritage which attracts the various tourists from various places all around (Hasan 2013).
The Airline products are demanding two types of services firstly the on ground services and secondly the in flight services. The airlines shall cover the products which range from the cabin services, the catering services, the ramp services and other services in the flight (Huang and Lin 2017).
They should look after the fact that the product shall have the design and the quality and range or features which portrays about the brand of Oman Airline. Since the customers are demanding on the benefits that the products of the company will give them so the airline companies shall provide the services to the customers so that the customers feel that their services are under the service wrapper. Their products are diverse and are divided in the many categories (Hinrichs 2013).
It is crucial for measuring the social media responses and to have an understanding about the performances so that the industry is improving. Since the airline companies are reporting on the social pages, the companies in markets throughout the world can identify business problems and resolve them from the valuable insights gained from analytical tools (Hisrich and Ramadani 2017). There are many problems faced by the industry and the companies have to focus how proper social media measurement can help resolve business problems for airline companies.
The key performance in the airline industry is as follows:
The plans for budgets and up gradation by the Oman Airline
The variation in the fare can be made on the following:
In the electronic reservations and ticketing, most tickets will be paid for in advance of the departure date, which means the new airline
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