Air Arabia began in 2003 with two leased Airbus A320 jets and has grown to become the leading low-cost carrier in the Middle East and North Africa, flying to 100 destinations with a fleet of 44 Airbus A320 jets. It achieved this through a pricing strategy of "pay less, fly more" and cost management techniques like using fuel-efficient new planes and hedging fuel costs. Air Arabia also created brand equity through crisp marketing and expanded globally through joint ventures.

1. WELCOME TO AIR ARABIA

2. Started in 2003, the Sharjah-based airline
began with only 2 leased Airbus A320 jets.

3. Today, it is the leader in LCC in Middle East and
North Africa, flies to 100 destinations and has 44
Airbus A320 jets.

4. How did
they do
it?

5. Pricing Strategy !!
+
=
High market share

6. This
cheap?
How?
Value Pricing
“Pay less, fly more”

7. Cost
Management

8. Brand new planes reduce fuel costs.
Fuel hedging policy reduces risk.

9. Airbus A320 has a capacity of162 passengers
without sacrificing quality and helps lower
training expenditure.

10. Sharklet Technology reduces overhead

11. Hang on!! There are more…

12. Creating Brand Equity

13. Crisp Marketing

14. Global Expansion Through Joint Ventures
49% stake in Petra
Airlines Fly Yeti
Air Arabia Maroc Air Arabia Egypt

15. Airline Business Award
ACHIEVEMENTS

16. What are Air
Arabia’s
challenges?

17. The fuel hedging policy backfires when the oil price falls below the
hedged price.
Government regulations can hurt the profit margin.
Entry of deep-pocketed competitor in low cost sector adopting a
hybrid model can dent market share of Air Arabia and incite a price
war.

18. Why don’t all other airlines apply the same business
model as Air Arabia?
Entirely different target segments.
Different brand values and future
vision.

19. What will happen if other airlines apply the same
business model as Air Arabia?
Air Arabia owns the lion’s share in LCC market, enjoys customer trust
due to quality service and possess expertise in cost cutting. It is very
difficult for any other airline to match that and other airlines will face a
hard time in thriving in this market.
Any such shift in business model will indicate changing core brand
values accompanied with lack of innovation and creativity. The airline
will start losing own customers drastically.

20. •Air Arabia Background
•Why Air Arabia is so successful?
•Achievements
•Challenges
•Mini Case Study Questions

21. DISCLAIMER
Created by Arnab Das, Jadavpur University, during an
internship in marketing management under Prof. Sameer
Mathur, IIM Lucknow.