Merlion Airways has experienced strong financial growth since starting operations in 2016. It has expanded to three hubs in Singapore, Los Angeles, and Frankfurt serving 118 destinations globally. While competition is high, particularly in Singapore, Merlion has differentiated itself through unique pricing and high passenger load factors averaging over 90%. The company segments the market between premium travelers who receive enhanced amenities, and economy travelers who pay lower fares but have fewer included services. Merlion tailors its aircraft configurations and approaches to each flight duration from short to long-haul.

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Merlion Airways
Marketing Report
It’s not just a flight, it’s an experience.
Alexandru Dorinel Ana Sara Schuhmacher
CEO Marketing Manager

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TABLE OF CONTENTS
Glossary...............................................................................................................................................................................3
1. Current corporate position ...............................................................................................................................4
1.1 Mission statement........................................................................................................................................................4
1.2 Corporate objectives..................................................................................................................................................4
1.3 Financial summary.......................................................................................................................................................4
1.4 Company profile ........................................................................................................................................................6
1.5 The Marketing Audi ...................................................................................................................................................6
1.6 Competition .................................................................................................................................................................8
1.7 Market segmentation ................................................................................................................................................8
1.8 The marketing mix ...................................................................................................................................................10

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GLOSSARY
EUR – Euro
FRA – Frankfurt am Main International Airport
GBP – Great Britain Pound
HKG – Hong Kong Chek Lpk kok International Airport
IATA – International Air Transport Association
KUL – Kuala Lumpur International Airport
LAX – Los Angeles International Airport
MRO – Maintenance Repair and Overhaul
Neo – New engine option
PAX – Passengers
PHX – Phoenix International Airport
SIN – Singapore Changi International Airport
USD – United States Dollar
VFR – Visiting friends and relatives

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1. CURRENT CORPORATE
POSITION
1.1 Our beliefs
At Merlion Airways, we are striving to become the world’s leading airline in the aeronautical
environment and a globally recognized brand, seeking to deliver superior services to our customers no
matter if they are flying first, business or economy class. We made it our objective to create a healthy,
sustainable, and profitable economic environment ensuring constant profits and a stable financial basis,
offering boundless returns to our valued investors and stakeholders while securing our development.
Furthermore, the Merlion Airways family is founded and dedicated to the belief that happy employees
equals happy customers. We seek to provide our staff with a fair and respectful workplace where they can
grow, thrive and be proud of regardless of their nationality and cultural background.
1.2 Corporate objectives
• Consolidate position at the main hubs: SIN, LAX and FRA due to their position in emerging markets
and increase the presence in the global market by 2.5% by 2024.
• Generate $36bil. revenue to invest in a cargo-only subsidiary and a comprehensive cargo
network which will include door-to-door services by 2023.
1.3 Financial summary
Starting with the Q2 of 2016, Merlion Airways through its marketing strategy has registered a coherent
financial growth. In the first two quarters of operation, our company has faced major competition on routes
between Singaproe - Middle East and Asia but still managed to obtain remarkable profits as seen in
Figure 1. This profits are the foundation for our company’s expansion which occurred in the Q4 of 2016
and represented the opening of our base at Los Angeles International and the acquirement of 87 new
aircraft. Furthermore, the opening of our new base in LAX has not only produced a completely unexpected
revenue growth due to the major demand in North America and few competitors but also increased costs
and workforce, generating over $4.9billion in revenue and $2.7billion in costs resulting in a profit of over
$2.2billion and creating over 8000 jobs. The expansion allowed Merlion Airways to engage in the
European market by opening a third base in Frankfurt International in Q4. Even though we recorded a
slower increase in how much revenue we generated, the company managed to remain profitable in
Europe’s competitive market by avoiding major competition, congestion and airport fees of big airports
and taking advantage of our competitor’s lack of awareness by flying to secondary aerodromes such as

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London Stansted and Paris Orly, and engaging in the Central and East European markets with regional
aircraft.
(Figure 1- profit and loss per quarter)
(Figure 2- RASK vs CASK
773,172,067.84
4,994,973,357.49
8,538,435,081.37
330,941,125.54
2,716,115,756.95
1,385,456,513.10
7,152,978,568.27
0.00
1,000,000,000.00
2,000,000,000.00
3,000,000,000.00
4,000,000,000.00
5,000,000,000.00
6,000,000,000.00
7,000,000,000.00
8,000,000,000.00
9,000,000,000.00
2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2
Cash flow per quarter
Revenue Costs Profit
$0.00
$0.05
$0.10
$0.15
$0.20
2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2
RASK-CASK
RASK CASK Profit/Loss

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1.4 Company Profile
In Q2 of 2016, Merlion Airways was granted a funding of $300mil. and stated operating flights within
the Asia – Pacific region from its main hub, Singapore Changi. For this to be possible, the company
invested over $100mil. dollars in the leasing of 19 aircraft which at the beginning were used to establish a
strong market presence within the region. In the years that followed, the company experienced a major
increase in working capital leading to further investments in aircraft acquiring and network development
resulting in a massive 195 mixed aircraft fleet (Appendix 1). The airline developed a massive network of
118 destinations (Figure 2) on 5 continents and 31 cargo centers around the world, sustained by an
impressive workforce which in 5Q reached 17,971 employees worldwide (Appendix 2). As part of the
marketing strategy, Merlion Airways became a member of the Open Skies alliance, among airlines such as
Cruise Jet and Paris Fly, flying over $1.4mil. pax in one year, achieving an overall load factor of 95.6%
and over 8% global market share.
(Figure 2 – Route Network)
1.5 The Marketing Audit
In order to stay afloat in such a competitive environment, due to the geographical positions of its hubs
(SIN, FRA, LAX) and the markets it is operating in, Merlion Airways had to determine its marketing
environment, problematic areas and growth opportunities and respond to them by developing plans of
action and further improve company’s marketing performance. As with the start of operation, the company
has conducted quarterly marketing audits which were examining the company’s micro and macro

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environment, its objectives, strategies and activities. By doing so, Merlion Airways not only consistently
improved the growth in pax carried, but also experienced constant growth in revenue as seen in figure 1.
Porter’s 5 forces
(Figure 3 – Porter’s 5F Framework
Industry
Competitors
HIGH
Bargaining
Power of the
Buyers
HIGH
Bargaining
Power of the
Suppliers
HIGH
Threat of
Substitute
Products
LOW
• Deregulated market
• Profitable airlines
looking to expand
• High demand
• Increased numbers of passengers
• Low or non-existent switching costs
• Price sensitive
• Buyer is well educated regarding
the product
•
• Environment’s algorithm allows PAX to
fly only
• Few suppliers many
buyers
• Product
differentiation
• Pricing policies
Threat of
New
Entrants
HIGH

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1.6 The Competition
Because Merlion Airways was based in Singapore among other three airlines targeting the same market
straight from the beginning of its operation, the competition was high and represented not only a threat,
but also an opportunity for the company to differentiate from the others through the unique pricing system
it offered and service levels which increased the load factor on most of the routes to over 90% (Appendix
3 and 4). Strong competition could be identified from the beginning of the operation in Singapore, from
one airline, Enit Airways, which constantly looked to overcome Merlion’s presence and obtain higher load
factors. Even though they managed to obtain greater profits in two quarters than Merlion Airways, they
experienced a lower load factor. Regarding the bases in LAX and FRA, competition was lower, our main
competitor being Cruise Jet, an airline which as Merlion Airways is part of the Open Skies alliance,
massively reducing the competition between the two airlines by setting up a common pricing system and
reducing the fluctuations in passenger demand.
1.7 The market segmentation
To be profitable, Merlion Airways divided its target market in two classes, premium and economy
travelers. Each of them have different needs, therefore Merlion Airways has adapted their aircraft and
services to satisfy their needs, offering premium passengers services such as airport lounges, on board
quality meals, alcoholic beverages, free WI-FI, closed suites or flat-bed seats and entertainment systems
while the economy travelers would benefit from lower fares, standard seats, basic meals and would have
to pay to use the WI-FI or have alcoholic beverages. Furthermore, as part of the segmentation process,
Merlion Airways configured its aircraft for short, medium, and long haul flights, targeting to use a more
low-cost approach on the short haul ones e.g. less leg room and a full cost approach on medium and long
haul flights. A more comprehensive aircraft configuration can be found in the 5th appendix section.
Market
Premium PAX
First Class
Leisure/VFR
Business
Business Class Business
Economy PAX Economy Class Leisure/VFR/Business
Cargo
Perishables Pharmaceuticals /
Foods/ Flowers
Luxury Clothing / Cars / Metals
Hazardous
Radioactive materials /
Chemicals / Substances /
Oil
Live cargo Animals / Organs

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PESTLE Analysis of Merlion Airways
Political Economic Social
• Unstable zones, such as Ukraine,
became unattractive and dramatically
reduced demand.
• Unions constantly demanding bigger
salaries which leads to increased costs
• The Brexit will have a regulatory and
passenger traffic impact (IATA 2016)
• Increased oil prices
determining Merlion Airways
to increase the fares
• Economic down-turn made
passengers more price-
sensitive making the airline
adopt a hybrid business model
• Depreciation of international
currency such as the US Dollar
or GBP caused turbulence
(IATA 2015)
• Increased life quality in the
operated markets
determined interest in
premium services
• Development of tourism in
Europe and Asia
• Growth in the business
market fueled long haul
operation and premium
services availability making
Merlion Airways reconfigure
its aircraft and adapt service
levels to customer’s needs
• Tremendous catchment areas
such as LAX provided great
demand for every market
segment
• Development of a frequent
flyers program ensures
customer loyalty
Technological Legal Environmental
• Internet booking system increased
efficiency and customer
satisfaction
• Aircraft hardware and software
development to optimize fuel
consumption and reduce pilot
errors
• Inflight entertainment systems and
Wi-Fi increased customer
satisfaction
• Bilateral and multilateral
agreements required to
operate certain markets
• Heavily regulated
environment by MAA,
ICAO and EASA
• Aircraft Maintenance
checks resulting in aircraft
downtime and
maintenance costs
• Merlion Airways has
encountered scheduling
difficulties in the European
and Asian – Pacific region
due to Curfew times,
aircraft no being able to
operates within the 2300-
0600. Slightly reducing
our ability to provide
services in the targeted
destinations and opening
the way for our
competitors.
• Aircraft noise pollution
• Airport and aircraft CO2
emissions
• Waste management
(Figure 5 – Pestle analysis of Merlion Airways)

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SWOT Analysis of Merlion Airways
(Figure 6 – SWOT analysis of Merlion Airways)
1.8 The Marketing Mix
Product
• Perishable product of air transportation of passenger and cargo in
emerging makers as Asia-Pacific, Europe, and North America
• Three service classes: First, Business and Economy
• On board services: Wi-Fi, entertainment systems, lounge area
• Ancillary services: chauffeur service, airport lounges in key cities such
as FRA, SIN, LAX, JFK, MUC, HKG etc.
Price
• Low fares on short haul routes
• Increased rates for medium-long haul routes due to better service
levels and aircraft configuration
• Based on kilometer flown
• Economy class multi-level pricing used to minimize spoilage
Place /
Distribution
• Airline or booking websites
• Distribution systems: Amadeus, Sabre, Travelport, ITA Software by
Google
• Travel agents
Promotion
• Advertising: eCommerce, GoogleAds, social media, billboards
• Events (e.g. Singapore Grand Prix)
• Sponsorships (e.g. Football or F1 teams)

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2. FUTURE STRATEGIC
DIRECTION
2.1 Assumptions
Merlion Airways expects to benefit from a predicted increase in overall passenger traffic by 4.8%
over the next ten years (Amadeus 2016). In addition, the latest findings show that luxury travel is
expected to have increased even more rapidly by 2025 by approximately 6.2% with particularly
high growth in the airline’s key markets such as India and China. With a rise of more than 12.8%, India
is not only predicted to be one of the most expanding luxury travel markets in the world also making
South Asia the fastest growing luxury travel region in the world (Amadeus 16). While experts
generally anticipate a strong growth of the middle class in emerging markets such as the BRIC-
Countries, Merlion Airways must face some challenges in China where regulations continue to
discourage luxury passengers from committing to premium services and growth in this sector is
expected to slow down (Amadeus 2016). Another challenge Merlion will be facing is the aggressive
expansion strategy of our key competitors namely Enit Airlines and Cruise Jet. Cruise Jet has especially
been tackling some of the routes Merlion Airways operates in North American routes until joining the
Open Skies alliance and establishing a common pricing and scheduling strategy. Enit on the contrary is
expected to continue to be one of the key competitors in Asia Pacific as they are based in Singapore
and have become the number two in the cargo market only within six months.
2.2 New Strategic Direction
2.2.1 Marketing Objectives (what to achieve)
A: Market penetration
- Increase brand awareness globally and increase presence in already established markets by
2,5% by 2024
The first marketing objective is to increase brand awareness for Merlion Airways across its global
network and to increase sales in the premium segment of the company, first and business class
products, on long-haul routes and on current key routes in the domestic North American market and all
major connections from its hub in Singapore to Australia and Asia Pacific. In order to achieve this we
will be launching a worldwide marketing campaign with print and TV advertisements promoting both
the low-cost and especially the premium product to attract premium customers. By doing so, Merlion

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Airways aims to retain and increase its presence in the already established markets by 2,5% by
2024.
B: Market extension
- Add new destinations such as Cape Town and Johannesburg to the network by Q3 of 2018
Merlion Airways’ second marketing objective is to bring its current product – premium services on
long-haul flights and a more low cost and basic approach on short flights – to new markets such as
Africa by adding high-traffic cities with luxury or business demand such as Cape Town and
Johannesburg to its network within the year. If the political situation allows, the airline will be also
looking at serving tourist destinations within the Maghreb-States such as Egypt, Tunisia and Morocco
with A320 aircraft where it will be tailoring prices and services to the lowest-fare seeking holiday
passengers.
This will not only broaden the company’s route network but it will also generate demand in existing
markets as it will be able to serve more routes especially to airports where no or only a small number
of airlines fly to.
C: Product development
- Open three brand new lounges for our First and Business class passengers at in LAX, SIN and FRA
within the next two years
Merlion Airways is continuously seeking to further improve its product portfolio and create new
exciting ways to further improve the brand’s image, customer relationships and increase the revenue.
While it already offers a wide range of top notch premium products, Merlion Airways is seeking to
further enhance the travelling experience for its business and premium passengers by opening three
brand-new lounges in LAX, SIN and FRA. These lounges will offer anything the tired and stressed
heart of the busy premium passengers desires from Michelin certified chefs preparing world-class
dishes to full privacy booths and even a SPA area where passengers can relax, meditate or receive a
calming massage before their flight. The three lounges are set to open on respective airports within
the next 2 years and are expected to increase premium passenger numbers by 13%. Also, by
implementing the industry’s most modern and exclusive lounges Merlion Airways will not only create
an increased interest in the airline but also strengthen our brand perception with current and future
passengers.
2.2.2 Marketing strategies
• Increase brand awareness globally and increase presence in already established markets by
2,5% by 2024

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PRODUCT: improve economy class features: increase leg room, reduce baggage costs
PRICE: implement competitive fares, have special prices through FFP or based on the multi-economy
classes: Y, Q, N, I
PLACE: airline website, travel agents
PROMOTION: design tailored marketing campaigns for the dedicated region and local holidays like
Christmas (see appendix), magazines, airport, online, youtube, study abroad websites
• Add new destinations such as Cape Town and Johannesburg to our network within the next
year.
PRODUCT: establish point-to-point connection to Cape Town and Johannesburg from FRA and SIN
PRICE: 13% - 17% less than competitor prices
PLACE: increase travel agents commission to promote the new routes by 2%
PROMOTION: design a marketing campaign to advertise the new routes through billboards, airport
totems, In-App advertising, Google Ads., company website website
• Open three brand new lounges for our First and Business class passengers at our hubs in LAX,
SIN and FRA within the next two years
PRODUCT: three new world class lounges at our bases in FRA, LAX, SIN
PRICE: included in First and Business Class Tickets, discount for Frequent Travellers with Merlion
PLACE: online booking, on location at the airport, travel agents
PROMOTION: Marketing campaign at the designated airport, in-flight magazine, websites, booking
form, mobile booking app, YouTube advertisements, FFP mailing list
* A comprehensive objectives, strategies and action plan chart can be found in the Appendix’s section 7.
2.3 Conclusion
Looking back, Merlion Airways had quite a strong start in the aviation industry and managed to
perform profitably with a total revenue of more than 8.6 billion USD within the first 15 months of
operation. However, Merlion could have performed even better and been in the top 3 airlines if
certain points of our marketing plan had been more flexible. This lack of quick and flexible decision
making becomes particularly evident when looking at the heavy expansion and growth rate our
competitors experienced over the last two years. While our key competitors such as Enit or Cruise Jet
entered the cargo market early we lost our chance to secure high demand routes and establish market
dominance early on. In addition, we did not take full advantage of the traffic on our high demand
routes and lost revenue by not scheduling enough aircraft on routes with high demand.

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Based on these conclusions, Merlion Airways strives to plan and analyze its flight schedules more
effectively to achieve higher load factors and take full advantage of its high traffic routes. Also,
extra and attention will be dedicated to the development of a cargo subsidiary to manifest deep
interest in cargo and increase its total revenue by making the most of the airline’s route network.
2.4 Recommendations/ Action plan
To achieve its strategies, it is recommended that Merlion Airways increases the number of daily
flights on its high demand routes where competition was able to tap traffic the airline missed to cover
itself. In addition, Merlion should also rework its flight schedule and operate more cost and traffic
effective aircraft on routes where they currently have low load factors. For example, Merlion
Airways currently operates A380s on some routes where demand simply is not high enough and
therefore more loss than revenue is made. While massive investments will be done to promote brand
image and the airline’s premium services by implementing new lounges, etc. Merlion Airways should
also invest into buying more cargo facilities to boost cargo revenue. To increase demand and promote
sales, it is also recommended to have more competitive cargo fares.

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APENDIX
1. Aircraft fleet distribution
2. Employees segmentation
2,110
7,567
3,150
16,230
1,741
Employees
Flight Crew Flight Attendant Senior Flight Attendant Support Staff Cargo Handlers
46
7
1
29
34
18
6
37
11
6
A321 A320 A350 A380 A330 B737 B787 B777 E195 CS100

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3. Pricing System with Economy multi-classes: Y, Q, N, and I on SIN – DXB route
4. Market Share and PAX loadfactor on SIN-DXB route

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5. Cabin configuration
Closed suite Flat bed seat
Standard seat

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6. Advertising Strategy
Christmas Advert

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7. Future objectives, strategies and action plans chart
Objective Strategy Action Plan
Increase Merlion Airways
marketshare by 2,5% globally
by 2024
PRODUCT: improve economy
class features
PRICE: implement competitive
fares
PLACE: rise commission for
travel agents
PROMOTION: design tailored
marketing campaign
- Increase seat size
- Analyse competitor
fares
- Set special commission
rates with our key
travel agencies
- Advertise the airline in
print (magazines,
posters) and online
Add new destinations such as
Cape Town and Johannesburg
to our network within the next
year.
PRODUCT: point-to-point
connection to Cape Town and
Johannesburg from FRA and
SIN
PRICE: competitive fares
PLACE: increase travel agents
commission to promote the new
routes
PROMOTION: design
marketing campaign to
promote new routes
- Operate A350s to
Cape Town and
Johannesburg
- Undercut competitor
prices or set fair rate
on monopoly route
- Increase travel agent
commission to
advertise the new
routes
- Advertisements at the
respective airports, on
our website and local
newspapers
Open three brand new lounges
for our First and Business class
passengers at our hubs in LAX,
SIN and FRA within the next two
years
PRODUCT: three new world
class lounges at our bases in
FRA, LAX, SIN
PRICE: included in First and
Business Class Tickets
PLACE: can be booked online,
on location at the airport or
with travel agents
PROMOTION: marketing
campaign at designated
airport
- Merlion airways
passenger exclusive
lounges with unique
benefits
- Included for premium
passengers by
standard
- Increase travel agent
commission to promote
new lounges and
attract more premium
passengers
- Poster at designated
airports, adverts in
local newspapers,
traveler and in-flight
magazines, PR
campaign with videos
and virtual tour
through the lounges
- Free tours for all
passengers on the day
of inauguration

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REFERENCES
IATA (2015) Exchange rates and aviation: examining the links (online) available from
<https://www.iata.org/publications/economic-
briefings/FX%20impacts%20on%20airlines%20(Dec%202015).pdf> [December 2015]
IATA (2016) The impact of ‘BREXIT’ on UK Air Transport (online) available from
<https://www.iata.org/whatwedo/Documents/economics/impact_of_brexit.pdf> [June 2015]
Amadeus AIT Group SA (2016) Shaping The Future Of Luxury Travel – Future Traveller Tribes 2030
[online] available from <http://www.amadeus.com/web/amadeus/en_1A-corporate/Amadeus-
Home/Travel-trends/Travel-community-trends/Future-Traveller-Tribes-2030/1319623906608-Page-
AMAD_SolutionDetailPpal> [7 December 2016]
Efzed Pty. Ltd. (2016) Airline Online [online] available from <http://airlineonline.aero/coventry/> [07
December 2016]