Review of a case study on pricing strategy of Air Arabia.

1. ‫اقتصادي‬

2. AIR ARABIA

3. SHEER
BRILLIANCE
IN
PRICING!

6. Cost cutting strategies

7. Streamlining
Takes several steps to save money

8. Competetors

9. The universal aircraft model
lowered their training
expenditure.
Growth in services was made
easier.

12. Air Arabia
Established in 1971
Less Money, More
Personality
Incredible growth, whoa!

13. Warm, Peppy Advertising
“This is what
our meals
look like at
Air Arabia
Airlines. It’s
also what
our fares
look like.”

14. •Point to Point flights
•Fast turnaround service, more flights
•Unique boarding process
•Mostly operates in secondary cities
with small airports
•Uniformity in flights, Boeing A320s
only
The Steps

15. Air Arabia dodges all the price
cutting traps.

16. As a result Air Arabia stood as
the most admired airlines in the
Middle East.

17. Importance of the questions
This presentation is based on the Case Study on
Air Arabia Airlines in “Marketing Management”
by Philip Kotler and Kevin Keller.
Relevant questions after the case study
Brainstorming will help understand other
businesses and find out ways for growth.

18. Q1. Air Arabia has succeeded in profitably challenging big established air
line companies in the Middle East and North Africa. Why don’t all other
airlines apply the same business model as Air Arabia?
•Air Arabia has mastered the act of low pricing since the
beginning.
•It started small and scaled up intelligently but others are
already huge.
•It foresaw issues like fuel hedging. It is not easy to hedge
fuel now.
•Turnaround times cannot be reduced by other airlines.
•Air Arabia prefers culture over numbers. Employee &
Customer Satisfaction. Not so easy to replicate.
•Competition in the sub-field increases and it would be a
loss for Air Arabia.

19. Q2. 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? What
will happen if the other businesses apply same model?
•New entrants
•Savings from fuel hedging won’t last longer due to fuel
price hike
•Turnaround times can increase if expanded to bigger
airports
•Expected change from Boeing A320s for expanding.

20. Air Arabia has already cut a lot of it’s revenue:
lost profit margins.
Fuel hedging might not continue in the future.
Perseverance as airlines which provides cheap
services won’t change in case it decides to size
up.
If new competitors walk in, sales will get
lowered.
CHALLENGES

21. Disclaimer
Created by,
Sushmitha Belede, BITS
Hyderabad,
during a marketing internship
under
Prof. Sameer Mathur, IIM
Lucknow