The firm in its initial years was into manufacturing scooters and auto rickshaws. It also enjoyed the lion’s share of the Indian two wheeler markets for a long duration of time. In the late Eighties and early nineties the market made a major shift in the type of vehicles on offer. New competitors like Yamaha and Hero-Honda came out with motorcycles, which were more powerful, better, looking and easier to handle. As such the consumers

1. A Report on Strategic Marketing
of GUNA Airlines
1
2012
Submitted By:
Sharad Tegi Tuladhar
EMBA, Spring 2011 Batch, 3rd Semester
ACE Institute of Management
Submitted To:
Suman Shakya
Instructor
Strategic Marketing Management

2. Table of Contents
1 Introduction ........................................................................................................................... 1
1.1 Introduction to the Company: ........................................................................................ 1
1.2 Background: .................................................................................................................. 2
1.3 Objectives of the project: ............................................................................................... 2
1.4 Methodology:................................................................................................................ 2
1.5 Limitation:..................................................................................................................... 2
2 External Analysis and Data Presentation: ................................................................................. 3
2.1 Customer Analysis ......................................................................................................... 3
2.1.1 Segments ............................................................................................................. 3
2.1.2 Customer Desires ................................................................................................. 3
2.1.3 Customer Motivational Factor ............................................................................... 3
3 Competitor Analysis:............................................................................................................... 4
3.1 Competitor Identification: .............................................................................................. 4
3.2 Major competitor: ......................................................................................................... 4
4 Market Analysis: ..................................................................................................................... 5
4.1 Market Identification: .................................................................................................... 5
4.2 Market Size: .................................................................................................................. 5
4.3 Key Success Factors ....................................................................................................... 8
5 External Environment ............................................................................................................. 8
5.1 Political Environment: .................................................................................................... 8
5.2 Economic Environment: ................................................................................................. 8
5.3 Social Environment: ....................................................................................................... 9
5.4 Technological Environment: ........................................................................................... 9
6 Recommendation: .................................................................................................................. 9
2

3. 1
1 Introduction
1.1 Introduction to the Company:
The aviation history of Nepal started in early 1950's.Initially, neighboring Indian aircraft used to
land on a mere cow grazing place called Gaucharan in Kathmandu. There are tales that a pilot
waiting to land there had to buzz the airfield several times to shoo the cows off it before landing.
Until 1951, only a few foreigners had penetrated into Nepal. They were mainly British officers
of the Gurkha troops, a few stray scholars and friends of the Royal family. Later on, Indian air
companies started their operation for business purposes, and connected Nepal with Indian cities.
After the establishment of the national flag carrier, the RNA, the route expansion of civil
aviation made extensive progress domestically and internationally.
The civil aviation service started in Nepal in 1953 with three old American -made DC-3 Dakotas
belonging to an Indian company. After five years, Nepal established her own registered airline,
Royal Nepal Airlines Corporation in July 1958 with one DC-3. There were only 96 personnel
then. At present around 1600 personnel are working for the corporation. At the beginning, its
service was limited to Indian cities like Patna, Calcutta and Delhi in the International Sector and
to Simara, Pokhara and Biratnagar in the Domestic Sector. The facilities provided at that time
were limited.
However in the present scenario the there are eight domestic flight carriers operating scheduled
flights to 44 districts of the Kingdom. Today it is possible to reach to most of the tourist
destinations in Nepal, from the remote airfields to major hub cities by air and this facility has
greatly enhanced the tourism industry. The step taken by the Government of Nepal by adopting
an open sky policy allowing the private airlines to step in the domestic air service front has
strengthened the development of at least the tourism sector.
Buddha Air, Yeti Airlines, Nepal Airlines Corporation, Agni Air, Guna Airlines are major
domestic airlines operating the extensive network of air service in the interior parts of Nepal. The
regions in mountains and high Himalayas are not well connected with roads and highways.
People are forced to walk several days and carry the goods by animals to reach to the convenient
urban place. Considering the same and the government of Nepal has built several airfields with
Short Take off and Landing (STOL) facilities and even the cost for the domestic air-tickets has
been subsidized for its people.
Guna Airlines Pvt. Ltd is an airline based in Nepal. Guna Airlines was formed in 2009. The
airline is part of the Guna Group a large Nepalese conglomerate of companies. The Guna Group

4. began as a small gold shop known as Guna Jewellers in Patan in 1984. Since then the group has
grown to a multi-industry company. By 1997, Guna Cinema Pvt. Ltd, Guna Co-Operative Ltd.
Asian Food Cold Storage Pvt. Ltd, Guna Colony Pvt. Ltd, Stupa Housing Pvt. Ltd, and Guna
Enterprises (aka Guna Mobiles) Pvt. Ltd were in operation. In the years following, Guna
expanded into cinema and currently operates eight movie halls. In 2009 the group launched Guna
Airlines Pvt. Ltd.
Guna Airlines flies to major destinations of Nepal. They serve Biratnagar, Simara, Bhairahawa
with a daily flights. The major tourist destination, Pokhara a city of lakes and mountains, is
served with thrice daily flights. Their safety policy is to operate at the airports with paved or
asphalt runway only.
Everest Experience flight is a rare flight conducted every morning in our pressurized aircraft.
Mount Everest, is the world's highest mountain above sea level at 29,029 feet (8,848 meters) and
their most experienced pilots take your aircraft at 25,000 feet. Their crew members invite each
passenger to the cockpit to capture the mesmerizing view of Mount Everest.
2
Guna Airlines operates a fleet of 2 Aircraft which were previously operated by Buddha Air.
With a major focus on safety and service, Guna aims to hold out a steady competition to the
already established market-leaders in the aviation service sector.
1.2 Background:
1.3 Objectives of the project:
The main objective of this project is to perform a market analysis and comparative analysis with the
competitors of Guna Airlines.
1.4 Methodology:
This project is completely based on secondary information collected from Guna Airlines’s Webiste
and Civil Aviation Authority of Nepal.
1.5 Limitation:
Following are the major limitations of this study:
a) This study is for completely academic purpose.
b) Time limitation, as this study was carried out in a very short span of time.
c) Because of the time limitations there is no onsite conversation with the passengers.

5. 3
2 External Analysis and Data Presentation:
External analysis helps any organization to understand its present position in the market. So that
future planning for the sustainable growth of the organization will be more realistic. External Analysis
provides:
 Information for planning, decision making, strategy formulation.
 Acquire and control required resources.
 Cope effectively with increasingly dynamic environment.
 Make a difference with higher performance.
External analysis constitutes of four sections or components: customer analysis, competitor analysis,
market analysis, and environmental analysis.
2.1 Customer Analysis
Customer analysis is the process of determining customer segmentation, value, purchasing behavior
and motivation in order to better target marketing and increase sales.
2.1.1 Segments
Segment Comment
Domestic Air
Traveler
 Equally distributed in education level
 average income group
 Personal user, not preferred by corporate user.
 Middle class Neapalis as disposable income of this category is
rising.
 Foreigner, in case of mountain flight.
2.1.2 Customer Desires
Segment Desires
Domestic Air
Traveler
 No delayed flight.
 Cheap air fare.
 Uninterrupted service.
2.1.3 Customer Motivational Factor
Segment Motivational Factor.
Domestic Air
Traveler
 Flies to major destination of Nepal.
 Safety measures to operate at the airports with paved or asphalt
runway only.
 Aircraft i.e The Beechcraft 1900 is 19 passengers, pressurized
twin-engine turboprop airplane. It is mainly designed and
primarily used as a regional airliner.
 33% discount to honor senior citizens.

6. 4
3 Competitor Analysis:
3.1 Competitor Identification:
Below are the identified major competitors of Guna Airlines:
1) Buddha Air
2) Yeti Airlines
3) Tara Air
4) Agni Air
5) Sita Air
6) Nepali Airlines.
3.2 Major competitor:
Competitor Strengths Weaknesses
Buddha Air  Innovation: Buddha air introduced the first e-ticketing
in a move to catch up with the pace of time. In 2002,
Buddha air launched its frequent flyer program , the
Royal Club , which rewards passengers with mileage
points every time to fly which can be redeemed for
free tickets, holiday packages or shopping. Buddha
Air is the first to introduce this program in the
country. All these factors add benefit to the airlines
and make it the most appreciable airlines over other
airlines.
 Differentiation: Buddha Air always keeps itself up-to-date
in the industry and introduces diverse types of
strategies with the new era of comfort and luxury,
which has helped to dominate in the market for a long
time. Innovation on different sectors within airline
industry has given them supremacy over other
airlines'. As Buddha Air quotes, As flight safety is our
top priority, pilots and engineers are frequently sent
abroad for refresher training & this airlines places its
highest priority on the safety of its flights and that's
the reason why they have no record of aviation
insurance claim since the airline was launched in
1997. To keep the flights safe, the engineers inspect
each aircraft thoroughly everyday as per the Standard
Operating Procedure, Nepalese Civil Airworthiness
Requirement and the Aircraft Operators Maintenance
Manuals. Buddha Air is the only private flight
operator in Nepal to install the Aircraft Data
Acquisition System (ADAS) device in all its aircrafts
in addition to the Cockpit Voice Recorder (CVR) and
the Flight Data Recorder (FDR). Innovation on
different sectors within airline industry has given
them supremacy over other airlines'.
 Brand Image: Buddha Air's Beechcraft and ATRs are
unique in Nepalese airlines industry. Its main
favorability comes from the record of no accident
since its establishment in 1997. The highly
recognized comfort focus by the introduction of
bigger aircrafts also adds benefit to the company in
building its brand image among the customers.
 Youngest Fleet: Buddha Air has maintained the
youngest fleet of aircraft of all the major aircrafts.
 Buddha Air's aircrafts require 1000
meters runway. This limits its access to
STOL market (Remote areas) where
runways are shorter.
 The mileage card Buddha Air offers is
not appropriate with the business clients.

7. 5
Yeti Air  Greener way to fly.
 Sky club.
 Jet stream, is the only aircraft in domestic operation
with Full glass cockpit, Enhanced Ground
Proximity Warning System (EGPWS), Terminal
Collision Avoidance System II (TCAS II), The
latest color weather RADAR
 Customer focused: Non-scheduled flight
 Yeti Airlines has got only two types of
aircrafts. One type is for Trunk route
and another one is for STOL route.
 This airline is facing more competition
on Trunk route because of the smaller
sized aircraft.
 Yeti Airlines uses only old aircrafts,
because of this there is low degree of
reliability and maintenance cost might
be also high.
Nepal Airlines  National Flag Carrier
 Safe and Widest destinations
 Reasonable pricing
 Good Hospitality
 Delay Service
 Lack of pilots
 Limited routes
 Mismanagement
 Lack of competent staffs
 Lack of punctually in flight service
4 Market Analysis:
4.1 Market Identification:
Nepalese domestic airlines market.
4.2 Market Size:

8. 6
Source: Civil Aviation Report, 2011- 2012
Source: Civil Aviation Report, 2011- 2012
Source: Civil Aviation Report, 2011- 2012

9. Source: Civil Aviation Report, 2011- 2012
7

10. 8
4.3 Key Success Factors
Airline industry is very volatile and capital intensive. Following are few major key success factors in
this industry.
 People: High caliber staff is critical in this service-oriented business.
 Service Product/Promotions.
 Quality control.
 Route System.
 Revenue/cost control.
 Financial Management.
 Safety of the traveler.
5 External Environment
Organizations are affected by conditions in the environment. Managers need to be aware of these
conditions in order to:
 Take advantage of opportunities that can lead to higher profits
 Reduce the impact of threats that can harm the organization’s future
5.1 Political Environment:
Nepalese politics is going through a transition phase, so political instability during this phase is
normal. And this has direct impact on the domestic airline industry. Because of this political
instability, there are ongoing schedules of strikes & bandhs. This has created a kind of opportunity for
airline industry, is because of these strikes & bandhs, general people cannot travel through land
transportation, and they have to opt of air travel. Whereas on the other hand instable politics means
frequent change in government, whenever government changes, their main focus will lie on allocating
their own trusted people in the important sector of the country. This may lead to delay in
infrastructure development like building, enhancing and maintenance of airports, unfavorable changes
in rules and regulations etc.
5.2 Economic Environment:
Economic environment and domestic political stability has the direct and positive relationship. More
stable politics means prosper economic environment of the country. Prosper economy will create

11. more opportunity for the airline industry. This will increase access of airline industry in capital
market, resulting in their expansion and purchasing new and advance air craft etc.
On the other hand, because of recession in the international economy and price change in fuel prices is
hitting the airline industry.
9
5.3 Social Environment:
The changing travel habits of people have very wide implications for the airline industry. In a country
like Nepal, there are people from varied income groups. The airlines have to recognize these
individuals and should serve them accordingly. Guna Air needs to focus on their clientele which are
mostly Middle income clients & their habits in order to keep them satisfied.
5.4 Technological Environment:
The increasing use of internet has provided many opportunities to airlines e.g. E-commerce method of
selling tickets, so that less infrastructure required and lead to overhead saving. Using latest technology
Guna Air can reduce their cost and expand their production so that they will operate at economies of
scale. With latest technology, if better airport infrastructure is available this will definitely help them
to reduce their maintenance cost.
6 Recommendation:
1) Should go for massive advertisement to show their existence in the market.
2) Should provide uninterrupted services, so that people will have more confidence in them.
3) Hoarding boards should also be placed at the domestic waiting lounge so that the people who
are regular travelers can be notified about Guna air.
4) Guna Air needs to increase its brand awareness and build a strong brand position in the
consumer’s mindset.
5) Should look toward adding few aircraft.
6) These people put focus on safety and time. So Guna air should avoid delay in their scheduled
flight.