Category: Case Study

Introduction

The Dubai-based aviation corporation FlyDubai appeared on the market comparatively recently. It started to carry flights only in 2009 (FlyDubai, n. d.). Since then, the company has demonstrated incredible rates of growth and has had a considerable impact on the cost of air travel in the world market. After working for less than ten years, the airline opened the new segment of budget air travel for the residents of the Middle East (FlyDubai, n. d.). FlyDubai also managed to set new standards in the fields of operations and customer service. Therefore, the popularity of the airline is constantly growing.

Pricing Strategy

The popularity of FlyDubai is not accidental. The punctuality of flights is among the top in the industry. “The first flight took off to Beirut on June 1, 2009 and just 12 months later the airline has built a network of 21 destinations” (Trade Arabia, 2010). FlyDubai is oriented towards all directions at 4,5 hour flying distance from Dubai. FlyDubai’s fleet consists of new Boeings and is constantly expanding (FlyDubai, n. d.). “FlyDubai’s aggressive growth is arguably the most extensive compared to any other budget carrier in the world” (Rai, 2010).

The company positions itself as the most low-cost airline in the Middle East. Core business of the airline is concerned with the provision of economy class flights for passengers. The FlyDubai airline offers a model of separate payments for services when buying tickets previously unknown in the UAE market. This model is designed to meet the needs of the budget-conscious passengers without creating difficulties for those who fly for the first time. The airline has a flexible price policy. It allows people with different incomes to purchase plane tickets. Most recently, the company has introduced a service of the business class flights. In addition, the company received the first aircrafts equipped with business class cabins for its disposal (FlyDubai, n. d.). This stage in the company’s history was marked by the expansion of its fleet base.

Sustainable Business Model

Affordable and convenient air flights are the key to success of any airline. While making a decision to establish the FlyDubai airline, Dubai’s government wanted to create a transporter that would provide the most affordable flight options in the existing areas of Dubai. Opening of new routes to the regions suffering from the lack of direct air links with the UAE was another reason. According to the founder of the airline, it would give a new impetus to trade and tourism in this region (FlyDubai, n. d.). The business model of FlyDubai is extremely sustainable, as it aspires to make flights cheaper and more comfortable. It is not necessary for people to pay much money for simple and at the same time comfortable flights.

Target Markets

Initially, the airline implemented flights only to the nearest countries. Persian Gulf countries have always been a target market for FlyDubai, both in terms of personal travel and business traffic. The company managed to build a route network that is one of the leading in coverage of direction in the region. Other countries of the Middle East are also extremely attractive for FlyDubai. In addition, the airline has great coverage in such areas as Eastern Europe and Central Asia. The target market of the airline consists of completely different people. Employees of organizations and businessmen who travel on business are the main customers of FlyDubai. These people represent the middle class and appreciate comfort and quality of flights. Nowadays, the number of passengers traveling for tourism increased extremely. The fact that FlyDubai is a low-cost airline makes it utterly attractive for the tourists with middle and low incomes.

Ramadan Offer

During the holy month of Ramadan, the first budget airline of Dubai FlyDubai announced a special offer for its passengers. The company offered all passengers traveling from August 15 to September 6 full or partial reimbursement of their expenses for the flights (IANS, 2010). Moreover, passengers should pay tax only on certain flights. Executive Director of FlyDubai Ghaith Al Ghaith affirms that Ramadan is the month of donation and a great time to spend with family and friends (IANS, 2010). The airline did its best to ensure that passengers were able to be with their loved ones, especially during the holy Ramadan. The company was pleased to provide passengers with the best conditions that should not be missed. The offer was very successful, as free flights were provided to such directions as Bahrain, Sudan, Azerbaijan, Jordan, Egypt, Kuwait, India, Pakistan, Lebanon, Oman, Sri Lanka and Qatar (IANS, 2010). People could evaluate the quality of the company and use services of FlyDubai subsequently (IANS, 2010).

Challenges

Despite the growing popularity of the airline, it also faced a number of difficulties. One of them is the aftermath of global financial crisis of 2008. It acutely affected the activities of the company. However, the government of Dubai thought considers the airline not only as a commercial project, but as the important element of the overall infrastructure and tourism development. The problem that FlyDubai can face in the future is being incapable to suggest high paid jobs as well as low fees for tickets because of rising oil prices, considering that the airline positions itself as a low-cost company. Moreover, due to a major worldwide economic crisis, the number of tourists may decline.

Conclusion

Since its appearance, the airline managed to achieve excellent results confirming the correctness of the chosen vector of development and the crucial importance of the airline for air transport market of the UAE (FlyDubai, n. d.). The Dubai Aviation Corporation supports the economic and tourism sectors in Dubai providing services to a new category of passengers and ensuring them safe flights to the popular and relevant destinations at affordable prices.

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