Issues Faced by the Oman Air-Free-Samples-Myassignmenthelp.com

Question: Give a brief of the background of the Oman Airline and discusses the various features of the services that it provides. Answer: Introduction Economic growth in a country is significantly related to the integrated market planning by various industries. Integrated Market Planning means recognition of the plan value that involves evaluation of strategic roles of a variety of communication disciplines like public relations, sales promotions and personal selling and combines all of them for providing consistency, maximum communication impact and clarity (Hill, Jones and Schilling 2012). In the context of the airline industry, integrated market planning is similarly an important aspect. The strategy that decides the air budget of any Airline is an important part of the IMP of the Airline. In todays globalized world, many people fly to other countries for better job opportunities. In this scenario, people are looking for budget airlines, so that they can avail affordable air travel. The economy and the budget airline travels are having more number of clients as most people are interested in simple travel to home, than a luxuriou s ride. Hence, the budget strategy of an airline is of great importance in the airline industry to get hold of the air competition market (Wit and Zuidberg 2012). This report, in the collaborating paragraphs, will focus on the various aspects of air budget and competition strategies with special reference to the Oman Airlines, along with a brief of its background and will also discuss the issues faced by Oman Airline regarding its air budget and its effect in the budget airline market. Furthermore, this report provides the solutions for the budget market issues faced by the Oman Airline and provide recommendations for new innovative plans and policies for the airline budget and also for the management and leadership performance, as the changes in budget policies will attract more people, which will require certain changes in the management and leadership as well. Discussion: Oman air was founded in 1993 and since then it has seen massive growth and has been playing a major role in making Muscat an important traffic hub in the Middle East, as it supports the industrial, tourism and commercial sectors. The airline made its start in March, 1993, when a wet-leased Boeing 737-300 from Ansett Worldwide Aviation flew from Muscat to Salalah. In July of that year, the airlines first international flight was operated to Dubai. In November, 1993, Oman Air started operating international flights to Trivandrum, to Kuwait and Karachi in January, 1994 and Colombia in October, 1994. Later, the airlines started to provide their services in places like Mumbai, Abu Dhabi, Dhaka, Chennai and Doha. Oman Airlines was admitted to the International Air transport Association (IATA), the international aviation industry trade group, in October, 1998 (Heath-Brown 2015). In 2007, the Omani government played a huge role in the establishment of the Oman Airlines. The Omani Government recapitalized the airlines by increasing the shareholding form 33% to approximately 80%. On 26th November, 2007, Oman Air commenced its long- haul services by launching flights to London and Bangkok. During the Dubai Air Show in 2009, Oman Air finalized an order that included five Embraer 175 aircraft along with 5 other options, which was received by the airlines in 2011 (Henderson 2015). The year 2010 was a year of achievement for the Oman Airlines. In this year it became the worlds first airline to offer Wi-Fi internet services and also mobile services on certain selected routes. In 2011, at Frances Laurier d'Or du Voyage d'Affaires, the airlines won the Gold award for being the Airline of the year. With its head office at Muscat, near the Muscat International Airport, the Oman Airline has established within a very short time span. With the passage of every year, this ai rline is aiming to hold its market with improved and better facilities (Roy 2012). Budget airline Market Budget airline market refers to the airline industries, attributed with a low-cost carrier or low cost airline. The fares for air travel in such airlines are lower and cheap. To cover up the revenue lost for decreased tickets, these airlines charge extras for food, seat allocation, baggage and priority boarding. Almost all carriers that have low ticket prices and limited services are termed as low cost carriers, irrespective to its operational models. Low cost carriers differ from the regional airlines it should not be confused with it, providing short flights with full time services or without services, with reduced fares (Derudder and Witlox 2014). The demand for low cost airlines is high and they attract more customers. With regards to the Oman Airline, if these budget strategies are used, it will increase the financial growth of Oman Airline rapidly. Oman Airlines is the flagship carrier of the Sultanate of Oman. Being the flagship carrier of Oman, it is availed by many people, a s it operates both domestically and internationally. But, as the air tickets of Oman Airline are very costly, the customers are availing services of the other airlines. In this scenario, the use of the abovementioned budget airline policies will help the Airline to retain its customers and profitability. The following gives a brief statistical view of the change in passenger growth the Oman Air has faced: Oman Airline and competition strategies The Oman Airline has a development plan, approved by the board of directors in 2013, that guides it in investing significantly in new narrow body and wide body aircraft, technology and staff and new destinations. According to this plan, Oman Airlines aims to add 50 new aircrafts by 2018 and 70 aircrafts by 2020. Apart from this, in 2014 Oman airlines added many new destinations like Jakarta, Manila and Duqm Sohar in 2016 and is aiming to add more new destinations in 2017 (Teigeler 2015). The Oman Airline has also made new innovations like new and improved economy and business class seats, including the latest in- flight- entertainment systems (IFS) to attract more customers. The Oman Airline is implementing various policies to provide the customers with the best products and services and to achieve maximum profitability (Galang 2012). Oman Air does not explain itself against competitors. It is so because other carriers in the region consist of different business models and Oman Air, instead of being a common Gulf carrier, offers a unique expression of Omani hospitality, identity and culture and focuses on the every aspect of passenger experience, including competitive pricing through its official website, travel agent partners and call centers. The Oman Air has also included services in long destination routes like door to door limousine services, including the lounge to aircraft limousine services to first class passengers at Muscat (Supian 2013). As to the competition strategies of Oman Airline, it relies on the right balance of code share agreements. It is so because code shares ensure high standards of product and service that the customers expect when they buy it. Oman Airline, which has a global reputation for its outstanding quality, focuses very much on the code share strategy, as it is very much important to retain its market position (Squalli 2012). Hence, the airline operates code share agreements on few specific routes with airlines like Qatar Airlines, Emirates Airlines, Turkish Airlines, Royal Jordanian, Sri Lankan Airlines, Ethiopian Airlines, and Malaysian Airlines. An important part of the Oman Airs market strategy is to bring the maximum number of visitors to Oman. The growth in the number of passengers has been parallel to the growth of the visitors to Oman and Oman has been achieving its mission. The Oman air aims to expand its network significantly and to bring more people to Oman with increasing hub traffic. The Oman Airline, by these strategies, is aiming to meet demands of the market competition and retain its outstanding reputation. Furthermore, the Oman Airline that is owned by the Oman Government receives immense support from the Government (Rezapour, Zeynali and Shahvalizade 2014). The Government has been investing for the development of the Oman Airline and its establishment within the international market and for building its reputation and expanding its fleet. Weaknesses of and threats faced by the Oman Airline Even though, the Oman Airline has earned a good reputation globally, it faces various threats and is attributed with certain weaknesses. Being a small organization, the Oman Air faces a good amount of competition from the neighboring countries. The following PESTEL and SWOT analysis will show the various factors which affect the Oman Airlines and the strength, weakness, opportunities and threats of the Oman Airline in connection to such factors. PESTEL Analysis There are certain factors that affect the airline industry (OConnell 2012). They are: Political and legal factors- The airline industry operate in a highly political environment, where passengers are favored over the airlines as passenger safety is the paramount and the political establishments have been made weary of the airlines and aim towards strict regulatory and operational policies due to earlier inclinations towards monopolistic behavior. With the increasing competition in this industry and regulations in demand, the passengers are able to push for amenities and low prices. Economic factors- Due to certain unfortunate incidents in the global airline industry, the airline industry is affected by certain economic factors. The Oman airline is also affected by such economic factors like declining passengers, high fuel prices, competitions from low cost airlines, high operation and maintenance costs and labor demands. Social factors- With time, there have been major changes in the demands of the consumer class, especially in respect of service. This requires the airlines provide proper services and stabilize their costs. The Oman Airline, having high air ticket prices, is also affected by such factors. Technological and environmental factors- Technological factor plays an important role in the airline industry as, in the already tough business environment, the use of the latest technologies will help the airlines to not only lower the fuel consumption, but also to reduce the costs and improve the efficiency. Environmental factors- The environmental factors refers to the environmental aspects like climate conditions and degree of climate changes in relation to the aviation industry. These factors are one of the main factors that affect the airlines and can be solved by adopting latest aviation technologies. SWOT Analysis SWOT analysis is a method of analyzing the strength, weakness, opportunities and threats of an organization (Pauceanu 2014). Based on the above mentioned factors, the following provides a SWOT analysis of Oman Air: Strength- The Oman air is the flagship carrier of Oman with direct flights to Europe, Asia, Africa, Indian sub-continent and Middle East. The Airline is backed with strong governmental support and hence, does not face problems regarding the fuel prices. Weakness- As to the weaknesses of the Oman Air, it faces a lot of competition from the neighboring countries being a small organization. It lacks connectivity to European sectors like Belgium, Amsterdam and also to America. Moreover, the basic salary paid to the local are very high as compared to the other countries and airlines, as the strict government regulations makes it compulsory to recruit locals. Opportunities- The Oman Air has been the receiver of many awards, which helps the airline in better marketing and increasing sales. Moreover, there are plenty of opportunities for growth and expansion of the OMAN Air, as advertisements can help in getting customers. Moreover, developing partnerships and the aim to build a strong customer based Airline business will ensure profit maximization. Threats- The Oman Air faces threats from the other competing airlines like Emirates and Fly Dubai. These competing airlines use various sales strategies, which will attract more customers and the Oman Air lacks such strategies. Moreover, the Oman Air lacks flight connectivity in many popular destinations. The price of the air tickets of Oman Air higher, whereas the demand for low cost Airlines is increasing rapidly. Tools of evaluation or analysis Evaluation or analysis tools refer to various tools and instruments used for evaluation of the performance and developmental policies used by an organization. Most of the evaluations require the use of a data collection tool, which is a survey or other data collection instrument. Evaluations need to adopt existing tools or create new tools. Tools used for one evaluation may not be used for another (Krajewski, Ritzman and Malhotra 2013).. There are various types of evaluation tools. Some of the evaluation tools are:- Participatory tools Evaluation is an integral part of any business plan from the beginning. The participatory evaluation involves all stakeholders- those directly affected by the plan or by carrying by carrying out the plan, for contributing to the understanding of the plan and in applying that understanding for the improvement in the work. As everyone is affected by using this evaluation, it changes the whole nature of the plan from something done for a group of people or a community to a partnership (Cousins and Chouinard 2012). This tool of evaluation makes sure that the needs of all the stakeholders are recognized and addressed and involves participation by all for improving the communitys quality of life. Therefore, this tool is a group decision making and communication tool which collects information of values and needs of the stakeholders for evaluation. Creative thinking (and problem framing) tools The creative thinking tool of evaluation is also known as the critical thinking tools of evaluation. This tool refers to the analyzing, assessing, synthesizing, reflecting and evaluating of gathered information obtained through experience, communication and observation. This tool involves clear, logical and reasoned thinking to solve problems or for making decisions. It basically means to take a hard look to understand and evaluate and analyze something to understand what it really means. It means the use of new and innovative ideas and to ensure that as many issues possible are considered (Jordanous 2012). This includes collection and recognition of existing information and using it to conclude conditions in different areas or issues. This information is often used as the beginning for understanding a problem or matter. Economic tools The economic tool of evaluation refers to the economic evaluation, which is a process of systematical measurement and valuation of inputs and outcomes of two alternative activities and a comparative study of the two (Drummond et al. 2015). The economic evaluation aims to provide the best course of action on the basis of the evidence available. The various economic tools used for the economic evaluation are:- Benefit-Cost Analysis This tool measures economic efficiency based of the ratio of benefits to cost and evaluates alternative actions (Marglin 2014). It also measures stream benefits and cost over time resulting from a strategic project or plan. Cost Effectiveness Analysis This economic tool is best for comparing the alternative means of delivering similar benefits and it is used in lieu of B/C at times when valuation of benefits become difficult (Glick 2012). In addition, it also measures efficiency and evaluation is done in terms of cost per output unit. Financial Analysis/Feasibility Financial feasibility or analysis means the analysis of the process to complete a project successfully and the analysis of the economical, technological, legal and scheduling factors, affecting it. It is used to determine potential positive and also negative outcomes of a project before a particular amount of time and money is invested in it (Huh, Hwang and Lee 2012). Fiscal Impact Analysis This evaluation tool analyses ad accesses the impacts of a project done on the revenues and costs of the government and aims to identify added service requirements, and includes the estimation of costs and revenues received from fees or taxes (Burchell and Listokin 2012). Economic Impact Analysis Economic impact analysis means to assess the impacts on sales, jobs a d income in a region. It analyses the effect of an event on the economy of a particular area that ranges from a single neighborhood to the entire globe (Shrader-Frechette 2012). Usually, changes in the business revenue, profit, personal jobs and wages are measured or analyzed by this tool. Social/Environmental Impact Analysis The social or environmental impact analysis is an economic tool of evaluation that aims to assess the impacts of certain developmental schemes, projects, plans and strategy on the society, before they are implemented (Glasson, Therivel and Chadwick 2013). Models and decision support tools Models and decision support tools refer to a range of computer based tools that include decision support systems risk management and indexing tools and simulation models that help in prioritizing strategies and assessing progress against targets (Bagstad et al. 2013). These systems or computer programs replicate the reasoning process of experts as they are incorporated with expert knowledge by way of rules which are encoded in the software, providing recommendations when information is supplied. This is one of the latest models and it will have a strong positive impact on the supply chain, procurement and operational management, which will solve the relevant issues, as this model does not support traditional and manual decision making and instead, supports automatic, modern and accurate decision making. Project and program analysis tools This evaluation tool performs a statistical analysis and evaluation with the help of a set of tools and techniques by describing, organizing and interpreting data or information. This tool is used for evaluation of performance against targets or for assessing financial information, including survey information for providing quantitative results from qualitative data (Cole et al. 2013). The Oman Air faces difficulties due to the expensive air budget and also due to the lack of connectivity in other countries. The competitors of the Oman Air have a better connectivity all around the globe and they use low air budget strategies that draw more customers, which is becoming a threat to the Oman Airlines by hampering its market in the global airline industry. In this scenario it is imperative for the Oman airlines to develop evaluation tools for evaluation of its existing strategies and development programs and plans in order to solve the problems. From the above tools of evaluation, the Oman airlines solve its existing problems with the help of evaluation tools like the economic evaluation tools, creative thinking evaluation tools and the project and program evaluation tools. With the help of the economic evaluation tools its can evaluate and analyze the problems regarding its air budget issues. With the help of the creative thinking tool of evaluation it can analyze the existing problems and innovate new methods and policies for resolving existing problems. The project and program tool of analysis can assess its performance against competitors and can also assess its financial information. Apart from this, the Oman airline can also adopt the models and decision support tools, which will provide solutions in an advanced and faster manner. Recommendations For facing the increasing challenges of the other big airlines in relation to the air budget market and the lack of connectivity, there are few things which, if done, can help the Oman Airline to face these challenges. Increase in connectivity-The Oman Airline should aim to increase its connectivity in the European countries mostly, along with other countries. This will help in retaining loyal customers and will attract fresh customers, leading to increased revenue in the long run. Adding new routes and reducing fares- The factors like routes and fares play an important role in the competitive air market. Moreover, like the other competing airlines, the Oman Air should also aim for reducing air fare in the peak seasons. But as all other airline use these techniques the Oman air must use more attractive offers and incentives for the travel agents for selling Oman Air tickets and services. Analysis and evaluation-The Oman airline must make proper analysis and evaluation of its existing strategies and try to make innovations that will meet the market challenges, customer satisfaction (by reducing and making the air fare affordable) and will also maintain profit maximization. Conclusion Therefore from the above discussion it can be said that even though Oman Airline has an outstanding reputation, based on the quality of aircraft and services they provide, it is still facing competition threats from the other big airlines. 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