1.

Background of the sector:

In order to study airline’s services of both Fly Dubai and Emirates, it is important to go through the
evolution of the airline industry and how we can apply service marketing to this industry. 

In recent decades, the airline industry has changed significantly. It was a luxurious means of
transport before the early 1900s, but it has become one of the most common methods of travel
today. There was a phase when most airlines were state-owned, followed by a period of oligopoly,
before we entered a stage when competition is as intense as any other commodity goods. Partly
because of these changes, the service quality and marketing of the airline industry also changed
rapidly.
In the early days, airlines placed a heavy emphasis on service quality because it was a luxurious
leisure pursuit. Then, it became a secondary focus when it entered the oligopoly stage. During this
stage, price and price wars were the primary concern of the travelers and the airline companies.
This tide shifted again during the 1990s, as some airlines started to reemphasize and improve their
service to attract travelers.

When it comes to service marketing, we can say that pure services include the following
characteristics: intangibility, inseparability, variability, perishability, and the inability to own a
service. However, the service provided by airlines often must rely on intangible but also tangible
aspects as well. These can include food, seating, entertainment programs, etc.

Below is a model that includes the four components of service and how it can be applied to the
context of the airline industry:
Industry 1. Physical 2.Service 3.Service 4.Service Delivery
Product Product Environment

Airline Ticket In-flight meal Service counter, Food and drinks serving, maintenance
& drinks, Airport lounge & of the facilities and actual
Cabin performance of attendant services.
Entertainment
program

2. About FlyDubai: 

Flydubai is a is the first government owned low-cost carrier based at Dubai International Airport.
The carrier was founded on 19-Mar-2008 and commenced operations on 01-Jun-2009. While not
part of the Emirates Group, flydubai was founded by Emirates Chairman Ahmed bin Saeed Al
Maktoum.

13 years after its inaugural commercial flight, flydubai is now making more than 1,400 flights a
week with over 500 pilots and 1,000 cabin crew taking thousands of passengers to destinations
throughout the region. The airline is using a market penetration pricing method by offering the
lowest flights price in the market

The company’s mission statement: ‘From the very beginning flydubai has stuck to its core
philosophy and we continue to strive to make air travel more affordable.’

The company’s vision statement: ‘to strive to make air travel more affordable’.

Core Values: Safety, excellence, efficiency, simplicity, continuous focus on lowering costs.

3. Analysis:
a) STPD strategy:
- Segmentation: 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. 
- Targeting: 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. 
- Positioning: 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. 
- Differentiation: Perceptual Map
 b) SWOT Analysis:

Strengths Weaknesses

-Well-extended route network in the Middle East with - The maximum allowed luggage for the ticket price is
considerable traffic. 10kgs. Rivals have an advantage over Fly Dubai and can
- Low-cost airline, and its strategy allows it to keep use this strategy to attract more passengers who are
the costs of operation very low. sensitive to price.
- The obstacles to entry into the low-cost airline
market are high. Regional competition within the low- -Quality of service provided by FlyDubai is seen as quiet
cost carrier sector is minimal. medium for passengers.
- It does not have challenges with the safety of its
aircraft and is unlikely to face any liabilities in the
medium-term period.
-Strong relationship with the government since it is a
100% government owned company.
- The business model of FlyDubai is extremely
sustainable, as it aspires to make flights cheaper and
more comfortable.
-Use of a strong IT infrastructure and technological
advanced tools to manage its activity.

Opportunities Threats

-The company can extend to more routes. - Other low-cost airlines have more destinations
-The target of Flydubai is increasing in number. More compared to FlyDubai.
people are including cheap traveling to their - Fly Dubai will need additional financing to survive when
behaviour. the market becomes very competitive, or the demand for
low-cost traveling reduces.
-As any tourism related activity, airline activity is
sensitive to any economic, social, financial, or health
changes (such as the COVID19 crisis).
- Greater expenses in the aviation industry especially
when improving the level of service.

c) Service 7Ps:
1. Product: The airline product includes two types of services
 On the ground services
 Inflight services
  Core product: Transportation
 Generic product: Check in, connecting flights, food and beverages on
board, safety instructions and guidance.
 Augmented product: Inflight entertainment, complementary gifts,
Internet connection, online booking, variety of meal options (vegetarian/
Halal/ …), Pick up services, …
2. Price: Market penetration pricing strategy: low-cost pricing.
3. Place: Company's Website + Traveling company + Travel agents/agencies +
Airport.
4. Promotion: Advertising and publicity + Promotion and discounts + Word of
mouth of passengers + Brand ambassadors.
5. Process: Reservation -> Booking -> Flight info -> Check-in -> Airport facilities ->
Baggage handling -> Boarding -> Flight guidance -> Flight entertainment -> Meal
services
6. People: Aircrew is characterised by a positive attitude, care, competence,
responsiveness, problem solving attitude, calmness, and being cheerful.
7. Physical evidence: Logo and symbol, tickets, airplanes, aircraft, uniform of the
aircrew, baggage, infrastructure.

4. Questions:

1. Partnership with Emirates: more beneficial for the low-cost company or the big airline
in the long term?

 Benefits for Flydubai: 

 Maintaining a low-cost business model while increasing profitability by appealing to a

larger target market. In fact, the Emirates-Flydubai network have more than 8.3 million
passengers.
 Fly Dubai passengers can access more than 126 Emirates destinations. 
 FlyDubai adopted Emirates skywards program as its loyalty program, which means that its
members can enjoy lots of privileges from both airlines. 
 The partnership eliminated the competition with a giant like Emirates because now
FlyDubai is focusing on lower demand routes using its smaller Boeing 737 aircraft while
Emirates is focusing on long-haul flights.  
 A low-cost carrier like Flydubai partnering with a giant carrier like Emirates will ensure
greater survivability, especially with the increasing competition in the industry from local
and international carriers like Etihad Airways, Air Arabia, Nok Air, etc.

 Benefits for Emirates: 

 The Emirates-FlyDubai network offers customers more travel choices to 210 destinations
across 100 countries. Emirates customers can access more than 118 Flydubai destinations. 
 Emirates passengers can connect to smaller flydubai services so that they won’t have to
travel between terminals. 
 Emirates customers now have improved flight schedules due to the proposed flights from
terminal 3 to terminal 22. 
 Emirates is targeting a wider audience, in fact, the shared network have more than 8.3
million passengers.
 By partnering with a low-cost carrier, Emirates can stand out from the competition by
dominating the GCC market.

2. Future of the Airline industry: Quality vs efficiency.

a. The Covid-19 crisis had a devastating impact on the airline industry sector, which led to
many transformations that were considered necessary in order for the industry to survive.
And with such shifts it is interesting to study them and the possible impacts they can have
on the future of the airline sector to start, passengers became more concerned with the
sanitary precautions. It became important to have higher hygiene standards, so in the
future, with the possibility of new pandemics and breakouts, it will be necessary for airline
companies to consider working on their sanitary standards in all the corners of the
terminals, the lounges, the gates, the cabins…and to focus on new ways to safeguard the
health of their employees and travelers, for example it will be necessary for travelers to
exhibit papers proving getting their vaccines or proving their negative tests in order for
them to be able to get on the flight

With the new digital era it will be also interesting to have mobile applications to transform
the travel experience, apps that can be used to store the passengers’ important information
such as a digital copy of their passport, of their tickets, of their vaccine's certifications… all
gathered in one platform that will limit the unnecessary waiting and contact  

b. After covid, we became more at ease with the remote mindset. Online meetings and
flexible arrangements entered almost all business’ cultures, and it made the number of
business travels decrease and that is likely to continue even post-pandemic which will lead
to people taking fewer corporate trips and thus leisure trips (holidays, family and friends’
visits…) will be the ones to generate the most income for airplane companies. However,
companies that highly depend on business passengers such as fly emirates will not be able
to generate much profit as the majority of it is generated by a small group of high-yielding
passengers, often traveling for business with airline companies struggling to stay in business
during covid, many found themselves indebted as they had to borrow huge sums of money
to stay afloat and cope with high daily cash burn rates and the debts are expected to rise
because of the rising credit risk and the high financing costs. Hence, this will inevitably
cause a rise in the prices of tickets and services provided by them in the future.
In addition, as the high-end airlines market knows a fierce competition because of the rising
number of luxury airlines such as Qatar Airways, Singapore Airlines, Japan airlines … which
subsequently creates a highly competitive market, these airlines will find it crucial to work
on differentiation, the quality of the services provided should be of top level and unique to
their brands in order for them to be able to thrive, maintain their positions and to compete
with their rivals. However, for the low-end airlines, passengers are expecting a certain level
of satisfaction from their travelers’ experience as a whole, they would want their trips to be
worth the paid price from the services provided (the food served, the quality of the
equipment, they will require a quality-price ratio and thus efficiency will be indispensable