Overview of the Qatar Airways - Paper Example

The Qatar Airways is the national Arline of the state of Qatar, which is a manifestation of the success of the countrys aviation industry. It began as a small regional airline in 1994 serving only a few routes. Following a relaunch of the airline by Sheikh Hamad Khalifa in 1997, the merchandise set out on a mission of becoming a strong international airline; providing excellent services to its customers. Since its re-launch, the Qatar Airline has exemplified itself as the fasted expanding carrier with a double-digit net growth every year. The airline recorded a remarkable milestone in April 2011 when it served one hundred routes globally. Two months after this achievement, the Qatar Airways got a recognition as the Arline of the year 2011, which further raised its standing in the international aviation industry. It got the second feat as the Arline of the Year 2012. The airline has strategic partnerships with various companies such as FlightAware and Aireon, which provide technology for tracking capabilities. From its capital base in Doha, Qatar Airways has expanded its operations to cover over one hundred and fifty destinations worldwide. It serves places in the Middle East, South Asia, Europe, Asia-Pacific, North and South America. The fleet consists of more than one hundred and ninety modern aircraft that carry passengers and cargo. This massive number of aircraft from just four of them in 1997 shows its strategic progress setting itself at the centre of the international air transport.

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Market Overview for the Airline

Qatar Arline is among the three most competitive aviation companies in the Gulf region alongside Etihad and Emirates. It has a global appeal as a leading air transport company for both cargo and passengers over several destinations in the world. Qatar brand campaign dubbed Going places together coupled with its innovativeness in ensuring the best experience for its customers are milestones in its competitive appeal thus expanding overall global market coverage (Alwahaishi, Snasel, & Nehari-Talet, 2009). The brand reinforces the idea that Qatar Airline belongs to everyone including people traveling very long distances to work, families going to a distant destination for a vacation or people just traveling for adventure. Qatar is one of the fasted growing aviation company and operates some of the youngest aircraft to different routes on the world map (Manuela Jr., 2011). Its brand campaign is both emotive and modern thus reflecting the core values that inspire its passengers to embrace progress and adventure.

Qatar Airways is an award-winning airline. It has been named an airline of the year three times in 2011, 2012 and 2015 in the annual Skytrax World Arline Awards thus entrenching itself as among the strongest competitors and fastest developing companies offering air transportation. It is considered the best airline in the Middle East. It appeared among the top 500 brands in the 2016 annual ranking of the world brands becoming the 451st most valuable brand. In the 2016 financial year, Qatar Airways realized a net operating profit of QAR 3 billion calculated on revenues of QAR 35.6 billion. This figure represents an operating profit margin of 8.6%, which is a reflection of not only the companys initiatives to attain profitability but also the dedication of every employee. The employees are at the centre of Qatar Airways progress (Alwahaishi, Snasel, & Nehari-Talet, 2009). They explicitly implement the strategies in ways that create a seamless synergy within the firm. The strategies including unique hospitality, absolute sense of respect and dignified treatment of clients contribute immensely to the retention and acquisition of new customers. In fact, the Airways recognizes that its staff is the greatest source of competitive advantage within the Gulf Regions and throughout the world. Since its establishment, the Qatar Airlines has continuously taken an expanding trend. For instance, the company purchased 9.99% of the total shares of the International Airlines Group thus affirming its strong international standings within the aviation industry.

Niche Markets for the Qatar Airways

The Qatar Airways is likely to operate at a smaller aggregate size compared to its closest competitor, the Fly Emirates in the shorter term. Nonetheless, it has expressed concerted efforts for bypassing the latter in the entire routes covered with the intention of operating the main business and leisure destinations worldwide (Report: Qatar 2008, 2008). It capitalizes its competitiveness by exploiting some of the markets that its opponents have not yet entered. For instance, the company flies more than twenty-seven destinations in Europe. The aviation company launched seven destinations in Europe for new flights including Helsinki and Zagreb (Manuela Jr., 2011). The capture of this market makes it the first Gulf carrier to serve a region previously considered as neglected by the aviation companies. The Emirates and Gulf Air serve only Copenhagen, while Etihad is not represented at all in Europe thus increasing the international competitiveness of QA, especially in the European region.

Qatar Airways places a strategic focus on serving emerging cities of the world such as Chongqing in China and Baku in Azerbaijan, Tbilisi (Georgia), Benghazi (Libya), Kigali (Rwanda) and Mombasa (Kenya) to increase its market share and eventually profit margins. In 2011, the airline launched fifteen routes and another nine in 2012. Competitors including Emirates nor Etihad Airways have not entered most of these new destinations targeted by the Qatar Airways

Impact of changes in operations and regulation environment on the Qatar Airways

Various changes in the regulations and service environment have influenced the progress of Qatar Airways right from the time of its inception and re-launch as a small local airline. The generational shift that occurred in 1995 after the assumption of power by a new Emir, Sheikh Hamad bin Khalifa Al Thani revolutionized the idea behind the establishment of Qatar Airways setting it as an international aviation company. The reaching of the airline and its rebranding, the Qatar Airways too on an onward trajectory thus posing a spirited competition against the Emirates (Alwahaishi, Snasel, & Nehari-Talet, 2009). The airline responds proactively to market shifts and changes that keep it at a competitive edge. For instance, it became the first company to buy A350s aircraft in response to a market favour for wide-body aircraft.

Opportunities and challenges for operations of the Qatar Airlines

At the regional level, the strategic location of Qatar in Asia that has accounted for more than eighty percent of the total worlds population is a source of its strength. This broad community not only provides the airline with a large market to serve but also a wide base of employee abilities to choose from hence making it a developing air transport service provider. From its team of qualified staff dream from more than eighty countries around the world, Air Qatar has managed to offer best experiences consistently for its customers thus setting it as an attractive brand (Anuwichanont & Rajabhat, 2011).. The model embraced by the operator, which focuses on prioritizing premium product and services for passengers, makes the airline a reliable merchandise.

Apart from the opportunities that the business has actively exploited, various issues are challenging the progress of Air Qatar. Delays in flights, rescheduling and cancellations are some of the problems that erode brand loyalty already enjoyed by Qatar Airways. Nonetheless, the airline has established a compensation team to restore the satisfaction of the customers, especially in cases where the delayed flights or any form of anomalies contribute to dissatisfaction (Westermann & Lancaster, 2011). Qatar has entrenched itself as a leading brand due to the high quality of services that it offers. With an incessant motivation to provide excellent services, the firm has opportunities of entering new markets and earning customer loyalty throughout the world.

The deviation of the Qatar airline from the model embraced by Emirates, which is its strongest opponent in the air transport industry, is a source of strategic advantage. While Emirates and most of the other Gulf airlines focus on the mass tourism market, Qatar is targeting the lucrative MICE (Meetings, Incentives, Conferences, and Events) circuit. This move is a critical dimension with a potential of placing the Qatar-based flag flier on the global map in the 2000s and beyond (Report: Qatar 2008, 2008). Naturally, QA publishes its schedule to reflect the incurred cost that includes operational expenses such as regular maintenance and safety, wages of staff and pilots and fuel among others. In some cases, QA practices price discrimination in which it offers the same transportation services at higher charges to different customers (Anuwichanont & Rajabhat, 2011).

Qatar Airlines Potential Scenario for Next One To Five Years

Based on the past ten years of operations, it can be projected that the Qatar Airways has a high potential for competitive growth. The countrys flag carrier has already entrenched itself as a major operator in the Middle East and the rest of the world. Its history full of awards for best performance is reflective of its central role in determining the trends of international air transportation. It is anticipated that the growth of the Qatar Airways will be even more energetic than in the past due to the increasing competition from other companies such as Etihad (Report: Qatar 2008, 2008). Qatar Airline is likely to increase the number of its aircraft and enter into new routes that are not yet served by other firms to continue with its reputation as a major operator. The business is poised to increase the number of its large size aircraft to meet the increasing need for cargo and passenger transportation (Westermann & Lancaster, 2011). The confidence for a continuous growth is born of the fact that the Middle Easter Aviation industry is among the fastest growing in the world. According to the World Travel and Tourism Council, the Gulf region is a lucrative market for the airlines hence an incentive for outsoaring operations of the Qatar Airways.

Looking at the past trends in the airlines operating the Gulf region led by the Dubai-based Fly Emirates; Qatar is likely to pursue a hub-and-spoke strategy whereby it establishes its priority markets, transport passengers, and cargo through airports between various destinations between continents. With the launch of A380s among the big aircraft operated by Qatar Airways, it is likely to revitalize its passenger transportation due to their large capacity. The airline has taken a positive trajectory with an increased aircraft traffic to support its expansion. Most passengers traveling over long distances prefer stopovers at some points instead of making straight flights (Report: Qatar 2008, 2008). Therefore, Qatar will establish some of the stop terminals within its routes to develop a niche that corresponds with the contemporary market demands. In 2008, Air Qatar became the first Gulf airline to serve Guangzhou. In the past, Qatar has stood out to compete through increasing the number of destinations plied. However, it will possibly change its strategy from expanding the routes to increasing flight frequencies with a...