A Financial Study Of Qatar Airways Tourism Essay

A Financial Study Of Qatar Airways Tourism Essay Qatar airlines which ranked amongst one of the best airline in the Gulf States lacking behind Emirates airways has been known to occupy second fiddle. The company recently has launched series of bold steps to re-position it from a † second choice † airline company to the number one competing head to head with the emirates in the business class segment of the market. Some of the activities include aggressive not only in its growth strategies, but in building its reputation and brand awareness. It places the highest priority on providing customers with the best service and unique accommodations and types of service provided. To do this, it has formed alliances with several different organizations to provide improved and unique services. For example, Qatar Airways has signed an agreement with Showtime Arabia and its new 560 satellite television systems. Qatar Airways is the launch customer for the Tailwind 560, and the service offered through the Tailwind 560 makes it the f irst international airline to provide passengers with live television across multiple regions. Introduction Today, the involvement of Middle Eastern airlines in extra-regional operations varies, but is already comparably high. Emirates is offering 82% of its seat capacity on extra-regional services. Most other important carriers from the region like Etihad Airways (74%), Qatar Airways (66%) and Gulf Air (54%) also operate more than half of their seats on extra-regional flights (AEA, 2006). Air France (26%) and Lufthansa (23%) show that the share of extra regional offer for European network carriers is considerably less, indicating that these carriers have stronger domestic markets. It has also projected the following for its financial year outlook. Qatar Airways aims for 40% jump in revenues, says CEO Akbar Al Baker. Defying the global financial downturn, Qatar Airways is expecting to record a 40 per cent increase in its revenues in its current financial year ending March 31, 2011 o ver the last year, according to the Doha-based airline’s chief executive officer.†We are targeting a 40 per cent increase in revenues for this year, which is slightly over the increase in the airline’s capacity of around 30 per cent. Qatar has also come up with balance marketing Mix to as to shift from competitor of Emirates to main player in the airline industry in the Gulf region. The Airline Industry and The Challenges The commercial aviation industry has been characterized by a cyclic nature since its inception. During times of economic prosperity, passenger traffic demand grows and airlines seek to add capacity to meet that demand. Conversely, during economic downturns, airlines respond to decreased travel demand through cancelling flights, grounding or selling aircraft and generally shrinking capacity. By 2005, a new wave of brash exuberance was experienced in the airline industry, and aircraft orders skyrocketed fourfold, year over-year, to record levels o f more than 2000 units, split fairly evenly between Airbus and Boeing. (See Fig. 1.) A sizable portion of aircraft buying originated with airlines based in the Gulf Region. Traffic growth in that region of the world was strong, and carriers like Emirates, Etihad and Qatar began placing large aircraft orders, often in duals of one-upmanship at various air-shows such as Paris, Farnborough and Dubai.