Arik Air's Business Operations: Challenges, Opportunities & Growth

This report provides an executive summary of the challenges and opportunities facing Arik Air in its business operations. The analysis highlights the increasing competition in the global airline sector, rapid changes in customer preferences, and the rise of low-cost carriers as key challenges. E...Read More

Executive summary
There are number of challenges and opportunities being faced by Arik air in terms of their
existing business operation. This is mainly due to the increase in competition in the global airline
sector and rapid changes in the preference pattern of the customers. It should be noted that
emergence of the popularity of low cost carrier concept also affected the business of Arik air due
to the reason that they are offering only premium services. Efficiency is another issue being
faced by Arik air in their business operation. This is mainly due to the reason that Arik air is still
trailing behind their global contemporaries in terms of technological and other advancements.
This is also causing higher cost of operation for Arik air as compared to their competitors.
Another challenge of them identified is their concentration in the African market only. It is
identified that Arik air is majorly concentrated in Nigeria and have a few international routes.
However, they are rarely known in the global aviation circuit and it is also affecting their
potentiality in tapping the larger market. However, if Arik air is compared with the other
airliners in Nigeria, then they are well ahead in terms of market share, route network and
revenue. The existing business and corporate level strategies of Arik air are also focused more on
maintaining the existing market leadership in Nigeria rather initiating growth strategies. They are
having huge opportunities in tapping the foreign markets especially the emerging economies.
This is due to the reason that emerging economies such as Brazil, India and China are witnessing
huge growth in the aviation sector and entering these markets will provide huge business for
Arik air. Moreover, they should also introduce low cost carrier services in order to increase their
revenue, passenger traffic and market share. This should be noted that low cost carrier market is
booming and entering in this sector will help Arik air to tap the larger customer segments.
However, it should also be noted that the low cost carrier services should be introduced first in

the home market for Arik air. This is because they are having well established market base in the
Nigerian market and introduction of the new services will face lower sets of entry barriers. In the
further stage, foreign markets should be targeted. Lastly, it is also recommended that new
services can also develop by Arik air in order to initiate the product development strategy. This
includes introduction of helicopter services. There are number of African regions where aircraft
services are not possible. This untapped market can be catered by Arik air by providing
helicopter services along with gaining more market share and penetration in their home market.