University: Integrated Project Management - Oman Air Analysis Report

This report provides an in-depth analysis of Oman Air, focusing on its background, market position, and challenges within the budget airline industry. It examines Oman Air's competitive strategies, including its approach to code-sharing agreements and government support. The report utilizes PESTEL and SWOT analyses to evaluate the airline's strengths, weaknesses, opportunities, and threats. Furthermore, it explores various evaluation tools and concludes with recommendations for improving Oman Air's performance. The report highlights the importance of integrated market planning and the impact of budget airline strategies on the airline's financial growth, ultimately aiming to provide insights into enhancing the airline's competitiveness and market share.

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Integrated Project Management 2
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Executive summary
The following report gives a brief of the background of the Oman Airline and discusses the
various features of the services that it provides. This report also provides a brief of Oman
Air’s background and points out the current problems faced by the Airline. The report gives a
detailed study of the various evaluation tools in relation to the issues faced by the Oman Air
and concludes by making certain recommendations for the improvement of Oman Air.

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Table of Contents
Introduction................................................................................................................................3
Discussion:.................................................................................................................................4
Budget airline Market............................................................................................................5
Oman Airline and competition strategies...............................................................................6
Weaknesses of and threats faced by the Oman Airline..........................................................8
PESTEL Analysis...............................................................................................................8
SWOT Analysis.................................................................................................................9
Tools of evaluation or analysis............................................................................................10
Participatory tools............................................................................................................10
Creative thinking (and problem framing) tools................................................................11
Economic tools.................................................................................................................11
Models and decision support tools...................................................................................13
Project and program analysis tools..................................................................................13
Recommendations....................................................................................................................14
Conclusion................................................................................................................................15

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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 today’s 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 luxurious 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.

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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 world’s first airline to
offer Wi-Fi internet services and also mobile services on certain selected routes. In 2011, at
France’s 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 airline is aiming to hold its market with improved and better facilities (Roy 2012).

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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, as 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.

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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).

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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 Air’s 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

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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 (O’Connell 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

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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.

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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

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evaluation makes sure that the needs of all the stakeholders are recognized and addressed and
involves participation by all for improving the community’s 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.