Strategic Map of Airline Services: Industry Analysis and Profitability

This report provides a comprehensive strategic map analysis of the airline industry, focusing on key competitors such as Etihad, United Airlines, and Air Asia. It examines critical variables like passenger and cargo yield, and traffic trends, illustrating the competitive landscape through strategic mapping. The analysis delves into key success factors, including technological advancements like the EX2 IFE system, strong brand image, international policies, and online booking systems. The report concludes with an assessment of the industry's profitability, highlighting the growth potential and the importance of strategies such as product differentiation and cost leadership. The study utilizes data from annual reports and industry analyses to support its findings, offering insights into the competitive dynamics and future prospects of the airline sector. This report is a valuable resource for understanding the strategic positioning and market dynamics within the airline industry.

Strategic map of the Airlines services
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Name of the student
Topic- Strategic map of Airlines services
University Name-

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Task-1
Industry rivals positioned
The strategic map is the valuable tool for evaluating and understanding the similarities,
differences, strength and weakness inherent in the market position of the rival companies.
After evaluating the Air industry, it is analysed that united airlines and Air Asia are the main
rivals (Hanlon., 2007)
(Source by author)

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1.1 Strategic map of Airline industry
It is evaluated that Etihad and other rivals such as delta, united airlines and Emirate has been
following the strategic map to make their airline services effective.
(Source by Author)
Apart from Emirates there are following companies such as delta, united airlines and
Emirate who are providing ‘next generation seating’ in the First Class and the Business Class
and Panasonic eX2 In-Flight Entertainment system in all the seats including Economic Class.
1.2 Variables are most relevant to your industry and delineate strategic approaches
There are several key variables which may affect the Airline industry
Passengers yield
It is calculated by dividing the revenue of passengers with the passenger miles.

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The yield per passenger are given as below for the following airline companies
Emirates= $ 13.5
Delta= $15.56
United Airlines= $16.5
Cargo yield of airline industry
Cargo yield of Airline industry has declined by 9% in 2017 as compared to last year data.
Passengers and cargo traffic
It is evaluated that since last five years, the passengers and cargo traffic has increased by 25%
which is good indicators and also result to increase in the airline services prices.
Airline services
with the ramified changes in economic and client’s needs, airline companies are including
various packages and other offers for the clients. It attracts more clients and increases the
clients need.
Air industry rivals earning
It is evaluated that the rivals of Etihad are having good amount of return and turnover which
reflects that they are expanding their business with the drastic rate.
Source: (Tugores-García, 2012).

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1.3 Plot the firm on two variable maps
This below given table reflects that Etihad Airway Abu Dubai is having average index
and it is positive indicator for the company. However, other rivals such as Virgin media, Easy
jet and Ryan Air are on the excellent position on the international market (Nhuta, 2012).
(Source by author)
1.3 Assign firms occupying the same map location to a common strategic group
The below give charts reflect the firm occupying the same group mapping.
(Source by author)

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It is evaluated that on the basis of cost position and the quality of the airline services Etihad
airlines, united airlines, Emirates are marked as companies falling in the same group mapping
(Tugores-García, 2012).
1.4 Draw circles around each strategic group
The chart reflecting the revenue of air industry competitors are given as below (Tugores-
García, 2012).
Revenue
American
Delta
Lufthansa
United
Air France
IAG
Emirates
Ethihad
(So
urce by author)

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2 Key success factors for the Air industry
Air industry is more backed by the innovative technologies and quality of the services.
However, with the increase in potential market and alliance of different countries, air
companies are coming up with the different marketing strategy. It gives high growth to their
busienss. There are following key success factors for the Air industry.
 Increase in the purchasing power of clients
 Increase GDP growth rate
 Use of advanced cyber system in air Industry (Nhuta, 2012).
 The innovative technologies and other services- EX2 is the latest IFE system in
service operation which provides media content capacity and Audio on Demand
(AVOD). These are the latest services which increases the value of the client’s
satisfaction of clients in Airline busienss (Hanlon, 2007).
 Etihad is having strong brand image and offer high class services which attract more
clients in market.
 International treaty and liberal visa policies are also the major factors for the success
of this air industry. People now could easily take visa from the government.
 Online options and dashboard mechanism have also allowed clients to book their
flights through online mode.
3. Does the industry offer good prospect for attractive profit and why?
Yes, Airline industry offers good amount of growth to companies in this airline
busienss. With the changes in economic, people are more inclined towards using the air
services as it is available for them at less cost and it takes less time to travel (Emirates
Airline, 2015). The Etihad Airline has been focusing on the product differentiation strategy to
satisfy the client’s needs and demand in market. Etihad needs to focus on the cost leadership
strategic program and providing less costly flight services to clients.
Results of industry
After evaluating the air industry growth rate and people inclination towards the air services,
it is observed that Etihad airlines would have strong position in market. However, as per the
last five years financial data of company, it is observed that company has increased its overall
profit by 22%. It is considered that Delta, Etihad and United airlines are following product
differentiation strategy. Nonetheless, with the use of advanced technologies, it will also
attract more clients for its offered airlines services (Etihad Airline, 2015).

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References
Emirates Airline 2015 – 2016 annual report. (2016). Emirates.com. Retrieved 7 February
2018, from https://cdn.ek.aero/downloads/ek/pdfs/report/annual_report_2016.pdf
Etihad Airways 2015 annual report. (2015). Etihad.com. Retrieved 7 February 2018, from
http://resources.etihad.com/etihadairways/images/E_Book/HTML/AnnualReport2015/
assets/basic-html/index.html
Hanlon, J.P., 2007. Global airlines: competition in a transnational industry. Routledge.
Nhuta, S., 2012. An analysis of the forces that determine the competitive intensity in the
airline industry and the implications for strategy.
Tugores-García, A., 2012. Analysis of global airline alliances as a strategy for international
network development (Doctoral dissertation, Massachusetts Institute of Technology).