New Venture Creation

Arabian Airways

New Venture Creation

Submitted to: M. Usman Ghauri

Submitted by: Waqas Sattar (1205) Bilawal Shabbir (1211) Arham Javed (1215)

Ch. Awais Zahid (1211)

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New Venture Creation

Arabian Airways

Arabian Airways

New Venture Creation

Arabian Airways

PROJECT SPONSORS
Our project is unique and is a catchy opportunity to invest. We put our project in the market and got different responses. As we need sponsors for our airline, we got replies more than our expectations. We chose the best three amongst them.

1. Ali Raza Dawood Habib

Address: 31-G Commercial DHA Lahore Cantt. Qualification: MBA Finance from USA. Experience: He is a CEO of Habib group of industries and Bank Al-Habib pvt Ltd. Net Worth: 1.9 billion Dollars. Investment Share: 20 % Existing Business: Habib Sugar Mills, Habib Oil Mills, Habib textile Mills.

2. Ch Ahmed Saeed
Address: Saeed House no. 2 Street no. 35 Clifton Karachi. Qualification: Master in Aviation. Experience: Director Civil aviation (1995), Chairman of PIA (200) Net Worth: 500 Million Dollars. Investment Share: 10 %

New Venture Creation

Arabian Airways

3. Sultan Ahmed bin Sulayem

Address: 48 Al-Nayan Dubai Qualification: Non Experience: Working as a CEO of Dubai World. Net Worth: 309 Billion Dollar Investment Share: 30 % Existing Business: Dubai World (investors)

4. Waqas Sattar
House no. 243 Street no. 35 Sector F-7/2 Islamabad Pakistan. Qualification: CPL (Commercial Pilot License) Experience: Worked as a senior pilot in Kuwait Airways for 15 years. Net Worth: 125 million Dollars. Investment Share: 20 % Existing Business: Land Lord.

5. Bank (loan)
We will get 20 % of the total amount as a loan from Bank Al-Islami.

Legal Setup:
It will be base on partnership among all the four investor on their investment shares.
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New Venture Creation

Arabian Airways

Project Cost

Title Land + Building Airplanes Furnishing Vehicles Office Equipment Utility Cost Preliminary Cost Total Contingencies Cost Total Project Fixed Cost Initial Working Capital Total Project Cost

Price 2 Million Dollar 340 Million Dollar 1 Million Dollar 2.5 Million Dollar .5 Million Dollar .1 Million Dollar 13.9 Million Dollar 360 Million Dollar 18 Million Dollar 378 Million Dollar 120 Million Dollar 498 Million Dollar

New Venture Creation

Arabian Airways

Project Cost COMPANY OVERVIEW

Our business is about airline service which we are going to introduce inside and outside (Dubai) the country. Our Mission is to provide best service and better packages among all other airline companies. Our head quarter will be in Blue Area Islamabad with offices in Lahore, Karachi and Dubai. We will prefer to buy new and latest airplanes instead of buying used. We will hire well educated, experienced and deserving staff to provide best services and also to run this airline company. We will also update our technology by time to time so we can fulfill, provide safety and get the confidence of our customers. We will try our best to attract more and more customers.

In the beginning daily one flight from

Islamabad to Karachi Karachi to Islamabad Karachi to Lahore Lahore to Karachi

And two flights weekly from

Karachi to Dubai Dubai to Karachi Lahore to Dubai Dubai to Lahore Islamabad to Dubai Dubai to Islamabad

New Venture Creation

Arabian Airways

Future Plan
By the time we will extend our services to other cities for example Peshawar and Quetta etc at domestic level. We also have a plan to extend our international region for example Europe.

Marketing Mix
PRODUCT
The product is any things which have both favorable &unfavorable that a person receives in exchange. Most products we think are physical but it also include services. Arabian Airways give the flight and cargo services for passengers.

The Core Product

The core product culture of Arabian Airways is a convenient, fast and high quality mode of traveling.

The Actual Level of Product

The actual product has the following characteristics:

Features:
The special features of Arabian Airways offers are the airlines attitude of the care they show towards their customers, Their flexible fares, new aircraftsnew Generation Airbus A321 Aircraft, ATR42 Leather Seats In Business Class and many other such features.

New Venture Creation

Arabian Airways

Brand name:
The brand name is Arabian Airways this name has been very appropriately selected pertaining to the product and its purpose.

Augmented Part ;
There is no augmented part.

Product Classification: Consumer Product:

Its fall in consumer product (service).

Where in consumer goods its fall in Shopping goods, Specialty goods.

Price
Pricing Strategy:
We will use penetration pricing strategy to enter the market to get more customers. After some time we will set the price on basis of below factors. Arabian Airways set their prices on the basis of two type of situation.

Domestic routes International routes

New Venture Creation

Arabian Airways

Domestic routes:
The cost plus method is used to set the price at domestic level. The ARABIAN AIRWAYS management estimates the price by using following 6 steps. Selecting the price objective Determining the demand Estimating costs Analyzing competitor price and offers. Selecting a price method. Select the final price.

International routes:
The price for international routes is set by adjusting taxes and duties imposed by IATA (International Airline Travel Association) and then adding the cost of the flight with a profit (or income) percentage on top. ARABIAN AIRWAYS will establish pricing strategies based on different international routes keeping in view the following points: Competitor price Cost of operation

Type of Seating Class

ARABIAN AIRWAYS has two categories of their pricing as below, they also vary by season to season and at peak time. 1. Economy Class 2. Business Class

New Venture Creation

Arabian Airways

Place
The following services will be allotted to our customers to help them purchase tickets making their shopping experience easier, comfortable and fun: Online ticketing Site Offices Intermediaries ( Travel Agents )

Distribution Channel Level:

Zero Level Distribution: Our aim is to let the customer float in a zero level distribution zone in which we will give them facilities to buy tickets from our site offices, the web and also via cell phones (first time in Pakistan)

One Level Distribution: We will also use the intermediates (Travel Agents) for selling of tickets.

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Arabian Airways

Promotion
We have alloted $0.5 million dollars for the promotioning of Arabian Airways. We advertise on top tv channels and online search engines and popular news websites. We will advertise in leading news papers, hordings, pamphlets. We will also give special discounts on ocassions like Eid,New Years to our customer.

We give the ratio to promotional tools : I. II. III. IV. V. Advertising : 50 % Publicity : 15 % Personal Selling : 10 % Sales Promotion Activity : 20 % Public Relationing : 5 %

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New Venture Creation

Arabian Airways

Promotion
Sales Promotion Activity 20% Public Relationig 5%

Advertisig 50%

Personal Selling 10%

Publicity 15%
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New Venture Creation

Arabian Airways

Market segmentation of Arabian Airways

Geographic Segmentation
Both segments domestic and international. Karachi, Lahore and Islamabad are included in domestic region. Only Dubai is included in International region in the beginning.

Demographic Segmentation
Income Segmentation -----audience who falls under the category of upper and upper middle class.

Occupation Segmentation ----- working class and business class.

Geographic Segmentation
Domestic Regions ----- people within the country. International Regions ----- people residing outside the country.

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New Venture Creation

Arabian Airways

Behavioral Segmentation
Occasion Based
Eids Occasion ----- people within the country and outside the country to get together with their families on Eid. New Years Occasion -----people coming back to their home land from different countries via Dubai and also within the country. Loyalty Status ----- frequent fliers with Arabian Airways.

Psychographic Segmentation
Social Class
Religious Travels ----- people going for or coming in for religious offering.

Competitor Analysis
Competitive Advantages of Arabian Airways
Reliability and safety Best engineering facilities. Best trained pilots. Latest technologies and highly equipped engineering.
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New Venture Creation

Arabian Airways

Arabian Airways operates both domestically and

internationally. So it has different competitors on both scales of operations. DOMESTIC COMPETITION

Pakistan International Airline (PIA) Shaheen Airline Airblue Airline

INTERNATIONAL COMPETITORS OF ARABIAN AIRWAYS

Etihad Airways Qatar Airways Emirates Airlines Pakistan International Airlines (PIA) Airblue Airline Shaheen Airline

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New Venture Creation

Arabian Airways

LOCATION
We chose Blue Area Islamabad for our Headquarters because it is the most commercially attractive spot in the city. We chose the Blue-area because of the fact that most of our competitors are located there. If customers want to reach or visit the head-office then this particular location makes us easily accessible. We will purchase a 3 or 4 storey building.

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