The Airline Shaheen Air Tourism Essay Example
The Airline Shaheen Air Tourism Essay Example

The Airline Shaheen Air Tourism Essay Example

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  • Pages: 15 (4103 words)
  • Published: October 3, 2017
  • Type: Report
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Shaheen Air or officially known as Shaheen Air International is a private air hose that provides rider, lading and charter services. It serves the major metropoliss of Pakistan and Persian Gulf. It was established in December 1993 and on October 25, 1994, it was accorded the position of 'Second National Carrier of Pakistan ' , by the Government of Pakistan. Its chief base is Jinnah International Airport ( KHI ) , Karachi, with a hub at Benazir Bhutto International Airport ( ISB ) , Islamabad.

Besides functioning major domestic paths i.e. Karachi, Lahore, Islamabad and Peshawar, Shaheen Air has besides been runing flights to Dubai, Abu Dhabi, Al Ain, Kuwait, Doha and Muscat from about all the major international gateways of Pakistan.


The air hose was established and started operations in


December 1993. It was formed as a undertaking of the Shaheen Foundation, that is named after the Peregrine falcon within the Pakistan Air Force. In October 1994 it was designated as the 2nd national bearer of Pakistan and in February 1995 began international operations, with a scheduled service between Peshawar and Dubai. When the air hose started it operated a fleet of leased Tupolev Tu-154 aircraft on most of its domestic flights. Shaheen Air International ( SAI ) was given the position of being the `` 2nd national air hose of Pakistan '' during the first twosome of old ages of operation, nevertheless this position is no longer recognised.

In July 2002, the air hose direction was changed when it was taken over by TAWA International Inc. of Canada. The new president of Shaheen Air, Khalid M Sehbai, made a foreign direct investing in Shaheen Air wit

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the aim of taking the air hose every bit successful as its yesteryear. During November 2004, the air hose inducted its first Boeing 737-200 Advanced for its chief path of Karachi-Lahore-Karachi, which allowed the phasing out of its Soviet Russian aircraft.

During 2005 the lading division of the air hose besides grew when it signed an agreement with the Pakistan Post and British Airways Cargo. For lading usage Shaheen Air Cargo acquired Il-76 aircraft. The aircraft were used on Dubai-Karachi paths. The initial two flights on January 3 and 5 carried about 100 metric metric tons export cargo that was delivered at Dubai for onward transit to Europe and USA by British Airways flights

In 2006, Shaheen Air International ( SAI ) became Shaheen Air and the air hose introduced a new livery and corporate web site. The air hose besides introduced flights to Quetta from Karachi. The Governor of Balochistan said that the betterment of air links were besides discussed in the on-going negotiations between Pakistan and Iran and he has offered the direction of Shaheen Air to run Quetta-Zahidan flights. Initially SAI operated eight flight to Karachi-Quetta and Quetta-Lahore. He announced that SAI would besides be allowed to run flights between Islamabad and Quetta. On May 22, 2006 the Civil Aviation Authority stopped all flights of Shaheen Air as it owed 1000000s of rupees to the CAA. On May 25, 2006 Shaheen Air was cleared by the Civil Aviation Authority ( CAA ) to restart its domestic and international operations. The clearance missive was issued by CAA following reception of the check from SAI towards payment of the outstanding dues. On September 18, 2006 it

was announced that Shaheen Air was to get down a four times hebdomadal service from Islamabad to Robin Hood Airport Doncaster Sheffield in the UK. However, no flights were of all time launched to Doncaster.

On October 2007 Shaheen Air International announced at the World Travel Market in London that they would be get downing flights from Islamabad to London Luton Airport. On November 2007 Shaheen Air International acquired two Airbus A310-300 aircraft from Turkish company, Saga Airlines. The first A310-300 ( TC-SGC ) had an all-white coloring material strategy with big Shaheen Air rubrics on both side of the fuselage. The aircraft flies twice hebdomadally on both the new Islamabad-Lahore-Kuwait path. On February 7, 2008, their 2nd UK finish Leeds Bradford Airport flights were launched. The twice hebdomadal service to Leeds Bradford Airport was discontinued. However, no ground was released to the imperativeness. The A310-300s were returned to Saga Airlines in 2009 and all UK paths were discontinued.


To accomplish robust and consistent profitableness, expand SAI wings, further through sustained efficient service and to be a paradigm for other air hoses.


To supply dependable, efficient and gracious service to all its riders at a competitory monetary value nationally and internationally.

Airline globalisation

The air hose industry has developed globally at a dramatic rate since universe war 11 and is now one of the fastest growth and most technologically advanced of all universe industries.

Globalization of air hose industry runs against the international agreements for set downing rights by agencies of bilateral pacts between states. However the air hoses are in private owned, dealingss with the authorities - or, more accurately, with the state authorities and authoritiess of other states are


In the field of international air power policy, provinces are usually concerned about the commercial aircraft of other states winging through their air space ; this primary concern is with aircraft that want to do landing in their district for the intent of puting down and picking up commercial traffic. What is usually called 'the right to wing '

Market factors:

A Customers can go from one topographic point to another topographic point within the state by coach or rail transit systems but going between the states is largely possible through ocean and air transit. Ocean transit is merely possible to some topographic points and is clip devouring every bit good. The one and merely transit system which cross the boundary lines with in proceedingss is the air travel and it has no close replacement so client demands are homogenous.

National planetary consumers: clients of air hose industry looking for best support from the company, exciting on board installations such as repast and latest engineering provided such as cyberspace, safer journey and eventually clients looking for a best and unmemorable travel experience. So they can go loyal easy if the company supply these installations irrespective of the state.

Multinational planetary consumers: Business functioning planetary clients must " be present in all the clients '' yelp ( 1992 ) clients need best service in the planetary. These client picks are hiking the planetary air hose industry.

The impacts of technological alterations and globalisation during past 20 old ages have abolished state boundary lines and cross boundary line travel has increased quickly which in bend additions planetary clients to air hose industry.

Airline industry is clearly a movable market with a small local

version in advertisement runs, monetary value and promotional activities influence a big impact on its company.

Cost factors:

Economies of range is achieved through cut downing house 's mean cost of production as new merchandises or services or added. Airlines economic systems of range achieved in relation to the figure of points served by an air hose, in whict SAI is really hapless. This can be done by confederation, franchising and codification sharing with other air hoses. Economy of graduated table achieved byA increasing the concern into other states.

Scale economic systems occur when unit costs go down every bit entire production is increased. If a bearer bash concern with the same sum of traffic at a lower cost, economic systems of graduated table is achieved. Economies of graduated table can be generated from returns to scale, larning, specialisation and distribution of fixed costs over a longer end product ( Gsell,2005 ) Larger planes tend to be more efficient ( on unit cost footing ) than smaller aircraft.

Many houses have moved in front on the footing of this sensed demand for more accurate cost estimations and have designed and implemented activity based bing systems. ( Schiff 1991 )

Carrier 's chief costs are labour, information engineering, substructure, purchasing of new flights, signalling and set downing costs. These costs may change significantly from state to state among air hoses depending on the state they operate and the type of concern scheme involved for illustration the labour and care costs in Asiatic market like ion Pakistan and india etc are cheaper than western states. But the common most characteristic cost Fluctuates from clip to clip and histories about 10-20 %

of operating costs is coal-black fuel cost. No air hose is exempted from this cost nevertheless some air hoses are implementing fuel hedge techniques which benefits merely to some extent.

Government globalisation Factors:

Any air hose industry is sensitively related to its authorities policies, any alterations in the authorities policies can act upon the industry a batch. The universe trade organisation ( WTO ) and general understanding on duties and trade ( GATT ) liberalized trade barriers between states.

Compatible proficient criterions and common selling ordinances: common proficient criterions such as ISO 9001 2000 and ISO 9000 benefited air hose industry to bring forth globally accepted merchandises easy.

Host authorities concerns: the attitudes and policies of host authorities policies favour globalisation. For illustration unfastened sky understanding between the UK and the USA addition figure of paths and more companies entered in to the planetary markets. But due to shut sky understanding Pakistan and India are confronting great loss in term of clip and cost.

Why localisation?

Lead states

The UK, the USA and some EU companies are stronger in money, advanced in engineering invention and have a strong base in their several states. Asiatic and some underdeveloped states particularly pakistan bearers can non vie them in their place particularly their domestic market.


To implement and to keep a robust path construction between states, high criterion inventions and immense capital is necessary. Poor concern schemes and unsuccessful corporate communicating schemes particularly lack of cognition on civilizations, linguistic communication and parts are the chief grounds for localisation.

Environmental analysis

A The concern environment of any industry depends on its general and industrial environment. These environments are the most of import 1 's and any alteration in the

political, economical, sociological, technological and legal environment impact the industry or concern to a greater or lesser extent. These factors are non independent of each other: many are linked and the future impact of these factors, which may be different from their past impacts.

A Air travel remains a big and turning industry. It facilitates economic growing, universe trade, international investing and touristry and is hence cardinal to the globalisation taking topographic point in many other industries.

PESTEL analysis:

Political and Legal factors:

Quickly altering geopolitical universe, where new states are emerging into places of economic strength and are organizing new political alliances.A The air hoses operations depend on their national authoritiess. In clip of war or during a national exigency or defense mechanism oriented state of affairs, air bearers can be required to supply airlift services to the authorities services. In the event air hoses have to supply a significant figure of aircraft and crew to the Air Mobility Command, its operations could be adversely impacted. Airline concern is capable to extended authorities ordinance, which can ensue in additions in costs, breaks to operations, bounds on operating flexibleness, decreases in the demand for air travel, and competitory disadvantages. Airlines are capable to extended domestic and international regulative demands.

Political instability between the states ( challengers ) impacts the same on the air hose industry. The two states India and Pakistan severed air links after the December 2001 onslaught on India 's parliament, blamed by Delhi on Pakistan-backed Kashmir separationists. Most of the air hoses particularly Indian air hoses have suffered financially since the start of the prohibition as flights to Central Asia and Europe have to do a two-hour

roundabout way.

The present authorities of the Pakistan had come from the president swayer under presidential parliamentary democracy. Due to inappropriate state of affairs in jurisprudence and order as the consequence the political state of affairs went worse and worse. The other factor like terrorist act should non be neglacted. The present political satuation of the Pakistan is non such a stable, that has late taken over power, the present governing party of the state is PPP ( pakistan people party ) , the present status is instate of ramdom upset, besides it is the biggest democratic party of the Pakistan. As a consequence the economic system of the state is traveling worse and worse. Although we can state being a democratic state the state of affairs is in the favour state 's air hose industry. Shaheen air international is viing in competitory environment and lending a satisfactory function in the state 's economic system. As a consequence in 1994 it was accorded the position of 'Second National Carrier of Pakistan ' , by the Government of Pakistan.

Economic factors:

Growth in universe travel and RPM ( gross per norm stat mi ) are straight relative to GDP. Turning economic systems of developing states increases demand for air travel. China and India together accounts 40 % of the universe 's population air travel for this part has been lifting by up to 9 % a twelvemonth and is forecast to turn quickly.

Due to increase in oil monetary value, Inflation, foreign exchange rates and authorities economic policies and economic slow downs and roars are adversely impacting the SAI 's net incomes. SAI is soon runing 22 domestic and 28

International Flights per hebdomad and lending a batch in the economic system of the Pakistan.

Sociological tendencies:

Due to the impact of globalisation, air hose industry witnessed immense growing for the past 20 old ages. People gustatory sensations, civilizations, likes and manner have been changed. Countries became financially stable and people are financially fit to pass on air travel.A

A Governments in developing states realized the benefits of touristry to their national economic systems and spurred the development of resorts and substructure to pull tourers from the affluent states in Western Europe and North America. This consequences an addition in economic system of developing states particularly Asian states like Pakistan India etc. As the economic systems of developing states grow, their ain citizens are already going the new international tourers of the hereafter.

Business travel has besides grown as companies become progressively international in footings of their investings, their supply and production ironss and their clients. The rapid growing of universe trade in goods and services and international direct investing has besides contributed to growing in concern travel.

Weather and natural catastrophes, outbreak diseases that consequence travel behavior. Airline industry could be adversely affected by an eruption of a disease that affects travel behavior. In 2003, there was an eruption of Severe Acute Respiratory Syndrome ( SARS ) , which had an inauspicious impact chiefly on our Asia operations. More late, there have been concerns about a possible eruption of avian grippe.

A In April 2009 the air hose industry was hit by swine grippe frights which lead to dramatic autumn of air hose portions. Many states cancelled flights to and from Mexico which lead to over capacity of planes and

air hoses staff and wedged air hose net incomes.

Terrorist onslaughts can besides impact air travel. After onslaughts on WTC ( universe trade Centre ) in September 2001 air travel dropped off dramatically as riders no longer felt safe traveling. Particularly it was a large hit to the economic system of the Pakistan as a consequence a bad image was created for the Pakistan in all over the universe. By go throughing the clip due terrier onslaught inside the Pakistan ( mundane bomb blast ) the societal state of affairs went worse and worse which indirectly effected Pakistani air lines like PIA, SAI and air Blue etc, and straight to the economic system of the Pakistan as the tourers stop sing Pakistan and rider felt insecure.

Technological factors:

From Boeing 247 and daggles DC3 in 1920s to Boeing 747 and daggles DC10 in 1970s air hose industry witnessed immense technological alterations. Airlines are to a great extent and progressively dependent on engineering to run its concern. In 1960s air hoses were one of the first major industries to set computing machine to work in a large manner. The developments in engineering changed industry from little planes transporting 10 riders to big planes transporting more than 400 riders such as Boeing 747 this reduces the operating and care costs.

Airline industry is to a great extent and progressively dependent on engineering to run its concern such as Computers for on-line reserve system and office intents, telecommunication systems for codification sharing and traffic signalling intents, optical maser coded bag tickets and machine clear tickets, luggage procedure through mechanization and advanced engineering for security challenges. SAI is utilizing the latest engineering with

the fleets of all its seven ego owned Boeing 737 aircraft on all national and international paths.

Environmental state of affairss:

Even though it is one of the least polluting signifiers of travel in the universe aircraft engines emit noise pollution, gases and particulate emanations, and contribute to planetary heating. As the industry turning quickly. Due to increasing rider needs more and more new planes come ining into the concern which creates more menace to the environment, The figure of domestic and international airdromes have been increasing which consumes Hectors of agricultural land for tracks for landing and takeoff operations, Most airdromes are located suburbs, so clients need to go a long distances by utilizing their ain or public transit systems which consume batch of fuel to travel.

A Confronting force per unit areas from the bulk of ICAO ( international civil air power organisation ) and IATA, the EU has warned a list of 4000 companies that must cut down their impact on ambiance or face a European airdrome prohibition. SAI is fundamentally a little company and the direction is sing these facts earnestly because it is planetary job.

Porter 's 5 Forces Analysis

Menace of entry:

A In modern air power industry new entry in the Pakistani air line industry is non a common topographic point. Existing participants like PIA, Air Blue and SAI are protected against new entry by scale economic systems. In hubbing operations where bing short-haul bearers feed the riders to long-haul services which are undertaken at a significant graduated table. It is hard to copy for new entrants.

The response of officeholders seems to be limited merely to the threatened path itself, and non to routes

out of nearby rival airdromes. The largest responses appear to be restricted to paths that were concentrated beforehand. Incumbents do see short-term additions in their rider loads concurrent with these menu cuts.

Capital is the of import issue for the new entrants in to the industry. If adoption is inexpensive, so the likeliness of more airliners come ining the industry is higher. The more new air hoses that enter the market, the more concentrated it becomes for everyone. It is ever possible for a new entrant to purchase the support services, such as care and land handling. Many air hoses have built subordinate concern offering such services and they will be prepared to sell these to a new entrant, even if the new entrant 's concern program involves viing with them.

Customer trueness is difficult for a new entrant. So many bequest and national bearers have strong bases with their clients. Huge investing on advertisement runs and puting low costs can get the better of this.

Today, most air hoses have an executive work force that has risen through the ranks and many have over 20 old ages of experience. Experience is difficult to achieve.A Employing extremely skilled pilots and other staff by offering competitory wage is necessary.

Power of purchasers:

Porter argues that the power of their clients will be a important determiner of profitableness for the houses in any industry. If a house has more clients concern runs successfully and the clients have limited bargaining power. In an opposite position the bargaining power of clients is more if a house has limited figure of clients.

The bargaining power of purchasers in the SAI is rather low. Obviously, there are

high costs involved with exchanging aeroplanes, but besides take a expression at the ability to vie on service. Unlike other concern sectors, air hoses differentiate with a small border. The seats provided by all economic system category air hoses, the clip the clients travel and the on board nutrient supply are about same.

Power of purchasers has increased with the engineering alterations. With the coming of the Internet as a convenient method for the mean consumer to seek for the lowest airfare and finish the dealing without an intermediary, purchaser power has increased as a important industry force.

Power of providers: 

When a house is wholly dependent on monopoly providers of crucially needed resources, these providers will be able to bear down monetary values. The Boeing 747 was introduced into air hose service in 1970, and was unchallenged by any other aircraft for following 25 old ages. This is because there was no alternate long-range aircraft with more than 400 seats. . The air hose supply concern is chiefly dominated by Boeing and Airbus. For this ground, there is n't a batch of aggressive competition among providers.

Financially, Planes must be ordered far in progress, go forthing air hoses with small pick but to topographic point orders in expectancy of industry growing it is a hazardous factor because no 1 predict the hereafter of the industry. The rival air hose like PIA and Air Blue are besides available that are supplying better service and installations than SAI and some extent in monetary value. If the plane ordered before four old ages at the clip of strong economic roar and is delivered during recession, remains over capacity cost for air

hose operators.

Menace of Substitutes:

Substitution occurs when the houses in another industry happen a new and better manner of run intoing the same client demands as are being targeted by the bing participant.

There are many figure of permutation issues impacting air hoses at the present clip. Video conferencing and teleconference and email brand concern travelers travel less. Email is well cut downing the market for the motion of pressing paperss by air and set uping air lading concern.

But there is no close replacement for passenger travel particularly in the instance of cross- boundary line travel. With no high-velocity rider transit system in the universe ( trains, coachs, ferries and personal cars ) compare to air travel, air hose became a feasible option for clients.

The deficiency of feasible replacements to the air hose industry which efficaciously meet the travel demands of consumers is advantageous, though it has surely impacted other industry factors like the menace of new entrants.

Competitive Competition:

Competitive challengers are organisations with similar merchandises and services aimed at the same client group. Highly competitory industries by and large earn low returns because the cost of competition is high. This can spell catastrophe when times get tough in the economic system.

The SAI is confronting high competitory competition. The sum of competition depends on the menace of new entrants and purchasers power. While the menace of replacements is low and the power of providers has remained mostly unchanged, these forces have been offset to alterations in purchaser power and new entrants, ensuing in overall hapless industry public presentation.

Due to low entry barriers and high issue barriers, inundation of new entrants increases the sum of competition for a long



Decrease in oil monetary values per barrel, economic roars, and authorities liberalisations, increasing figure of developing states, an addition in pupil and concern travel and information engineering and out sourcing are the chief chances for the air hose. Bing a Second National Carrier of Pakistan, SAI have a great chance to come in in European market because it has about same degree of functioning installations like other Pakistani air hoses such as PIA and Air Blue and besides the labor and care costs in Asiatic market are cheaper than western countries.SAI has about 18 old ages experience of functioning air hose clients, it has created trade name name and client consciousness.


SAI and about the air hose industry is adversely affected by a failure or break of computing machine, communications or other engineering systems. Any failures including natural catastrophes, power failures, terrorist onslaughts, equipment failures, package failures and computing machine viruses and hackers could impact its operations and client service, consequence in the loss of of import informations, loss of grosss, and increased costs, and by and large harm its concern.

Fears of terrorist act or war, menu enterprises, fluctuations in fuel monetary values, labour actions, conditions and other factors could impact this seasonal form.

An addition in oil monetary value, recessions, terrorist onslaughts, hapless conditions conditions and diseases are the chief menaces the SAI and the whole air line industry we can state Asian air hoses particularly Pakistani air hose has been confronting from several old ages and will be traveling to confront in the hereafter. The unstable political state of affairs of the Pakistan is a large menace SAI every bit good.

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