ANALYSIS OF THE AIRLINE INDUSTRY

ARIK AIR
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OUTLINE
Aviation in Nigeria Industry overview Industry structure Key success factors Differential performance Conclusion

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Quote
The Nigerian Government,
To provide a safe efficient, reliable, dynamic, customer-focused and market driven air transport services which will make the country a leading hub in Africa and a major participant in global aviation and at the same time make significant contribution to Nigeria's gross domestic product. (GDP)

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Aviation in Nigeria
Aviation is a complex industry: It is divided into 2 major parts.
All over the globe, aviation has become a major means of transportation and communication Nigeria has placed substantial premium on the development of civil aviation

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Industry Overview
A proposed entrant should know that the aviation industry is highly capital intensive with huge investment in aircraft The aviation industry suffers from inadequate funding and availability of funding for the industry is hampered by factors including legal, regulatory, political and economic factors.

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Financing Options
Outright purchase Installmental payment Borrowing and equity contribution Finance lease Operating lease

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TRAVEL AGENCY INTERNET

AERO, CHANCHANGI,IRS, ARIK, DANA, AIR NIGERIA, FIRST NATION

OIL MARKETING COMPANIES AIR-PLANE MANUFACTURERS GROUND HANDLING

ROAD RAIL EMAIL PHONE MAIL/COURIER 5/12/2012 GROUP 3 A 7

KEY SUCCESS FACTORS

People Service product/promotions Route system Revenue/cost control Financial management

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Business Focus
ArikAir ensures the highest standards of safety and security are sustained as they deliver the following services
Scheduled passenger service Passenger charter flights Executive charter flights for corporate organizations and VIPs

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Differential performance
On site aircraft maintenance by Lufthansa Technik Minimum response time to confirm bookings Round the clock service International safety standards Expert expatriate management team World class customer service delivery Value added benefits like flexibility, more choice of schedules and frequencies
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Market Share
8% 5% 10% 28%

9% Virgin
Aero arik dana Chachangi

Irs

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40%

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Number of Routes
60 50 58

40
30 20 14

26
13 17 10

Virgin Aero

arik
dana Chachangi Irs

10
0

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Passenger frequency
45%
40% 35% 30% 25% 20% 15% 23% 41%

Virgin
Aero arik 11% dana Chachangi

10%
5% 0%

8%

8%

4%

Irs

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Based on 1st quarter 2010

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PRICING
LAG - PHC - LAG
140000 120000 100000 80000 Economy 60000 40000 20000 0 5/12/2012
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Business

Arik

Aero

Dana

Airnigeria

PRICING
LAG - ABJ - LAG
120000

100000 80000 60000

40000 20000 0 5/12/2012 Economy business

Arik

Aero

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Current Route Network

Primary hubs Lagos and Abuja 26 routes domestic 20 airports domestic Per week 150 flights Secondary hub - Port harcourt

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`In Conclusion
Arik Air has delivered:
Brand new aircrafts First class maintenance Developed new routes Developed infrastructure Carried over 2,700,000 passengers Appointed as National carrier of Niger Republic
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So.
Havent they created a world class airline that, in Sir Arumemi-Ikhides words, Nigeria and the rest of the world would be proud to fly?
We believe they have

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