Aer Arann has always been careful to make sure that it divides the market into two segments, the first segment being those who travel for business and the second segment being those who travel for leisure. Aer Arann makes sure that in all marketing campaigns and customer building strategies, it manages to convince both these market segments that air travel is not an element of luxury but a necessity.
This measure can be justified by the fact the air travel is still considered to be a luxury in Ireland by a vast majority and this niche market can be very profitably taken advantage of by a sales and marketing that can change this bent of mind in the Irish. SWOT Analysis Strengths • Aer Arann is competing with Aer Lingus and Ryanair in the Irish market. Having becomes the third busiest airline at Dublin Airport Aer Arann is giving Small National Airline Aer Lingus and Low Cost Carrier Ryanair a run for their money.
• Aer Arann has an advantage over several other airlines through the Government subsidiaries it receives. The airline has recorded government subsidiaries as high as around €20 million. Weaknesses • Aer Arann is an airline that targets business and leisure travelers and has to do so in order to keep the business rolling. Unlike the immediate competition that Aer Arann faces, it is not an established leader as yet. • Aer Arann relies too much on third party outsourcing to perform maintenance and other such operational mechanisms.
This is a risk for Aer Arann in the sense that any union strike or the temporary or permanent closure of any of the organizations that is used y Aer Arann to out-source and save costs can result in Aer Arann undergoing immense switching costs while leaving Aer Arann in an extremely vulnerable position. Opportunities • Aer Arann seems to have caught the eye of the Irish Government considering the four Public Service Obligation Routes that Aer Arann has recently attained. Further benefit can be yielded by providing service that compels the Irish Authorities to give Aer Arann PSO clearance for all six routes.
• Aer Arann is a regional airline but it operates between UK, Ireland and France. Aer Arann can present its ever improving track record to the French Government in order to gain access to more French air routes since Aer Arann currently operates on only three French routes. • Aer Arann’s track record in Ireland and the revenue generated by the efficient usage of subsidiaries can allow Aer Arann to gain subsidiaries from the French government for domestic flights in France. Threats • Two of the 6 awarded PSO clearances were awarded to Aer Arann’s immediate competition, the Scottish regional airline Loganair.
Loganair can be a cause of loss in market share in the Irish market for Aer Arann. • Loganair is a franchise for British Airways and therefore has the advantage of being a part of an International Network Airline. This convenient position for Loganair is one of the most dangerous of threats for Aer Arann. • The only other threat to Aer Arann is posed by Ryanair. The Ryanair “No frills” approach and aggressive pricing strategies have proven to be a success for the low cost European carrier.