Qatar Airlines and Its Growth Reasons

Introduction

Various reasons explain the rapid growth and development of Qatar airlines ranging from the internal factors to the factors emanating from the external environment. Since its re-inauguration, the airline has seen tremendous growth to approximately 140 destinations globally. Factors that have been cited as the major contributors to this growth and development include excellent service delivery, sound management, government support, and industrial environment. Besides, the firm has relied heavily on the new technological advancements and highly professional workforce both in the management and in junior staff positions. While these factors remain to be integral in the growth and development of the airline, the provision of high-quality services has played a critical role (Fojt 25). In other words, the airline is committed to offering high-quality services in addition to an increased level of efficiency.

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Essentially, the airline has fully identified and utilized its competencies to build, maintain, and grow its position in the marketplace. Competencies such as increased technological advancements, skills, and professionalism of the workforce and the financial support from the government have primarily been used to ensure the quality of service delivery, which is the major source of its competitive advantage (Fojt 25). In a highly competitive environment such as in the airline industry, identifying factors that provide competitive edge remain critical, particularly in capturing increased market share. As such, Qatar airlines have fully utilized their competencies that provide this competitive edge in order to capture a sizeable market share.

The history of the airline

Based in Doha, the airline is the national carrier of the state of Qatar. Besides, the airline represents one of the big success stories in the highly competitive aviation industry. The airline started its operations way back in 1994 as a regional carrier offering fewer services to only a small number of routes (Fojt 25). In 1997, the country’s top leader championed the re-launch of the airline with a vision of turning the national carrier into an excellent and international airline offering quality services to its clients. Since its re-launch, the airline has recorded constant higher growth with unprecedented expansion.

Besides, dynamic leadership has contributed to its growth. Essentially, the transformational and dynamic management of the CEO has greatly contributed to the airline’s rapid growth into a renowned excellent airline. Under the management, the airline has been transformed into the leading force, particularly within the region and in the global stage, offering excellent and standard services to its clients (Fojt 25). In 2011, the airline attained a landmark by reaching over 100 destinations globally as well as obtaining delivery of over 100 aircraft. The achievement is an incredible accomplishment within just fourteen years of its re-launch. By 2013, the airline has already developed a global network covering over 140 destinations, particularly within the Middle East as well as in South Asia and Asia Pacific. Other destinations are found in Africa, Europe, North and South America. The airline is also equipped with a modern fleet of over 130 passengers and cargo aircrafts.

Reasons for the growth of the airline according to Porter’s diamond model

Factor conditions

Various factors have contributed to the growth of the airline from a mere regional carrier to internationally recognized airline with over 140 destinations. Factors such as the utilization of highly professional and skilled labor, infrastructure and advanced technology have enabled the airline to offer high quality services, which in effect has led to the capture of a sizable market share within the global market (Márkus 150). In fact, both internal and external factors have contributed to the firm’s increased competitive advantage.

Competent and dynamic management

The management of the firm is one of the major factors that have contributed hugely to its rapid growth and development. Essentially, the management competency has greatly contributed to the sustained growth in terms of revenue and profitability. The management competencies are not only found at the top levels of the firm but also at middle and junior levels. However, the top management is highly focused on the strategies that are geared towards growth and development of the airline. In other words, the management practices and activities are aimed at improving revenue and profitability growth as well as expansion.

In developing the strategic goal of the firm, the management considered existing opportunities within the core businesses of the airline. Besides, the management sufficiently considered existing opportunities in areas adjacent to the core business of the airline such as new customer sub-segment. Moreover, the airline management came up with an infrastructure that supports appropriate execution of the firm’s strategies.

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Essentially, besides the capabilities and the transformational management style of the top manager, the strategic goals and supportive infrastructure has contributed to the rapid growth of the airline within the industry. The management of the airline has focused on three main areas including strengthening leadership practices at all levels, creating customer-focused strategies and effective execution of the stratagems. Within the leadership practices, the firm has emphasized on three growth areas including expansion in customer sub-segments, growing the core business areas as well as in the adjacent opportunities. The strategies have aided the firm to build the internal organizational capabilities and performing management, which is critical for growth and expansion of the airline. Generally, the management capabilities with focused strategies have contributed hugely to the growth of the airline.

Supportive infrastructures

The growth of the airline has also been greatly supported by the available physical and management infrastructures. In terms of physical infrastructure, the airline’s operations have been supported by the expanded Hamad international airport with initial capacity of over 30 million passengers. The modern and state of the art airport is expected to be enlarged and upon completion, its capacity will increase to over 50 million passengers on a yearly basis.

The increased capacity of the airport and its capability of handling many passengers have enabled the airline to increase its efficiency in handling the ever-increasing passenger traffic, which in turn has contributed to the increased client base. Besides, Qatar airline is the only airline in the region with the youngest fleet and an average aircraft age of below four years. The youngest fleet consists of the modern aircrafts that provide the passengers with increased comfort and luxury, an experience that can only be found within the airline.

Besides, at the management level, the firm has come up with standardized infrastructure that has supported the execution of its strategies. The management has achieved this development through the elimination of various departmental and regional hurdles that prevent the execution of the growth policies. Besides, the firm has continuously applied the leading indicators as well as the performance drivers that are aligned to the growth strategies. Further, the airline has ensured the growth of leadership capabilities at every level whether in managerial and non-managerial positions. The managerial or non-physical infrastructure has contributed hugely to the development and growth of the airline. Besides, the non-physical infrastructures are one of the major managerial competencies that have increased the firm’s competitive advantage over its rivals.

Advanced technology

The firm has appropriately applied the prevailing advanced technological knowhow to deliver excellent and quality services. The service offerings through technological platform have propelled the airline into the global stage. Most of the airline services can be delivered online including flight bookings and other information such as departure time. The online services have enabled the clients to get any information concerning flight bookings, prices, luggage collective onboard services as well as arrival/departure times all over the globe. Essentially, the online platform through the firm’s website has increased the level in which the firm’s clients can obtain and access information conveniently. In other words, the technological platform has increased the efficiency and effectiveness in information delivery. The convenience created by the application of new technological advancements is one of the service qualities, which in turn has contributed to the growth of a large pool of clientele.

According to the industry specific studies, clients prefer the convenience and quality in the service delivery. In fact, the airline attained the level of offering 5-star travel experience online where customers can easily book their flights and search for more information anywhere and anytime around the globe. The new site has increased the rate of price transparency and access to information regarding new flight deals. The technological applications have come with increased customer experience that continues to attract a large number of clientele.

The demand conditions

The nature of demand in the aviation industry requires considering both the quality and quantity in terms of services being provided and capacity. The reason is that the demand of the industry is highly sophisticated with ever-increasing knowledgeable clients and their changing needs as well as the economic hurdles that have contributed to the reduced capacities of the passengers. Therefore, pricing and quality remain to be the major drivers of growth and expansion of firms operating within the industry.

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Provision of quality services and products

The Qatar airline has been focusing on the provision of quality services and products to its clients. In fact, the quality service delivery is one of the strategies that have contributed hugely towards the growth and development of the airline. Besides, the airline has ensured efficiency and effectiveness in handling passenger traffic, improved onboard services as well as luggage handling procedures. Moreover, the airline has focused on the customer-oriented strategies that have led to the improvement of certain areas such as effective luggage collection.

In order to be distinct from other firms, the airline has provided its services online. All the service areas and information are available to the clients online. The availability of information online has drastically reduced the time and expenses related to the search of information. The provision of services online has greatly contributed to increased efficiency in service delivery. Quality and effective service delivery are one of the critical competencies that contribute hugely to increased competitive advantage to the firm. Generally, the airline service delivery including the management of information concerning departure/arrival time, luggage collection, onboard services as well as rout availability has been ranked as the most effective within the industry.

The pricing strategies

With the constant declining economic conditions, clients have continuously become more sensitive to prices not only in the aviation industry but also in other industries. Currently, fair prices are one of the major drivers of demand in the aviation industry. In fact, the Qatar airline provides flexible fare prices in all its classes particularly in the economy category. Besides the class categorization, ticket prices are also pegged on other variables that result in the reduction of fares. Besides, the airline’s cargo prices are also fair compared with other airlines in the region. The fair prices combined with increased quality have contributed hugely to the growth of the airline passengers in almost all regions across the globe.

Related and supportive industries

The nature of national conditions that determine the creation, organization and management of the airline as well as the level of domestic and regional competition has played a critical role in the growth and development of the firm (Porter 79). The capabilities of the top leadership of the airline, the use of highly competent and skilled labor, the application of technology as well as the supportive oil and gas industry has propelled the growth and development of the airline.

The firm’s strategy, structure and competition

The firm’s focus on the customer-oriented strategies, safety policies as well as the corporate social responsibility has also contributed to its rapid growth and expansion (Fojt 26). Customer oriented strategies and safety policies have resulted in the production of high quality services while corporate social responsibility has increased the relationship the firm has with the communities and governments in which it operates. The commitment of the firm towards the greener energy and reduction of carbon emissions as part of its corporate social responsibility has also enhanced its good relations with the larger global community.

Chance events

Other factors outside the control of the government and industry such as the fundamental technological innovations, unexpected changes of oil prices as well as economic conditions has also influenced the growth of the firm (Porter 84). In fact, the firm’s capability of identifying these variables and gaining full control as well as appropriate application has propelled its growth and development. For instance, the firm has used new technological advancements in aviation and Information Technology (IT) industries to improve the quality of its service delivery.

Government support

Since its re-launch, the airline has received enormous government support in all fronts including finance and infrastructure development. The government of Qatar through its top leadership has provided the necessary requirements to support the growth of the airline from a mere national and regional carrier to an international airline with increased quality in service delivery. The vision of the top leadership is to turn the original regional airline into a global carrier with improved quality service delivery. As such, the government together with top management of the airline developed strategies and policies aimed at achieving the goal.

Conclusion

As indicated, various factors have contributed to the growth of the airline ranging from the competent and dynamic leadership of the top manager to government policies and strategies geared towards attaining the strategic goals. Most importantly, improved service delivery, competency of the management, technological advancements as well as government support has propelled the firm into a renowned global airline with over 140 destinations and largest number of fleets. Generally, these factors have contributed to the rapid growth of the firm both in terms of revenue and profitability and in terms of geographical coverage as well as fleet size.

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Works Cited

Fojt, Martin. The Airline Industry. Bingley, UK: Emerald Group Publishing, 2006. Print.

Márkus, Gábor. “Measuring Company Level Competitiveness in Porter’s Diamond Model Framework.” Business Science Review, 3.1 (2008):149-158. Print.

Porter, Michael. “The Five Competitive Forces that Shape Strategy.” Harvard Business Review, 86.1 (2008): 78-93. Print.

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StudyCorgi. (2020, November 28). Qatar Airlines and Its Growth Reasons. Retrieved from https://studycorgi.com/qatar-airlines-and-its-growth-reasons/

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