SAUDIA Airline: A Review of Their Services and Amenities

In 1945 SAUDIA started its operation with a single twin-engine DC-3 that was a gift given to King Abdul Aziz from US President Franklin D. Roosevelt. In 1947, they added three more planes and from 1950-2000 the airline shows an aggressive growth of its network and fleet now airline operations are expanded to 5 continents which include, Africa, the middle east, Europe, Asia, and North America.

SAUDIA Business Model

SAUDIA is a full-service legacy carrier, and also a national flag carrier owned by the government of Saudia Arabia. It is also the largest domestic airline which multiple hubs that include, Riyadh, Jeddah, and Dammam. It operates on the hybrid model i.e. is point to point and hub-spoke model. In aircraft, they offer first class, business class, and economy class (guest class). SAUDIA is a member of the Sky Team airline alliance since 2011. It is the fourth largest airline in the Middle East and is operating on 85 international destinations and 22 domestic destinations.

SAUDIA Fleet

SAUDIA contain a fleet size of 144 different aircraft and they are looking forward to adding more aircraft to their fleet. The addition of new state-of-the-art aircraft will be very valuable proportionate. The indication of more fleets will be based on its operation strategy for domestic, international, and regional flights. The fleet of SAUDIA is based on Boeing and Airbus.

Aircraft Name	No. of aircraft
Boeing B777-368ER	33
Airbus 330-300	32
Boeing B787-10 Dreamliner	5
Boeing B787-9 Dreamliner	13
Airbus A321	15
Airbus A320	16
Airbus A320ceo	30

Cargo Division

In the cargo division, SAUDAI has Boeing 747-400 Freighter and B747-8 F along with Boeing 777 Freighters. The cargo division is also expanded to the 3 continents Europe, Africa, and Asia.

Competition of Airline

The airline operates in a very competitive market between three major competitors including Emirates, Qatar, and Etihad. But there is no competition for SAUDIA with these three big airlines as SAUDIA has a hybrid business structure that includes a hub-spoke and point-to-point model also. As compared to SAUDIA these three airlines strictly operate from a single hub as they follow only the hub and spoke network model.

PESTE Analysis

Pest analysis is a powerful and worldly used tool that seeks to provide a strategist’s framework that increases understanding of the firm awareness of its external environment (Galea, 2014 ). The variables included in the external environment are beyond the control of the firm. A good strategy evaluating a business model must be adopted keeping in view of these variables. Therefore, PEST analysis for SAUDIA airline is conducted to find out, factors that are affecting the airline’s performance.

PESTE analysis is utilized for the performance of the SAUDIA. The main task of this analysis is to find the main challenges that are faced by SAUDIA. Moreover, it is important not just only to identify them but analysis and comes up with strategies to improve and overcome them (studymode, 2022).

Political

Saudi Arabia has a stable political structure that is controlled and operated under the leadership of the monarch. The kingship follows the Sharia law and makes proper decisions. There isn’t any political party there. The royal family is in charge of controlling the political environment of Saudi Arabia. It is also a member of world-leading org like the UN, the Gulf cooperation council, the Arab League, the Organization of Islamic Cooperation, and OPEC (Ahsan Ali, 2021). These political and economic relationship has proven very useful for its airline.  The set of bilateral air service agreements with other states connects them to other sovereign countries and also increases the air market for the Saudis aviation industry.

Saudi Arabia is now transitioning into a new political era of international engagement for expanding and supporting its economic vision. Promoting international tourism is also one of its catalyst (Vision 2030, 2021). Moreover, Saudi Arabia is eliminating the supreme councils and going to developing councils of political, security affairs, and economic development affairs. This will now help the different industries to speed up strategic development and decision making including the aviation industry also stated in Vision 2030.

Environmental

Saudi Arabia being the world’s leading developed county is also facing environmental challenges that include, air pollution, desertification, water pollution, urbanization, deforestation, etc. Despite their challenges, they are focusing on achieving environmental sustainability by utilizing different ways to overcome them. Preservation of natural resources, increasing the efficiency of waste management and reducing all types of pollution for the protection and rehabilitating of their country.

The induction of new technology aircraft in the SAUDI airline fleet has lessened the impact on environmental pollution as it is operation state of the art aircraft. Moreover, SAUDIA has to look at the new trend on short-haul flights as NEO technology aircraft are being adopted by most of the airlines for more efficiency and more environmental growth which will benefit t the SAUDIA airline in the long term.

Social

The vision for 2030 supports some social liberalization to promote the development of the entertainment industry and tourism, as well as extensive reforms of the education system, traditionally. If a stronghold of the religious would be implemented in the country then it will change the relationship between the state and its citizens, politically and socially, and economically, and the Partnership between government and clerisy.

The government wants to have an effective negotiation of the social contract to gain support for the massive economic changes. For this, the government needs to have effective strategic communication and consultation with people for grabbing their attention for inclusive growth and social safety networks (Kinninmont, 2017).

The Aviation industry in Saudi Arabia is drastically growing which has created multiple job opportunities for the citizens. Nearly, 152,000 jobs were created by airlines in Saudi Arabia (Gamraoyi, 2016). Overall in the country, the unemployment rate fall between 8-12% in the year 2021.

Technological

Saudi Arabia is planning to shift its economic dependency toward technology rather than oil and gas by the end of 2030. For this, the country is investing its resources in innovation, entrepreneurship, and R&D. In technology, the most considerable topic would be digital technology. Digital transformation is also one of the essential programs of Vision 2030. The SAUDIA airline must focus on digital transformation and modify its business model according to the trends to keep in line with the industry. (Balubaid, 2020)

Economical

According to estimates, Saudi Arabia’s nominal GDP in 2020 will be $680 billion, ranking 19th in the world. Among them is the country’s per capita income of 19,587 US dollars, ranking 39th in the world. The air transport and logistic hub are contributing 6% of the GDP. The economic condition of Saudi Arabia makes them take the decision for launching a new national airline. This means that SAUDI which functional national airline of Saudi Arabia demand has increased which become difficult for the airline to handle it. Therefore, they have ended up making the decision to launch a new national airline by 2023. The official aim of this initiative is to expand the transport and logistics sector to rise its contribution from 6% to 10 % by 2030.

Mohammed bin Salman said, “The comprehensive strategy aims to position Saudi Arabia as a global logistics hub connecting the three continents. This will help other sectors like tourism, Hajj, and Umrah to achieve their national targets.” (Bodell, 2021)

Moreover, the Vision 2030 goal also includes attracting 100 million tourists yearly which means that if they are able to attract 30 million tourists each year then they will be able to reach this 2030 vision goal. This is also a great opportunity for the airlines to prove their self and rank higher on the list.

Not only is this but Saudi Arabia going to build a new international airport in its capital Riyadh. This would the main hub for the new national airline and will be for its existing SAUDIA airline. The kind Khalid international airport is already the 2^nd busiest airport in this country.

Airline’s Best Practices for Market Strategies

Customer Understanding

SAUDIA Airlines has used powerful analytical capabilities to understand customer needs and preferences (geographies and market segments). SAUDIA has used Net Promotor Score which is one the best metric for measuring customer satisfaction. SAUDIA has used social media networks to get real-time reviews of their product and services.

Process Digitalization concept

SAUDIA had one of the most ERP systems that make the company gain efficiency and quality in their transactions which is a good process digitalization concept. This automation system helps the employees refocus on their tasks and the company’s main strategy rather than on another task.

Work Enablement and Performance Management

The use of innovative technologies to enhance customer satisfaction by increasing staff satisfaction was used by SAUDIA. Moreover, for performance management SAUDIA has used advanced tools and portals to give access to data to its management team for making strategic decisions.

SAUDIA in New Digital Business

There is a lot of competition in the aviation industry. Every day companies are introducing new features at a rapid pace and services to achieve customer satisfaction and increase passenger market share. AirAsia is using facial recognition for check-in at the airport, Emirates offers meal services to business class using smartphones, and Lufthansa is using virtual reality to promote its higher class.

Talking SAUDIA it has also improved its services and product such as

• Manage to book: allows customers to reschedule flights, check-in online, add extra baggage, select seats, purchase Wi-Fi vouchers, and upgrade flight classes through a bidding system.
• Refund: using the SAUDAI website you can easily make refund transactions, which will save time for the guest.
• Virtual reality: SAUDAI also has SAUDAI 360 VR portal. That allows the airline to have an amazing experience to discover first-class cabins.

To sum up, SAUDIA is also adopting new technologies and features for staying competitive in the aggressive market.

Evaluating Product and Marketing Methods

Brand equity

The fastest-growing airline brand in the Brand Finance Middle East 150 2022 ranking is Saudi Arabia’s SAUDIA, which increased its brand value by 13% to $572 million.

Competitors

On the international network, SAUDAI had to face competition in the market as Emirates, Etihad, and Qatar as standing in front. But as SAUDIA operates on a very different business model having a hybrid hub and spoke model as well as point-to-point that will give SAUDAI a competitor edge in the market.

Marketing channels

SAUDIA is utilizing current trends in the industry for its marketing. Digital marketing technology is the main channel of SAUDIA. Other channel includes include advertising, sponsoring, online marketing, loyalty programs, collaborations, public relations, and in-flight service.

Perks for Frequent Buyers

The ALFURSAN program offers unique experiences and privileges to its members. The more you fly with Saudi and Sky Team, the higher your membership level, from Blue Card level to “Elite” Silver Card level to “Super Elite” Gold Card level, and enjoy more exclusive privileges.

Benefits	Blue	Silver Elite	Gold Elite Plus
Bonus Miles	–	25%	50%
Family Miles	✓	✓	✓
Priority Wait Listing	High	Higher	Highest
Priority Boarding	–	✓	✓
Priority Airport Standby	High	Higher	Highest
Seat selection	–	✓	✓
Additional Baggage allowance	–	1piece *	1piece *
Rapid Check in Class	–	Business	First
Special attention to luggage	–	Business	First
Lounge Access ***	–	✓	✓
Monthly Newsletter	✓	✓	✓
Alfursan Partners Promotion benefits	✓	✓	✓
Priority Call handling	–	✓	✓

Marketing Plan of SAUDIA

The marketing model of SAUDIA has five phases (Malik Muhammad, 2014).

• Phase 1: electronic media, TVC, TV channels Cables, and radio with print media and Advertising in Newspaper and Magazines
• Phase 2: social media that include Facebook, Twitter, web banners, SMS, and emails
• Phase 3: ATL, Bill Boards, Steamers on Posh areas, clubs, hotels, and travel agencies with BTL activities i.e., on-ground promotional activities, airports, Malls, and travel agencies
• Phase 4: Events, conferences, exhibitions, etc. Sponsors
• Phase 5: Digital marketing, and promotional giveaways to corporate and education sectors.

Financial Assessment

The report highlights that Saudi will operate more than 40,000 flights in the first quarter of 2022, a 44% increase from the first quarter of 2021. The airline’s 144 aircraft flew more than 101,600 hours in the first quarter of this year, which is 77 percent increase compared to the same period last year.

SAUDIA Ranked Fastest Growing Airline Brand in the Middle East

The Saudi flagship grew 13.1 percent and earned an ‘A’ brand rating. With double-digit growth, Saudi was named the “fastest growing airline brand” in the Middle East. The airline will add 10 new routes to its network this year, including the recently opened cities: of Amsterdam (Netherlands), Entebbe (Uganda), and Bangkok (Thailand), as well as Barcelona (Spain), Marrakech (Morocco), Malaga (Spain), Moscow (Russia). , Beijing (China), Mykonos, Greece, Seoul (Korea), and Chicago (USA) (Saudia 2022)

 SAUDIA Performance Assessment

The impact of the COVID-19 pandemic was the same on all the aviation networks including SAUDIA airline but the cargo division was still in operational condition. Just after the pandemic SAUDIA has shown great growth and jumped from 82nd to 51st. Skytrax has also announced the SAUDAI the World’s Most Improved Airline of 2021. This year, the airline is continuously showing its performance and improved by a stunning 55% and is now ranked at 26th in the global airline ranking of Skytrax. The striking new onboard product is one of the highlighting improvements done by this airline (Saudia, 2021).

Saudia Arabia has also eased its visa and travel restriction for the betterment of tourism and a business-friendly environment. As Saudia Arabia has made a goal of achieving 100 billion guests on a yearly basis, therefore they are putting a lot of effort into their aviation and logistics industry to boost the performance and quality of services for achieving Vision 2030 100 billion guest goal.

Recommendations for Improvements

The main reason for being underrated is because they did not have purpose-built airports as this airport is the basic necessity for a full-service carrier. As to support a very big network, and traffic you need a bigger space. We saw until 2019 that this airline used to conduct its operations from the tiny north terminal of Jeddah. However, in 2020, the airline shifted its operation to new terminals, and currently, it is conducting its operation from the new terminals both domestically and internationally.

We can see that SAUDIA has witnessed up to 90% of the growth but after the pandemic COVID-19 the airline is not witnessing any growth in its passenger. The privilege of having a national carrier is that it is backed by the government of Saudi Arabia for financial support.

However, Jeddah’s new terminal would result in a game changer for this airline, they may become the regional leader for destinations or maybe in some international destinations as well. Because the airline is only operating multiple diverse fleets. it operates the Airbus A320s fleet on European destinations where neighboring airlines use Boeing 787s, airbus 350s, A380s or state-of-the-art Boeing 777s.

Saudization in SAUDIA

The other problem that is making hurdles in the growth of SAUDIA is Saudization. In 2013 the government of Saudi Arabia launched the Saudization program under which the significance of employing Saudi citizens became greater and their national departments hired more Saudi citizens which came in the way of the airline’s growth because the airline has lost its diversity. If we talk about their neighboring airlines, Qatar, Emirates, and Etihad they have more than 200 nationalities at once working for them. Whereas in Saudi Airlines more than 90% of its employees are Saudis.

In the coming times, we might see growth in the airlines, not extreme growth but significant growth. As new Jeddah airport will prove to be a game changer definitely in the region and the airline industry will get a boost.

Despite a travel ban from 20 countries, SAUDAI has risen from third place in the summer of 2019 to first. The other three big carriers include Emirates down 52%, Qatar Airways 33% and SAUDIA reduced by just 26%. The SAUDIA has also the advantage of having a large domestic network, where something others don’t have.

Conclusion

The aviation industry in the last decade face many problems such as the oil crisis, the 9/11 attack, and recently, the COVID-19 pandemic which induced its growth both in the European and American regions (Garefalakis, 2016). SAUDIA has become one of the largest airlines in the Middle East. The PESTE analysis on SAUDIA reveals that all the indicators are in favor of SAUDIA and as an owner of being a national flag carrier a huge level of support is provided to this airline by the government. During the COVID-19 pandemic, the performance of the airline was low but after the COVID-19 it was awarded as the World Most Improved Airline of 2021.

The SAUDAI is operating a very aggressive market where the big three airlines originate. But after seeing its business model and strategies we can conclude that it doesn’t have any kind of competition with these 3 big airlines (Emirates, Etihad, and Qatar). It has adopted a different model that has uplifted airlines. The reasons that are hurdles in the airline’s performance are 1: not having its own main hub airport, 2: not having diversity, and 3: the missing of alcoholic items in on-board services. The development of Riyadh Airport would be very beneficial for the airline and in the next few years, we will see, more growth for the airline.

Customer service at SUADIA Airline strives to provide exceptional support and assistance to passengers. The airline is dedicated to delivering a high level of customer satisfaction through prompt responses, efficient problem-solving, and friendly service. SUADIA Airline’s customer service team is readily available to address inquiries, provide information, and assist passengers throughout their travel experience.

Customer Care: +1 800 472 8342

References

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