Druk Air-Royal Bhutan Airlines
Durk Air Corporation Limited, founded in 1981 and commenced operations in 1983 as Druk Air-Royal Bhutan Airlines is the national flag carrier of Bhutan. This case study will focus on the SWOT analysis of the airline, segmentation, opportunities to increase the business and finally the recommendations for the CEO of the airline.
SWOT Analysis
The airline enjoyed the status of being the sole airline operating out of Bhutan till 2010, when the market was opened for private participation. The major strengths of the airline include its image as the national carrier, superior service compared to its sole competitor-Bhutan Airlines, its image as a customer friendly airline in spite of enjoying monopoly, reflects Bhutan’s values. Major weaknesses include limited and difficult scope for expansion, high ticket prices primarily due to external factors, unreliability and inability to fly on long, non-stop routes, inability to tap into the domestic market due to small market size and infrastructure handicaps. Some of the opportunities for the airline include increasing number of tourist arrivals, rising interest among foreigners in Bhutan, improving infrastructure including new airports, government’s initiatives to expand the number of Air Service Agreements (ASA) with the neighboring countries to expand and promote tourism . The prominent threats for the airline is the rise in competition as the market matures with the entry of foreign airline companies, inability to expand owing to the difficulty in onboarding experienced staff including pilots, geographical limitations of the country, minimal domestic traffic etc.
Segmentation
The airline serves as the primary mode of transport for the people travelling into and out of Bhutan. Bhutan has branded itself as high value, low volume destination that leaves the tourist with only air as the option to enter the country. The primary target market for the airline are the tourists from various parts of the world and particularly the neighboring countries such as India. Also, with the controlled opening of Bhutan market to the MNCs, an increasing number of business travelers are also expected into and out of the country. Still tourists remain as the primary target market for Druk Air.
Opportunities for Druk Air
The various opportunities for the airline has been mentioned in the SWOT analysis above. The airline should be well prepared to cater to the rising tourism industry as there is a growing interest and increased awareness among international travelers on Bhutan as an upcoming tourist destination.
Recommendation to the CEO
One of the primary hindrance for the growth of the airline in Bhutan is the inadequate infrastructure at the four airports in the country. The CEO should work with the government to expedite the expansion of airports and provide adequate facilities to ensure uninterrupted day time operations at all the airports. The possibility of round the clock operations at Paro should also be considered. The airline should also enter into code-sharing pacts with other airlines which will facilitate an easier and improved flow of tourists from various parts of the world. Yet another area that the CEO should focus on is to improve the reliability of the airline, which is a must for promoting Bhutan as a tourist destination.
References
CAPA Center for Aviation. (2011, September 6). Major changes set for Bhutan market as Drukair expands and Tashi Air plans early 2012 launch. Retrieved from CAPA: http://centreforaviation.com/analysis/considerable-changes-occurring-in-the-bhutanese-aviation-market-58246
