International Expansion Strategy Of Airlines Management

Essay add: 28-10-2015, 15:51   /   Views: 351

Globalization has made cross-border movement common and rampant in the world. Air travel is the most common means of transport via international routes. This has made trade around the world, tourism, economic growth and global investment increase rapidly. The aviation industry has become a very large and growing sector. According to Goeldner and Ritchie (2000), the airlines in the world now carry over 1.6billion passengers a year. This has made a lot of airlines sprout up and continue increasing their international destinations. Expanding globally allows companies to increase their profitability (Hill, 2009). The airline industry is very challenging and competitive and every airline strives to gain competitive advantage.

The Nigerian aviation industry has been statured with domestic flights with very few indigenous airlines expanding to neighbouring regional countries and with only one airline: Arik Air flying over the Atlantic. This comes as a shock to observers of the aviation industry as many financiers have avoided the Nigerian aviation market due to poor infrastructure (Airfiance, 2006). Arik's massive expansion is coming at a time even the nation's national carrier - Nigerian Eagle (formerly Virgin Nigeria) has withdrawn some international services (Tattersall, 2009).

The purpose of this research is to discover the approach and the essential factors that determine the expansion decisions airlines make with particular interest to an airline in Nigeria: Arik Air. This airline has been chosen due to its massive development and ambitious expansion in the history of Nigerian aviation. The Nigerian wholly owned airline which (Arik, 2009) has its hub in two locations in Nigeria is gradually becoming the country's largest carrier (Sobie, 2007). The growing importance of the aviation industry has contributed to the airline's increase. In a country that is under-serving passengers which is different from transatlantic markets where there is overcapacity (Dunn, 2009), growth is the perfect scenario.

Arik Air launched operation in October 2006 and within six months; the carrier launched its first international flight (Sobie, 2007). Presently, the airline flies to all the 22 airports in Nigeria and operates 8 international flights (Arik, 2009). The analysis prepared by OAG aviation in 2010 as stated in Airline Network News and Analysis (2010), the fastest growing airline of leading airlines in Africa is undoubtedly Arik Air of Nigeria.

With the information presented above, this study will attempt to appraise and examine Arik Air's expansion strategy outside of the Nigerian airspace and also examine the influence this massive airline has had on the Nigerian aviation sector and the country has a whole.


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