Faisal Haddad

IE University

Create a Company Analysis and Recommendations Report

Assignment A3.1

Prof. Carl Kock

Date 21/10/2023
 Royal Jordanian
The national air carrier of the Hashemite Kingdom of Jordan

To begin with, RJ is the ambassador carrying the flag of Jordan around the globe and the
image of the Jordanian culture.

Market Overview:

The airline business is supposed to tip into profits. Carriers are expected to procure a
worldwide net benefit of $4.7 billion one year from now on incomes of $779 billion
(0.6% net edge). Despite the expanded financial vulnerability and a stoppage in
worldwide GDP from 2.9% to 1.3% from the earlier year, this expected improvement
happens. It is guessed that the traveler business would create $522 billion. Throughout
2023, traveler request is expected to increment to 85.5% of 2019 levels. A huge piece of
this figure depends on the way that China's Zero Coronavirus rules, which are restricting
both neighborhood and unfamiliar business sectors, stay obscure. By and by, 4.2 billion
travelers are expected to fly, breaking the four billion achievements interestingly starting
around 2019. In any case, even though traveler request is projected to grow more rapidly
than traveler limit (+21.1% versus +18.0%), traveler yields are anticipated to decline (-
1.7%) as some lower energy costs are given to the customer.

The airline industry is a fascinating and dynamic business sector for several reasons, and
its allure can be best explained by examining its unique characteristics, economic impact,
and societal significance. The airline industry is unparalleled in its ability to connect
people, businesses, and cultures across the world. Also, the airlines are important sector
to driver the growth in the economy. It creates a huge number of direct and indirect jobs
for both pilots and flight attendants as well as maintenance personnel, travel agencies and
airport staff. In regions neighboring airports, this industry also supports the growth of
auxiliary businesses including hotels, restaurants, and transport services. In addition, it
has an important role to play in the growing tourism sector which is a major contributor
to economies all over the world.
 RJ in Oligopolistic market:

The global airline industry is typically characterized by an oligopoly, where a few major
airlines dominate the market as Qatar Airlines, Singapore Airlines, and trickish airlines.
Royal Jordanian competes with both regional airlines in the Middle East and international
carriers that offer services to and from Jordan. Royal Jordanian offer differentiated
services, which may include various classes of travel, in-flight entertainment, dining
options, and loyalty programs. This allows them to cater to a range of customer
preferences and needs. The airline industry connects people and goods worldwide,
making it a highly globalized and competitive market. Royal Jordanian primarily serves
routes to and from Jordan, the Middle East, and key international destinations.

PESTEL Analysis:

o Compared to neighboring counties, the country is more stable and secure.

o The country is secured and stable compared to the neighborhood counties.
o More than 75% of refugees are reluctant to go back to their home country due to the lack of
Political security.
o Jordan is hosting lots of other nationalities due to the several crises that happened during the
last 5 decades (Palestine – Syria – Iraq)
o During the political instability in the MENA region, Jordan still enjoys a relatively stable
political environment.
o The regional turbulence has adversely affected on new investment opportunities and
tourism.
o Jordan’s economy is among the smallest in the Middle East with insufficient supplies of water,
oil, and other natural resources underling the government’s heavy reliance on foreign
assistance.
Economic o Jordan’s currency is linked to USD where it provides the country with stable pricing situation.
o Unemployment rate in Jordan considered one of the highest globally with rate of 27%.
o Minimum wage is 370 USD.
o Inflation rate is 4.6%, unemployment rate is 18.4%, and population below poverty line is
14.2%.
o SME’s represent 60% of the total private sector and 37% from the total employment in
Jordan.
o Feasible currency convertibility situation as it’s linked to USD (1 JOD = 1.3 USD)
o Jordanian residents consist of a natural blend of people of different demographics and
psychographics.
Social o Jordanian population is considered to be a youth dominant population.
o The majority of the Jordanian population resides in major Jordanian cities.
Technological o The digital transformation of the Jordanian government picked up rapidly to reach 57% from
the governmental transactions from traditional to digital channels.
o In an effort to encourage “Green Approach”, Jordan is giving special incentive on solar
Environmental/ equipment. This will impact positively the cost of energy.
Ecological o Jordan’s geographic location is naturally protected from climate disturbances (earthquakes,
floods, tornados). Eliminating the cost risks association with natural disasters.

SWOT Analysis

Strengths Weaknesses
o Strong brand value. o A formal organizational structure with too many
o A stable loyal customer base. layers.
o Royal Jordanian has formed alliances and o Limited empowerment and decision-making for
partnerships with other carriers, expanding its the teams.
network and offering more destinations to its o Jordan has a relatively small domestic market, so
customers Royal Jordanian relies heavily on international
routes for revenue.

Opportunities Threats
o The global tourism industry continues to grow, o Very competitive market.
offering opportunities for Royal Jordanian to o Low-cost Carriers and airlines are invading the
attract more international tourists to Jordan and industry and the global market.
the Middle East. o Political conflicts and regional instability, which
o sustainability in travel presents opportunities for can disrupt operations and reduce passenger
Royal Jordanian to invest in more fuel-efficient demand
and eco-friendly practices.

RJ Competitive Advantage:

Royal Jordanian's strategic location in Amman, Jordan, provides a competitive advantage

as a hub for travel between Europe, Asia, and the Middle East. This central location
allows the airline to connect passengers on various international routes. Royal Jordanian
has established itself as the national carrier of Jordan with a recognizable brand. It
benefits from the support and recognition of the Jordanian government, which can be an
advantage in terms of market presence.
Like many global airlines, Royal Jordanian has formed alliances and partnerships with
other carriers, which can enhance its network and offer passengers a wider range of
destinations.

What this business could do even better going forward?

During the instability of the MENA region and the political situation of levant RJ has the
opportunity to be the best chose in region to active that digital strategy is crucial. Also, to
stay competitive in the airline industry, enhance customer experience, and streamline
operations.

Way forward for Royal Jordanian in its digital strategy:

Creating a B-brand (fully digital brand) to serve the levant region. The digital brand will
help RJ in increasing revenues. Help maximizing shareholders value and minimizing
operational cost by introducing online Booking and Reservation Systems invest in a user-
friendly website and mobile app with intuitive interfaces to improve the online booking
experience. Implement dynamic pricing algorithms to offer personalized fare options
based on customer preferences and historical data.

Data-Driven Decision-Making Leverage big data analytics to gain insights into customer
behavior, preferences, and trends. Use this data to make informed decisions regarding
routes, pricing, and services.

Utilize AI and machine learning for predictive recommendations and targeted marketing.

Streamlined Check-In and Boarding, self-service kiosks and digital boarding passes to
reduce wait times and improve the check-in process.

Digital Customer Support Implement AI-powered chatbots for customer support to

provide quick responses to common inquiries. Offer 24/7 online customer support for
immediate issue resolution.