Norwegians baseetablering i Brasilien

Kenneth Dernie & René Rixe

Student thesis: Diploma thesis

Abstract

The purpose of this project is to shed light on the opening of a Norwegian Air Shuttle base operating domestic flights in Brazil. The focus of the research question is to answer how much of a future market share Norwegian can acquire in the period of 2020-2025 and how the management team can plan the establishment of a domestic base. This is done through a comprehensive analysis of Brazils macro environment covering; Politics, Institutions, Economy and the surrounding world which illustrates how the dynamics between these elements will evolve. Furthermore, the meso-micro environment is analyzed through the market and competition situation for domestic flights. Finally, a project plan based on internal information is composed to reduce unexpected challenges. The Brazilian macro environment is analyzed through the ‘Politics, Institutions and Economy model’ (PIEmodel) by Niels Mygind ‘07. Additionally, the meso and micro environment is analyzed using ‘THE TAKE OFF-model’ an entry analysis for the low-cost carriers on new markets by author’s creation ‘19. The model is developed by using elements from ‘Porters Five Forces’, ‘The Marketing Mix’, studies and research reports relevant to aviation. The approach for the project plan is done by utilizing the ‘Masterplan’ by Kristian Sørensen ’17. The literature used has origins from different sources such as specialized literature, scientific journals and publications, databases and news media to create a broad perspective within the project. The results of this report will help the management team of Norwegian decide whether to start operating in Brazil and if the establishment of a base will strengthen their vision and goals. The findings of the analysis show that Brazil has emerged from the recession caused by the corruption scandal ‘Operation Car Wash’. Despite signs of improvement in the economy Brazil still faces issues with the future pension reform. The aviation industry is limited by law No. 7.565/86 for domestic flights within Brazil which only allows up to 20% foreign investments. However, MP 863/18 is scheduled for voting in 2019 and will bring amendments for up to 100% foreign investments. The domestic low-cost carriers GOL, AZUL and AVIANCA Brazil has been protected from foreign entries by the law. The analysis has shown that Norwegian will be able to offer a better perceived product at a lower price than the existing domestic lowcost carriers. The composed project plan show that Norwegian will mainly work within the scope of encounters met in earlier base establishments. This project concludes that Norwegian will be able to compete in a thriving and expanding market. Their market share in 2020 will be 0,65% in ASK and 0,66% in RPK. By the end of the analysis period in 2025 it will be 2,27% in ASK and 2,18% in RPK. Furthermore, the composed project plan secures Norwegian the possibility of a swift entry to the Brazilian domestic flight market.

EducationsGraduate Diploma in International Business, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2019
Number of pages127