“How can a budget airline survive in Hong Kong”
To find out the success factors and forecast the future of budget airline in aviation industry, apply those factors to analyze the operation strategy of a budget airline which would like to survive in Hong Kong market. 3.Background.
In the recent years, budget airline becomes more and more popular. Many people choose low-cost airline to save the cost in transportation so they can spend more on the activities. Ryanair, the largest budget airline in Europe, "The Economist Magazine" labeled it as "the world's most profitable airline." when the oil prices is in an increasingly competitive environment. AirAisa, the most famous budget airline in Asia won the Skytrax World's best low-cost airline award in 2009 and 2010. The operation strategy and business model of AirAsia is similar with Ryanair, seems that there are no differences in the attitude and perception of passengers from two very different continents. Spring Airlines, as the only low-cost airline in China, earnings nearly 4 million in the first 8 months of 2011, and annual profit is expected to nearly 5 billion. However there is no outstanding Hong Kong based budget airline. Oasis Hong Kong – a Hong Kong based budget airline, which operated for two years and was liquidated on 2008. Seems only being low-cost is not enough and it is not easy to operate low-cost airline successfully in Hong Kong. How can a budget airline survive in Hong Kong?
1. Analyse the failure of Oasis Hong Kong.
2. Find out the success factors of a budget airline by cases study of some famous budget airline in other countries.
3. Clarify the need of and the future of budget airline.
4. Conduct a questionnaire to find out the preferences of Hong Kong air traffic user in choosing carrier and analyse the market of Hong Kong
5. Analyze and conclude the result of the survey thus to recommended the strategy of an low cost airline in Hong Kong
5.Review of relevant literature.
5.1 The failure of Oasis Hong Kong.
The failure of Oasis Hong Kong is a hot topic in aviation industry. Oasis carry a business model that typically different to others budget airlines. The revenue cannot come up the great cost is the mainly reason of its liquidation. We can learn from the mistakes by study the case of Oasis. 名詞 1. follower
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5.1.2 Oasis Hong Kong Airline service
Oasis operated long haul with low price journey for customers. Tickets were sold through the company website and travel agents. One-way fares between Hong Kong and London were launched from £75 or HK$1,000 (excluding taxes and charges). Same with others traditional airlines, Oasis provide two hot meals and soft drinks on both long haul routes in all classes. Free headphones, blankets and pillows were also distributed free in all classes (Altius directory 2010). Oasis provides long haul journey and convenience service to customer. So the operation cost is greater. To provide a long haul journey, less frequency flight is necessary. To compare with frequency and short haul journey, the profit of long haul journey is lower. Another reason of the great cost is that Oasis owns five Boeing 747-400 aircraft (Megan Kuhn 2007) , not only the purchasing cost is high, the maintenance cost of 747 is also high to compare with others model of aircraft (Transport Studies Group University of Westminster 2008). This makes Oasis facing a heavy financial pressure.
5.1.3 Others Factors that influence Oasis Hong Kong Airline operation
The mainly problem that Oasis was facing on that time is the fuel cost. While Oasis was established, the international oil prices was around 50 U.S. dollars per barrel; when the...