Marketing Strategy China Airlines on Guam
CASE SYNOPSIS:
This is a case study about how a foreign carrier, China Airlines, adapts it strategy competing in the Guam-based airline industry. The case traces the company’s history on Guam from setting up its regular flight schedule between Guam and Taipei, through a pricing competition with its main competitor Continental Micronesia, to today where it occupies the sole market share of flights between these locations. In addition, the study explains China Airlines approach to its customers through partnerships with hotels and tourism companies in both Taiwan and on Guam; how this business has been affected by immigration regulations; and how it has become a successful carrier
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Airline companies can do mass sales to the tourist agents at a lower price, but allowing it to maximize its profits in general. China Airlines works closely with a lot of tourist agents both in Taiwan and Guam.
According to China Airlines Guam Branch general manager Norman Wang, flight sales have to be balanced between an outbound and inbound market. When a flight comes in to Guam, which is an inbound flight, its outbound passengers have to reach a certain level of capacity. Otherwise, it will lose money if it flies back to Taiwan below its break-even level.
In order to attract more tourist to come to Guam, China Airlines works closely with three tourist companies on Guam, which take care of the arrival passengers while the tourism companies in Taiwan do sales. Due to languages barriers, customer service at the arrival destination is necessary for most Taiwanese. Thus, these three companies are incorporated to take the passengers to check in at hotels and arrange activities as necessary. Regarding the outbound passengers, China Airlines made more effort to work with eleven local tourism companies on Guam since Taiwan is not a very popular tourism destination for local residents. Therefore, these eleven
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