Essay Hong Kong Budget Airline Analysis

4129 Words Mar 31st, 2014 17 Pages
Hong Kong
Budget Airline Industry Analysis

By Jaeyeong Ahn 1155032046 Xie Jianting 1155001899 Shi Weiran 1155002072
Tan Jiayi 1009609441 Gao Jingya 1155001997

TABLE OF CONTENTS

1. Introduction

2. Budget Airline Industry 2.1 Definition & Pricing Model 2.2 Common Practices to Lower Overall Costs 2.3 Development of Budget Airline in America, Europe and Asia 3. Hong Kong Market Analysis 3.1 Competitive Landscape 3.2 Major Budget Airlines in Hong Kong 3.3 Market Analysis 3.4 Target Customer Analysis

4. SWOT Analysis of Budget Airlines 4.1 Strengths 4.2 Weaknesses 4. 3 Opportunities 4.4 Threats

5. Analysis of Success Factors in Budget
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2. Budget Airline Industry

2.1 Definition & Pricing Model
A budget airline (also known as low-cost carrier) is an airline that offers generally low fares in exchange for eliminating many traditional passenger services. To attract more customers, budget airlines usually offer lower prices than full-service airlines. Some flights are even advertised as free, plus any fuel taxes, airport construction fees and so on. The tickets of lowest price only make up certain percentage (usually up to 20%) of total seats in a flight, and are always first to sell. The price steadily goes up as more tickets are sold, finally up to a point where it is comparable to that of full-service airlines. 2.2 Common Practices to Lower Overall Costs

2.2.1Choosing suitable aircrafts
Most budget airlines operate aircraft configured with a single passenger class, and most operate just a single type of aircraft. Currently the most popular types of aircraft are Airbus 320 and Boeing 737. Not only do these aircrafts hold more passengers, but also they are efficient in in terms of fuel, training, maintenance and crew costs per passenger.

2.2.2 Using the aircraft more frequently To maximize the utilization of aircraft and thus to break even sooner, the airlines tend to offload and re-load the aircraft in shorter time periods.

2.2.3 Landing at smaller and less…