The Impact of Appearance of Cheaper Airlines
in Hong Kong Airline Industry
Introduction
People have long considered aviation as one of the key ways to travel, especially since it is the fastest way people can get to their destinations. In this fast-paced world, wherein businesses cannot afford to be one second late and where people expect to be with their loved ones all the time, airline traveling is one of the most economical ways to travel and save time. With the popular growth of commercial airlines, more and more people are taking the option of flying instead of other slower transportations as trains, cruiser, or cars. Hong is considered as one of the nations which have a stable tourism industry. This is because of efforts made by the Hong Kong Special Administrative Region (HKSAR). One of the most important roles of the Hong Kong administration is the existence of the affordable and cheaper airline industry. Primarily, the main goal of this investigation is to evaluate the effect of the existence of cheaper airlines in Hongkong. The paper will also provide analysis of the effect of having cheaper airline industries in the economy of Hong Kong.
Background of the Study. One of the biggest service organizations recognized in the world now are those airline industries. These industries all over the world are now living in an interesting era. More and more people have been using these industries for every services and purpose they want and for their travel satisfaction. The process of change as of the old economy to the new global economy has brought tremendous changes and development to the services being offered. Part of the changes brought by the competition of these industries globally is the new economics, new market structure, new marketing strategy as well as the new technological structures of each and every industry within the marketing service field. Nowadays, people are more willing to use the services of the airline industry especially those individuals who wanted their travel to be convenient and satisfying which makes all such industries to be in demand.
However, because of the demands for airline industries, there are many companies in Hong Kong which provides lo cost and no frills airline services. Some airlines which provides these kind of approach in Hong Kong tourists include , Bangkok Airways (Thailand-Hong Kong), JetStar Asia (Southeast Asia-Hong Kong), and Cebu Pacific Air (Philippines-Hong Kong) and Oasis (Hong Kong- London). The existence of these industries is the answers of the industries to the growing numbers of customers who wanted to have low fare and no frills service and enjoy their travel. The goal of a the airline operation should be to find out what the customer desires and then amend or set the finest procedure to ensure that they get it from the services and operations that the airline company is offering. The term 'customer' is used to include the entire customers and clients. Accordingly, every work group has a customer, the person who receives their output (service) (1998). And because competition becomes tougher and tougher through the years and with the growing number of tourist in Hong Kong, many airline companies try to attract customers through its pricing strategy. However, such strategy are said to impact the airline industries in the country. Hence, it is important that research studies must be conducted to recognize the effects of the existence of affordable airline industry in the whole sector of the airline industry. Research Objective Hong Kong airline industry has been regarded as the most competitive industries in Hong Kong. Hence, the strategy used by specific airlines may affect the commerce as a whole. As a result, the main objective of this document is to explore the impact of the look of cheaper Airlines in Hong Kong. In particular, the research tries to attain the following objectives:
Ø To study the history of HK Airline Industry > To study the strategies of HK Airline Industry
Ø To investigate the impact of the existence of low cost airlines in HK Airline Industry
Ø To study the development of the HK Airline Industry
Ø To study the importance of cheaper airlines in the Hong Kong Airline industry
Ø To study the prospect of the Hong Kong Airline Industry.
Rationale of the Research Study
This research will be important in management/business firms, particularly for the Airline industry in a sense that it will broaden their knowledge about marketing techniques and will help them weigh if the current techniques are appropriate in Hong Kong setting. Furthermore, it will contribute to business research. This can be used as a future reference for future research that will focus the effects of having low cost airlines in HK Airline industry as a whole.
Moreover, this study provides significant role to the society since it depicts the future of a certain business with regards to marketing techniques and business models. In addition, this study might become of great use to different businesses since marketing style has negative and positive effects to different businesses or even to consumers. Moreover, research materials are useful in persuading people to adopt something new like the business mode to be followed in Hong Kong Airline industry.
Literature Review
Low Cost Airline Industries
Many airlines in Hong Kong are trying to pursue a low-cost and no frills strategy. Low cost airlines are regarded to adhere on a simple corporate design. For example, they used only one kind of aircraft, one segment of customers and more seats are crammed within the airplane. Sometimes some low cost airlines have no airport lounges, and no food, no choice of seats for passengers and others. As much as possible, these types of airlines try to keep their logistics simples by maximising revenue- generating air time and cutting turnaround times on the ground. Mostly, low cost airlines implement short-haul routes policies. It is said that most customers who chooses to fly with these airlines are not defectors from the present situation. Rather, lower prices allow passengers to fly when they wanted to have a fast and cheaper travel time. It is said that low-cost airlines are found to complement both conventional and charter airlines; however, they are encountering overlaps. Low-cost airlines vie with charter airlines that provides up to one third of their passenger sears without hotel package accommodation, for the sake of independent tourists and other passengers that travels frequently to holiday homes. Moreover, they also compete with the conventional airlines, which weekend costs attracts passengers who are moderately sensitive in budgets and do not need flexible tickets.
Pricing Policies in Airline Industries
Pricing strategy should be designed in concert with the other value- related activities of the firm, especially those activities that directly interface with customers. Of primary importance here are product programs, sales and promotion programs, and distribution programs ( 1995). A high price can help convey a quality product image. A special price transaction can be an integral part of the firm's promotional program. A trade discount can be an incentive for distributors to provide stronger support in pushing the company's products. The focal point of all these activities should be the firm's overall marketing strategy. Marketing strategies attempt to define where the firm wants to be in the marketplace and how it plans to get there. They provide the larger framework within which pricing and other programs are developed.
Pricing is a critical factor in airline management. This is only one of several product and service features which are planned and combined together in order to generate demand. But it is the main factor whereby the demand for air services is coordinated with the supply. An airline's main goal must be to sell the capacity it is set and able to present at prices which will make adequate demand to ensure a satisfactory level of profit. A great deal hinges on what each airline considers enough profit. For several nationalized airlines it may mean little more than breaking even. For some it may be calculated in terms of a sufficient rate of return to shareholders or a target rate of return on the value of the possessions employed. Various airlines may go further and embark not only to generate a target rate of return on their existing assets but also to produce a sufficient save fund to self-finance, as far as possible, the acquisition of new assets such as aircraft. Hong Kong Airlines appears in recent years to have followed this latter objective. Thus even the profit objective in airline pricing may have different implications for different airlines. There is also a temporal dimension to the profit objective. While some airlines may be concerned more with current profits, others may place the emphasis on longer-term profitability. They may be prepared to forgo profits in the short term to ensure their longer-term objective ( 2002).
International airlines will normally have a clear profit objective but it will be only one of a number of corporate objectives. These other objectives may also impinge on pricing policy. Expansion into new routes and new markets figures large in many airlines' corporate objectives. Expansion may be an objective in its own right or the ultimate aim may be rapid growth or the attainment of a particular size of operation. Many airlines want to be big! There may be cost advantages from growth but ultimately the purpose of growth seems to be more akin to a revenue- maximising objective.
Overview of Methodology
Referring to the aim and objectives set for the dissertation, the author will now demonstrate the methodology of the means of obtaining data for analysis and coming to the conclusion to meet the aim and objectives. Though it does show ethnic concerns to those out there, interviews will be tied with the primary data research collection of this dissertation and the secondary research will be supported by the use of the study of other scholars as mentioned in the literature review.
Research Design
The Research will use the descriptive method. This descriptive kind of study will use observations. Basically, this research, as one, can be categorized as a descriptive study, wherein the purpose is to represent a precise profile of persons, proceedings or situations, and may be an addition or a forerunner to a piece of investigative research, a study that tries to institute fundamental association between variables. (2003). Hence, with the descriptive study, it is needed to comprise a clear image of the phenomena on which a researcher wishes to gather data prior to the compilation of the data. (2003). Moreover, even if many project instructors are frequently careful or work that is too expressive, and they will want a researcher to go further and make conclusions from the data collected, portrayal in management and business study has a very clear position, although, it should not be thought of as an end in itself, but only as a means to an end. (2003).
The research which was described in this paper will be based on quantitative and qualitative approach. The qualitative research method allows a more adaptable iterative method, whilst quantitative research method permits specification of dependent and independent variables and permits for a more complex measures of succeeding presentation of the subject of the research. Throughout the collection of the data, the researcher’s choice as well as design of the methodologies is consistently modified. This allows investigation of important new issues and questions as they arise, and allows the investigators to drop unproductive areas of research from the original research plan.
The significance of the qualitative method can best be comprehended by testing its characteristics. Primarily, one of the advantages of this approach is its openness to adopt specific research context. In addition, the researcher will not try to control the setting of the study. Herein, the researcher will find ways to naturally comprehend on occurring events in their natural states (1995).
On the other hand, the quantitative research approach is said to be compative with this dissertation since it permits the given problems to be investigate in specified set terms ( 1998). Moreover, this type of research has the ability of specifying the independent and dependent variables to be investigated. In addition, it also go after resolutions for distinctive set of the research goals, leading at more objective and purposive conclusions as well as identification of the causality of the issues. It also discards judgment subjectivity. Finally, it gives achieving high levels of reliability of the collated information because of the controlled observations, mass surveys, laboratory experiments, or other kinds of research approaches and manipulations. The dissertation will be conducted through the use of survey questionnaires and statistical approach, hence, quantitative research design suits this research study.
Respondents of the Study
The main purpose of this case study is to identify the impact of the appearances of Low cost airlines in HK Airline Industry. The data will be collected from 50 respondents who will answer the questionnaire and their answers were used in the analysis part. Hence, the respondents of this study include 50 managers. The managers are chosen because the respondents find them more reliable for this study. The true identity of the respondents will not be revealed for confidential purposes. After selecting the appropriate population, inferential statistics will be used so as have tangible conclusion. Herein, the use of inferential statistics will be considered so as to determine the attribution of the population by a direct analysis of the selected population or simple called the sample. The reason for this relies on the fact that it’s much easier to analyses a portion than investigate the whole population. Nonetheless, utilizing a sample has also its own disadvantages; hence, there is a need to choose the most suitable sample from any population.
Interview/Questionnaire Structure
The researcher will design a self-administered questionnaire for the survey process. The main goal of the questionnaire is to know the impact of cheaper airlines to Airline industry as a whole. This research will use a mixture of closed questions and more open comments in the questionnaire. A closed question is one that has direct responses. The easiest type is the dichotomous question wherein the respondent should answer yes or no (2003).
From closed questions, the researcher will be able to put boundary on responses that are within the degree of this study. For instance, the researcher intends to ask the respondents what they think of airline industries in general. By the used of multiple choice approaches, the responses of the respondents would be within the one of the limited probable answers of the researcher. Therefore, the researcher will make a closed question kind to stay focused on the statement of the problem and on the main reason of the research. However, the researcher will nevertheless extend the closed questions with the comments option to be able to gather qualitative data for this study. In addition, closed questions will be used in the investigation for the reason that the answers are simple to evaluate and are straightforward as subject respondents are usually busy that they do not have much time to give concentrate to open questions. Closed response questions keep the respondent having to think of probable responses.
Data Collection and Analysis
The study utilizes questionnaires and interviews to collect applicable data. In addition, the researcher will also use preceding researches associated to the perception of the managers about low cost airlines. A self-administered questionnaire is employed by me so as to save time and effort in the organization of the answers that will be attained. In the discussion, the researcher hopes that those questions that are not tackled by the questionnaires will be gathered from the respondents using the survey questionnaire. The straightforward approach of the questionnaire guarantees that there would be a response generated by me with regards to the questions asked. In this research the utilization of secondary and primary data will be used. The minor sources of data are gathered from available articles from industry journals, theses and associated researches in airline industries. The main source of information comes from a questionnaire and surveys are made by me. The most important data often gives the complete meaning of terms and numerical units used in the survey. These are commonly crashed into better classifications. Herein, I constructed a questionnaire and managed them to the respondents. The respondents were asked to answer the questions in the materials, each rating the reports using the Likert scale.
In the Likert method, a set of manner statements are showed,
where topics of a research are asked to state approval or disagreement using a five-point scale. The level of settlement is given an arithmetical value starting from one to five, thus an overall arithmetical value can be computed from all the answers.
Data Validity
In order to ensure the validation purposes, the researcher will first submit an example of the set of survey questionnaires and after agreement; the survey will be given to five respondents. When the questions were answered, the researcher will ask the respondents for any additional suggestions or any needed corrections to make sure further enhancements and validity of the materials. The researcher will again inspect the details of the interview questions to find out the consistency of the materials. The researchers will disregard unrelated questions and will alter terms that would be hard for the respondents, too much simpler words.
Administration of the materials
The researcher will eliminate the five respondents who will be primarily used for the validity of the materials. The researcher will also compute, record and tabulate all the answers in the given interview questions. Furthermore, arranged interview will be used in this research study. Structured interview is a kind of interview that promotes a question and answer process. It is composed of a detailed explicit questions and the researcher shall divert from putting or adding any other comment while the process of interviewing is being conducted. In addition, the researcher must be able to let the interviewee to elucidate further those unclear statements. However, the interviewer must see to it that the process should remain objective rather than subjective and that he/she does not have any right to state his/her own opinions and ideas so as not to influence the answers or comments of the interviewee.
Expected Outcomes
For dissertation, the expected outcome should adhere to the main objective of the study, which is the identification of the effect of the looks of Low-cost airlines in HK Airline Industry. In addition, the researcher also expects that the study will provide pertinent data about HK airline industries and how low cost airlines emerges and develops. The implications of low cost airlines will be based on the impact on customers, marketing strategies and the management style of the airline industries.
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