Budget Airline Survive in Hong Kong

1. Title

"How can a budget airline survive in Hong Kong"

2. Aims

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?

4. Objectives

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.

5.1.2 Oasis Hong Kong Airline service

Oasis operated long haul with low price journey for customers. Tickets were