Pricing Strategy in the Airline Industry: A Case Study of Flights between Hong Kong and London

By

ACKNOWLEDGEMENT

My thanks go out to all who have helped me complete this study and with whom this project may have not been possible. In particular, my gratitude goes out to friends, facilitator and family for extensive and helpful comments on early drafts. I am also deeply indebted to the authors who have shared my interest and preceded me. Their works provided me with a host of information to learn from and build upon, also served as examples to emulate.

DECLARATION

The contents of this research is my own work and it represent my own ideas and not of university. Moreover I take an oath that the content of this research has not been submitted earlier for any research.

Signed __________________ Date _________________

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

CHAPTER 1: INTRODUCTION1

Background1

Research aims1

Research outcomes1

Outline1

CHAPTER 2: LITERATURE REVIEW3

The current state of the Hong Kong airline industry3

CHAPTER 3: METHODOLOGY7

Research Design7

CHAPTER 4: DISCUSSION9

Importance of Pricing9

Pricing Methods9

Pricing strategy of airline between Hong Kong and London10

CHAPTER 5: CONCLUSION16

REFERENCES18

CHAPTER 1: INTRODUCTION

Background

This research is based the pricing strategy of the flights travelling between Hong Kong and London. In this research, the researcher focussed on the Hong Kong airline industry.

Research aims

The basic aim of this research is to throw light on the airline pricing strategy of regular passenger flights between Hong Kong and London. This way the company business strategy will be analyzed.

Research outcomes

This research will address the following issues

The microeconomic/market structure and relationship to modern business decision making.

The impact of microeconomic factors on the business in an era of global competition.

Outline

Chapter 1 includes a brief introduction, research aims and the research outcomes.

Chapter 2 puts light on the current state of the Hong Kong airline industry.

Chapter 3 describes the research method used.

Chapter 4 provides discussion on the pricing strategy.

Chapter 5 presents conclusion and recommendation.

CHAPTER 2: LITERATURE REVIEW

The current state of the Hong Kong airline industry

The past few decades were very important for the development of the Hong Kong airline industry. The airport of Hong Kong is one of the leading international airports. More than 36 million passengers and more than 3 million tons of cargo are handled in this airport. The airport capacity is expected to increase to 9 million tones cargo and 87 million passengers in the long run. More than 70 flights are served at this airport each week. All the flights go and come from more than 140 destinations worldwide. (Dennis 2007, pp. 311-321)

There is no national airline of the Hong Kong as of now. However, more than seven airlines use Hong Kong as its base, and the most dominant one is the Cathay Pacific. Cathay pacific serves both china and global network. Hong Kong has the competitive advantage as it has the shortest distance to all urban centres. Maximum five hours are taken by flights to reach Hong Kong from East Asia. The Chinese mainland gateway is Hong Kong. (Dobruszkes 2006, pp. 249-264)

Chinese market is both an opportunity as well as a threat to Hong ...