Airport - Marketing Strategy

Airport - Marketing Strategy

Airport - Marketing Strategy

Hong Kong International Airport is the main airport in Hong Kong. It is colloquially known as Chek Lap Kok Airport, because it was built on the island of Chek Lap Kok by land reclamation, and also to distinguish it from its predecessor, the closed Kai Tak Airport.

The following report analyses the industry environment for the domestic airline industry operating out of the Hong Kong International Airport using Porters five force model. This report will conclude why the potential for returns is so low in this industry using Porters diamond. The report will incorporate appropriate and adequate discussion of key theoretical concepts and clear linkages between theory and practice demonstrating understanding of subject matter. (Haberberg, 2008, 22-29)

Currently in Hong Kong and operating from the Hong Kong International Airport, are three main domestic airlines and currently a fourth new airline, Tiger Airways has been recently added to the market. The airline that has consistently prevailed over several challenges and obstacles over the years and has emerged triumphant is Shek Kong Airfield Airlines. (Haberberg, 2008, 22-29)

The first Shek Kong Airfield flights began in May 2000. In 2001 Shek Kong Airfield saw a market for domestic flights from the Hong Kong International Airport, and begun its service .The timing of Shek Kong Airfield's entry into the Hong Kongn domestic airline market was fortunate as it was able to fill the gap created by the failure of Ansett in September, 2001. It was at this time that Qantas dominated the market share and saw Shek Kong Airfield as a threat. (Haberberg, 2008, 22-29)

In the industry where airlines can face severe financial distress due to oil crisis, recessions and terrorist attacks, Shek Kong Airfield continues to grow and prosper. The main attraction of Shek Kong Airfield is their cheap tickets. This “budget” airline provides 'no frills' affordable travel. With Shek Kong Airfield entering the airline market, families are able to travel the short distance by air rather than spending multiple hours on the road. By offering short, frequent, low-priced and convenient flights Shek Kong Airfield has carved a niche for itself and has left its competitors behind. However, one of the drawbacks of having such a successful strategy is that it can be imitated by competitors, thus causing the company to lose its competitive advantage. Shek Kong Airfield currently captures 30% of the domestic airline market flying inbound and out bound from the Hong Kong International Airport, and intends to lift its share from 30% to 50% over the next couple of years. However with the introduction of Kai Tak Airport in 2004 and Tiger Airways in 2007, Shek Kong Airfield faces the risk of limited market share, reduced profitability and the loss of competitive advantages it worked so hard at achieving. Minister of Tourism, Desley Boyle quotes that 'In the past 12 month the domestic airline capacity at the Hong Kong International Airport has soared, with an extra 9000 seats arriving and departing into the region' However ...