An Analysis: Oasis Hong Kong Airline’s Business Strategies

Executive Summary

Oasis Hong Kong airline is a budget airline established in Hong Kong. Founded by the Lees (Raymond &

Priscilla) in cooperation with Dragonair Chief Executive Steve Miller, the said airline saw its beginnings early in 2005,

February, to be exact. The civil aviation company has its hub in the Hong Kong International Airport, servicing

passengers headed towards the London Gatwick Airport destination late last year in October. The firm claims that

their raison d’être for operation is to make frequent long haul travel accessible to everyone. After the first long-haul

passenger airline that adopted a budget airline model became defunct (Laker Airways) due to bankruptcy twenty-five
years ago, Oasis became the second airline to operate on the mentioned model.

Currently, the Oasis Hong Kong airline ceased their operation due to economic problems and troubles

created by global inflation. With this regard, this paper focuses on the analysis of Oasis Hong Kong Airline’s business

strategies, and how such approaches to promoting the business is helpful or detrimental to the good of the business

as a whole, and how such strategies may be improved to benefit the airline under analysis. This paper uses some of

the strategic management tools such as Porter’s Five Forces Model and PEST Analysis in order to identify the

current stance of the company in Hong Kong Airline Industry. The results of the study justified that the current

management performance of the said Airline is in good condition however, the company decided to ceased their

operation because the airline was struggling with debts of up to one billion Hong Kong dollars ($128m). Aside from

this, under intense competition, Oasis airline was unable to retain their Hong Kong employee, except to remain a few

overseas staff and they failed to attract new investment on time. Actually, in these few years, the price of oil and

petroleum products is volatile since Oasis first flew in October 2006; the fuel prices was US$ 60 a barrel up to US$
100 a barrel and this changes directly affects the operation of the company.

Table of Contents

Page

Title Page………………………………………………………………………………………………………………. i
Executive Summary……………………………………………………………………………………………….. 1

Table of Contents…………………………………………………………………………………………………… 2

Chapter 1 - Introduction/ purpose…………………………………………………………………………. 4

1.1 Background of the Company ……………………………………………………………………… 4

1.2 Company Profile ………………………………………………………………………………………… 5

1.3 Key Issue/phenomena that this company has been facing …………………………. 8

1.4 Rationale of doing the study ……………………………………………………………………… 8

1.5 Significance of the study ……………………………………………………………………………. 9

1.6 Expected Outcomes and Scope of the Study ……………………………………………… 9

1.7 Aim of the Dissertation …………………………………………………………………………… 10

1.8 Objectives of the Study ………………………………………………………………………. ……10

Chapter 2- Literature Review………………………………………………………………………………...11

2.1 Ratio Analysis ………………………………………………………………………………………….11

2.2 Industry analysis ……………………………………………………………………………………..12

2.3 Definition of competitive advantages ………………………………………………………13

2.4 CPM ……………………………………………………………………………………………………….. 13

2.5 For External Assessment ………………………………………………………………………… 14

2.6 For Internal Assessment ………………………………………………………………………….16

2.7 For Strategic Choices ……………………………………………………………………………….18

2.8 For Evaluation analysis …………………………………………………………………………….19

Chapter 3 - Research Methodology………………………………………………………………………21 3.1

Introduction/purpose ………………………………………………………………………………21
 3.2 Data & Information required …………………………………………………………………..21

a. PEST/The Five-Forces Model of Competition ………………………………………22

b. Distinctive Competencies of enterprise ………………………………………………22

3.3 Approach (e.g. Survey, questionnaire, and / or observation) ……………………24

3.4 Data Organization and Analysis ……………………………………………………………….24

3.5 Difficulties and Limitation of the research ……………………………………………….25

Chapter 4 - Findings………………………………………………………………………………………………26

4.1 The intensity of competitive rivalry is keen ………………………………………………27

4.2 The threat of new entrants is not strong ……………………………………………….. 29

4.3 The bargaining power of customers is not strong ………………………………….. 31

4.4 The bargaining power of suppliers is not strong ………………………………………31

4.5 The threat of substitute is weak ………………………………………………………………34

4.6 Summary ……………………………………………………………………………………………….. 35

Chapter 5 – Analysis……………………………………………………………………….…………………….37

5.1. Verification whether the intensity of competitive rivalry is keen …….………37

5.2. Verification whether the threat of new entrants is not strong …….………….38

5.3. Verification whether the bargaining power of customers is strong …….…..38

5.4. Verification whether the bargaining power of suppliers is weak …….……….39

5.5. Verification whether the threat of substitute is weak …….………………….……39

Chapter 6 – Conclusion………………………………………………………………………………………….40

6.1 Summary of Objectives to have achieved …………………………………………………………40

6.2 Implication of the findings and the fact …………………………………………………………….41

6.3 The Future ………………………………………………………………………………………………………..42

Appendix ……………………………………………………………………………………………………………….44

Bibliography…………………………………………………………………………………………………………..45

Chapter 1 - Introduction/Purpose

1.1 Background of the Company

Budget airlines are with their cut price flights, served by fantastically low-price flights, and it would directly

here to stay. The premise ideas is that once you know where to fly, you’ll be able to find out how much luggage you

can take with, how to get the cheapest of cheap seats, make sure that you are don’t pay a dollar more than. In 1986,

Ryan-air launched its first ‘cheap’ flight, at that time the costing £90 from Dublin to Luton, they have been going there

from strength to strength ever starting. Their prices have dropped further and further in order to attract the public. Not

only have they succeeded in desirable many to the skies who would like never previously have been able to afford it,

and they have also created a new kind of traveller ever since the European ‘open skies’ agreement of 1987 paved the
way for easyJet. People who will long onto the net to find a cheap flight and end up holidaying somewhere they have
never hear of.

With low landing charges, Ryan-air to cover its lowly, the idea is use ticket online booking, fly to small

airports with low landing charges, cut cost by doing away with all the perks of flying like newspaper, magazine, food

and drinks, and, carry as many people as possible for the achievable fares. Ryan-air new carries over a million

passengers a month, while easyJet, one of a close and much younger rival budget airline, is fast catching up.

Furthermore, budget airlines in response to the greater demand for cheaper flights, some of the larger tour operators

as like as British Midland, Jet2 and Air- Scotland, Britannia Direct and MyTravel are beginning to muscle in on the
market, leading to hopes that budget flights would soon be available worldwide.

1.2 Oasis Hong Kong Airlines Profile

 In 2005, Oasis Hong Kong Airlines began corporate life with long-haul, flying London Gatwick Airport and
Vancouver International Airport from its hub.

Oasis Hong Kong, the first flight was flying from Hong Kong International Airport to Russia on October 26,

2006. The cost conscious business model enabled Oasis Hong Kong to advertise its flights as affordable as a long-
haul low-cost - at just GBP£75 one way.

The company founders Rev. Raymond C. Lee, and his wife, Priscilla H. Lee and the chief executive, Steve

Miller, was founder and first chief executive of Dragon air, they ensured that the new business received plenty of

publicity, including sales generated from its web site and travel agents. The internet has helped Oasis Hong Kong

make the transition from an upstart airline to London – leading long haul’s low-cost carrier. In additional, though Oasis

originally operated as a low-fare airline, it had already broken-even after the first six months of operations. Oasis'

main sources of revenue was who used to have to transfer en-route to get to London, therefore achieved through

flying long-haul so as it can decrease operating cost - maintenance and fuel costs. The airline is also recognized for

it’s from customer benefit and award-winning product; they have voted and won the award “World’s Leading New

Airline" and "Asia's Leading Budget/No Frills Airline" at the Annual World Travel Awards 2007, therefore Oasis was

also named "New Airline of the Year" by the Centre for Asia Pacific Aviation of Australia, and was voted "Best New
Service" and "Best Business Class Carrier" at the 2007 World Low Cost Airline Congress Awards held in London.

Services

Oasis Hong Kong, providing meals and soft drinks were served free on both long haul routes in all classes,

one of the successes of Oasis Hong Kong airlines was widely advertised. Both meals will be included in the ticket

price. If you require special, all special meals are subject to a HKD75 (GBP5), and for any additional snacks and
alcoholic drinks are all at a cost of HKD15 (GBP1) per item available to be ordered in economy.

For seat, economy class was 32" and business class offered at least 50" seat pitch. Oasis Hong Kong

designs a good type of aircraft. It offers the unprecedented levels of productivity, efficiency and the economics in the

passenger service. The B-LFC can carry 71 business and 268 economy passengers in a class configuration or up to
B-LFA, can carry 81 business and 278 economy passengers in a single-class economy configuration.

Free headphones, blankets and pillows were also distributed free in all classes. Each passenger had their
own seat-back TV that had at least 16 channels available, and up to 12 channels of audio.
Furthermore, Oasis Hong Kong announced that all its passenger check-in operation into the newly commissioned
Terminal 2 of the Hong Kong International Airport on 28 February, 2007.

Destinations

Oasis Hong Kong airline commences service in long-haul flights between Hong Kong and Europe in October

2006, and operated on two routes, from Hong Kong to London Gatwick Airport and Vancouver International Airport.

Hong Kong fights to the United States in the months following the Hong Kong-Europe launch then. Oasis will be flying
ex-Singapore Airlines Boeing 747-412 aircraft.

Oasis is the same a first budget airline in Hong Kong. Oasis were also planned offer non-stop fights to

London Gatwick Airport in mid-October of 2006, followed by Milan-Malpensa, Berlin-Schönefeld, Germany and

destinations in the U.S. (Oakland, Chicago). The long-awaited Oakland service will soon come on line once the

Vancouver service is established because Oasis is believed to commence service to Chicago and New York before
reaching Washington DC.

Fleet

Oasis Hong Kong currently operates 5 Boeing 747 aircraft, and it had planned to more its fleet to 14 by

2011. Singapore Airlines previously owned two of Boeing 747 aircraft. All Nippon Airways previously owned three of
Boeing 747 aircraft.

The first aircraft was delivered to Singapore Airlines on July 11, 1989, with registration 9V-SMC. Later on, to

cover for the loss of another Boeing 747-400, Oasis Hong Kong leased to China airline 3B-SMC in the mid-1990s and

overshot its runway at Hong Kong Kai Tak Airport in 1993. Furthermore, Oasis Hong Kong is registration TF-AMA

that to Iberia Airlines. The aircraft was owned by SIA Engineering Co. Limited but sold to oasis and delivered it to
Oasis on September 19, 2006.

The second aircraft was delivered to Singapore Airlines on December 13, 1989, with registration 9V-SME.

Oasis Hong Kong is registration TF-AMB that to Air Atlanta Icelandic and Iberia Airlines. With the two aircraft, it was

delivered to Oasis on November 24, 2006. At the same time, oasis to offer daily non-stop flights between Hong Kong

and London. Another three Boeing 747-400s was selling from All Nippon airways. Later on, Oasis Growth Income

and Investment Limited operating these three Boeing 747s and delivered to ANA between February 25, 1999

(JA403A) and June 28, 2000 (JA405A), and were had scheduled to retire from ANA between 2007 and 2008 in
exchange for the newer Boeing 777s and 787s.

1.3 Key issue that Oasis Hong Kong has been facing
 On 9 April 2008, Oasis Hong Kong announced that it had ceased operations at 2pm local time that it will

cease operations of losses caused. I heard the news from television and much news reported that airline was

struggling with debts of up to $128 million USD and loses more than $128,000 USD per flight. It seriously affects the

image and liquidator appointed to oversee the liquidation of the company. With the amazing HK$1 billion Oasis Hong

Kong bankruptcy that just happened, leaving 700 employees jobless and 30,000 travellers, these poor traveller woes.

Any Airline that goes out of business in exorbitant oil prices, with the price of fuel surging upwards by more than 73%

in the past year. Therefore, Oasis Hong Kong one of reason ceased operations is that in these few years, the price of

oil and petroleum products is volatile since Oasis first flew in October 2006; the fuel prices was US$ 60 a barrel up to

US$ 100 a barrel up to years of 2008. Facing with greater debt, Oasis Hong Kong main debt are has been facing

greater debt is failure to attract new investment on time and under intense competition, Oasis airline was unable to
retain their Hong Kong employee, except to remain a few overseas staff.

1.4 Rationale of doing the study

I found out there are some interesting phenomenon available in budget airline industry in Hong Kong is that

why Oasis Hong Kong suddenly announced that it had ceased operations. The study is to depict a scenario for
answering the question are there any business opportunities available to invest in low-cost airlines?

As a graduate of BBA, there are good opportunities for applying what I have learnt from the course.
Moreover, the area is a very interesting topic to explore.

1.5 Significance of the study

Find out how to make improvement, if it continues to operate as a going concern. Which side must be
spending more to improve or against defending?

After that, how well the airline can face with threat. As Oasis airline facing first flew was delayed after Russia

held back its right to over fly Russian territory in October 2006 this bad news. Why Oasis airline just can alive in the

industry in 2008? In this study, the purpose is to find out the answer why Oasis airline announced that it had ceased

operations suddenly. As a graduate of BBA, there will be a good opportunities for applying what I have learnt from the

course. Moreover, it is a very interesting topic for me to explore in the subject area. The most effective way to learn

any subject is by doing it.

1.6 Expected Outcomes and Scope of The Study

 Referring to the section 1.4, there are eight components of strategic management model, including Ratio

Analysis, Industry analysis, CPM, External Assessment, Internal Assessment, SWOT analysis, Strategic Choices and

Evaluation analysis. We will conduct research for collecting and analyzing data and information, depicting an overall
profile of scenario for the purpose of Oasis Hong Kong.

Ø To analyze, assess and verify whether the intensity of competitive rivalry is not keen.

Ø To analyze, assess and verify whether the threat of new entrants is not strong.

Ø To analyze, assess and verify whether the bargaining power of customers is weak.

Ø To analyze, assess and verify whether the bargaining power of suppliers is weak.

Ø To analyze, assess and verify whether the threat of substitute products is weak.

Ø There are still business opportunities available for airlines to invest the low-cost airlines under the following
hypotheses.

1.7 Aim of The Dissertation (referring to the section 1.5)

After the completion of this study, I will organize a seminar, report it on the newspapers. Moreover, post on

the internet, and send it to Oasis Hong Kong top management. Final, inviting those members concerned on

investment of budget airline industry in Hong Kong in the coming five years, and announcing what I have found.

1.8 Objectives of the Study (referring to the section 1.6)

In order to accomplish the dissertation, the following will be taken:

1. Establish a conceptual framework with hypotheses for the study.

2. Review literature for relevant theories, concepts, models which facilitate the study.

3. Conduct research for organizing related information ready for analysis.

4. Analyze the result of research.

5. Verification of the hypotheses and discussion of the facts & findings.

6. Draw conclusion

7. Make recommendation in order to make achievement of the budget airline perspective on that situation.
a. any adverse effects to the company will occur if nothing to be done on the fact.
 b. treated as guideline or policy for organizations to determine their future investment in budget airline
industry in Hong Kong.

8.

Chapter 2 - Literature Review

2.1 Ratio Analysis

In any contemporary operating organisation, progress that the company is making is recorded as basis for,

among a host of other essential things, decision-making and as a benchmark for measuring the firm’s performance

for the period under scrutiny. A financial situation analysis is one such yardstick that documents current and future

financial situation in an attempt to determine a financial strategy to help achieve organisational goals. As formally

defined by Riahi-Belkaoui in 1998, financial analysis ‘is an information processing system used to provide relevant

information for decision making’ (p. 1). The main sources of information for such analyses are published financial

statements of the concerned company. Various accounts from published financial statements are evaluated in

relation to each other to form performance indicators, which are then compared to ‘established’ standards. These
performance indicators are better known as ratios, and constitute the main tools of conventional financial analysis.

Basically, Atril & Mclaney (2004) mentioned that by calculating a relatively small number of ratios, it is often

possible to build up a reasonably good picture of the position and performance of a business. In consideration to

Oasis Airline, ratios help to highlight the financial strengths and weaknesses of a business, but they can not, by

themselves, explain why certain strengths or weaknesses exist, or why certain changes occurred. Just by details

investigation will find the reasons. Ratios can be grouped into certain categories; each of them identifies a particular

aspect of financial performance or, position. There are five broad categories which define as follows: (1) Profitability;

(2) Liquidity; (3) Financial Leverage; and (4) Asset Management (Pike & Neale 1999). With this regard, the financial

ratios of Oasis Hong Kong Airline are presented in Appendix (see Appendix). Basically, the presented ratio was only

updated as of December 2007 since the company decided ceasing their operation last April 2008 (Chiu J. & Chaney
2008).

2.2 Industry analysis

Airline industry is a complicated business, starting an airline company is not easy, it involves major capital

requirements for aircraft, compliance of government regulations, restrictions and state policy, competitive reaction

from other tourist transport and requiring high level of expertise to operate and manage. What is the airline industry

problem that they have to face? Airline is facing the rapid increase of globalization, rising fuel prices, heavy repair and
maintenances cost, raising labor costs, increasing competition and requirements for higher service levels and greater
flexibility, budget airlines especially.

2.3 Definition of Competitive Advantages

Competitive advantages is show a company sustains profits that exceed the average for its industry, how

well that retain more customers than its competition, the firm can over its competitors and an ability to generate
greater value for the firm and its shareholders.

Michael Porter’s (1998, 2006) framework and typology:

2.4 Critical Path Method (CPM)

This method was developed by E.l du Pont de Nemours and company in 1956 to aids them in the

scheduling of some management works like routine plant overhaul, maintenance, and construction work. Actually,

this method is crucial to airline businesses since their work usually fall under repetitive operations of which the

management has experience on data involving time and costs among others (Thompson, A.A. and Strickland, A.J.
2003), and relatively small variance in their performance time, and CPM reasonably assumed that the completion

time for each activity involved in a work project is known. Moreover, the CPM incorporates no statistical analysis in
its determination estimates.

2.5 For External Assessment

Opportunities

1. Expansion to becoming a major carrier

2. Improving quantity of core customers

3. Possible partnership with other low cost air transport organisations

Marketing and business development through e-commerce,

4.
internet
 Online booking are so popular recently, Oasis Hong Kong is easy to make their brand name become more

and more famous. Besides, they need to introduce the B2B and B2C Business. In initially, Oasis Hong Kong has

promoted the low cost fares for the ticket to the school graduation/rest, and providing them with the various kinds of

support they need to become self assured on years of 2006 summer. However, Electronic commerce emphasizes the
generation and exploitation of new business opportunities.

Technological Advancement, Rapidly Growth of E-commerce Market, Online Advertisement and online

booking can Generate Revenue are the other three opportunities that we should pay attention. E-commerce is often

thought to doing business and using simply, fast and low costs refer to buying or selling using on the Internet. People

would immediately think of consumer purchase. For the Online booking, Oasis Hong Kong can via their own celebrity

to attract different types of commercial companies to advertise on their website. Moreover, rapidly growth of E-
commerce Market is the suitable time to attract more new clients, especially the youngest to use their services.

Threats

Potential strengths of the new entrants in the low cost air transport
1.
industry

Unstable market places the company in danger of filing Chapter 11

2.
claims

3. Increasing competition in e-commerce

4. Escalating prices of fuels used in business operation

Attack by substitutes, Time consuming & costly infringement, and

5.
Internet fraud complaints

In opposites, we need to focus on the threats and try to make some improvements. Firstly, the most we

worry about is there is strong competition in the current market. There are so many competitors as like Dragon Air,
Cathay Pacific Airways, and budget airline including Jetstar, United Airlines and so on, although each airline has their
potential customer. They need to face the strong competition and try to via the improvements to attract more clients.

Besides, elements include substitutes, and the competitor, and so on. Payment in the Internet, it caused the problem

on the tax, the revenue of internet sales may decrease, and especially it will affect the buyer. Attack by substitutes in

a threat, Time consuming & costly infringement, and Internet fraud complaint are the other threats that we should pay

more efforts to deal with. Many of the budget airlines work on a first come, they sell all the low fares first and don’t

release any more closer to the date of departure. Therefore, the cheap fares advertised by budget airlines. At the

same time, customers always complain which they can never get the fares online. For the attack by substitutes,

Oasis Hong Kong should strength it’s characterized to keep their clients. They need to make an investigation on the

complaint and give the feedbacks to their clients. Furthermore, in the whole process of trading, buyer usually don’t
have any kind of receipts.

Originally, almost all of airlines are having a market share, has than one more fares supplier in Hong Kong;
therefore we cannot fulfill all the demand. People can select to buy budget fares or not, i.e. more airline company with
promotional offers seasonal specials.

2.6 Internal Assessment

Strengths

1 Strong language, culture and kinship

2 Strong reputation

3 Customer oriented

4 Strong community involvement

5 High technology

6 Strong in brand name

7 Unlimited innovation

8 High sales amount

 9 Full skilled labour

10 Larger in local market share with long-haul

11 Online Advertisements can Generate Revenue

12 Rapidly Growth of E-commerce Market

Based on the previous presentation of the external and internal assessment, Oasis Hong Kong is indeed on

its way on becoming the dominant player in the industry. However, the road it has to travel is paved with obstacles

and hurdles that will essentially test the company’s resolve. This is highlighted in the previous presentation analysis

above. The company, regardless of its potential to be great, has some weaknesses that may cause their demise if not

dealt with accordingly. This is compounded by the imminent threats to its operations as seen in the

macroenvironement of Oasis Hong Kong. However, the opportunities and strengths that the company have may well
even out these perceived negativities as they outnumber them.

Seeing that the company’s strength is built on their reputation, it seems that Oasis Hong Kong does

implement a strategy that complements their environment. In the same manner, the previous presentation has given

the impression that the internal environment of the organisation is able to contribute to this success. Thus, a balance

in managing both internal and external environment may have been the redeeming feature of Oasis Hong Kong in the
low-cost air transport industry.

Weaknesses

1 Relatively high price and high operation cost

2 Investment cost in high technology

3 Weak bargaining power of labour union

4 Financial stability
 5 Internet fraud complaints

6 Strong competition in current market

7 Government impose tax on internet sales

8 Time consuming And costly infringement claims

Fares change all the time, with promotional offers for the opening of new routes, seasonal specials and so

forth. Enterprises must make sure don’t miss any bargains, an example Oasis Hong Kong can sign up their customer
on e-mail with any promotions from all the websites.

2.7 For Strategic Choices

They are currently selling their travel tickets through their website, which can be accessed at

[Link]. Although not in par with the websites of old-timers like Cathay Pacific Airways that is also

Hong Kong-based, it seems to function pretty well and has all the basic information for its users. One outstanding

characteristic of the website is that compared to other sites in the same line of business, it is remarkably uncluttered.

Since the start of its operation, many have expressed scepticism in its success, as it has been proven that the

economies of scale are not effortlessly shifted to the long haul model. If there is anything so far that Oasis Hong Kong

has done right, it is the creation of a fair bit of coverage about its service and has reportedly endeavoured to reach

out to their market by permitting agents to register on the firm’s site to vend tickets. In October of 2006, they launched

an online promotion (‘Be The First To Fly’) giving away more than 100 free flights between London and Hong Kong,
as part of its first marketing initiative in the UK market[1].

Just this month, Oasis signed an agreement with Galileo GDS (a global travel distribution system), which

allowed Oasis' fares and inventory to be added to the Galileo GDS. As a consequence of the agreement, the carrier

is supplied with a platform that permits the airline to examine online and offline total travel distribution. Also, Oasis will

now be able to sell its tickets more effectively through Galileo's wide-ranging exposure to agent locations.

Consequently, Galileo-connected travel agents will have new opportunities to increase sales with new Oasis content
available directly on their desktops[2]. Further, Oasis has outsourced contact centre services last year which will

provide the carrier's customers and travel agents with sales, general enquiries and customer service assistance,
handling all inbound calls between 08:00 and 20:00 each day, seven days a week. They also have partnered with
various hotels, car rental agencies, apartments and villas for the accommodation of their passengers, which was
effectively incorporated in their website as one of the many conveniences of travelling with Oasis Hong Kong.

As evidences to the effectiveness of their low-cost strategy, Hong Kong has experienced an 8.1% visitor

increase last year, and a couple of airline operators (AirAsia and Jetstar) have introduced low cost long haul routes of
their own, also last year[3]. Oasis Hong Kong Airlines claims to be committed to delivering nothing but the best of

service, and as the passengers are the most fitting judge of their performance, the management asserts to looking

forward to hearing from their customers regarding their flight experience with the carrier. And while they do not

guarantee to reply to all feedback forms, they declare to welcome comments and offers assurance that they will be

forwarded to the relevant department(s). From their original fleet of two Boeing 747-400s, the finalisation of an

agreement with All Nippon Airways Co., Ltd. to purchase three additional Boeing 747-400s, increased their fleet to

five aircrafts. This was carried out just earlier this month as part of its planned fleet expansion in preparation for the
launch of the airline’s new Vancouver route in the second half of 2007.

2.8 For Evaluation analysis

As the airline previously operates on one route only (Hong Kong International Airport to London Gatwick

Airport), they have plans of expanding to other routes this year and the years to follow. Number one in their list of

priorities is to be able to fly their growing number of loyal passengers to Vancouver International Airport, but

negotiations to give license to fly to said airport is still on-going, subject to government approval. It is widely

speculated that next in their priority list is the Oakland International Airport, and other airports that also route budget

carrier hubs, like easyJet and Westjet. Oasis is also currently in the process of negotiations with Southwest Airlines

and JetBlue Airways for potential partnership arrangements. The application for route licenses is currently going

headstrong, as part of the carrier’s marketing strategy to fly to leading aviation hubs around the globe. The main

targets for expansion as of the moment are Cologne/Bonn, Berlin and Milan in Europe and Oakland (San Francisco)

and Chicago in USA. Other aviation hubs in leading tourist-garners will follow after the said routes have been given

licences, to further increase market scope for the company, in their intention to provide low-cost flying to more
people.

Also, like all other businesses in the same line of industry, Oasis has plans to participate in oil hedging to

safeguard against potential fuel price increases. This is not only to maintain the low-cost fares being offered to

passengers but also to be able to sustain business profitability. As Oasis has plans to break even during the first 12

to 18 months of operations, the said strategy will aid a good deal in its realisation. Although the increase of tourism

activity in Hong Kong is seen as a positive sign which will likely to continue in the following years, it is hardly
comparable to the marked increase of the same activity in neighbouring Asian countries.
 Chapter 3 - Methodology

3.1 Introduction /Purpose

In this part, we will rank and analyze the Oasis Hong Kong ability to create and maintain an environment in
which budget airlines can compete.

We assume Oasis Hong Kong operate in a wealth creation environment that enhances or hinders their

ability to compete their business, based on analysis made by our own research project, the methodology is divides
the national environment into 2 main factors:

Ø PEST analysis

Ø 5-Forces Analysis

Research Question:

Are there any business opportunities available to invest to the low-cost airlines?

3.2 Data & Information required

Proposition

There is a still business opportunity available for airlines to invest the low-cost airlines. The phenomenal

success of budget airlines like easyJet, Virgin Atlantic Airways Ltd and Ryanair has revolutionized the travel industry.

Between them, other budget airlines now can carry staggering passengers a year to destinations all over Europe.

Why Oasis Hong Kong can’t? In this part, we outlines what the various budget airlines have to offer and recommends
which destinations are any adverse effects to the company will occur if nothing to be done on the fact.

3.2.1. PEST analysis

Political Conditions - political influences include government stability, taxation policy, foreign trade

regulations and social welfare policies.

Hong Kong is an attractive market for overseas eyewear makers and the newest trends. The opening of

Oasis Hong Kong and the growth of long-haul market economy is supporting the demand for transportation services

in Hong Kong. Oasis Hong Kong does not worry that the legislation could severely set back their most effective
marketing. Hence, it has started flight to London from Hong Kong and thinks it can manage to avoid turbulence by
keeping costs down and efficiency high.
 The political situation of Hong Kong is very stable now or even in the knowing future, all of these are provide

by its stable and high visibility law. As the policy they adapted to the worldwide are in peace and free for development
and easy to follow the market trend in major.

Social cultural - In a research conducted by AC Nielsen in mid January 2005, 25 per cent out of 1,016

consumers felt that their personal financial situation will improve in the next 12 months. Consumer spending has been

grown to 11 per cent in the second quarter of 2004. The average spending on holiday travel will be HK$9,320.

Subsequent to the Tsunami incident in South Asia on the past Boxing Day, the travel desires on Hong Kong people

seemed to have softened with less than a third indicated plans to travel aboard, but 73 per cent of those claimed to
be shifting to visit the Mainland China.

Technological - Today, e-business has become an integral part of operations in the airline industry, with

ultimate objectives of not only achieving cost saving but also generating additional revenue. Beyond to enhance their

current product line, their further investment should be focus on improving and incorporating appropriate new

technology. Two years ago, Oasis Hong Kong implemented and ambitious to become Asia’s leading e-business

airline and the company is determined to provide greater ease and convenience for its customers and business

partners—enhancing efficiency and economic benefits, as well as creating new opportunities for further business
growth.

The airline expects its e-business projects to significantly increase revenue, with 25-30 per cent of tickets

being sold online by 2005. E-business is also expected to help cut operational costs by more than HK$500 million a
year by 2003, with substantial savings coming from the airline’s own online purchasing and reduced inventory.

5-Forces Analysis - Airline industry conducts more research and development (R&D) than any other industry

because air transportation is dependent to considerable degree on the quality and performance of equipment

produced for the airlines and airways operators, therefore R&D is a major long-term determine of national economic

growth. With this, Porter’s 5-Forces Model is useful for understanding the context of the industry, in which the firm
operates (‘Porter’s Five Forces’ 2006).

Distinctive Competencies of enterprise- Evaluation of the distinctive competencies of an enterprise is really

vital to their development. This evaluation serves as basis of strategies to be used in business procedures. Thus, it
is vital for the company to carefully assess the important features of this factor.
3.3 Approach

For this research design, the researcher gathered data, collated published studies from different local and

foreign universities and articles from journals; and make an analysis of the collected documentary and verbal

material. Afterwards, the researcher summarised all the information, make a conclusion based on the results of
evaluation and provide insightful recommendations on the dealing with the business practices of Oasis Hong Kong.

These gathered data and collated studies form and comprise the discussions of that this study is base on.

This complements with the other data that the researcher gathered through the company news and reports. The

information that is summarised and the conclusion that gained form these sources helps the researcher to have an
idea of the magnitude of the sufficiency and criticality of business practice of Oasis Hong Kong.

3.4 Data Organization and Analysis

As stated, this study utilised the secondary data. Secondary data include raw data and published

summaries, as well as both quantitative and qualitative data. Saunders & Thornhill (2003) deduced that secondary

data fall into three main subgroups—documentary data, survey-based data, and those compiled from different

sources. On the other hand, the study used news and company reports to gather primary data. Basically, these are
called documentary secondary data.

Documentary secondary data, accordingly, are the ones often used in research projects that also use

primary data collection methods, although such data can also be used on their own or be combined with other

secondary data. The type includes written documents (notices, correspondence, minutes of meetings, and reports to

shareholders, diaries, transcripts of speeches, administrative and public records, as well as articles from books,

journals, magazines and newspapers). Because it can be important raw data sources on their own right, a storage

medium for compiled and provide qualitative data, and can be used. To generate statistical measures (e.g., data on

absenteeism derived from company records); and, non-written documents, like tape and video recordings, pictures,

drawings, films and television programmes, digital versatile disks and CD-ROMs that can be analyzed both

quantitatively and qualitatively, as well be used to help triangulate. The part of findings, based on other data such as

written documents and primary data collected through observations, interviews and questionnaires (Saunders &

Thornhill, 2003, pp. 190-191). From the gathered past studies related to the status of Oasis Hong Kong business

practice, this study employed an analysis since this study involves gathering information by examining records and
documents.
 In addition, the documentary data discussed in this paper are often used in research projects. Research

based almost exclusively on secondary data is termed archival research and, although this term has historical
connotations, it can refer to recent as well as historical documents i.e. review of related literature (Bryman, 1989).

3.5 Difficulties and Limitation of the research

This dissertation looks at some of the variables that affect particularly those under the control because the

data should be corrected in the same period, much, found more related books. From this foundation, it continues with

a summary of techniques used in the design, as like how to write a research paper. Moreover, knowledge problems
and tackle difficulties in time limited. The research should be preceded in the form of more detailed studies.

Chapter 4 – Findings

The management of operation requires a continual making of decisions regarding the future and the basis
for such forecasts is the record of the past performance.

When observations of this kind are arranged in a time sequence and separated by (or represent) more or

less regular intervals of time (months, years, decades, etc.), the progression of values is known as a time series. The

concept of trend in economic time series rests in large part upon the secular growth of population, capital and

resources. On the other hand, this work attempts to determine and analyse the business operation of Oasis Hong
Kong in accordance to their strategies in the Airline market.

These days, everyone talks about the virtues of interactive marketing and building long-term relationships

with customers by relying on websites, call centres, and bricks-and-clicks integration. We all know there is a

compelling case for treating different customers differently and focusing on “share of customer” as a metric of
success. To some of us now, it seems that this new world of competition was created entirely from the development

of a newly available Internet technology, or that it was simply imagined out of the thin air of entrepreneurial drive and
business guru creativity.

Actually, the most dominant strategic management paradigm in recent years is known as the strategies

model (Fredrickson 1991). Porter (1998) claims that the intensity of competition in an industry is neither a matter of

coincidence or bad luck. Rather, competition in any business industry is rooted in its underlying economic structure

and goes well beyond the behaviour of current competitors. The state of competition in an industry depends on five
basic competitive forces. The following discussion illustrates the five basic competitive forces in the two companies.
 Figure 1 - The Five Factors or Forces Affecting Competition in an Industry[4]

With this regard, this part of the chapter will be divided into five categories: (i) intensity of competitive rivalry,

(ii) new entrants’ status, (iii) evaluation of the bargaining power of customers, (iv) presentation of the bargaining

power of suppliers, and (v) presentation of the threat of substitute products. The summary of findings will be shown in
4.6 and the analysis of Porter’s Five Forces will be discussed in the next Chapter.

4.1 The intensity of competitive rivalry is keen

This part of the study will analyze and assess the intensity of competitive rivalry of Oasis Hong Kong.

Basically, in order for Oasis Hong Kong to develop a strategy that can provide superior performance, they must

achieve and sustain competitive advantage and it has been suggested to develop some degree of competitive
advantage.

Basically, companies in the aviation industry considered to be diverse in their history and culture and in how

they do business. Moreover, the aviation industry in Hong Kong is experiencing fast market growth. The services

offered by aviation companies in the industry are essentially interchangeable and indistinguishable. It has also been

established that the services provided by the Oasis Hong Kong is a commodity to a major part of its stakeholders.
Moreover, it also shows that there are considerable numbers of large competitors that dominate the industry.

Currently, Oasis Hong Kong had high fixed costs and spent a lot of money on their operation. Likewise,

service capacity, to be economically feasible, must be done in large, expensive increments. Significant barriers as

well hinder companies that want to exit the industry. These include regulations, labour agreements, costs of closing
facilities, and the absence of secondary market for assets. In addition, it could also be observed that staying in the
industry is of great strategic importance to companies in the industry, probably because they have nowhere else to
go.

Actually, the assessment of the airline industry attractiveness is based on Porter’s 5 forces model. In our

case, Oasis Hong Kong position in the airline industry in Hong Kong is not in good status since there are some

wobble situation they are facing. As reported by Chiu J. & Chaney (2008), Oasis Hong Kong shows its desire to

establish autonomous growth through the development of their services but because of the growing number of

budget carrier competitors and increasing price of fuels, Oasis Hong Kong Airlines said that they halted flights and

would go into liquidation after just 17 months. Basically, stiff competition triggered heavy losses of Oasis Hong Kong
Airline (Chiu J. & Chaney 2008).

Even though this is happening to Oasis Hong Kong Airline and they decided to ceased their operation for the

mean time, Hong Kong travel industry has still been showing steady signs of growth and progress for a couple of

years now (Travel Daily News Website 2008). This consistent progress can be attributed to the change in strategic

directions that was implemented several years ago and is still being further structured up to now. Basically, the critical

element of the strategy was that Hong Kong travel industry started looking at things from the perspectives of the
consumers and the customers.

4.2 The threat of new entrants is not strong

The threat of new entrants could be considered as serious because the lack of distribution channels of major

competitors will damage the good reputation of companies and organizations as well as their products and services
(Krajewski, 1999).

Firstly, in the case of Oasis Hong Kong Airlines, the threat of new entrants is not strong (Chiu J. & Chaney 2008).

Because of the existing high price pressures of fuels in Airline Industry (Chiu J. & Chaney 2008), the new entrants

especially the new low-cost airline will have difficulties in surviving in current business market. As revealed by Chiu J.

& Chaney (2008), even though Oasis Hong Kong is considered as a leading long-haul low-cost airline they are still
suffering because of global inflation rate and high and escalating business costs.

Secondly, a national air-taxi system is force airline industry’s hand. In the words, financing billions of dollars

in flight and ground equipment during the 1990s present a tremendous challenge to the airline industry. Airline

industry returns on investment generally have been poor (see below table). Otherwise, with a notable exception

(Nawal [Link], The Commercial Airline Industry, 1976) 12 airline cash flows over the long term have been

inadequate to meet capital requirements. Therefore, the ratio of debt to equity for many airline company owners has

increased impact to negative levels on their credit worthiness. This has not only limited access by airlines industry to
external, but also led to larger option fees and progress payment requirements from the airline industry-as much as
20precent of the aircraft price in a three-to four years period before delivery.
 At the same time, deregulation has increased the demands on management for marketing skills, strategic

planning, cost control, policy to guarantee, and competition with other firms. Investor who is should be concerned with

financial condition of the airlines. The financial condition of the industry directly affects the company behaviour in
short run and ultimately, like their structure, performance in long term.

For short term, the airline company might resort to less than compensatory fares in order to generate

sufficient cash to cover their fixed cost to meet the above-mentioned financing. This may threaten that the profitability

and survival for carriers in long term. Benefit from low fares in short run, carriers to survive, fares must be raised

eventually to keep capital in the industry. Furthermore, a small number of carriers need to complete with each more.

At all the large commercial airports, they provide much stronger competitive pressure to hold down costs and fares
competing in less extensive networks than a large number of carriers.

Table Net profit /Loss and rate of return on investment for the U.S. scheduled Airlines, 1990-2005

Year Net ROI Year Net ROI

Profit/Loss(thousands) (%) Profit/Loss(thousands) (%)

1990 9,140 3.0 2000 28,006 3.5

1991 (37,331) 1.6 2001 214,850 4.9

1992 52,319 5.2 2002 226,693 5.1

1993 78,480 6.1 2003 321,641 6.4

1994 223,172 9.8 2004 (84,204) 2.5

1995 367,119 12.0 2005 563,354 8.5

1996 427,633 11.0

1997 415,388 7.6

1998 209,952 4.9

1999 52,752 3.2

1999 (178,930) 1.5

4.3 The bargaining power of customers is not strong

This refers to the impact that customers have on a producing industry (‘Porter’s Five Forces’ 2006). In Oasis

Hong Kong’s consumers, buyer power is strong, such that this could provide Oasis Hong Kong Airline’s rivals with a
strong and efficient business. In Oasis Hong Kong environment, the buyer power is the impact that customers have
on the industry.

Travellers are who fly for trends in jet airplane sales. A talk with air-taxi model would be attractive for a
reason beyond mere convenience was a routine first stop for understanding the small plan system.

4.4 The bargaining power of suppliers is not strong

With respect to the current stance of global economy, everyone is suffering from high inflation rate. In the

case of Oasis Hong Kong, the power of their suppliers is also strong. The increase in costs of maintenance of

airplanes and costs of fuels has significant impact to the operation of Oasis Hong Kong (Chiu J. & Chaney 2008). In

addition, because of this, Oasis Hong Kong has to adjust their prices in order to cope up with the current changes in

the business environment. Basically, the proceeding presentation below illustrates that high fuel prices are leading

airlines a faster-growing source of gas emissions, more eco-friendly cars. For years, airlines have countered pressure
from environmentalists, airlines are working hard to develop fuels for their jets (Denis Balibouse/Reuters).
Source: [Link]
 Source: Bureau of Transportation Statistics

As seen in these presentations, it is predicted that within the next five years, high oil prices could be one of

the biggest problem in the airline industry. With oil topping $140 a barrel, it is in the interest of airlines, now to really

push for fuel alternatives. Oil prices are skyrocketing, and do not look to be coming down anytime soon. It is sad what
has become of the airline industry.
 Source: [Link]

Regarding above the figure, oil sources running out fast, we will see oil at $80 a barrel again. Energy costs

are a huge portion of an airplane’s expenses, so naturally the companies became worried and began to look for

alternatives. The effects of high fuel prices to bring to airlines attention a huge potential fuel savings that would save
the industry hundreds of millions of dollars annually with.

It is said that the conditions and the present arrangement in the fuel supply market largely determines the

extent in which effective competition can be achieved. The bargaining power of a supplier could be a threat for the

profit of the company, and Oasis Hong Kong is very much aware of it. In this manner, Oasis Hong Kong is trying to

have a good contract with its fuel supplier. Herein, Oasis Hong Kong makes it sure that they are also benefited in the
said contract while the suppliers enjoy the agreement with them.
4.5 The threat of substitute is weak

Actually, Oasis Hong Kong was chosen in 2007 as "World’s Leading New Airline" and "Asia's Leading

Budget/No Frills Airline" at the Annual World Travel Awards 2007. In addition to this, the company was also named as

"New Airline of the Year" by the Centre for Asia Pacific Aviation of Australia (CAPA New Airline of the Year 2007),

and was voted in 2007 World Low Cost Airline Congress Awards as "Best New Service" and "Best Business Class
Carrier" held in London (Recognising the airline industry 2007).

Another reasonably of forecasting is time-series and trend. Aviation is certainly static, like new aircraft sales,

fares prices, revenue passenger miles, passengers benefit, flying hours, on-time performance and number of
departure all stability than ship and other transportation.

For trend, is a long-term tendency for the forecasted, and it must consists of interpreting the time-series. The
trend determined by four factors: (1) long-term trend, (2)business cycle, (3) seasonal phenomena, and (4) irregular or

unique phenomena, such as strikes, market segmentation, intensive growth strategies. The value of trend is a

reflection of its statistical relationship with time. It functions are can be a negative for phasing out of fuel-inefficient

aircraft or positive described by growth curves, GNP, industrialization, changes in technology, and long-term shifts in
preference from the airline fleet.

For business cycle, it is due to the level of economic activity that has been associated with the

developed. The business cycle has a significant effect on all segments of the air industry. The level of traveller or

leisure purpose all refer to the income elastic that is airplane sales, revenue passenger miles, and disposal income,

personal income, and national income. In addition, the business cycle has never been fully explained by economics,

like controlled by government, employment levels, corporate profits or capital investment. Although the government is

dealing with new, tiny companies or/and trying to help them innovate without making them into mini defence

constructors who will remain permanently dependent on its funds, still possible for many people, much of the time.

For seasonal, the value of it is associated with the time of years. it is said both the weather and the social customs
associated with four seasons.

4.6 Summary

As revealed in the findings, currently Oasis Hong Kong Airline is suffering from possible downfall because of

stiff competition, escalating high price pressures of fuels and changing behaviour of their customers. As discussed,

the knowledge of the underlying sources of competitive pressure highlights the critical strengths and weaknesses of

Oasis Hong Kong Airline, animates its positioning in the industry, clarifies the areas where strategic changes may

yield the greatest payoff, and highlights the areas where industry trends promise to hold the greatest significance as
either opportunities or threats. Basically, the previous presentation revealed that the intensity of competitive rivalry

among budget airlines in Hong Kong is keen. This stiff competition among budget airlines triggered heavy losses to
Oasis Hong Kong Airline. But even though there are stiff competitions among rival airlines, the new entrants for this

industry are not that strong. And the primary reason is due to the global inflation that makes the survival of new

players difficult. Apparently, the buyer and supplier power in this type of industry is strong which may possibly

contribute to their survival difficulties. In consideration to these difficulties, the quality of services and the satisfaction
give by Oasis Airline to their clients and customers will hinder any substitutes to have their way.

Chapter 5 - Discussion/Analysis

In investigating rivals' operational processes, Oasis Hong Kong Airline may learn of new and improved

methods and processes that allow it to remain competitive. Thus, securing information across several environmental

sectors may enable a firm to gain competitive advantage or maintain its market position. According to Davies & Lam

(2001), although the five forces approach provides sound theoretical basis and allows systematic analysis, it has the

disadvantage of not providing how to measure and weight the many different components which determine each of

the forces. Also, it is only possible to make an unambiguous judgment on the strength of a force if all the indicators
‘point’ in the same direction. If indicators contradict each other, there is the problem of how to balance them.

5.1. Verification whether the intensity of competitive rivalry is keen

As revealed in the previous chapter, the intensity of competitive rivalry is keen and it affects the business

operation of the company. As justified, the company still dominates the low-cost Airline business but due to the

escalating prices of fuels, Oasis Hong Kong Airline ceased their operation. This means that even though Oasis Hong
Kong Airline is still on top of the competition among other low-cost Airline company, the company is not exempted to

the impact of global inflation. The company enjoys its competitive position in the region and still trying to sustain its

competitive advantage among its rivals. With this regard, the company still needs to manage and sustain the quality
of their services in order to gain trust to their customers.

5.2. Verification whether the threat of new entrants is not strong

According to Davies & Lam (2001), barriers to entry are related to economies of scale, the existence of
learning and experience curve effects, brand preferences and customer loyalty, capital requirements, cost
disadvantages independent of size, access to distribution channels and government actions and policies. The

economies of scale, for instance, implies that the more scale economies, the less threat of entry in that if entrant

cannot quickly get large market share, it will have a major cost disadvantage. In the case of Oasis Hong Kong Airline,

the threat of new entrants is not strong since Oasis Hong Kong Airline already established the position in the market.

The new entrants in the market may possibly have difficulties to maintain their business because of the inflation rate
which lessen the treat of new entrants.

5.3. Verification whether the bargaining power of customers is strong

Airline businesses have a long history--a history rich in diversity, international scope, and, above all,

continuous change and adaptation. These competitive changes have forced adaptations, and in general have
improved the level and efficiency of the services offered by Oasis Hong Kong Airlines to clients, thereby increasing

service quality. Coupled with these and extensive advertising of airline companies, the customers have become

informed and becoming more demanding. They have required that airline companies meet their very specific

individual needs, therefore showing that clients to this industry have shaped what it is right now. This means, on an

overall note, that customers have a high influence on the workings of the airline industry, as they have the ability to
affect it.

5.4. Verification whether the bargaining power of suppliers is weak

Similar to the results of previous variable, the bargaining power of suppliers in Oasis Hong Kong Airline is

also high. This is evident as when the said airline ceased their operation in 2007 (Chiu J. & Chaney 2008). The fuel

supplies and airplane maintenance materials use in business operation is crucial for the company. And currently, due

to global inflation and the increase of prices of these supplies, this becomes a treat in business operation of Oasis
Hong Kong.

5.5. Verification whether the threat of substitute is weak

With respect to the efforts of the company in maintaining the quality of their services, the treat of substitute is

weak. Actually, substitutes give high influence to the company since substitutes they can make a company lose the
clients it has. But in the case Oasis Hong Kong Airlines, they make sure that the substitutes won’t give them too

much problem. They do this by proving that the services they offer are of best quality and are better than substitutes.
They also prove that their services are better against others by comparing and contrasting it with substitutes so that

clients can know the difference. The company also offer services superior than substitutes so that they can attract
more clients.

Chapter 6 - Conclusion

6.1 Summary of Objectives to have achieved

The strategies of Oasis Hong Kong Airline focus more on the management and access of information

rather the creation of irrelevant airline services. For this reason, Oasis Hong Kong Airline has developed a unique set

of guiding principles - simplicity, cost-efficiency and effectiveness. Total commitment to these principles makes the

airline services of Oasis Hong Kong Airline very user-friendly to its customers. Oasis Hong Kong Airline was able to

achieve a broad market leadership through various acquisition deals over the years even there is a stiff competition in

the market. The strategies of Oasis Hong Kong Airline are focused mainly on driving the growth of its airline services

and improving the company’s financial performance. These innovations have also helped secure significant

acquisitions and partnerships. And more importantly, these innovations have led to the release of the potentials of the
company’s employees, thus building a quality performance- based culture.

On the other hand, Oasis Hong Kong Airline’ strategies in the airline industry changed for the better at the

start of the new millennium and began pursuing airline service differentiation. True enough, the differentiated airline

services of Oasis Hong Kong Airline were able to satisfy the needs of customers through a sustainable competitive
advantage. This also justified that the bargaining power of their customer is high while the treat of their substitute and

new entrant is low because of their extensive efforts in maintaining the quality of their services. Moreover, this

allowed Oasis Hong Kong Airline to desensitize the prices of their airline services and instead focused on the values

that generated not only a comparatively higher price but also a better margin since these things could help to avoid
business downfall.

6.2 Implication of the findings and the fact

Methods that Oasis could use to collect information and assess the relative attractiveness of potential

overseas markets will be aided by technological innovations abound ready for the utilisation of a company such as

the one under analysis. Understanding passenger values can lead to major strategy decisions—particularly around
investment and branding to meet and market to customer needs. If the client values the attribute, it is worth investing
to improve and/or market that attribute—if the client doesn't, then the investment is likely to be wasted (somewhat

akin to spitting in the wind). The Internet, in this case, will be the most powerful tool of the company to gather market

information in order to assess the relative attractiveness of potential overseas markets. With the glut of information

and the Internet, there is now so much data available that the challenge is no longer uncovering it but rather figuring

out how not to be overwhelmed. If the business knows the drivers of its success, then it can determine where to direct
focus and from where to base peripheral vision.

The potentialities of the internet as a major marketing tool has been notably utilised by Oasis. The Internet

presence of an organisation, in this case, the Oasis Hong Kong Airlines, has vast potentialities as well as limitations.

It is important to note that with globalisation and with the current rate of advancement in technology, there is an

increasingly bigger chance of getting the entire firm’s marketing message through to the target markets with the

utilisation of the Internet. The wise use of a website could either attract or lose existing and potential customers. The
Internet marketing strategies of the firm, therefore, need to be consistent with what was preset as marketing objective
of the firm and in an industry as civil aviation where innovations are an edge, this is very vital.

6.2.1. Consequence or effects to the company if nothing will be done on the fact

Oasis Hong Kong Airlines’ primary marketing objective is to attract more consumers away from the

conventional long haul travel services offered by previously existing in Hong Kong in order to maximize profits and

achieve market leadership. Another marketing objective of the company is to decide on whether to continue or not the

space bed project. A marketing objective should be to improve the service the company offers at the same time

lowering the costs made by the company. In relation to the marketing objectives the strategies company use is the

following. The company could further improve the image of their flight attendants since people are known to be

tensed and uptight during a flight. The company can train the employees to be more conscious and obedient to

clients. The company can implement discounts and other benefits on flight fares to attract consumers to avail their

services. Lastly, a strategy by the company is a continued use of different media to promote the company’s services

in relation to such the company should use more advertisement techniques. The company need to constant seeks

out creative new ways of solving existing problems and generating original ideas. In addition, managers must realize

the value of international marketing management theories and how such theories can support them in the better

management of the marketing aspect of the business. Be it formulating strategies or making major decisions, they
also need to fully understand the mistakes made in the past. That way, they can avoid similar mistakes in the future.

6.3 The Future

As the airline is currently operating on one route only (Hong Kong International Airport to London Gatwick

Airport), they have plans of expanding to other routes this year and the years to follow. Number one in their list of
priorities is to be able to fly their growing number of loyal passengers to Vancouver International Airport, but

negotiations to give license to fly to the said airport was still on-going, subject to government approval. It is widely

speculated that next in their priority list is the Oakland International Airport, and other airports that also route budget

carrier hubs, like easyJet and Westjet. Oasis is also currently in the process of negotiations with Southwest Airlines

and JetBlue Airways for potential partnership arrangements. The application for route licenses is currently going

headstrong, as part of the carrier’s marketing strategy to fly to leading aviation hubs around the globe. The main

targets for expansion as of the moment are Cologne/Bonn, Berlin and Milan in Europe and Oakland (San Francisco)

and Chicago in USA. Other aviation hubs in leading tourist-garners will follow after the said routes have been given

licences, to further increase market scope for the company, in their intention to provide low-cost flying to more
people.

Also, like all other businesses in the same line of industry, Oasis has plans to participate in oil hedging to
safeguard against potential fuel price increases. This is not only to maintain the low-cost fares being offered to

passengers but also to be able to sustain business profitability. As Oasis has plans to break even during the first 12

to 18 months of operations, the said strategy will aid a good deal in its realisation. Although the increase of tourism

activity in Hong Kong is seen as a positive sign which will likely to continue in the following years, it is hardly

comparable to the marked increase of the same activity in neighbouring Asian countries. In fact, it is said by analysts
that what the Hong Kong tourism industry is experiencing is just the tip of the iceberg.