Analysis for Airline Industry.

1.Executive Summary

Airline is a complex industry. It involves major capital requirements for aircraft, monitor by government regulations, restrictions and state policy, competitive reaction from other tourist transport and requiring high level of expertise to operate and manage. Airline facing increasing globalization, rising fuel prices, heavy repair & maintenance cost, raising labor costs, increasing competition and requirements for higher service levels and greater flexibility.

The acceptance of China to World Trade Organization and Beijing's winning bid for 2008 Olympics is expected to have a beneficial effect on airline industry to Hong Kong. However, loosening regulation of China's airline industry, additional flying routes, stake, merger and alliances increase the competition of Hong Kong airline business.

These significant changes in the market environment and fundamental shifts in customer demands are requiring the operator to re-focus competitive strategy. Apart from achieve low cost or differentiate it by enhancing product attributes in a way that adds value for the customer. Globalization, Airline Alliances, Frequent Flyer Programmes and Integration in tourism sector becomes a commonly adopted ways for airline operators to extend their capacity and market reach.

An airline operators must strive to maximize the operational efficiency across the range of airline business processes, including process reservations and bookings, customer services, corporate image, travel experience and supply chain management.

2. Airline Industry in Asia Pacific Region

Faced with rising aviation fuel prices, increasing competition and airline globalization, new openings into Asian countries and additional flying routes being launched, it has been an intensive competition for Airlines.

Asian airlines are campaigning aggressively to ensure passengers have the latest technology and the best available service at their fingertips. Having dealt with the detrimental effects of the Asian economic crisis and embracing global competition, the Asian airline industry is growing. According to the Association of Asia Pacific Airlines,