The Dragonair Airline Marketing Strategy - Essay Example

HONG KONG BASED DRAGONAIR Student Name Course code and Name Professor University State Date Due HONG KONG BASED DRAGONAIR Full service airlines passenger marketing strategies According to Cathy pacific (2013.p.23-26), the Air transport has been one of the most vital sections of the travel and tourism sector, air transport has really contributed to the increased growth in the tourism sector in the world. The united nation world of tourism institution (UNWTI), has predicted that by the year 2020 the international arrival of tourist will be approximately 1.6 billion which will comprise a long term forecast growth of 4.1% annually by 2020. The aviation sector is one of the main contributor to the Hong Kong finances and as such the strength of this hub originates from the frequency of the flights. The connectivity and the competitive fares offered by the airline services (Heyne & Percy 2014, 1950-1952). Where about 1.2 billion of the tourist will come from the inter-regions, about 378 million are long –haul users of the airline. For instance in India market of air travel is dominated by Air Indian which has full ownership of the government, jet airways which is located at Mumbai which also commands second in the market share. Due to the increased Airline travel the low cost carriers (LLC) usually command 63% of the market share, for the passengers who fly on a full services and are in the economy class (Dennis 2010, n.d). The Dragonair airline marketing strategy aims at developing the international plan for expanding the airline into the Indian market and other parts of Asia. This is based on the airlines need to identify and understand their customers as well as their competitors (Thanasupsin, Chaichana and Pliankaron 2010, p.212-224). Thus, the Dragonair marketing strategy seeks to increase their competition differences with other companies in the service sector and ensuring the quality of services offered is up to the required standards. Moreover, it ensures the efficiency of what they offer is purposeful through integrated making standards and quality of services that seek to improve customer satisfaction. Dragon believes in the marketing analogy “the customer is the king” and from their services it is evident that the customer makes their core concept of being in this business (Belobaba, Odani and Barnhart 2011, p.56-89). Their key to success is pegged on the fact that they are always willing to meet the customers’ intended quality of the services seek to help them deter competition from other airlines operating in the Hong Kong route. Though problems always arise when trying to look at customer satisfaction and the profitability of the airline company and Dragonair always tries to find a balance between the two. Their main objective as an airline that engages in fulltime air service is developing incentives that make them look good in the eyes of the consumers by clearly enlighten their staff from the cabin crew members to the pilots on the importance of marketing and consumer relationship interventions that have helped propel other full service airlines like Etihad and emirates (Heyne & Percy 2014, p.1950-1952). Identification of delivery gaps in the service of airline forms part of Dragonair’s marketing strategy as it helps them differentiate their services by devising means to minimize gaps that may affect efficient service delivery to the full service customers. The company’s marketing research team helps in analysing the perceptions of the quality of the services with reference to full time services and make suggestions based on the results on improvement of marketing services to the top management who devise marketing strategies that drive the company’s sales. Price reduction strategy has helped Dragonair increase customer loyalty in most of its routes as it offers low prices coupled up with the best services. Their promotional strategies during peak and off peak periods ensures that the airline improves it is brand attitude and maintain its brand image at the same time, coupons and direct marketing through mails as well as advertisements has helped in increasing the intake of Dragonair’s products (Cathy pacific 2013, n.d). Analyse and discuss Dragonair offers a full range of services and essential benefits to its members to maintain customer loyalty and increase its operations. The Dragonair networks normally covers most of the destinations in the main land of china. The lengths covered by an airline in the aviation industry ids classified into the short, medium and long haul. For instance, Dragonair’s Ember E-190 is considered as a short haul airliner while the A320’s are normally medium haul airbus while the Boeing 747-8 is a long haul airliner (Belobaba et al, 2011p. 58-89). Dragonair airline hub is located at the Hong Kong airport, it is from here that the airline connects and manages its operations to other destinations like North and south of America, in Middle East, Africa. Dragonair has a total number of 46 aircrafts and its short-haul routes comprises of 53 destinations in the China’s main land while its medium-haul destinations comprise of some parts of Asia. The pacific of southwest and India are the long-haul routes operated by the Cathy Dragon, further it operates long-haul routes between Hong Kong and London, Vancouver, Toronto, New York and the Asian continent and also other routes covers the Bengaluru, Kolkata and these routes are normally charged at HKD1015 (Cathy pacific 2013, n.d). Short-haul travel on the other hand, are aimed at transporting passengers to short distances , these are usually within China’s mainland and any other destination and are normally charged at HKD275.These short-haul routes also include Singapore and Bangkok. Dragon air normally deploys the A350-900s Aircraft for the long-haul flights, according to the company this aims at opening the Europeans market while using those of 1000s in the Northern America (Huang and Hsu 2016, p.1-8). The Cathy Dragon in the year 2016 purchased a total of 22 A350-900s aircrafts and 26 A350-1000s these are expected to be in operation by 2018 .looking into consideration in the fleet deployment in these route the table below indicates the aircraft available for all hauls. The fleet outline matrix Aircraft type current future Airbus A320-200 15 Airbus A321-200 8 Airbus A330-300 23 2 Total 46 2 Table 1.1 fleet outline matrix (Cathy pacific, 2013) The total number of fleet owned by the Dragon air according to the table above is 46, since the long haul which is represented by A330’s covers a wide geographical location there are plans of securing additional airbuses in the future that is by 2020 (Cathy pacific 2016, n.d). Also the number of fleet allocated for long haul are many compared to those for short and medium haul routes, this is a clear indication that Dragon air is focusing more on long haul routes as it will be aimed at increasing the company base capital and expand its operations. The short haul is using the A320’s airbuses whose number stands at 15 normally aimed to cover the main land of China territories, they are also many than medium haul meaning that the nation is focusing on tourist locally and other leisure activities. The medium haul that is represented by the A321’S aircrafts has the least number of airbuses currently standing at 8 and there is no future prospect of sourcing other fleets (Cathy pacific, 2013.p.23-26) All these fleets are operated either by a single or a wide body craft. Dragonair’s hub-and-spoke operations Dragonair has it main hub at the international airport. Which has it’s headquarter at Hong Kong, the Dragonair House. The three code shares of aircraft that are providing full service to their customer that is first class and business lounge in the aircraft depending on the kind of haul one has taken. There were efforts aimed at reducing the number of flights which were scheduled daily in Hong Kong airport by 10% a recommendation that was passed in 2016 by the aviation regulators in order to help introduce the air traffic controllers; however this move lacked confidence from the civil department of aviation (Huber 2016, 712-729). In the year 2016 the Cathy Pacific which gave rise to the Dragonair was operating a total of 450 flights daily while combined. For instance, a new route established by the Dragonair from Hong Kong to Kuala Lumpur operated flights weekly. All these moves of opening more routes in all china’s mainland are aimed at making this airline the best in China which can only be compared to the number one world airline, fly emirates (Huang et al. 2016, p.87-94). This high number clearly shows that the customers served by Dragonair like it and it relevance in the market gives it a competitive advantage over other airlines in the Chinese market. There is an estimated number of over about 27 million passengers that were served by these aircrafts in the year 2015 taking 138000 flights to different destinations same year, a clear indication of the robust services offered by Dragonair (Tsui and Fung 2016, p.1-11). Dragonair’s minimum connecting time for passengers that are required to connect with a gateway for a flight is normally 55 min and passengers are always advised to arrive 1 hour to departure to avoid inconveniences. Hong Kong airport offers some of the most beautiful and descent lounges for its customers more so the first class passengers. The First class passengers boarding an aircraft at Hong Kong airport are located in the first wing and the first pier and thus a customer travelling via the first class from Hong Kong to Beijing will require a duration of about 3hours and 20min to arrive and he or she will be traveling in Airbus A330-300 (Huang and Hsu 2016, p.1-8). On the other hand while using business class travels, its lounges are many and diverse which are located in the business wing, the bridge, the cabin, business pier lounges (Thanasupsin et al, 2010.p.212.224). With quality flights and the best lounges for different classes in the Hong Kong airport has kept the increasing number of customers using the Dragonair airlines more so on local travels Kong mainland. Further, the introduction of many routes for all hauls has enabled Dragonair customers to connect flights easily (Lawton and Solomko 2005, p.355-362). The cheap flight fare for Dragonair has enabled to boost its operations. The only remaining bit is to conduct the best marketing in order to fend off competition in the Chinese market from other airline operators. The company should aim at being the leading airline traveler compared to the other airlines in the world not only in the Asia pacific region only just like the pacific and the Malaysian airlines. Dragon air’s frequent flyer program According to ATA, (2010. P.231-237) many of the airlines normally have programs that are aimed at encouraging their users to continue or join the program in order for them to gain miles and segments in terms of loyalty points. These points are redeemable and can be used for future air travel and can also be used to gain other rewards in the related field, the earned points mainly are based on the fare one has paid and the distance travelled (Sultan and Simpson 2012, p.188-126). Their membership benefits include awarding of points when customers use credit cards and form of expenditure while on travel Likewise, Dragonair which has in recent years become an international travel company that offers long-hauls with a large fleet and normally having comprehensive routes all over the globe has not been left out in offering these frequent travel flier benefits to its customers aimed at boosting their competitiveness and increasing the market share (Cathy pacific 2013, n.d). The Marco polo club is the loyalty program that is aimed at catering for frequent fliers in Dragonair airline. Where for one to gain a membership card he or she must be categorized in the tiers that exist. The members can thereafter enjoy the reservations and benefits that comes with it thus, baggage, seat advantages and airport lounges are at their disposal (Tsui and Fung 2016, p.1-11). The points are normally accumulated through flying and redeemable miles are gained through flights and other associated spending by the customers. Normally, the Asian miles is earned via conducting shopping, eating, credit card using and afterward they can be redeemed to use while travelling or gaining lifestyle awards. The privileges to different group members ranges from the type of class a passenger travels in. The membership tiers are categorized into clubs with different requirements for each particular benefit for instance: to qualify for Green tier membership a minimum of 100 club points are needed or payment of $100 the key benefits normally includes having the boarding priority and the club usually accounts for check-in and the business class access while, silver requires 300 points for reservation of seats that are advanced (Huang et al. 2016, p.87-94). The Gold card on the other hand, requires 600 points for first class members and additional two guests. Introduction of the diamond card will be done later. However, these cards have been seen to accrue some renewal charges annually, therefore to the great extent the cards counteract the benefits of the travel cards. Also the accrued interests by these cards in most cases surpasses the travel points gained. But to the greater extend the membership cards are just meant show a little appreciation and increase loyalty by encouraging spending on Dragonair airlines; it poses some positive thinking to the customers who usually use this company to travel. References ATA, (2010) ‘ATA Airline Handbook.” Air transport Association for China vol 4. Pp.231-237 Belobaba, P, Odani, A and Barnhart, C. (2011) ‘The Global Airline industry’ Case study China modern Airline. Pp. 56-89 Cathy pacific (2013): History inside CX. http:/www.attc.de/images/CX.pdf pp.23-26 Dennis, K., (2010) China’s first low –fare Airline starts service to Kuala Lumpur. Aviation daily.pp.7. Heyne, R, & Percy, J.(2014) ‘Perception paradox Airline service quality issues.’ Proceeding decision of the science institute –Annual meeting at Hong Kong vol 50(2). Pp 1950-1952 Huang, S.H.S. and Hsu, W.K.K., 2016. Evaluating the service requirements of combination air cargo carriers. Asia Pacific Management Review, 21(1), pp.1-8. Huang, S.H.S., Tseng, W.J. and Hsu, W.K.K., 2016. An assessment of knowledge gap in service quality for air freight carriers. Transport Policy, 50, pp.87-94. Huber, H., 2016. Network structure, capacity growth and route hierarchies: the case of China’s air traffic system revisited. Transportation Planning and Technology, 39(7), pp.712-729. Lawton, T.C. and Solomko, S., 2005. When being the lowest cost is not enough: Building a successful low-fare airline business model in Asia. Journal of Air Transport Management, 11(6), pp.355-362. Sultan, F and Simpson, M. (2012) International service variants airline passenger expectations and perceptions of service quality’ Journal of service marketing vol 14(3) pp.188-216 Thanasupsin, K, Chaichana, S and Pliankaron, D (2010) ‘Factors influencing mode selection of low cost carrier and full time service Airline in Hong Kong.’ Transportation journal vol 49(7) pp.212-224 Tsui, W.H.K. and Fung, M.K.Y., 2016. Analysing passenger network changes: The case of Hong Kong. Journal of Air Transport Management, 50, pp.1-11. Read More