E Commerce at Yunnan Lucky Air - 1685 Words

E - Commerce at Yunnan Lucky Air: Introduction: Backed by the Hainan Airlines of the China, Yunnan Airlines was founded in 2004 as one of the most cost-effective domestic airline operating from its hub in Kunming, in the province of Yunnan. The limited route license added to the airline’s competitive advantage and maintained its monopoly within the region. Its major competitors include Air China and China Southern Airlines among others. As Yunnan is one of the most attractive tourist destinations of Southern China, the airline attracted a lot of customers and started producing profits within just three years of its inception. This huge success was the result of a viable strategy of the company that included just one type of airplane to†¦show more content†¦A lot of factors need to be considered by the executive team of Lucky Air. An ill-devised or poorly implemented marketing plan would not only hinder the company’s growth, it would also result in the loss of the edge they have over the other companies. The four cost components of the airline industry – fuel, landing fees, aircraft leasing and taxes - has made operating Lucky Air in a productive manner a constant challenge. Even though the company has a high competitive advantage being linked to Hainan Airlines, it still needed to upgrade its business strategy on a regular basis to ensure maintaining the lead they had over the other airlines. The company like all its counterparts face a myriad of restraints including heavily regulated governmental laws, limitation to price reduction, a low potential for rapid expansion due to government restrictions and heavy taxes. Lucky Air being new in the field and operating on a small geographical area has to burden a lot of costs. The restriction on expansion of the company makes it necessary for the airlines to lease the airplanes at a high cost and the taxes ranging from 2%-10% makes it a challenge to manage its finances. The monopoly of ‘Civil Aviation Oil’ for fuel and â€Å"National Development Reform Commission’ for aircraft leasing puts a burden on the budget of the airline companies as they may dictate the terms of their services as they see fit. Another factor that Lucky Air has to keep in mind while devising its businessShow MoreRelatedE-Commerce at Yunnan Lucky Air5422 Words   |  22 Pages08-076 August 11, 2008 E-commerce at Yunnan Lucky Air Inaki Berenguer, Cai Shijun, Li Liang, Liu Jing, Ningya Wang Preserve the essence of traditional Chinese culture while learning from successful models of the world. - Yunnan Lucky Air, statement of corporate culture Fortune had favored Yunnan Lucky Air. Four years after its founding in 2004, Lucky Air had grown into a US$104.3 million (RMB720 million) low-cost airline, serving domestic routes from its hub in Kunming, the capital of southwesternRead MoreYunnan Luck Air Case Study Essay1721 Words   |  7 Pages1. What are Yunnan Lucky Air’s best options? Luck Air had a great business model, and that was to follow the same model as Southwest Airlines in the United States. Because Luck Air is considered a domestic airline in China they operate on a small scale compared to major competitors and so it made economical sense to offer low-cost, high-efficiency to their customers. In 2007 Lucky Air was able to more than double the amount of passengers from the year before by using a low-cost tactic. HoweverRead MoreLucky Air the Beginning727 Words   |  3 Pages1. What are Yunna Lucky Air’s best options? Lucky Air chose to follow the model of the Southwest Airlines in the United States. Lucky Air is a domestic airline located in China. Because it is a low-cost and high-efficiency airline it doubled the amount of passengers since 2007. E-commerce was a risk Luck Air decided to take on because other airlines were now offering low-cost high-efficiency flights. E-commerce by definition is commercial transactions conducted electronically on the internet. This