...SU HAN CHAN KO WANG HONG KONG DRAGON AIRLINES LIMITED (A): DETERMINING THE COST OF CAPITAL In early January 2006, a taskforce at Hong Kong Dragon Airlines (“Dragonair”) led by engineering manager John Walters and finance manager Bevis Ho was formed to evaluate ways to replace a spare engine that had been determined to be beyond economic repair (“BER”).1 A few potential options were on the table: either to purchase the engine outright or to lease the engine via a direct lease or a sale-and-leaseback arrangement. In order to assess and compare the attractiveness of each option, the taskforce first had to determine the appropriate discount rate to use. Dragonair: Company Background2,3,4 Hong Kong-based Dragonair was founded in May 1985 as a wholly owned subsidiary of Hong Kong Macau International Investment Co by local industrialist K.P. Chao. The airline started operations in July 1985 with a Boeing 737 and service between Hong Kong and Kota Kinabalu in Malaysia. With a fleet of only one aircraft, Dragonair was known in its early days as the “when-it’s-in-the-air-there’s-nothing-on-the-ground” airline. After much effort by Chao to rally support from both the Chinese central government and the British government, Dragonair began service to Phuket and six cities in mainland China in 1986. In 1990, CITIC Pacific, the Swire Group 5 and Cathay Pacific Airways (“Cathay Pacific”) acquired an 89% stake in Dragonair. After the acquisition, Cathay Pacific transferred...
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...Hong Kong Budget Airline Industry Analysis By Jaeyeong Ahn 1155032046 Xie Jianting 1155001899 Shi Weiran 1155002072 Tan Jiayi 1009609441 Gao Jingya 1155001997 TABLE OF CONTENTS 1. Introduction 2. Budget Airline Industry 2.1 Definition & Pricing Model 2.2 Common Practices to Lower Overall Costs 2.3 Development of Budget Airline in America, Europe and Asia 3. Hong Kong Market Analysis 3.1 Competitive Landscape 3.2 Major Budget Airlines in Hong Kong 3.3 Market Analysis 3.4 Target Customer Analysis 4. SWOT Analysis of Budget Airlines 4.1 Strengths 4.2 Weaknesses 4. 3 Opportunities 4.4 Threats 5. Analysis of Success Factors in Budget Airline Industry 5.1 AirAsia’s Success in Asia 5.2 Oasis’s Failure in Hong Kong 6. Conclusion 1. Introduction In September 2013, Hong Kong Express Airways announced its plan to transform itself into a budget airline. Meanwhile, Jetstar, an Australian budget airline, has applied for an operating license in Hong Kong under the belief that there are abundant opportunities for growth in the budget airline industry. However, Hong Kong-based airlines Cathay Pacific and Dragonair strongly insist that the market is saturated, and that new entrants into the market will harm the airline industry as a whole. The purpose of this report is to analyze the prospect of budget airline industry in Hong Kong and to determine if...
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...Company background The story of Malaysia Airlines started in the golden age of commercial air travel. A joint initiative of the Ocean Steamship Company of Liverpool, the Straits Steamship of Singapore and Imperial Airways led to a proposal to the Colonial Straits Settlement government to run an air service between Penang and Singapore. The result was the incorporation of Malayan Airways Limited (MAL) on 12 October 1937. On 2 April 1947, MAL took to the skies with its first commercial flight as the national airline. Fuelled by a young and dynamic team of visionaries, the domestic carrier turned into an international airline in less than a decade. With the formation of Malaysia in 1963, the airline changed its name to Malaysian Airlines Limited. Soon after, Borneo Airways was incorporated into MAL. Within 20 years, MAL grew from a single aircraft operator into a company with 2,400 employees and a fleet operator using the then latest Comet IV jet aircraft, six F27s, eight DCs and two Pioneers. In 1965, with the separation of Singapore from Malaysia, MAL became a bi-national airline and was renamed Malaysia-Singapore Airlines (MSA). A new logo was introduced and the airline grew exponentially with new services to Perth, Taipei, Rome and London. However, in 1972, the partners went separate ways. Malaysia introduced Malaysian Airline Limited, which was subsequently renamed Malaysian Airline System and took to the skies on 1 October 1972. It was later branded Malaysia Airlines...
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...Strategic Management Group Project Virgin Atlantic Airways Limited Instructor: Mr. Audun Fiskerud Presented by: Mikael Tving Therkildsen - Jacob Brodersen – Jonas Ravn Nielsen - Gary Chuyu Fang Executive summary This report strategically analyses the Strategy Business Unit (SBU), passenger transfer service, for Virgin Atlantic Airways Limited. The strategic analysis contains investigation of certain key business areas of Virgin Atlantic, such as: defining whom the Virgin Atlantic customer is; understanding of the external environment issues of the airline industry; competitor analysis, and analysis of the Human Resources within the organization. Through the analysis of Virgin Atlantic Airways Limited, some issues for the company were uncovered. Especially two main issues should be considered as potential problems for Virgin Atlantic’s business unit and so action needs to be taken within these areas: 1. Lacking economy of scale (size of the company). 2. Increasing environmental awareness among customers. 1. Virgin Atlantic lacks economy of scale because of the size of the company and limited routes available. To be able to compete effectively and gain greater profits through economy of scale, Virgin Atlantic has to expand by opening new routes. The implementation of this will require strategic financial planning and adjustment of the company structure. It is likely that this process will take several years; however, this change is necessary to increase Virgin...
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...February 2013 US Airways and American Airlines announced their plans to merge the airlines creating the largest airline in the world. US Airways was founded in 1937 as All American Aviation and in 1996 commenced operations as US Airways with its parent company being US Airways group. The headquarters is located in Tempe Arizona. US Airways operates an intensive international and domestic network and has 198 destinations throughout North and South America, Middle East and Europe. Us Airways is a member of Star Alliance Network with a fleet of 346 mainline jet aircrafts and 256 regional jet and turbo prop aircrafts. Us Airways has a shuttle that provides hourly service between Boston, New York, and Washington, D.C. that is known as US Airways Express that is operated by contract and subsidiary airline companies. As of January 2013 US Airways employed 32,213 individuals worldwide and operated 3,028 daily flights. American Airlines, Inc. is owned by the AMR Corporation headquartered in Fort Worth, Texas. It operates and extensive international and domestic network as US Airways. American Airlines has scheduled flights throughout North America, South America, Europe, the Caribbean, and Asia/Pacific. The Dallas/Fort Worth International Airport is the airlines largest hub with American Airlines accounting for about 85% of the traffic and 83% of landing fees and travel to more destinations than any other hub. American Airlines operates maintenance bases at Tulsa, and Fort...
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...Tony Tyler Director General & CEO International Air Transport Association Annual Report 2012 68th Annual General Meeting Beijing, June 2012 Contents IATA Membership Board of Governors Director General’s message The state of the industry Safety Feature: What is the benefit of global connectivity? 2 4 6 10 18 22 26 30 36 42 48 52 Feature: How safe can we be? Security Feature: Do I need to take my shoes off? Taxation & regulatory policy Environment Feature: What is right for the passenger? Feature: Can aviation biofuels work? Simplifying the Business Feature: What’s on offer? Cost efficiency Feature: Why does economic regulation matter? Industry settlement systems Aviation solutions Note: Unless specified otherwise, all dollar ($) figures refer to US dollars (US$). This review uses only 100% recycled paper (Cyclus Print) and vegetable inks. # IATA Membership as of 1 May 2012 ABSA Cargo Airline Adria Airways Aegean Airlines Aer Lingus Aero República Aeroflot Aerolineas Argentinas Aeromexico Aerosvit Airlines Afriqiyah Airways Aigle Azur Air Algérie Air Astana Air Austral Air Baltic Air Berlin Air Canada Air China Air Corsica Air Europa Air France Air India Air Koryo Air Macau Air Madagascar Air Malawi Air Malta Air Mauritius Air Moldova Air Namibia Air New Zealand Air Nigeria Air Niugini Air Nostrum Air One Air Pacific Air Seychelles Air Tahiti Air Tahiti Nui Air Transat Air Vanuatu Air Zimbabwe Aircalin Airlink Alaska Airlines...
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