FUNDAMENTALS OF ENTREPRENEURSHIP (ENT300)

CASE STUDY FOR AIRLINES SERVICES BUSINESS

THAI AIRWAYS, EMIRATES, KOREA AIRWAYS

PREPARED BY:

FACULTY : FACULTY OF MECHANICAL ENGINEERING

PROGRAMME : DIPLOMA OF MECHANICAL ENGINEERING

SEMESTER :5

PROJECT TITTLE : CASE STUDY OF AIRLINES SERVICES BUSINESS

GROUP MEMBERS : 1. MUHAMMAD TAQIYUDDIN BIN MD TAZALI (2017249154)

2. SHAHRINA FIDAH BINTI SOERIAN SHAH (2017253668)

3. SITI FAYZATUL FAZAREKHA BINTI HADLIM (2017253606)

4. ARNY MARAJIM (2017253896)

PREPARED FOR:

MADAM SUHANA BINTI MOHAMAD

SUBMISSION DATE:

10 OCTOBER 2019
TABLE OF CONTENTS

NO. CONTENTS PAGE

1. EXECUTIVE SUMMARY 4
2. INTRODUCTION 5
3. COMPANY INFORMATION:
1. THAI AIRWAYS
 BACKGROUND OF COMPANY
 ORGANIZATIONAL STRUCTURE
 BUSINESS MODEL 7 - 21
 PRODUCT AND SERVICES
 BUSINESS, MARKETING, OPERATIONAL
STRATEGIES
 FINANCIAL ACHIEVEMENT
2. EMIRATES
 BACKGROUND OF COMPANY
 ORGANIZATIONAL STRUCTURE
 BUSINESS MODEL
22 - 31
 PRODUCT AND SERVICES
 BUSINESS, MARKETING, OPERATIONAL
STRATEGIES
 FINANCIAL ACHIEVEMENT
3. KOREAN AIR
 BACKGROUND OF COMPANY
 ORGANIZATIONAL STRUCTURE
 BUSINESS MODEL
32 - 44
 PRODUCT AND SERVICES
 BUSINESS, MARKETING, OPERATIONAL
STRATEGIES
 FINANCIAL ACHIEVEMENT

2
4. COMPANY ANALYSIS (SWOT ANALYSIS):
1. THAI AIRWAYS
 STRENGTH
 WEAKNESS 46 - 51
 OPPORTUNITIES
 THREATS
 SUMMARY
2. EMIRATES
 STRENGTH
 WEAKNESS
52 - 56
 OPPORTUNITIES
 THREATS
 SUMMARY
3. KOREAN AIR
 STRENGTH
 WEAKNESS
57 - 59
 OPPORTUNITIES
 THREATS
 SUMMARY
5. BUSINESS PROBLEM 60 - 63
6. RECOMMENDATION AND IMPROVEMENT 64 - 66
7. REFERENCES 67 - 68
8. APPENDICES 69

3
1.0 EXECUTIVE SUMMARY

The following is a written report of case study on analysis of business problem from 3
selected companies. This report was made to make a better understanding on real life
business background, progress and problems.

Through the report, we have applied the theory and application about SWOT analysis
on the business. For the past decades, each company has faced many up and down times.
Thus, by applying SWOT analysis, we can have a better understanding on each company’s
strength, weakness, opportunities and threat. It is important to do the SWOT analysis
because it helps company to identify the problems faced and help the company to act on the
solution or take on a new objective.

By doing SWOT analysis on Thai Airways, Emirates and Korean Air, we discovered
and list out some major strengths, weakness, opportunities and threats faced. Strength of
each company varies as some of them have strength in their hygiene, food, luggage weight,
route destination, reputation, sponsorship, cargo and aircraft. Next, some of common
weakness are accident, limited success, low R&D investment, limited advertisement and
limited route. Furthermore, business opportunity such as increase business advertisement,
create tourism platform, having a good membership reward and expand business worldwide.
Lastly, threat such high fuel consumption, labour union, high competition, government
impacts and fluctuation risk.

To summarize, SWOT analysis helps company figuring their business problem while
find a solution to improve the business. Plus, there will be major business problem identified
and some recommendation and improvement for each company.

4
2.0 INTRODUCTION

Running out an airline business probably have the up and down. Especially, air travel
has been generally accepted as safe and fast way to travel. Every airline company has their
own style to manage the business properly and perfectly. The uniqueness of each airline in
managing their business can be successful or maybe can be failure for them to survive in this
aviation industry these days.

Thus, the purpose of the carried-out case study is to analyse and highlight the problem
of each company using SWOT analysis. With SWOT analysis, student can identify the pros
and cons of having a well-known and wide airline business. Most of the problem faced by the
airline companies are difficulties to compete with other carriers due to their offered low fares
and the development of infrastructure has been very slow thus unable to keep up the pace of
growth of the aviation sector. Having an airline business can cause harm to the investors if
there are some government legislation. In recent times, air travel has been a target for terrorist,
and this had given a very negative impact on the airline themselves.

With this case study, students can investigate and learn about the management of
some companies which is airline company. In this case study, there are several airline
companies that have been studied. The airline companies that has been studied are Thai
Airways, Emirates and Korean Air. By observing all these companies develop over the years,
it motivated new entrepreneurs to run a business.

5
 3.0
COMPANY
INFORMATION

6
THAI AIRWAYS

7
BACKGROUND OF THAI AIRWAYS

THAI AIRWAYS
Figure 3.1.1: Thai Airways slogan; smooth as silk
Thai Airways International Public Company Limited is the national carrier of the
Kingdom of Thailand. It operates domestic, regional and intercontinental flights radiating from
its home base in Bangkok to destinations around the world and within Thailand. The
headquarters of this company is in Vibhavadi Rangsit Road, Chatuchak District, Bangkok and
primarily operates from Suvarnabhumi Airport.

Thai Airways International was founded in 1960 as a joint venture between Thailand’s
domestic carrier, Thai Airways Company (TAC) and Scandinavian Airlines System (SAS) with
the Scandinavian carrier. The purpose of the joint venture was to create an international wing
for domestic carrier Thai Airways Company. SAS provided operational, managerial and
marketing expertise with training assistance to fully build independent national airline.

The carrier’s first revenue flight was on 1 May 1960. Flights were operated to nine
overseas Asian destinations from Bangkok. The airline’s first intercontinental services using
Douglas DC-8s started in 1971 to Australia and then to Europe the following year. Services to
North America commenced in 1980. On 1 April 1977, Thai government bought 15 percent of
SAS-owned shares and Thai became an airline owned by the Thai government. As of 2019,
the company is owned by the Thai Ministry of Finance.

The chairman of Thai Airway is Ekniti Nitithanprapas and the President of Thai Airways
is Sorajak Kasemsuvan. This airline is a founding member of the Star Alliance and is the
second-largest shareholder of the low-cost carrier Nok Air with 21.80 percent stake. It
launched a regional carrier under the name Thai Smile in the middle of 2012 using its new
Airbus 1320 aircraft.

8
 Thai Airways flies to 84 destinations in 37 countries, using a fleet of over 90 aircrafts
from its hub at Suvarnabhumi Airport and secondary hub at Phuket International Airport. The

THAI AIRWAYS
airline was once an operator of two of the world’s longest non-stop routes between Bangkok
and Los Angeles and New York City, but the airline abandoned all non-stop US services in
2012 due to high fuel prices, withdrawal of aircraft, luggage weight limits and rising airfares.

In 2013, services between Bangkok and Los Angeles were served via Incheon
International Airport near Seoul but ended its service to the US on 25 October 2015. Thai
Airways’ route network is now dominated by the flights to Europe, East Asia and South and
Southwest Asia though the airline serves five cities in Oceania. Thai was the first Asia-Pacific
airline to serve London Heathrow Airport. Among Asia-Pacific carries, the company has one
of the largest passenger operations in Europe. As of the end of 2018, 1,438 of its 22,054
employees were pilot.

Figure 3.1.2: Suvarnabhumi Airport

Figure 3.1.3: Thai Airways route worldwide route.

9
ORGANIZATIONAL STRUCTURE

THAI AIRWAYS

Figure 3.1.4: Thai Airways organizational structure

10
BUSSINESS MODEL

THAI AIRWAYS
Thai Airways International Public Co., ltd is a national enterprise subordinated to the
Ministry of Transport. It is a public company registered in The Securities Exchange of Thailand
since 1991 with the Ministry of Finance as a dominance shareholder at more than 50%. The
airline has its corporate headquarter in Vibhavadi Rangsit Road, Chatuchak District, Bangkok
and primarily operates from Suvarabhumi Airport. This airline is also a founding member of
Star Alliance.

They operate the airline business that transport passengers, goods, parcels and
postal through air transportation via Thai major cities to the primary cities around the world.
They provide schedule flights to charter flights through their alliances with Suvarnabhumi
Airport as the main hub for all flight routes. Thai Airways affiliates are THAI Cargo and THAI
Smile Air. As of September 2019, the mainline for Thai Airways fleets consist of the following
aircraft;

Figure 3.1.5: Variety of aircraft used by Thai Airways

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PRODUCT AND SERVICES

THAI AIRWAYS
Thai Airways services are separated to 3 different class which are economy class,
Royal Silk class (business class) and Royal First class (first class).

Thai Airways’ Royal First Class delivers the pinnacle in luxury from the dedicated
check-in areas to the award-winning Royal First-Class Lounge facility at Suvarnabhumi
Bangkok International Airport. Passengers will be pampered prior to boarding or whilst in
transit and get a selection of Asian, Western or healthier, lighter meal options prior to boarding.
A spa menu of Thai, foot, or oil massages that use aromatherapy and gentle music supreme
relaxation or take an herbal steam or sauna treatment to ease the aches from a travel-weary
body with finishing of a fine meal or a shower to leave refreshed and ready for the next
destination is also provided to the First-Class passengers.

Royal First-Class passengers will receive VIP treatment all the way with an electric
buggy meet and greet service to and from the aircraft door at Suvarnabhumi Bangkok
International Airport. The airways provide them 50kgs check-in luggage and 7kgs hand
luggage.

Figure 3.1.6: A Wide view angle of Thai Airway’s Royal First Class.

Figure 3.1.7: Specious 8 feet long semi-private suites (Royal First Class).

12
 Thai’s Royal Silk Class seats have been installed on all Thai aircraft. The angled
shell design seats have 150 to 160 cm of pitch and width of 51 to 55 cm. Their service-based

THAI AIRWAYS
emphasis on the needs and personal preferences of passengers where passengers have a
choice of either the new “Samrab Thai” (Thai set menu) or a selection of Western menu.
They also offer the latest inflight product enhancements from mood lighting, larger windows
and overhead storage lockers to new amenity kits. The flat bed seat product which are ideal
for sleeping on overnight flights are also offered. This business class seats feature personal
15-16” video touch- activated screens at each seat, offering up to 100 entertainments shows.
Royal Silk Class’s passengers get 40kgs check-in luggage and 7kgs hand luggage.

Figure 3.1.8: A view of Thai Airways Royal Silk Class.

Figure 3.1.9: A customizable seat to serve a great comfort.

13
 Thai’s Economy class offers between 81cm and 86cm seat pitch depending on the
aircraft type. It offers a spacious cabin, award-winning service and cuisine. Thai Airways is

THAI AIRWAYS
renowned as one of the best in the business having claimed the 2018 Skytrax World’s Best
Economy Class, Best Economy Class Onboard Catering, Best Cabin Crew in Thailand and
Economy Class in Asia. Passenger get to enjoy personal screens with AVOD and 30kgs
check in luggage and 7kgs hand luggage.

Figure 3.1.10: A view of Thai Airways Economy Class.

Figure 3.1.11: Comfortable wider than average seats and generous legroom that exceeds
most other airlines.

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 THAI AIRWAYS
Figure 3.1.12: Duty Free Inflight products.

Figure 3.1.13: Variety of company products and merchandise sold on Thai Airways Online
shop.

Figure 3.1.14: Royal Orchid Lounge Figure 3.1. 15: Royal Orchid Spa.

15
BUSINESS, MARKETING AND OPERATIONAL STRATEGY

THAI AIRWAYS
Business Strategy

The business strategy for Thai Airways are purpose to offer domestic and international
air travel and related services that are safe, convenient, and of quality that ensure customers’
satisfaction and trust. Other than that, their purpose is to be committed to international
standards of management efficiency, transparency and integrity and to achieve satisfactory
operating results in order to maximize benefits for shareholders. They also want to create a
suitable working environment and offer appropriate salaries and wages as an incentive for the
staff to learn and work to their fullest potential and take pride in their contribution to the
company. Lastly, they oath to be socially responsible as the national airline.

Firstly, Thai Airways provide their own ground customer services. Their check-in
services are comprised of ticket and travel document validation, advanced requirements
checking, bagging tagging and recording and issuance of boarding-pass. They provide access
to First and Business Class Lounges to first class, business class passengers and premium
and gold card members while first and business class have the extra privilege to access to
Thai Airways’ Royal Orchid Spa. Baggage services for missing, damaging, losses and
pilferage of luggage is also provided. Other than that, services in transferring of passenger
and crews between and aircraft is available, including loading, unloading and transfer of
passenger checked baggage between terminal and aircraft.

Secondly, their aircraft services are one the best business strategy that made them
to be the best airline in Asia. They provide mobile ramp service for boarding and disembarking
when aircraft parks at remote parking area and their own towing tractor service. Before flight,
the aircraft undergoes portable water service, toilet draining service, interior cleaning service,
air conditioning unit and ground power unit services, hot air engine starter service and cargo
transfer between warehouse and aircraft. Their maintenance service is also well taken care of
by having periodic maintenance checks of ground equipment and vehicles and container
repair service in accordance with international best practices.

Lastly, their transport support services efforts provide customers convenience and
enabling passengers to purchase additional services with ease. Such as, dispatch services
that provide information about flight route weather condition to ensure flight safety, including
take-off and landing. They also operate Duty Free goods for sales on board with King Power
Marketing and Management Co., Ltd.

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Marketing Strategy

THAI AIRWAYS
Thai Airways marketing strategy is analysed through marketing mix which covers 4Ps
(product, price, place and promotions). Thai Airways is the flagship of Thailand which serves
many global destinations. This airway has a fleet of aircraft carriers like Airbus A330-300,
Airbus A350-900 and Boeing 787-8. The company also plan to acquire 15 next generation
wide bodied aircrafts to replace its old Boeing 777 and is also planning to purchase some new
narrow body aircraft. These flights also offer a variety of seat styles based like Royal First
Class and Royal Silk Class and economy class as a part of its marketing mix product portfolio.
Thai Airways’ frequent flyer programme is called Royal Orchid Plus and has over 2 million
members. The company also has another regional carrier called Thai Smile which is a lower
cost airline.

The pricing strategy for Thai Airways are sold as premium priced as being an
international flight service. The price varies depending upon the flight duration, distance
travelled, and the type of seat booked by the passengers. There is another domestic branch
of Thai Airways called Thai Smile that has low cost budget carries. The company also has
something called “Bonus Miles” which the passengers can earn during a flight and can be
use it later.

Following the place distribution of Thai Airways, the carrier flies to 84 destinations
in 37 countries with a fleet of over 90 aircrafts. Thai Airways’ fleet flies to Europe, East
Asia and South/Southwest Asia and five cities in Oceania. The most profitable destination for
Thai Airways is in Europe with the most maximum number of passenger operations. Thai
Airways also planned 13 routes schedules in Japan, Australia and India. Particularly in India,
Thai Smile has a fleet network connecting Gaya, Varnasi, Jaipur and Lucknow. In year 2016,
Thai Airways plan to resume it routes that is connected to Da Nang, Kota Kinabalu, Luang
Prabang and Mandalay.

17
 The promotion and advertising strategy in Thai Airways are by using digital media,
print and television advertisement. The airways have been ranked second by Go Asia’s

THAI AIRWAYS
“Best Airline Asia” Award. Thai Airways also does promotion by offering unique services like
increasing the number of flights during important Thai festival such as Songkran and serving
special desserts. Other than that. Thai Airways also has a promotional campaign to its name
called “Thailand one and only campaign” under which a visitor can choose from five activities
like Muay Thai, Traditional Thai dancing, Thai cooking, Making Thai style floral garland and
speaking Thai ad submit a clip based on the activities to try and win the contest. Participants
from overseas also get an opportunity to win a stay for a month in Thailand or a short stay
holiday or a luxury package. These campaigns help increase the social media visibility of the
brand and spread brand awareness through words of mouth marketing.

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Operational Strategy

THAI AIRWAYS
Thai Airways is a state-owned enterprise under the administration of the Ministry of
Transport, is the national carrier operating domestic, regional and intercontinental flights from
its central hub to key destinations in Thailand and around the world. Offering a comprehensive
air transport, the company’s operation is divided into three main businesses which are Air
Transport Business, Business Units and other Business Support Services.

Thai Airways Air Transport Business consists of passengers, cargo and main on
scheduled flight as well as chartered flights to domestic and international destinations. They
increased their number of fleets where now they owned a fleet of 95 aircrafts, consisting of 38
long-haul aircraft serving intercontinental destinations, 35 medium-range aircraft serving
regional destinations and 22 narrow-body short haul aircraft. The company also acquired 2
new airbus serving on regional and intercontinental routes.

Other than that, they continued their route network development by rescheduling or
utilizing suitable type of aircraft for each market condition, developing the market by focusing
on readjusting the frequency of flights to destinations with good potential. Other than that,
strengthening route network around the country by increasing new destination and optimizing
the cooperation with alliances to enhance route network to cover demand from every
customer’s target group. They also increase flexibility in adjustments of flight schedule and
preparing flight network in readiness for the onset of the AEC trade activities.

They also managed flights by dividing the schedule into two seasons which are
Summer Schedule running from the last Sunday of March to the last Saturday of October and
the Winter Schedule effective from the last Sunday of October to the last Saturday of March
as required by the International Air Transport Association (IATA). However, the frequency of
flight, types of operated aircraft and schedule destinations may vary according to the demands
of each period. The company operates 137 weekly domestic flights and 670 weekly
international flights spanning two geographical zones.

Product and service enhancement is also constantly being made to better meet the
needs of customers where pre-flight services via the internet and mobile phone are provided
for customers to access to various travel information such as booking information, flight
details, timetables, online ticketing, checking in with messages and 2D barcodes and home-
printed boarding pass functionality.

19
 Their inflight equipment has also improved in meeting customers’ expectation,
enhancing competitiveness and increasing overall convenience for passengers by retrofitting

THAI AIRWAYS
of passenger’s seats and entertainment system the company undertakes a retrofit program of
passenger seats to be modernized and more convenient with Business-class seats that can
be 180 degree reclined and premium economy class seats. Moreover, every seat on all
classes is fitted with a personal screen, and on-demand entertainment channels including
games and live text news. Software has also been developed to support increasing contents
such as e-Menu and e-Shopping. Other than, Thai Airways have also provided on-board
Internet known as ‘Thai Sky Connect’ for the passengers to communicate via flight.

20
Financial Achievements

THAI AIRWAYS
Thai Airways have suffered from finance where their net loss has increased to 11.6
billion baht from 2.11 billion in 2017. The table below shows their summarised financial report
for 10 years from the year 2008 to 2017.

Table 3.1.1: Thai Airways Ten-year financial report summaries.

In the year 2019, Thai Airways was recorded an operating loss for the first time since
the year 2014. The figure below shows Thai Airways’ financial and operational results for the
quarter ended March for the year 2019.

Figure 3.1.16: Thai Airways Financial and Operational Result.

In order to diversify its sources of revenues, Thai Airways is working on a deal with
Airbus to form a joint venture to handle a maintenance and a repair centre at U-Tapao airport,
located on the eastern seaboard of Thailand. Other than that, one of their strategies is also a
plan to embark on e-commerce by September, targeting frequent flyers.

21
EMIRATES

22
BACKGROUND OF COMPANY

EMIRATES
Figure 3.2.1: Emirates latest slogan; Fly Better.
Emirates Airline is the national carrier of the emirate of Dubai which is established in
25 Oct 1985 when the operations launched with just two aircraft. It is owned by the government
of Dubai’s Investment Corporation of Dubai. Now Emirates is the largest airlines in the Middle
East, operating over 3,600 flights per week from its hub at Dubai International Airport, to more
than 150 cities in 80 countries across six continents. It is the world’s fourth-largest airline by
scheduled revenue passenger-kilometers flown and number of International passengers
carried was founded in 1985 by the royal family of Dubai.

During the mid-1980s, Dubai was concerned in providing regional feeder flights for
other carriers therefore the Gulf air begun to stop their services. Thus, Emirates airline
required to function independently of government subsidy by conceived from Dubai’s royal
family. In the mid-1980s, Emirates airline release a new Boeing 737-300 and an Airbus A30B4-
200 by the support from Pakistan International Airlines in providing technical and
administrative assistance.

By 1986, Emirates continue to enlarge its route of destinations to Colombo, Dhaka,

Amman, and Cairo. In 1987, a second Boeing 727 was purchased from the Dubai Government
and an A300 was temporarily replaced by a second example from Kuwait Airways. During the
first decade of operations, Emirates recorded sky-rocketing growth averaging by 30%.

By the early 1990s, Emirates became the world’s fastest growing airlines as the
revenue increased approximately Us$100 million each year, approaching US$500 million in
the year 1993. Emirates continued to expand during the late 1990s and started having round-
the-world services from autumn 1993 after established a partnership with US Airways. In 1995,
the airline expanded the fleet to six Airbus A300s and eight A310s and built the network up to
cover 37 destinations in 30 countries. They received their first Boeing 777-200 aircraft in 1996.

23
 In 2004, Emirates began flying non-stop to New York City. These flights meant the
resumption of non-stop air services between the United Arab Emirates and the United States

EMIRATES
and restarted again in 2007. Emirates built the Dubai International Airport's Terminal 3
exclusively for the use of Emirates opened in 14 October 2008. It is the second largest building
in the world by floor space at a cost of $4.5 billion.

Pakistan was the first country to receive flights and since then, Emirates operates to
five destinations in the country. India was the second country to receive flights from Emirates,
and Emirates is expanding its network there. Emirates is the largest airline operating
internationally in India and operates over 185 flights a week across 10 cities.

On 6 September 2012, it was announced Emirates and Qantas had signed a 10-year
agreement to set up a major alliance, which would see Qantas move its hub for its European
flights from Singapore to Dubai International Airport and end its 17-year revenue-sharing
agreement with British Airways on the services between Australia and Britain. Emirates
passengers gained access to Qantas’ Australian domestic network of more than 50
destinations.

Figure 3.2.3: Emirates Boeing 777-300ER, the

Figure 3.2.2: Emirates Boeing 727-200 in 1991
world’s largest operator and the only airline to
during the Expansion to Far East Market in 1981
have operated every version of the aircraft.

Figure 3.2.4: Emirates Airbus A380 with first class removed

to make way for 615 passengers across business and economy class cabins.

24
ORGANIZATIONAL STRUCTURE

EMIRATES

Figure 3.2.5: Emirates Organizational structure.

25
BUSINESS MODEL

Emirates business model is a low-cost carrier and a flat organizational structure that

EMIRATES
allows the airline to maintain low overhead costs. Emirates has not joined any global airline
alliance and remained independent. Independently Emirates turns Dubai into one of the
largest flight connection hubs, airlines around the world over the last 30 years.

Emirates are operating a large capacity on hub and spoke routes with Dubai at the
centre, enabled mass of expansion at hyper efficient levels. Emirates airlines sending direct
passengers through their hub and conveniently connect them to their destination. This strategy
is effective when operating a large capacity aircraft on popular routes.

Being based in Dubai comes with other perks for the airliner. But Emirates benefits
from the absence of income tax in Dubai as gross wages lower than other competitor airlines.
Emirates also operates in a union-free environment. Emirates also largely depends on an
open skies policy, and bilateral agreements with destination governments.

Operational model of Emirates is to reduce expenses per passenger by applying fuel

efficient, and super-sized planes. These savings allow Emirates to undercut fares of
established rivals while still making money. From 2016, Emirates plans on operating the Airbus
A380 and Boeing 777 aircraft in its fleet of over 300 aircraft. Emirates keep their maintenance
costs and inventory low with this level of standardization.

Figure 3.2.6: Emirates Airways Aircraft fleet information as of March 2019

26
PRODUCTS AND SERVICES
First class services, Business class services and Economic class services are some

EMIRATES
of the passenger services which the company provides. First class services provide a
comfortable seat that can be converted into minibar, flat beds, storage facility for security and
private suits. For a business class, there is an entertainment options on ICE system, partitions
for privacy purposes, winged headrest, massage function, and sockets are provided. While a
standard size with option of entertainment are provides for an economic class.

Figure 3.2.7: Spacious Emirate Airways Figure 3.2.8: Emirates Airways Business
First Class Seat. Class.

Figure 3.2.9: Emirates Airways Economy Class.

27
 ICE TV live is provided on selected aircraft where its coverage in real time with even
more live TV options such as sporting events and breaking news. There are also have over

EMIRATES
4,500 channels of movies, TV shows, and games, on demand and in multiple languages.
Passengers are also able to be surfing internet by the availability of an onboard wi-fi.

Figure 3.2.10: Provided ICE TV Live for Passenger.

Savour delicious meals and beverages are served on board. First class dining delight
in special touches and exclusives beverages. While on the Business class and Economy
class dining offer an order, what tempts you on menus given. There is also a tasty treat for
child passengers

Figure 3.2.11: Emirates Airways First Class Figure 3.2.12: Emirates Airways Business
dining. Class dining.

Figure 3.2.13: Emirates Airways Economy Class dining.

28
STRATEGIES (BUSINESS, MARKETING, AND OPERATIONAL)
Emirates operates up to 3,500 flight per week and is considered the largest airline in

EMIRATES
Western Asia and grow rapidly as the “global transport” airline market in this cultural world.
Even though it is entirely claimed by the Government of Dubai, Emirates has developed in
scale and stature not through protectionism but rather through rivalry with the regularly
developing number of worldwide transporters that exploit Dubai’s open-skies strategy.

As a global transporter, the airlines have used its strategic hub locations to maximum
benefits. Dubai is in position of the strategic routes linking east and west resulting in direct
flights. Acts as a connector for various flights to different countries and various short route
flights which have benefitted them and the passenger significantly.

Other than that, Emirates also serve low cost tickets to its client in correlation with
the other airlines. It has been able to maintain an effective pricing policy due to its direct flights
and the customers are able to save due to stopovers. The ability for a low-cost labour enable
Emirates to cut down the fares. This give advantage over their competitors in certain routes
due to their pricing strategy. The strategy of dynamic pricing helps on the management of seat
capacity on every airplane. The pricing policy of the company caters to the needs of different
sections of the society and is diversified to suit.

Besides, Emirates has a promotional strategy that is very competitive. They have an
appealing slogan which “Fly Emirates. Keep discovering”. They also providing an excellent
service and continue to improve. Both traditional and modern marketing techniques are based
to cater to their wide and unique customer base. Such as, an effective advertisement is
promoted in magazines, billboards, radios, and website in more than 9 languages.

Emirates also known for big sponsorships and an official sponsor for a major premier
league club Arsenal. Now Emirates is the top preference for many families, and this is one of
their marketing strategies to promotes Emirates in various irrespective of geographic
boundaries.

To conclude, the airline sector is very dynamic and complex. It is highly influenced by
consumer mind-set. Emirates has successfully tackled the ever-changing customer
preferences using their comprehensive market research strategies. Even though there are
high competitors offering luxury services at a much lower rate, Emirates is focusing on the
loyal customers and giving their best to improve.

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FINANCIAL ACHIEVEMENTS

EMIRATES

Figure 3.2.14 : Emirates Airways Financial statement 2018 – 2019

30
 EMIRATES
Table 3.2.1: Emirates Airways Ten Year overview

31
 KOREAN AIR
3.3
KOREAN AIRLINES CO., LTD.

32
BACKGROUND OF COMPANY

KOREAN AIR
Figure 3.31: Korean Air slogan; Excellence in Flight

Korean National Air was established in 1946 in South Korea. On 30th October 1948
which is now Korea’s National Air Day, was its first operation from Seoul to Punan. It operated
from 1947 to 1950 with Stinson Voyager aircraft. Then, the airline operation was suspended
from 1950 to 1952 due to the Korean War and continue flying in 1952 with Douglas DC-3
and Douglas DC-4 aircraft.

Figure 3.3.2: Stinson Voyager aircraft Figure 3.3.3: Douglas DC-3

Figure 3.3.4: Douglas DC-4

In 1962, Korean National Airlines was taken over forcedly from Captain Shin Yong
Wook and changed their name into Korean Air by the South Korean government.

33
 On 1 March 1969, the airline was controlled by the Hanjin Transport Group. The
company introduced long-haul services to Los Angeles International Airport on 26th April 1971,

KOREAN AIR
followed by passenger services on 19th April 1972.

Before Boeing 747 were introduced, international flights to Hong Kong, Taiwan and
Los Angeles were flown with Boeing 707s. During 1973, the airline introduced Boeing 747s
and started a European service to Paris, France using Boeing 707. This airline became one
of the earliest Asian airlines to operate Airbus aircraft which were put into an instant service
on Asian routes while the European routes had to be designed eastbound from South Korea
since South Korean aircraft were banned from flying in the airspace of North Korea. For
example, Gimpo-Anchorage-Paris.

In 1st March 1984, “Korean Air” logo was introduced featuring a stylized Taegeuk
design. It was designed in collaboration between Korean Air and Boeing. In the 1990s, Korean
Air became the first airline to use the new McDonnel Douglas MD-11 aircraft. However, the
aircraft did not meet the airline’s performance requirements and they were immediately
changed for freight service. Some old aircrafts also converted for freight service.

In 5th June 2007, Korean Air announce that they would create
a new low-cost carrier called Jin Air Airlines. The airline was created
to compete with Korea’s KTX high-speed railway network system
which offered less cost. On 17th July 2008, Jin Air started its first
operation from Seoul to Jeju. Korean Air announced that some of its
aircrafts which were 737s and A300s would be belong to Jin Air
Figure 3.3.5: Jin Air Airline
Airlines.
Logo
During 2009, Korean Air’s reputation increasing and become more prestigious which
is different from other older airlines which had been destroyed by several unexpected fatal
accidents.

During mid-2010, a co-marketing of Korean Air collaborated with games company

Blizzard Entertainment. In August 2010, Korean Air announced losses despite having high
revenue. At the same year, Hanjin Group, the parent company, opened a mew cargo terminal
at Navoi in Uzbekistan. The terminal will become a cargo hub with Incheon-Navoi-Milan flights.

Korean Air owns five hotels both in Korea and international which are two KAL hotels
on Jeju Island, the Hyatt in Incheon, Waikiki Resort in Hawaii and lastly, a building called the
Wilshire Grand Tower in Los Angeles. In 2013, Korean Air received a 44% stake in Czech
Airlines and sold the them in October 2017.

34
ORGANIZATIONAL STRUCTURE

KOREAN AIR

Figure 3.3.6: Korea Airways Organizational structure.

35
BUSINESS MODEL
Korean Air’s headquarters is in Gonghangdong, Gangseo-gu in Seoul. Korean Air also

KOREAN AIR
has offices at Gimpo International Airport in Seoul. Korean Air’s other offices are at Jeju
International Airport in Jeju and Gimhae International Airport in Busan.

There are a few subsidiaries in Korean Air such as Jin Air, Kal Hotel Network, Hanjin
Transportation and Jungseok Enterprise.

There are also two types of partners in Korean Air which are alliance partners and non-
alliance partners. These partners are under SKYTeam Partner Airlines. Korean Air’s alliance
partners are Aeroflot, Aerolineas Argentinas, Aeromexico, Air Europe, Air France, Alitalia,
China Airlines, China Eastern, Czech Airlines, Delta Air Lines, Garuda Indonesia, Kenya
Airways, KLM, Middle East Airlines, Saudia Airlines, Tarom, Vietnam Airlines and Xiamen Air.

Other Korean Air’s partners which are non-alliance are Alaska Airlines, American
Airlines, China Southern, Emirates, GOL, Hawaiian Airlines, Japan Airlines and Jet Airways.

Figure 3.3.7: Governance structure of Hanjin Group

36
 KOREAN AIR
Figure 3.3.8: Alliance partner of Korean Air

Figure 3.3.9: Non-alliances partner of Korean Air

37
 PRODUCT AND SERVICES
Korean Air always try their best to give the best service for their customers. They offer

KOREAN AIR
4 types of first class, 4 types of business class and 2 types of economy class. They are serving
world-class dining for their customers. They even offer menus such as Western, Chinese,
Japanese and traditional Korean menus that suit the unique characteristics of their customer’s
destination and luxurious tableware in flight.

Figure 3.3.10: Dream Lounge A380 “Celestial Bar” Figure3.3.11: Korean Air A380 First Class

Figure 3.3.12: Korean Air B747-8 Business Class Figure 3.3.13: Korean Air Airbus A330 Economy
Class

38
 Korean Air also provided Amenity Kit service to the passengers on long flights to
America Europe, Oceania and the Middle East. Amenity Kit contains 3 different luxury

KOREAN AIR
cosmetic items such as face cream, body lotion and lip balm which are packed in a convenient
pouch. They also give eye mask, toothbrush and toothpaste along with the pouch.

Figure 3.3.14: Amenity Kit services

All passengers that travelling with Korean Air can enjoy in-flight shopping. Korean Air
offer a wide range of duty-free products including cosmetics, perfumes, liquor, fashion goods,
pearls, dietary supplements, chocolates, watches and electronics on all their international
flights. The passengers can pre-order the products through email, but pre-order is not
available when the customers fly with other airlines such as code-share flight.

Figure 3.3.15: In-flight shopping

39
BUSINESS, MARKETING AND OPERATIONAL STRATEGIES
Business Strategies

KOREAN AIR
The business strategy of Korean Air airlines is to give affordable luxury flight with
highest quality service from departure to arrival.

Firstly, Korean Air has been giving a good service such as SKYPASS. Skypass is the
loyalty program of Korean Air which they give to the passenger multiple benefits like free
tickets and hotel discounts if the passengers fly a certain amounts of miles per year with
Korean Air flight. There are two types of membership which is Million Miler and Morning Calm
Premium. Both memberships are available for SkyTeam Elite Plus privileges.

Next, Korean Air serves passenger transportation and cargo service in 127 cities
in 44 countries which make them on top 20 airlines in the world and one of top-ranked
international cargo online. Korean Air have transport 12.89 million international passengers
and 7.52 million local passengers. It has total of 19178 workers which are the workers are
concentrated on cabin crew, engineer and administration.

Furthermore, Korean Air also offers 4 types of first class, 4 types of business class
and 2 types of economy class. 4 types of first class are Kosmo Suites 2.0, Kosmo Suites,
Sleeper and Kosmo Sleeper. Next, 4 types of business class are Prestige Suites, Prestige
Sleeper, Prestige Plus and B737 Prestige Seat. Lastly, 2 types of economy class are New
Economy and Economy.

40
Marketing Strategies
Korean Air has their own target market which is to be best inflight service and to expand

KOREAN AIR
their business into global. It also has their own target customers which is every 20 years old
customers, Korean and foreigners, businessman and the person who wants to use premium
airlines.

First, Korean Air has provided Skypass for their customers. In 2006, there were 13000
members of Skypass. Skypass members can earn mileage when they are travelling, and they
also can buy flight tickets with their mileage that they have collected. Korean Air also provides
some services to the members such as check-in counter only for VIP and lounge, free-
baggage service for residual seats.

Next, Korean Air also has many partnerships under Skyteam. From this partnership,
Korean Air can promote their own brand to other country to attract more people to use Korean
Air services. Passengers can also use rented-car, hotel, theme park, restaurant and hospital
with discounted price from this partnership.

Furthermore, Korean Air uses culture marketing to be a premium airline since 2007.
Sponsorship such as “Museum Sponsorship” and “Flying Art Ambassador” support culture
exchange between Korea and Europe. Through these sponsorships, it also supports Korean
language service in museums where professional crews give information of the museums and
the works to the passengers in Korean language.

41
Operating Strategies
Korean Air’s mission, “Excellence in Flight” which means Excellence in operational,

KOREAN AIR
service and innovative. The main business is air transportation that deals with passenger
cargo and aircraft maintenance service.

Firstly, Korean Air has made a mobile application

named “Korean Air”. This application was created to ease their
passengers when using their services. The passengers can
easily check flight information and their mileage from the
application. This application can also be used to book and
check-in flight. So, the customer does not have to search
Korean Air website to book and check-in flight. Figure 3.3.16: Korean Air
Application
Next, Korean Air also has made social media marketing. Social media such as
Instagram, Blog, Twitter, Facebook and YouTube are used to attract more people to use
Korean Air service. People can get more information about Korean Air from the social media.
Since many people nowadays use social media, Korean Air can get more attention from local
and foreigners to use their services.

Furthermore, Korean Air has launched a new route to some potential markets such
as Xi’an and Mudanjiang in China, Shizuoka in Japan and non-regular flights to a third country.
Korean Air also decided to go into global such as South America, the Middle East and Africa
to expand their business. Korean Air has the largest flights among other Asian airline
companies for long-distance flights such as Korea-America.

Figure 3.3.17: Route offered by Korean Air.

42
FINANCIAL ACHIEVEMENTS

KOREAN AIR
Korean Air has achieved many achievements every year. They also improved their
service every year to fulfil their customer’s satisfied.

Table 3.3.1: Korean Air Financial Statement

First half of the year

Unit: 100 million
1H18 1H19 Changes
INCOME STATEMENTS
Revenue 60311 60699 +388 +0.6%
Operating Expense 57719 60232 +2513 +4.4%
Operating Income 2592 467 -2125
Income Before Tax -3176 -5253 -2077
Net Income -2522 -4150 -1628
PASSENGER BUSINESS
ASK (mil. km) 49276 49857 +581 +1.2%
RPK (mil. km) 39391 40574 +1183 +3%
L/F 79.90% 81.40% +1.5%
Yield (KRW) 93.9 94.9 +1 +1.0%
Revenue (KRW hundred mil.) 36988 38512 +1524 +4.1%
CARGO BUSINESS
AFTK (mil. ton/km) 5287 5140 -147 -2.8%
FTK (mil. ton/km) 4032 3602 -430 -10.7%
L/F 76.30% 70.10% -6.2%
Yield (KRW) 349.7 353.9 +4.2 +1.2%
Revenue (KRW hundred mil.) 14101 12746 -1355 -9.6%

Operating Expense (billion) 5772 6023 +251 +4.45%

43
 KOREAN AIR
Table 3.3.2: Korean Air Financial Position

Unit: KRW hundred million Dec 31, 2018 June 30, 2019 Changes
Current Assets 35702 35275 -427 -1.2%
Cash Equivalent 12613 11900 -713 -5.7%
Non-Current Assets 208031 222649 +14618 +7%
Aircraft Related Assets 150276 161246 +10970 +7.3%
Total Assets 243734 257924 +14190 +5.8%
Financial Liabilities 146732 160635 +13903 +9.5%
Other Liabilities 66782 69694 +2912 +4.4%
Advance Received 35384 37685 +2301 +6.5%
Total Liabilities 213514 230329 +16815 +7.9%
Total Equity 30219 27595 -2624 -8.7%

Table 3.3.3: Korean Air Fleet Status

Type Dec 31, 2018 June 30, 2019

A380 10 10
A330 29 29
Wide Body B747-400 2 2
B747-8I 10 10
B777 42 44
B787-9 9 10
B737-800/900 32 31
Narrow Body A220 (CS300) 9 10
Flight Total 143 146
B747F 4 4
Freighter B747-8F 7 7
B777F 12 12
Cargo Total 23 23
Total 166 169

44
 4.0
COMPANY
ANALYSIS
(SWOT)

45
4.1: Thai Airways

THAI AIRWAYS
Strength
1. Best Hygiene

 Awarded by the World Health Organization (WHO) for the implementation of

its in-cabin management system in 2004.

 Thai initiated a program entitled “The Most Hygienic

In-Cabin Environment Program” with an emphasis on
air quality, surface cleanliness and food safety.

 A special audit process is carried out for the cleaning

and sanitization of aircraft systems by a team of
specialists and these measures are applied to the
entire Thai feet.

2. Best Services.

 Received top Skytrax Awards:

3. Best food served on-flight

 Thai’s chefs create menus inspired by the flavours of

Thailand and cuisines of the world that highlight
seasonal ingredients.
Figure 4.1.1: 2019 Skytrax Award
 The food products are from the Royal Projects which
are farmed sustainably and provide livelihood for many highland dwellers.

4. Generous amount of luggage weight

 Economy passengers get 30kgs check in luggage and 7kgs hand luggage.

 Business class passengers get 40kgs check-in luggage and 7kgs hand
luggage.

 First class passengers get 50kgs check-in luggage and 7kgs hand luggage.

5. Thailand Icon.

 The best airline representing their own country

 The national carrier of the Kingdom of Thailand.

 Certified to be the best airline in Thailand and Asia.

 A founding member of Star Alliance.

46
Weakness

THAI AIRWAYS
1. Limited advertisement

 The airline only publishes their advertisement around Asia.

 Their advertisements are only published in local and Asia’s television through
short commercials.

 Only limited magazines and aircrafts promote their advertisements.

2. Limited route.

 Promote flight to local places and around Asia.

 Promotes flights to Europe, East Asia and South and Southwest Asia

 Serves five cities in Oceania

 Do not promote flight to United States of America.

 Services between Bangkok and Los Angeles were served via Incheon
International Airport near Seoul during the year 2013.

 However, Thai Airways’ ended their service to United States on 25 October

2015.
4. Unstable financial.

 Suffers net loss for a few years.

 Boost tourism by exempting visa fees for visitors from 21 countries also does
not help.

 Offer discounts also will look dim on the outlook for profitability.
5. Less market share growth.

 Intense competition from other international airlines

 Well known ambassadors hired to promote other airlines.

 More frequent promotions are done by other airlines.

47
Opportunities

THAI AIRWAYS
1. Make Suvarnahoomi Airport as the major hub.

 A boost for the airline.

 Easy access to everything as it is in the centre as the international airport.

 Saves time and cost.

2. Increase their tourism advertisement

 Put up more advertisement in local and international newspapers and

magazines.

 Set up booths in shopping malls or airports.

 Make a page or account in social media.

3. Create a tourism platform.

 Partner up with a sponsor that has well-known tourism platform.

 Hire well-known artist or entrepreneurs to be ambassadors.

 Up to date with trends on where people demand to go in a season.

4. Good membership reward.

 Provide suitable discounts to attract flyer to fly more.

 Give points to flyers whenever they purchase a booking.

 Give special vouchers to flyers on certain special occasions.

48
Threats

THAI AIRWAYS
1. Rising fuel costs

 Jet fuel costs account for a large portion of aviation business total expenses.

 Frequent regular fluctuation of aviation fuel prices.

 Accounting for 27.5% of Thai Airways’ total operating cost.

 Must manage aviation fuel price fluctuations to delay and minimize impact of
fuel when prices rise.
2. Foreign exchange fluctuation risks

 Currency tend to change frequently due to economic factors.

 Need to ensure cash expenses are paid in the same currencies as revenues
as possible.

 Always need to convert outstanding cash in different currencies into the

currencies of expenses to better match its major expenses.

 May incur excessive foreign currency debts.

3. Airline industry competitive risk

 Continuous growth of the aviation industry particularly passenger traffic in

Asia.

 Number of inbound and outbound passengers expected to increase every

year.

 Ongoing competition from Middle East airlines, new strategies of some

airlines and the rapid growth of low-cost airlines.
4. Natural disaster risk

 Turbulences disaster on flight

 Epidemics and terrorism

 International conflicts at certain borders.

49
5. Cyber threat risk

THAI AIRWAYS
 Need to rely on IT and internet for reservations, ground service support, cargo
services, flight operations and online sales.

 Confidential information such as customer’s information can be hacked and

wrongfully disclosed.

 Some information could be improperly modified.

 Replacement computer centres are located at same site which makes it

easier to hack overall system.

6. Regulatory risk

 May occur change in interpretations of regulations or issuance of new laws or

regulations that can impact the business.

 Incur additional expense.

50
 THAI AIRWAYS

Figure 4.1.2: Thai Airways Swot analysis summary.

51
4.2: EMIRATES

Strength

EMIRATES
1. Worldwide Destinations

 Emirates flies to over 150 destinations in more than 80 countries around the
world. There are more than 230 aircraft and 6 continents of Emirates airlines.

2. Good reputation.

 Highly positive brand image. Emirates was named the World’s best Airline and
received 12th consecutive award for best In-flight entertainment at Skytrax
World Airline Awards 2016.

3. Sponsorship

 Emirates is sponsoring the most famous football clubs such as AC Milan, Real
Madrid, Paris Saint-Germain and Arsenal. They Also deal a sponsorship with
The English football club Arsenal creates a stadium named as Emirates
Stadium.

4. High visibility

 Emirates offer many deals through social medias. These deals show how
hungry and committed Emirates to compete with other companies.

5. Diverse nationality of employee

 The workforce consists of over 160 nationalities, the diversity makes the airline
a global organization.

6. High level of customer satisfaction

 Management department has achieved a good relationship with customer and

good brand equity among the potential customers.

7. Beyond customer service

 Most companies strive for exceptional customer service. The companies of the
Emirates Group focus beyond customer service, actively seeking a more
meaningful exchange because they implement the importance of customer
engagement.

52
 8. Good returns on Capital Expenditure

 Emirates Airlines is relatively successful at execution of new projects and

EMIRATES
generated good returns on capital expenditure by building new revenue
streams

Weakness

1. Allegations from other airline companies

 Emirates received allegation from some airlines due to not paying taxes and
leaves negative mark on the company image.

2. No global international airline alliances

 Emirates seek to grow based on own business plan without seeking permission
from alliance partner therefore they are unable to enjoy jointly benefits such as
code sharing and cost reduction.

3. Limited success outside core business

 Even though Emirates Airlines is one of the leading organizations in its industry
it has faced challenges in moving to other product segments with its present
culture.

4. High attritions in the industry work force

 Compare to other organizations in the industry Emirates Airlines has a higher

attrition rate and must spend a lot more compare to its competitors on training
and development of its employees.

5. Investment in Research and Development is below the fastest growing players in the
industry.

 Emirates is spending above the average on Research and Development, it has

not been able to compete with the leading players in the industry in terms of
innovation. It has come across as a mature firm looking forward to bringing out
product based on tested features in the market.

53
Opportunities

1. High demand

EMIRATES
 Emirates offer a convenient flight with three different types of class. They also
offer affordable price for a budget airline.

2. New environmental policies

 The new opportunities will create a level playing field for all the players in the
industry. It represents a great opportunity for Emirates Airline to drive home its
advantage in new technology and gain market share in the new product
category.

3. Opening of new markets because of government agreement

 The adoption of new technology standard and government free trade

agreement has provided Emirates Airlines an opportunity to enter a new
emerging market.

4. New customers from online channel

 Over the past few years the company has invested vast sum if money into the
online platform. This investment has opened new sales channel for Emirates
Airlines. In the next few years the company can leverage this opportunity by
knowing its customer better and serving their needs using big data analytics.

5. Lower inflation rate

 The low inflation rate brings more stability in the market, enable credit at lower
interest rate to the customers of Emirates Airlines.

6. Government approval

 Government green drive also opens an opportunity for procurement of

Emirates Airlines products by the state as well as federal government
contractors.

54
Threats

1. High competitors

EMIRATES
 Airlines such as Qatar Airways, Turkish Airlines, and Etihad are emerging to
compete Emirates. Stable profitability has increased the number of players in
the industry over last two years which has put downward pressure on not only
profitability but also on overall sales.

2. No regular supply of innovative products

 Over the years the company has developed numerous products but those are
often response to the development by other players. Secondly the supply of
new products is not regular thus leading to high and low swings in the sales
number over a period.

3. Government impacts

 Increasing trend toward isolationism in the American economy can lead to

similar reaction from other government thus negatively impacting the
international sales.

4. High demand of profitable products

 In seasonal nature and unlikely event during the peak season may impact the
profitability of the company in short to medium term.

55
 EMIRATES

Figure 4.2.1: Emirates SWOT analysis summary

56
4.3: KOREAN AIR

KOREAN AIR
Strength

1. Worldwide
 Korean Air’s international division and subsidiary division together serve 127
cities and 44 countries.
 It is also one of the top-ranked international cargo airlines.
2. Aircraft
 Korean Air have different types of aircraft which can provides variety of services
for passengers in flight. In 2013, Korean Airlines has 180 aircrafts.
3. Cargo
 Korean Air represents First Place in Cargo until now.
 The airline’s reputation increasing every year which lead more people using
their services.

Weakness

1. Accident
 Some people are still afraid to use Korean Air service due to Guam accident in
1997. This accident gives bad image towards Korean Air.
2. System
 Korean Air has complex system compare to other big and small airline.
3. Stiff competition
 Asiana Airlines which is Korean Air’s competitor, has similar flight routes with
Korean Air. Their competitor also offers cheaper flight tickets than Korean Air.
This will lead low revenue and income for Korean Air to operate their business.

57
Opportunities

KOREAN AIR
1. Expand Business

 Korean Air Airline has ability to expand their business from local to global as
their reputation is increasing.

2. Marketing

 Incheon International Airport is one of the well-known airports in Korea. Korean

Air can improve their marketing system through the airport.

Threat

1. Fuel

 Since Korea does not have fuel resources, they need to pay more fuel cost that
will affect their business operating.

2. Labour union

 Labour union can be barrier when it has different idea with employees. For
example, if Pilot union decide not to work, Korean Air will not be able to continue
their business.

58
 KOREAN AIR

Figure 4.3.1: Korean Air SWOT Analysis summary.

59
 5.0
BUSINESS
PROBLEMS

60
BUSINESS PROBLEMS

There are many problems faced by the companies when running the businesses. The
companies’ problems are:

1. Problem: Demand and expectation from customers.

Thai Airways, Emirates and Korean Air share these common problems.
Running a high ends company name precede every single services and products
served by those companies. Plus, customers have high expectation for every moment
served started from buying the tickets. Furthermore, if the services did not live up to
their expectation, customers will be disappointed and give a bad rating towards the
airline companies. Long story short, when companies cannot fulfil the customers’
expectation, there will be consequences that affects the companies.

Solution:
The companies should make a survey repeatedly to have such amount of
feedbacks. This way, companies could know where they are lacking and make an
improvement to perform way better from previous services.

Advantages:

 Low costs: pay to produce survey question.

 Convenient: online survey is the easiest, and most popular.
 Precise results.

Disadvantages:

 Inflexible design.
 Possible unsuitable questions.

61
2. Problem: Competitor route destination.

Other competitor offers such vast destination route. This provoke target
company to experience a decrease in number of clients. Existing customers may
switch to other airline whose promote better destination. In long term, those customers
probably will forget the destination offer by the previous company and company will
facing unprofitable income.

Solution:
The company should introduce or increase the flight for the destination who
customer demands the most. Furthermore, company should pay attention to this kind
of things where profits should be theirs. Putting some efforts on doing some research
on famous destination, whether its seasonal or all year destination will worth it in the
future.

Advantages:
 Increase in passenger volume.
 Create more job opportunities.
 Profit income increase.

Disadvantages:

 Air pollution increase.

 Overcrowded airport.

62
3. Problem: Worker’s attitude

Every companies’ employee is a representation for their company.

Every single action done by the employee effect the company image. For example,
employees are unfriendly, racist, mocking people, rude manner and many more. These
bad attitudes offend surrounding people’s feeling and probably customer will try their
best to avoid having the company services in the future.

Solution:
Company should filter out those company’s candidate with bad attitude the first
time they try out for the company. Plus, company could have special training for the
employees so everyone can work in their best state.

Advantages:

 Employee will be more motivated and inspire others.

 Much happier environment in the airplane.
 Company will have good rating.

Disadvantages:

 Money wasted on tiny problems.

63
 6.0
RECOMMENDATION
AND
IMPROVEMENT

64
Recommendation and Improvement.

Airline industry is a potential industry for travellers, be it holidaymakers, leisure or

frequent business travellers. But, to keep up its standards for them is also very important. In
fact, the airlines should offer best facilities and services to its customers to improve their air-
travel experience. These are few recommendations that can be done to improve the airline
business.

Firstly, in order to improve customer experiences, company should make sure their
equipment and aircrafts is in the best condition. Maintenance engineer and operational
manager should keep an eye on aircraft. They must inspect and make sure all parts of the
aircraft including machines, engines and parts of the plane itself is at the optimal condition, so
that it will be able to operate well and correctly. Other employees also need to alert either
manager or engineer if there are any damaged or breakdown happened involving the
equipment and aircrafts. This way, company could evade any unwanted incidents and provide
safer and more comfortable ride.

Next, airline companies should focus on providing quality food. Nowadays customers
want such vogue services and delicious food after they pay numerous amounts of money on
flight tickets. For instance, different customer has different appetite. They might tend to eat
freshly cooked food instead of processed microwaved food. Some of them also prefer not
having carbs. Through this, companies should aware of what customer diet are. They might
be varying by their countries, religions, and time of flights. By improving food services,
customers can have much pleasant ride and will hop on the same companies for their next
trip.

Furthermore, a cyber threat is real risk problems faced by every companies globally.
Nowadays, every works is done through internet. Company rely on IT and internet for check
customers’ reservation, ground service support, cargo services, flight operations and online
sales. Passengers’ confidential information might be hacked and leaked, or much worse being
misused. By that, company should apply encrypt any sensitive data, install endpoint protection
on every company’s electronics and company should have planned secure back up.
Therefore, airline companies will be invulnerable, and every data is much secure. This will
gain more trust from customer to fly again with the same company in the future.

65
 Finally, boards of director should consider in expanding the business in varying parts.
Companies can partner up with reliable company to introduce new products or technologies.
Plus, they can redesign any older products. next, they could produce more own products
without rely on other company. This will attract customer to try new advanced technology
offered and will fascinated them on the new and redesign products. furthermore, with own
produced products, it can save cost on transportation, labour, tax, and investment.

66
 7.0
REFERENCES

67
References:
PDF:
1. Annual Report Thai Airways International Public Company Limited, 2010.
2. Annual Report Thai Airways International Public Company Limited, 2011.
3. Annual Report Thai Airways International Public Company Limited, 2018.
4. The Emirates Group Annual Report 2018-2019
5. The Emirates Group Annual Report 2017-2018
6. The Emirates Group Annual Report 2016-2017

INTERNET:
1. https://www.mba.aero/thai-airways-to-review-its-strategic-plans/
2. https://www.thaiairways.com/en_KR/about_thai/company_profile/history.page
3. https://www.researchgate.net/publication/317017473_Thai_Airways_International_an
_in_depth_Analysis
4. http://investor.thaiairways.com/en
5. https://www.thaiairways.com/en_AU/TravelAgents/THAI_Info.page?
6. https://cdn.ek.aero/downloads/ek/pdfs/report/annual_report_2018.pdf
7. https://cdn.ek.aero/downloads/ek/pdfs/report/annual_report_2019.pdf
8. https://digital.hbs.edu/platform-rctom/submission/emirates-connecting-the-world/
9. https://www.emirates.com/english/about-us/business-model/financial-
transparency.aspx
10. https://en.wikipedia.org/wiki/Emirates_(airline)
11. https://www.academia.edu/9968265/MARKETING_STRATEGY_OF_EMIRATES_AI
RLINES
12. https://www.marketscreener.com/KOREAN-AIR-LINES-CO-LTD-6493279/
13. Korean Air 1H19 Financial Results
14. https://www.koreanair.com/global/en/traveling/classes-of-service.html
15. https://www.koreanair.com/global/en/traveling/in-flight-shopping.html
16. https://www.koreanair.com/global/en/about/who-we-are2.html
17. https://asia.nikkei.com/Companies/Korean-Air-Lines-Co.-Ltd
18. https://www.businesstravelnews.com/Interviews/Korean-Air-Sees-Corporate-
Business-Growth-After-Year-One-with-Delta
19. http://news.mk.co.kr, "Korean Air support culture exchange", 2009
20. SKYteam Website, http://www.skyteam.com

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 8.0
APPENDICES

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Figure 8.1: Thai Airways website

Figure 8.2: Emirates website

Figure 8.3: Korean Air website.

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