Yield Management Practice

Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 1

Yield Management Practice

SATHID TONGRAK 5130112080 EKKALAK PATSEETONG 5330112024 ANYAMANEE DOOMLAK 5330112065 TEENIDA POKSAKUL 5330112066 RATCHUDA AKARAPONGSAKUL 5330112071 MANIDA KOOPRASERT 5330112079 WANALEE SUBARTSAWAD 5330112084 PENG KAIYANG 5430112121

One Way Direct Flight Operating on Route from Phuket to Seoul and from Seoul to Phuket

2007-2008

Present to

Aj. Amankorn Maita


Table of Contents

PROJECT NAME ……………………………………………………………………………………… 3

PROJECT OBJECTIVE……………………………………………………………………………….. 5

PROJECT LIMITATION……………………………………………………………………………… 6

METHODOLOGY……………………………………………………………………………………… 7

ANALYSIS………………………………………………………………………………………………. 8

RECOMMENDATION…………………………………………………………………………………. 15

REFERENCES……………………………………………………………………………….………….. 16


Project Name

The Project Name

“Yield management practice for airlines which are one way direct flight operating on route

from Phuket to Seoul and from Seoul to Phuket in year 2007-2008”

Route Consideration

There are three difference airlines operating flights from Phuket at Phuket International Airport

(HKT) to Seoul, Korea at Incheon International Airport (ICN) and vice versa.

The three airlines are Asiana Airlines, Korean Air and Thai Airways International but for one

way direct flight, there are only two which are Asiana Airlines and Korean Air that operate.

Therefor Thai Airways International will not be count as our route selection because they operate

flight to Bangkok instead of Phuket.

Flight distance from Phuket International Airport to Incheon International Airport in kilometers

according to this airport distance calculator, air miles from Phuket Airport (HKT) to Seoul Airport

(ICN) is 4,321.31 kilometers. The distance shown below is the straight line distance or direct flight

distance between airports.


Information

Years: 2007 - 2008

Routes: Phuket to Seoul (HKT-ICN)

Seoul to Phuket (ICN-HKT)

Airports: Phuket International Airport, Phuket, Thailand (HKT)

Incheon International Airport, Seoul, South Korea (ICN)

Distance: 2,685.14 miles / 4,321.31 kilometers

Airlines: Asiana Airlines (OZ)

Korean Air (KE)

Map:

The airport location map below shows the location of Phuket International Airport (Red) and Incheon International Airport (Green). Also find the air travel direction.


Project Objective

The Project Objective

This yield management practice mini-project for the airlines which are one way direct flight

operating on route from Phuket to Seoul and from Seoul to Phuket aim to obtain the demand and

supply information. The information will be used as analytical tool to obtain the yield management

methodology using by the airlines which are the operators on the mentioned route.

Once the information that will be used to analyse be prepared, we will design the yield

management methodology using by those airlines in or for maximize yield.

Topic Summary

- To obtain the demand and supply information for the airlines which are one way direct

flight operating on route from Phuket to Seoul and from Seoul to Phuket.

- To evaluate the yield management methodology using for the airlines which are one way

direct flight operating on route from Phuket to Seoul and from Seoul to Phuket.

- To design the yield management methodology using for maximize yield for the airlines

which are one way direct flight operating on route from Phuket to Seoul and from Seoul

to Phuket.


Project Limitation

The Project Limitation

Our group did brainstorming to deal with the scope of the data to be searched for further data

analysis while decided to gather information only operators which operated one way direct flight

from HKT-ICN and from ICN-HKT. Then we scoped to use information for only one-way direct

flight with non-stop at intermediate flight path.

The periods of year which we were selected are between years 2007 to 2008. We decided to

see previous data which may use for analysis and we will use related websites to gather

information as well as data source.

Topic Summary

- This project gathers information only operators which operated one way direct flight

from HKT-ICN and ICN-HKT with non-stop.

- This project gathers information from related websites.

- This project gathers information only the period of year 2007 to year 2008.


Methodology

The Methodology

1. Routes Selection

a. Our group was proposed two difference routes which are the route from Phuket to

Hong Kong (BKK-HKG) and vice versa as well as Phuket to Seoul, South Korea

(HKT-ICN) and vice versa.

b. As long as we survey with several methods, we finally cannot approach any key

information that will use to be analyse for route HKT-HKG therefor we decided to

change to route from HKT-ICN.

2. Gather information for the total demand and supply of flight from HKT-ICN and ICN-HKT

on related website year over year from year 2007 to year 2008.

3. Gather information of Demand that airlines carry passenger from HKT-ICN and ICN-HKT

year over year from year 2007 to year 2008.

4. Gather information of Supply that airlines provide for the customer from HKT-ICN and

ICN-HKT year over year from year 2007 to year 2008.

5. Study about the pricing technique that airlines use for maximize the revenue.

a. How they setting the price.

b. What is the price discrimination technique by classes, by high/low demand.

c. Can the airline operators sell difference price in each high/low, demand period.


0

50

100

150

200

250

300

350

400

450

500

Arrival Departure Total

Aircraft Movements 2007

Asiana Airlines Korean Air

0

20,000

40,000

60,000

80,000

100,000

120,000

Disembarked Embarked Total

Passengers 2007


Analysis

The Analysis

Demand

1. Airlines Annual Traffic Year 2007

Airlines Code

Aircraft Movements Passengers

Arrival Departure Total Disembarked Embarked Total

Asiana Airlines OZ 236 236 472 50,878 54065 104,934

Korean Air KE 208 208 416 49,235 48,068 97,303

Figure 1.1: Aircraft Movements in year 2007 Figure 1.2: Passengers in year 2007

Figure 1.1 and 1.2 represent the comparison between Asiana Airlines and Korean Air in year 2007


2. Airlines Annual Traffic Year 2008

Airlines Code Aircraft Movements Passengers

Arrival Departure Total Disembarked Embarked Total

Asiana Airlines OZ 359 358 717 72,096 71236 143,332

Korean Air KE 219 220 439 45,389 44,858 90,247

Figure 2.1: Aircraft Movements in year 2008 Figure 2.2: Passengers in year 2008

Figure 2.1 and 2.2 represent the comparison between Asiana Airlines and Korean Air in year 2008

0

100

200

300

400

500

600

700

800

Arrival Departure Total

Aircraft Movements 2008


0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Disembarked Embarked Total

Passengers 2008



3. Growth Rate (From year 2007 to 2008)

Airlines Aircraft Movements Passengers

OZ 34% 27%

KE 5% -8%

Figure 3.1: Aircraft Movements in year 2008

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

AM PAX

Growth (From year 2007 to 2008)

OZ KE

The growth rate from year 2008 for

Asiana Airlines (OZ) show the aircraft

moments changed by 34% while

passengers changed by 27%. However,

Korean Air (KE) performed not quite well

in comparison. The aircraft movements

increased by 5 % but on the other hand,

the passengers were declined from year

2007 for 8%.


Supply

Asiana Airlines (OZ)

There are 8 flights departing from Phuket to Incheon (Seoul, South Korea)

There are 8 flights departing from Incheon (Seoul, South Korea) to Phuket

Korean Air (KE)

There are 5 flights departing from Phuket to Incheon (Seoul, South Korea)

There are 5 flights departing from Incheon (Seoul, South Korea) to Phuket

Flight Time Aircraft Mon Tue Wed Thu Fri Sat Sun Total Day

OZ 748 02:00-09:45 Boeing 767-300 (763) P P - P P - P 5

OZ 748 02:00-09:45 Boeing 777-200 (772) - - - P - - - 1

OZ 748 02:00-09:45 Boeing 767-300 (763) - P - - P - P 3

OZ 748 02:00-09:45 Airbus A330-300 (333) P - - - - P - 2

OZ 748 02:00-09:45 Boeing 767-300 (763) P P - P - - P 4

OZ 748 02:00-09:45 Airbus A330-300 (333) P - - - - - - 1

OZ 748 02:00-09:45 Boeing 767-300 (763) P P - P - - P 4

OZ 748 02:00-09:45 Boeing 767-300 (763) - - - - - P - 1


OZ 747 20:20-01:00 Boeing 767-300 (763) P - P P - P P 5

OZ 747 20:20-01:00 Boeing 777-200 (772) - - P - - - - 1

OZ 747 20:20-01:00 Boeing 767-300 (763) P - P P - P - 4

OZ 747 20:20-01:00 Airbus A330-300 (333) - - - - P - P 2

OZ 747 20:20-01:00 Boeing 767-300 (763) P - P - - - P 3

OZ 747 20:20-01:00 Airbus A330-300 (333) - - - - - - P 1

OZ 747 20:20-01:00 Boeing 767-300 (763) P - P - - - P 3

OZ 747 20:20-01:00 Boeing 767-300 (763) - - - - - P - 1


KE 638 00:45 -08:50 Airbus A330-300 (333) P P P P P P P 7

KE 638 01:15-09:00 Airbus A330-300 (333) - P P P P P - 5

KE 638 01:15-09:00 Boeing 747-400 (744) - - - P P P - 3

KE 638 01:15-09:00 Airbus A330-300 (333) - P P P P - - 4

KE 638 01:15-09:00 Airbus A330-300 (333) - P P P P P - 5


KE 637 18:40- 23:20 Airbus A330-300 (333) P P P P P - - 5

KE 637 18:40- 23:20 Boeing 747-400 (744) - - P P P - - 3

KE 637 18:40- 23:20 Airbus A330-300 (333) P P P P - - - 4

KE 637 18:40- 23:20 Airbus A330-300 (333) P P P P P - - 5

KE 637 19:00-23:15 Airbus A330-300 (333) P P P P P P P 7


Carry Capacity

Price

F C Y

Boeing 767-300 (763) - 15 235 250

Boeing 777-200 (772) 8 24 214 246

Airbus A330-300 (333) - 30 260 290

Class

OZ

TotalAircraft Airline

F C Y

Airbus A330-300 (333) 6 18 252 276

Boeing 747-400 (744) 10 61 262 333

TotalAirline Aircraft

KE

Class

F C Y

HKT-ICN - 65,530 17,270

ICN-HKT - 26,950 19,600

ClassesRoutesAirline

OZ

F C Y

HKT-ICN 65,530 23,000 16,000

ICN-HKT 48,730 35,400 25,350

Airline RoutesClasses

KE


Revenue Calculation

Airline Route Classes Fares PAX BKG REV.

OZ HKT-ICN

F 0 0 0

C 65,530 15 982,950

Y 17,270 235 4,058,450

Total 250 5,041,400


OZ ICN-HKT

F 0 0 0

C 26,950 30 808,500

Y 19,600 260 5,096,000

Total 290 5,904,500


KE HKT-ICN

F 65,530 6 393,180

C 23,000 18 414,000

Y 16,000 252 4,032,000

Total 276 4,446,000


KE ICN-HKT

F 48,730 10 487,300

C 35,400 61 2,159,400

Y 25,350 262 6,641,700

Total 333 8,801,100

Summation

OZ HKT-ICN ICN-HKT

KE HKT-ICN ICN-HKT

SEAT 250 290

SEAT 276 333

DISTANCE 4,321.31 4,321.31

DISTANCE 4,321.31 4,321.31 PAX 250 290

PAX 276 333

LF% (RPK/ASK) 100% 100%

LF% (RPK/ASK) 100% 100%

ASK 1,080,328 1,253,180

ASK 1,192,682 1,438,996

RPK 1,080,328 1,253,180

RPK 1,192,682 1,438,996

REV 5,041,400 5,904,500

REV 4,446,000 8,801,100

RASK 4.67 4.71

RASK 3.73 6.12

YIELD 4.67 4.71

YIELD 3.73 6.12

Topic Summary

Suppose that load factor is 100% for all (all seat were sold), the result show that OZ is

balance for both routes but KE’s result is diverse, better result for ICN-HKT route.


Abbreviation

Abbr. Meaning

Formula

LF Load Factor (

)

ASK Available Seat Kilometres

SEAT x DISTANCE

RPK Revenue Passenger Kilometres

PAX x DISTANCE

RASK Revenue per Available Seat Kilometres (

)

YIELD The income return on an investment (

)


Recommendation

The Recommendation

The airline can sell the ticket both high and low demand for this route. Because the airlines can

use Revenue Management Approach in the normal period by use class categories to attract the

customers. There are difference prices and products which the customer can choose to match with

their needs. Hence, the price depends on the customer behavior and willingness to pay.

Additionally the airlines have their own customers’ loyalty so they can sell when demand

increase and decrease. The airlines have to do advertisement in order to promote the destination

and itinerary both in the country and worldwide via diverse marketing channels whether television

or internet so it will easy to recognized by customers.

For HKT-ICN and vice versa, any airlines also create their special itinerary provide the

customers such as travel as Korean TV series, touch with historical attraction; any famous palaces,

Korean national costume, touch with traditional and even Korean food (kimchi), experience with

wonderful weather throughout the year, and surgery tour for attracts the tourist around the world.

To participated and encouraged the customers those kinds of special event, the airline or travel

agents can be create trips to Seoul at all particular time with the acceptable price, that’s also can be

increase their revenue efficaciously.


References

General Information, Records and Statistics

http://www.airportthai.co.th/

Airline Information

https://www.koreanair.com/

http://www.flyasiana.com

http://www.asiana-gsa.com/

Distance from HKT - ICN and vice versa

http://www.prokerala.com/travel/airports/distance/from-hkt/to-icn/

Airline Summary Information http://centreforaviation.com/

Routes, Ticket Price and Calendar

http://th.skyscanner.com

Korean Air Fleet

http://www.koreanair.com/local/na/gd/eng/au/of/au_of.jsp

Peter Belobaba’s Lecture about Aviation Business Management

http://mit-ocw-thai.eng.chula.ac.th/MIT_THAI/aeronautics-and-astronautics-

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http://www.airportthai.co.th/

https://www.koreanair.com/

http://www.flyasiana.com/

http://www.asiana-gsa.com/

http://www.prokerala.com/travel/airports/distance/from-hkt/to-icn/

http://centreforaviation.com/

http://th.skyscanner.com/

http://www.koreanair.com/local/na/gd/eng/au/of/au_of.jsp

http://mit-ocw-thai.eng.chula.ac.th/MIT_THAI/aeronautics-and-astronautics-e27e34e28e27e01e23e23e21e01e32e23e40e14e34e19e2de32e01e32e28e41e25e30e01e32e23e1ae34e19e2de27e01e32e28/16.75j-1.234j-e01e32e23e08e31e14e01e32e23e2ae32e22e01e32e23e1ae34e19-e24e14e39e43e1ae44e21e49e1ce25e34-2006/e40e2de01e2ae32e23e1be23e30e01e2de1ae01e32e23e40e23e35e22e19-1/skinless_view






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Yield Management Practice