What Are Yunnan Lucky Air’s Best Options?

Question 01: What are Yunnan Lucky Air’s best options?

Answer to the Question No. 01

Yunnan Lucky Air an aviation based company which providing the services of airlines in China itself by considering the world including U.S.A and Europe. And was found since 2005, were offering their services on this industry to the peoples by low cost offerings through agents. It is a efficiency airline and 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 is a good way to stay in competition with other airlines. E-commerce allows airlines to cut out the middle man such as sales agents and sales offices. Its downfall however is that because they cut out the middle man allowing their rates to be less some people may think it is a scam or would be afraid to disclose credit card information because there is no sale agency involved.

Question 02. What factors should its executive team consider?

Answer to the Question No. 02

Cost leadership plan would allow Lucky Air to produce at the lowest cost allowing them to gain a larger share of its target market. Differentiation; Lucky Air could have shown ways in which they are unique. It can be the physical appearance that draws more attention from customer or psychological making customers think and believe that Lucky Air is among no other airline, which will draw in more of the customers it is looking for. Focus strategy they look at focusing on a much smaller target segment. Deciding to stick to a specific market of customer helps them as well.

Lucky Air operates mostly in secondary cites to avoid congestion and reduce landing costs. But they have a big dis - advantage that needs to be taken into consideration, is unlike low-cost airlines in the United States and Europe that could achieve a roughly 30% cost advantage, Lucky Air’s cost structure is only about 5% lower than the industry average, mostly due to government-imposed constraints. Lucky Air’s four largest cost components, fuel, landing fees, aircra³ leasing, and taxes comprised about 70% of its operating cost, but unfortunately this is due to government regulations. Be-cause of poor security many consumers and unsophisticated online system many customers try to stay away from online payment and prefer that face to face payment method. “±transaction security was oven poor and payment systems expensive or unavailable, so only 15.8% of Inter-net users were online buyers and only 25% used an online banking service.4 Credit card penetrator in China was less than 4% (31 million), compared to 90% in the United States” (E-Commerce Yunnan Lucky Air). But Lucky Air has an advantage because one of their biggest strengths is their I± operations, thanks to their parent company Hainan Airlines, for I± support and spent amerce 0.15% of its own net income on I± investment. Executive should take this into consideration.

Question 03: What lessons should they draw from lucky air experience and that of low-cost airlines elsewhere?

Answer to the Question No. 03

Yunnan Lucky Air an aeronautics based organization which giving the administrations of carriers in China itself by considering the world including U.S.A and Europe. What's more, was found since 2005, were putting forth their administrations on this industry to the people groups by minimal effort offerings through specialists.

In the event that aircraft online business was truly taking off in China, then Lucky Air could grab the preferred standpoint by building up itself as the online travel pioneer. Low Internet entrance and lacking on the web installment strategies had truly upset the advancement of the online travel business, yet the circumstance could change drastically as the Internet entered further and more profound into China. The cases of Southwest Airlines and other minimal effort aircrafts abroad proposed that online business could fabricate dependability, increment transformation, and decrease cost – gave that an aircraft were ready to contribute altogether in innovation and staff. The choices were far reaching and the cash tight: Lucky Air needed to put down its wagers accurately in the event that it needed a decent result later on.