Yield Management Practice
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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
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 2
Table of Contents
PROJECT NAME ……………………………………………………………………………………… 3
PROJECT OBJECTIVE……………………………………………………………………………….. 5
PROJECT LIMITATION……………………………………………………………………………… 6
METHODOLOGY……………………………………………………………………………………… 7
ANALYSIS………………………………………………………………………………………………. 8
RECOMMENDATION…………………………………………………………………………………. 15
REFERENCES……………………………………………………………………………….………….. 16
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 3
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.
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 4
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.
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 5
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.
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 6
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.
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 7
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.
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 8
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
Asiana Airlines Korean Air
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
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 9
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
Asiana Airlines Korean Air
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Disembarked Embarked Total
Passengers 2008
Asiana Airlines Korean Air
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 10
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%.
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 11
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
Flight Time Aircraft Mon Tue Wed Thu Fri Sat Sun Total Day
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
Flight Time Aircraft Mon Tue Wed Thu Fri Sat Sun Total Day
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
Flight Time Aircraft Mon Tue Wed Thu Fri Sat Sun Total Day
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
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 12
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
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 13
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
Airline Route Classes Fares PAX BKG REV.
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
Airline Route Classes Fares PAX BKG REV.
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
Airline Route Classes Fares PAX BKG REV.
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.
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 14
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 (
)
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 15
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.
Yield Management Practice: (HKT-ICN) and (ICN-HKT) Page | 16
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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e01e32e23e08e31e14e01e32e23e2ae32e22e01e32e23e1ae34e19-
e24e14e39e43e1ae44e21e49e1ce25e34-
2006/e40e2de01e2ae32e23e1be23e30e01e2de1ae01e32e23e40e23e35e22e19-1/skinless_view