6. Conclusion
Based on our analysis, we conclude that the budget airline industry in Hong Kong has a promising prospect. First of all, there is tremendous need for budget airlines as the middle-class population in China and Southeast Asia is increasing dramatically. Besides, the relatively low penetration rate of Hong Kong budget airline (5.2%) indicates that huge market share is left for budget airlines. Last but not least, the popularity of traveling and short flights has brought opportunities for low cost airlines to embrace the booming tourism industry in Hong Kong. Given the increasing need for budget airlines and relatively unsaturated market, we are confident to predict that the budget airline industry will embrace a bright future.
Nevertheless, when it comes to individual companies, their future performance could differ greatly. According to our analysis of Oasis and AirAsia, we have discovered that both internal weaknesses (e.g. managerial problems, operational problems) and external situations (economic performance, competitive landscape) affect a company’s performance. However, the most critical factors are internal factors—a company’s strategic decisions and operational capabilities.
We have two suggestions for investors. First, diversify your investment in various companies to capitalize on the industrial success and avoid risks. Second, seek experts’ advice and insights about individual companies’ performance in order to select the most profitable company. In this way investors can maximize their profit gain while minimizing potential risks.