Research On Operation Strategy Of K Airline’s Ancillary Services In China-Europe Route

The cultural exchange and tourism demand between China and Europe have reached record highs,and the market size of China-Europe routes has also suddenly expanded.Domestic and foreign airlines have successively operated many direct routes between China and Europe,and with the continuous maturation of hub airports,the development of the transit market has led to the competition in the China-Europe route market intensifying.Due to the long flying time,passengers’ requirements have changed from safety to the pursuit of comfort and convenience.The development of the ancillary services not only covers up the limitation of basic flight ticket services but also meets the needs of passengers’ personalized selection,and at the same time can increase the airline’s total revenue.Therefore,to provide advice for the operation of K Airline’s ancillary service,this thesis will present the results of a survey on the airline’s ancillary services in China and Europe,it will analyze the influencing factors and consumer preferences when purchasing ancillary services in order to improve the passenger segmentation in these regions.First,this thesis summarizes the development and current situation of domestic and foreign airlines’ ancillary services,introduces the segment of civil aviation passengers and consumers’ preferences for purchasing ancillary service products.It has been discovered that the current ancillary services are mainly divided into 4 categories,which are A-la-carte ancillaries,frequent flyer program activities,commission-based ancillaries,and advertising.Secondly,from the aspects of the route network distribution,capacity investment,flight load factor,passenger turnover,and major consumer groups,it conducts a comprehensive and systematic analysis of K Airline’s China-Europe route operations.Finally,compared with domestic and foreign airlines,it is found that the operation of K Airline’s China-Europe route has the following three shortcomings: 1.Unclear passenger segmentation,which leads to the products being homogeneous;2.The products’ pricing is not differentiated;3.The incentive marketing structures currently in place are inadequate to satisfactorily service the needs of the modern customer and the everchanging landscape of today’s customer service requirements.Therefore,to solve the above problems,this thesis selects a total of 12 ancillary service products and 14 factors that affect passenger’s purchasing decisions from the three dimensions of demographic characteristics,behavioral characteristics,and consumption characteristics,and conducts a survey in China and Europe.The questionnaire results were tested for reliability and validity.Meanwhile,based on the questionnaire data comparing the differences between China and Europe,cross-analysis and K-means cluster analysis models are established and draw the conclusion that the passengers can be subdivided into three categories.Also,the cross-analysis and cluster analysis results are combined with the passenger demand of China-Europe routes to provide specific product mix options for these three types of passengers.Based on the conclusion of passenger segmentation,it is recommended to carry out the "price discrimination" pricing strategy and the promotion incentive mechanism according to local conditions through the flexible mechanism of ancillary service products to stimulate the revenue management of K Airline’s China-Europe routes.The research results of this thesis will provide useful advice for the ancillary services of K Airlines and provide certain reference values and significance for other companies.