Extended Essay Real Draft
Candidate Name: Jutadhaj Visudhipol
Candidate Number: 000964-082
School Name: Geelong Grammar School
School Code: 0964
Examination Session: November 2011
Submission Date: 3 June 2011
Extended Essay
(Economic)
Research Question:
To what extent does the competition in the domestic low-cost airlines industry of Thailand reflect price versus non-price factors?
ABSTRACT WORD COUNT: 270
ESSAY WORD COUNT: 3847
SUPERVISOR’S NAME:
Mr. Justin Kristiansen
Abstract
In the domestic low-cost airlines industry of Thailand, there are three major airlines, which dominate the industry’s output, Thai Air Asia, the current Market leader, Thai Airways International’s own Nok Air and Orient Thai and One Two Go, a joint operation. How do low-cost airlines compete in a highly competitive market? How far do the characteristics of the competition and the price war in the industry, lead to prosperity or destruction? In both Thailand and a more mature market like the US, the low-cost airlines industry doesn’t seem to profit pleasingly. This raises more questions, what would a successful low-cost airline possibly do to gain a sustainable business success? Perhaps, non-pricing competition? To respond to these questions I chose to investigate Thailand, a famous tourist destination, as a studying ground. By doing so, I will investigate the following research question:
To what extent does the competition in the domestic low-cost airlines industry of Thailand reflect price versus non-price factors?
It is clearly suggested by the study of the concentration ratio and the income statement ratio that the price competition is at its peak, where cost could not be lower any further, to gain profit. Non-pricing competition in low-cost airlines industry is unconventional. However Thai Air Asia proves that it can certainly shake the industry and reframe the competition. Even though the end result of the game is still unknown, the market and business performance shows a positive momentum to
Candidate Number: 000964-082
School Name: Geelong Grammar School
School Code: 0964
Examination Session: November 2011
Submission Date: 3 June 2011
Extended Essay
(Economic)
Research Question:
To what extent does the competition in the domestic low-cost airlines industry of Thailand reflect price versus non-price factors?
ABSTRACT WORD COUNT: 270
ESSAY WORD COUNT: 3847
SUPERVISOR’S NAME:
Mr. Justin Kristiansen
Abstract
In the domestic low-cost airlines industry of Thailand, there are three major airlines, which dominate the industry’s output, Thai Air Asia, the current Market leader, Thai Airways International’s own Nok Air and Orient Thai and One Two Go, a joint operation. How do low-cost airlines compete in a highly competitive market? How far do the characteristics of the competition and the price war in the industry, lead to prosperity or destruction? In both Thailand and a more mature market like the US, the low-cost airlines industry doesn’t seem to profit pleasingly. This raises more questions, what would a successful low-cost airline possibly do to gain a sustainable business success? Perhaps, non-pricing competition? To respond to these questions I chose to investigate Thailand, a famous tourist destination, as a studying ground. By doing so, I will investigate the following research question:
To what extent does the competition in the domestic low-cost airlines industry of Thailand reflect price versus non-price factors?
It is clearly suggested by the study of the concentration ratio and the income statement ratio that the price competition is at its peak, where cost could not be lower any further, to gain profit. Non-pricing competition in low-cost airlines industry is unconventional. However Thai Air Asia proves that it can certainly shake the industry and reframe the competition. Even though the end result of the game is still unknown, the market and business performance shows a positive momentum to
Bibliography: 2. Orient Thai and One Two Go’s Company information, Available at http://www.flyorientthai.com/en/aboutus/ (Accessed 10 January 2011) 3 Examples of price promotion offered by each of the airlines on posters in 2010: Price offers, October 27, 2010-Daily NewsAD_334634 Examples of non-price promotion offered by each of the airlines on posters in 2010: Co-promotion hotel bundling, July 8, 2010-Bangkok PostAD_269987 Tour Package (Dec 2010) Customer loyalty card (Nov 2010) E-mail interview with Ms. Topaz Subunrak, Public relation officer, Thai Air Asia, (January 30 2011) How did the low-cost industry begin?