Incheon International Airport Marketing Case & Strategy Analysis

Team name: ApplebyTeam Leader: Hyunwoo Shin (University of British Columbia)

Team members: Chan Young Byun (York University), Chieun Ahn (Queen’s University), Han Gyul Cho (Emory University)

Team member Introduction & Career Plan

Team leader: Hyun Woo Shin School: University of British Columbia Year: 3rd year Major: Accounting

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Contact Information: edshin89@gmail.com My careere plan is to study accouting, and becoming an ____ analyst at Wall Street.

Team member: Chan Young Byun School: York University Year: 3rd year Major: Business Administration Contact Information: chanj3@live.co.kr After graduating from university, I would like to work at a global consulting agency and become

a well-known consultant.

Team member: Chieun Ahn School: Queen’s University Year: 3rd year Major: Commerce Contact Information: 010-4773-6897 / ahn.chieun@gmail.com I am open to both working in Korea and abroad. I would like to continue my passion for

marketing and advertising after graduation. I am also interested in education administration.

Team member: Han Gyul Cho School: Emory University Year: 3rd year Major: Economics Contact Information: stevec1005@hotmail.com I would like to study financial engineering in graduate school. Upon finishing the study, I would

like to become an economics researcher.

<Table of Contents>

I. Executive SummaryII. Introduction to Incheon International AirportIII. History of Incheon International AirportIV. Background Establishment of Incheon International AirportV. Early Stage’s Hardship and ChallengesVI. Incheon International Airport - SWOT Analysis

1. Strengths2. Weaknesses3. Opportunities

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4. ThreatsVII. Hub Airport - Definition and NecessityVIII. Incheon International Airport Duty Free Shops – Introduction and Marketing Strategy

1. Early Stage2. Introduction of Airport Duty Free Shops3. Airstar Avenue Performance4. Airstar Avenue’s Marketing Strategies5. Airstar Avenue’s Challenges

IX. Airline Attract Strategies1. Early Stage2. Number of Airlines and Destinations Offered3. Operation Performance

X. Incheon International Airport’s Service & Accommodation Strategies1. Customer Service and Accommodation2. Employee Training and increase in satisfaction level

XI. Differentiation of the Airport Support Facilities1. Outsourcing2. Analysis of Operation Systems

XII. Difficulties and Challenges after opening1. Accessibility2. Construction of New Southeastern Airports3. Recession

XIII. The Future of Incheon International Airport - Recommendation1. Introduction of the High-Speed Airport Railroad2. Development of adjacent cities3. Development of China’s niche market

XIV. Final summary and conclusionXV. Reflection on final competitionXVI. References

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Incheon International Airport has become the number one airport in the world, just within ten years of operation. As a gate to Repulic of Korea, it has played a huge role in putting the name “Repulic of Korea” out to the world. It has been contributing significantly in increasing national brand power. Thus, analysising its successful marketing strategies would help not just us, but the others about the key factors that has lead to such success.

The Future of Incheon International Airport - Recommendation Introduction of the High-Speed Airport Railroad Development of adjacent cities Development of China’s niche market

ICN

Airstar Avenue

Airlines

Service & Accommodation

Airport Support Facilities

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II. Introduction to Incheon International AirportOur country is in the rapid wave of world trade liberalization in the 21st century, and under the abrupt changes in politics, economy and society as well as in the process of sophistication in industrial levels, which in turn has brought an expectation of advancement onto tourism and service industry and, on account of dazzling development in information communications, a new paradigm of life in human societies has been launched through the borderless world economy and the globalization of exchanges in culture and information.

In the past, our country had various airports that had not played their proper roles in a systematic way. To manage and operate each one in an efficient way, it is required to play its own prime role. A small local airport cannot take a place of an international one; Incheon International Airport cannot allow light planes to take off and land. In the similar way, by considering various conditions and environment such as the geographical position, accessibility, demand aspects, and software profiles, each airport is to be assigned and operated to take a peculiar role suitable for each one.

Incheon International Airport was constructed in order to plat its role as the Hub airport in Northeast Asia according to the industrial development and globalization to increased demand for aviation transportation. Started in 1992, more than 7,000,000,008,000 billion won in total cost has been put the construction of Incheon International Airport for eight years and four months and it was opened March 29, 2001. The opening of Phase 1 was completed at the time of gongsaman, Incheon International Airport; meeting annual 170,000 aircraft operations through the 27 million passengers and 1.7 million tons of cargo were transported.

The potential of the Northeast Asian aviation market, including South Korea, has been most appreciated in the world. It is expected that there will be competitions among regional countries as well as the world’s leading airlines for the future advantage in the region. In such a competitive environment, the opening of Incheon International Airport has large significance value.

Despite the late construction of Incheon International Airport compared to other competitors, it has the full potential in terms of location or facility system. Based on the largest advantage, the shortest route between Europe and The United States, Incheon Airport is able to build varied network and high-density routes so it is advantageous for Incheon Airport to attract a lot of cargos and passengers. In addition, compared to other competing airports, Incheon Airport can hold up some strong advantages that are lower airport charges, a 24-hour capable of landing, and the possibility of expansion of the rear region.

Since the opening of Incheon International Airport under 10 years operating periods, Incheon Airport has received the world's second largest international cargo and the world's top 10 international passengers. In 2009, ‘Sky Trax’, one of the best research firms specializing in aviation services in the UK, has chosen Incheon International Airport as the best airport in the world. Incheon Airport has won consecutive awards for best airport in the world rewarded by Airports Council International (ACI). It also has won the world’s best airport award for three consecutive years by the U.S. global traveler. Incheon Airport is continuously growing for the best in services, operations and cargo system.

Facilities of Incheon Airport are separated as passenger terminal facilities, freight terminals, dock facilities, and navigation safety facilities, transportation facilities. Passenger terminal facility has 270 check-in counters, 120 ports of passport and 28 security checkpoints. It has the capacity of handling 6400 passengers per hour.

Cargo terminal has a facility, which could hold 24 aircrafts at the same time, and its annual cargo capacity is 4.5 million tons. The ground control communications has been installed in control tower, which is 100m above the ground and it has the aircraft’s landing instrument and cover facility that help aircrafts land the runway with visible distance of 50m.

In 2020 when final construction is completed, there would be additional five runways. It is expected that the size of passenger terminal would be increased to 1,146,000 ㎡, 100 million people in passenger and freight 1,000 million tons. The number of flights is expected to increase up to 740,000-circuit annually.

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III. History of Incheon Airport’01.03.29 The opening of Incheon International Airport’03.09 Asia's first CAT-IIIb (100m line of sight can be landed) operating’05.10 Achieved a cumulative passenger 100 million people’06.03 Incheon International Airport opened a free trade area’06.06 Reached a cumulative 10 million tons cargo’06.08 Achieved one hundred thousand people visitor one day’07.03 Achieved the world's # 1 airport rating for two consecutive years’07.04 Released unattended check-in (self-check)’07.07 Cargo terminal investment AACT and DHL’07.10 Achieved 1 million accident-free flying’08.02 Achieved the world's # 1 airport rating for three consecutive years’08.06 Step 2 Grand Opening and Start of operation’09.02 Supported Arbil, Iraq, the new airport expansion consulting operations’09.03 Achieved a cumulative passenger 200 million people’09.03 Continuous operation in navigation safety facilities 70,000 hours’09.04 Achieved the world's # 1 airport rating for three consecutive years’09.06 Named Gonghangsang Skytrax World's Best Awards’09.12 Selected as Global Traveler Award for four consecutive years’09.12 Reached Transit passengers 5,000,000 people annually (in 2009)’10.09 President of the 34th National Productivity Award (Korea Productivity Center)’11.01 Selected as Global Traveler Award for five consecutive years’11.02 Korea's Most Admired Companies for four consecutive years (Korea Management

Association Consulting)’11.02 Achieved the world's # 1 airport rating for six consecutive years (ACI)

IV. Background Establishment of Incheon Airport

Due to increased demand for aviation, Kimpo International Airport had reached its maximum capacity of passenger and cargo operations, new airport development project had to be driven. In the early 1980, the Government of the Republic of Korea selected 22 new airport candidates around Seoul based on the criteria of regional routes, aircraft obstacles, weather condition, noise, land use and accessibility. After the government closely examined above conditions and in 1990, YeongJong Island area was selected as the best candidate of new airport project. In 1992, Incheon International Airport went into construction in order to accommodate the Northeast Asian aviation demand and aim to be further international HUB airport.

V. Incheon Airport - Hardship and ChallengeIncheon International Airport is currently one of the most successful national projects being evaluated, but at the time of construction and until the opening, it faced with much opposition and could not be free from the pessimistic comments. Opponents of the development of new airport cited land imbalances, natural disasters and environmental degradation, and the difficulty of financing as main reasons.

Fearing about the concentration of metropolitan, they argued to extend the Cheongju International Airport for balanced regional development. In addition, they opposed the construction of Incheon Airport based on argument that environmentalists concerned about the physical conflict with birds, a thick fog and the reclamation of mud flat, which is not environmentally right. They also have warned that it causes enormous damage to the coast of Incheon if deep-sea tidal storms and typhoons from the West Sea hit at the same time. Another concern was the shrink of runway caused from the weakness of landfill.

However, the government and the Incheon International Airport Corporation pushed the construction of a new international airport, Incheon International Airport was selected as the world’s best airport after 10 years.

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The imbalance development of regions, one of concerns from opponents, is acting as one of advantages of Incheon International Airport since it attracts transit passengers compared to other competing airports in Japan, China and several others. Also, YeongJong Island is close to Seoul, another advantage of Incheon Airport. Even Kimpo Airport was closer to Seoul, it had environmental disadvantage such as a fog and noise. In contrast, Incheon Airport is able to operate 24-hours because it is located in non-residential region.

Incheon International Airport is located on the island so it has even more outstanding possibility to expand further than other competing airport in Korea. St. Acquired 17,000,000 pyeong, 18 times larger than YeoEi Island, Incheon International Airport finished the first business phase using only 421 million pyeong. Incheon Airport still has left out with 1300 million pyeong, so no further construction work is necessary to expand. In contrast, For Hong Kong International Airport (155 million pyeong) and Kansai International Airport (378 million pyeong) respectively, further expansion works are needed for them to expand the area but it is costly so they are having difficulties. Kansai airport and chekrapkok airport had spent 30 trillion won and 24 trillion won respectively for expansion projects that are more than 3 times of the Incheon International Airport Expenses (7.8 trillion won).

Unlike the concern that reclaimed ground is not firm, it is known that they showed little or no damage from reclaimed ground since the opening of Incheon International Airport. It is because Incheon Airport is constructed on tidal flats. In contrast, Kansai International airport, build on filled sea, has subsided 11 meters for 6 years since the opening in 1994. Cost of emergency repair work has already committed 80 million yen per year, but it is expected to subside 2 meters per year, the astronomical maintenance costs are expected to commit.

Cheap airport usage fee is one of advantageous factor to increase the competitiveness of Incheon Airport. Incheon airport has advantage over other competing airport such as Kansai airport, Pudong airport and Hong Kong airport in term of the fee for taking off and landing. Incheon airport has charged $2800 which is 19.7% increased amount from the charge by Kimpo airport. Compared to this, Kansai has charged $8844, Pudong airport, $5087 and Hong Kong airport, $5063 respectively.

The reason for Incheon airport’s cheap facility is due to lower construction cost. Kansai spent 135 billion dollar and Chek Lap Kok spent 90 billion dollar on their constructions. Their costs were expensive because they had to harden the ground to build airport but since Incheon airport was built on mud flats so it was cheaper.Finally, the Incheon International Airport constructed 15 ㎞ miles away from the mainland minimizes the damage from aircraft noise. Therefore, Incheon International Airport is able to operate 24-hour and the role of hub airport can easily be digested.

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VI. Incheon International Airport - SWOT Analysis(1) Strengths

The benefit of Incheon airport is convenient and prompt immigration service. By installing unmanned immigration service, Incheon airport shorten the immigration time and is efficiently linked to the airlines, security, search and customs so that the average time per person is between 12 minutes to 16 minutes. Compared to international departure average time, 60 minutes, and immigration average, 45 minutes, Incheon airport has shortened the time dramatically.

Also, Incheon airport provides entertaining enjoyments and at the same time installs the Korean traditional culture area aiming for foreign passengers to imprint ‘Tourist Korea’ image.

Incheon airport actively participate in foreign marketing activities to promote the competitiveness of Incheon airport. First of all, Incheon airport held an Asia-root-one business meeting providing 1:1 business meetings between airlines and airports, exhibitions relating to tourism, forums about aviation and various tour program. Through a meeting between Incheon airport and airlines, Incheon airport takes advantage of opportunities to promote marketing activities such as increasing new routes, building strong networks with international airports and airlines to enhance the value of Incheon airport. Since the opening of Incheon airport, they have actively been participating in World Route Conference and Asia Route Conference to promote advertising, and Incheon airport could add three to five airlines as a result. Last year, Delta airline, Air Asia X and Air India were newly placed by Incheon airport as a result of active marketing strategies.

Another advantage of Incheon airport is the convenience of transfer system. At the time of the opening of the Incheon airport, they served 47 airlines and 109 destinations. With effective marketing strategy to attract airlines, Incheon airport now serves 67 airlines and 172 destinations around the world building various own routes. In addition, Incheon airport is committed to provide many kinds of convenient facilities for transit passengers while waiting. During the delay period, transit passengers are able to enjoy web surfing, movies, concerts, and shower and relaxed for free.

Another important factor for Incheon airport to be able to become the hub airport of Northeast is the geological location of the airport. Incheon airport is located in the middle of China and Japan so visitors from China and Japan are easy to use Incheon airport. Also Incheon airport could be a gateway between North America and Southeast Asia. However, it is certain that the geological location is not the only factor. In fact, without the commitment and support of domestic airlines and the government policy, it was really hard for Incheon airport to become the best airport in the world by itself.

Lastly, Incheon airport owns high tech technology as the best hub airport of Northeast. It is true that Incheon airport have the largest terminal, the large control tower built up against strong winds and earthquakes, high precision automatic landing system, advanced information and transportation system. At the same time, Incheon airport has two 3.75 km large runways for giant aircrafts such as Airbus 380.

(2) Weaknesses

The number of passengers using Incheon airport has been increasing steadily since the opening of the airport. Due to increasing passengers, it is time for Incheon airport to expand airport facilities to accommodate increasing passengers. At this moment, Incheon airport is not effectively dealing with increasing passengers in the STAR line and mobile systems. Also, it is likely that Incheon airport is far from the metropolitan. Thus, there should be improvement in transportation between the airport and the metropolitan to effectively accommodate increasing travelers and quickly handle with cargos.

Incheon airport’s marketing strategy is superior compared to other competitors but updating the content instantly is still required to stay top of the world.

Incheon airport is largely depending on the global and domestic economic conditions. The decrease in a number of passengers and the usage of facilities according to high oil price caused by global recession is a natural limit for Incheon airport. This rapid reduction in productivity of the airport might cause decreasing the financial strength of the airport. Especially, Incheon airport is in the middle of the third

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level expansion project, so the increase in construction costs would negatively affect the financial status of the airport.

Lastly, compared to the world leading airports such as Heathrow airport and JFK airport, Incheon airport still has a lot to improve.

(3) Opportunities

In June of 2009, eight years after the opening of the port in 2001, Incheon International Airport has finalized and announced the third level expansion project. According to the plan, the third level expansion includes expansion of existing freight terminal and construction of the second passenger terminal. Moreover, it is planning on expanding its airplane mooring, connecting roads to the second passenger terminal, railway etc. In order to add values as a global distribution center, Incheon International Airport is looking into building the second airport distribution center (92 ten thousand ㎡). The third level expansion project is planned to take its place between years 2015-2017, with possible modifications according to changes in demands. Once the third level expansion project is completed, Incheon International Airport’s annual passenger capacity will increase from 44 million to 62 million people, and annual cargo capacity from 4.5million tons to 5.8million tons. Furthermore, it is expected to create jobs to 80,000 people, and approximately $7.3 trillion effect on production inducement, and $3.3 trillion added-value.

Incheon International Airport should also take chances on other opportunities such as recent enter of low cost airlines to the Asian market, domestic low cost airline’s effort to operate in Incheon International Airport, implementation of the five-day workweek, and increasing number of tourists due to the Korean Wave .

(4) Threats

Incheon International Airport has beomce the hub airport of the Northeast Asia in about ten years. Nearby Asian airports, such as ones in Singapore, HongKong, Beijing, Shanghai, and Japan are updating its hardware and software and coming up with new marketing strategies to compete against Incheon International Airport. Espeically, in last October, Japan’s Haneda airport has announced its goal to become the new hub airport of Northeast Asia. Since then, Haneda airport has been putting a lot of effort in attracting tourists and transfer passengers. Korean government’s policy to privatize Incheon Internatioal Airport is making its future uncertain. Currnetly, the government owns 100% of Incheon International Airport stock. It is planning on giving 49% of it to people, especially those with low-income. There are both positive and negative views on the government’s policy. Those who support the privatization believe that monitoring system is going to be reinforced, resulting it to become an even more solid global company. Although service and business strategies of Incheon International Airport are evaluated to be successful, many people believe that it still lacks in terms of number of airlines and transfer passenger rate compared to other international hub airports. With global economic recession, many believe that by privatizing 49% of Incheon International Airport, it will become eaiser to get 4 trillion wons needed for its third expansion project. The opposition side believes that there is no need to privatize a company that is operating in the black over the years. It voices that privatizing the company will backfire. Thus, privatization of Incheon International Airport would need to be decided after a careful consideration on both sides. VII. Hub Airport – Definition and Necessity

In 21st century, with rapid development of aviation industry, it has become possible to go to anywhere in the world within 24 hours. The importance of having airports that can handle the increasing number of passengers and demand has been imprinted to countries. World’s many countries have been either constructing new airports or expanding existing airports to make them become the center airport of the region. Those that have become the main airport of the region is called “hub airport”. Incheon International Airport is one of hub airports in the world.

The word “hub” has the meaning of “center”. Thus, hub airport serves as the center of the region. It becomes the center for many airlines. The main reason for aviation industry puts on emphasis on hub

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airports is to bring all passengers and cargo to one place. This increases number of flights and disperses costs for airlines. Airlines benefit with reduced price, while passengers benefit by having more choices of airlines. This allows passengers to travel to their destinations at lower cost.

Thus, hub airports have a high number of passengers and cargo compared to other airports. This is because a lot of passengers and cargo choose the hub airport as the transfer place.

Republic of Korea’s representative airport, Incheon International Airport, has its focus on becoming the hub airport of Northeastern Asia. As a result, in 2011, it has become the hub airport of Northeastern Asia to its reputation. Reasons for putting such effort are as follow:

a. Profit from increasing number of passengers and freightage One of Characteristics of Hub airport is the increasing number of passengers and freightage. Thus, Incheon International Aiport can make a huge profit from airline’s landing/departing fees, parking fees and passenger’s airport service fees.

b. ‘Republic of Korea’ worldwide image marketingAn airport serves as a face of the country. As a gateway to Korea, Incheon International gives off the very first impression of the country. Given that, being the Hub airport of Eastern Asia gives off positive impression of Korea to even those who are just stopping at Incheon for a transfer flight.

c.  Increasing number of tourists to Republic of KoreaPassengers who are coming to Korea, or simply stopping at Incheon International Airport for a transfer flight can both watch and personally experience Korean traditional activities. This attracts more touristst to Korea.

VIII. Incheon International Airport Duty Free Shops – Introduction and Marketing Strategy

(1) Early Stage

With the opening of Incheon International Airport in 2001, its duty free shops included four different brands: Lotte, AK, Silla, and Korea tourism. In the early years, each duty free shop focused on maximizing its own sales revenue. There was no joint marketing strategy.

(2) Incheon International Airport Duty Free Shops

In 2008, Incheon International Airport merged four different major Duty Free shops under one brand name, Airstar Avenue. In December 2009, Airstar Avenue started the world’s only Duty Free Shops’ joint marketing by opening its official webpage. Airstar Avenue is more than just a shopping place. It is now a premium duty free shopping place, where customers can experience different activities. (3) Airstar Avenue Performance

July of 2011, Airstar Avenue ranked number one in the service category among all the world’s airport duty free shops. In terms of sales, it ranked 2nd after Dubai airport duty free shops. It ranked first in terms of sales among international airports in Asia. Seven years after the opening, in 2008, Incheon International Airport’s duty free shop’s, Airstar Avenue, revenue was more than 1 trillion won. As seen in <Table 1>, Airstar Avenue’s sales is rapidly increasing over the years.

<Table 1>Year Airstar Avenue Sales (Won)2004 650 Billion2005 750 Billion2006 850 Billion2007 935 Billion2008 1trillion 34 Billion

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(4) Airstar Avenue’s Marketing Strateies

Incheon International Airport has merged four different duty free shops (Lotte, AK, Silla, and Korea Tuorism) under one brand called Airstar Avenue for customer’s convenience. This was Incheon International Airport’s marketing strategy to differentiate its duty free shopping experience from that of all the other airports’.

a. In 2008, Airstar Avenue started the joint-marketing for Lotte, AK, Silla and Korea Tourism duty free shops for convenience of customers. A launch of the joint website made it possible for the customers to easily check events, discount coupons, and categorized shopping on one website.

b. In order to maximize the amount of time customers spend at duty free shops, Airstar Avenue offers free internet service at the lounge. It also opened “Airstar terrace”, where customers can enjoy the view of Incheon International Airport, as well as other cultural life by having book café, bar, galleries. Airstar Avenue also offers activities where passengers can experience Korean traditional culture. This has played a huge role in keeping both domestic and international tourists at Airstar Avenue. Furthermore, Airstar Avenue opens Korea cultural museum and Korea traditional crafts museum.

Likewise, maximizing the amount of time passengers stay in the duty free shops is essential as duty free shops marketing strategies, as it has a direct relationship with sales revenue. Thus, Incheon International Airport constructed the gates and shops to maximize the flow.

a. By locating duty free shops near departure gates and lounges, Incheon International Airport made it sure that passengers would need to always go through the Airstar Avenue, or stay near by. This resulted in passengers spending more time and money on shopping.

b. By locating main duty free shops near the center of the main terminal, Incheon International Airport was able to attract passengers who went through the departure process. Smalller duty free shops near the end of each boarding terminal attract passengers who are waiting to go on board.

Moreover, Incheon International Airport also does other marketing strategies to differentiate itself from competitors.

a. Every year, Airstar Avenue recruit Airstar Avenue global marketer. This program allows university students an opportunity to travel world’s renown airports in countries such as Dubai, Netherlands, and Singapore and ask them to learn those airports’ marketing strategies.

b. Airstart Avenue provides regular prices and other airport duty free shops’ prices for all products. This became possible after merging four different brands under one name.

c. Unlike other airports’ duty free shops that close at 8pm, Incheon International Airport’s Airstar Avenue opens until 9:30pm for convenience of passengers who travel later in the afternoon.

d. Airstar Avenue strictly regulates the employees’ service quality. In order to extend the contract with Airstar Avenue, each brand needs to have good records of service quality.

(5) Airstar Avenue’s Challenges

Incheon International Airport merged its duty free shops under one brand name, Airstar Avenue, for the first time in the history of duty free shops. With such a shocking marketing strategy, Incheon International Airport’s duty free shops succeeded in many aspects compared to that of other airports. However, there are still a few problems that Airstar Avenue faces:

a. Despite of the fact that Airstar Avenue being the world’s one and only joint brand, it has low brand awareness both in and outside of Korea.

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b. Even after three years of joint marketing under the name of Airstar Avenue, the website is insufficient and joint marketing/promotion is lacking.

c. As four different brands are running the Airstar Avenue together, there are always factors for dispute. It is also harder to take fast action against sudden changes in trend, or both domestic and internationals.

d. Sales from duty free shops need to take up a large portion of airport’s sales. For example, United Kingdom’s Gatwick airport’s duty free shop sales takes up to 67%, Germany’s Am Main airport’s takes up to 37%. It has been pointed out by experts that Incheon International Airport also needs to increase the percentage sales to up to 50% in order to success commercially.

IX. Airline Attract StrategiesAfter the opening, Incheon International Airport has been working hard to attract passengers and cargo shipping in order to stay competitive. In order to do so, it has been focusing on its airline attract strategies. As a result of successful strategies, Incheon International Airport has now become the hub airport of the Northeastern Asia.

(1) Early Stage

Incheon International Airport had only 47 airlines that connected to only 109 different cities. It was remarkably lower number compared to that of its competitors such as Japan’s Narita airport and China’s Pudong. Incheon International Airport started to attract more airlines by offering lower fees.

Incheon International Airport compared to other world renowned airports, took a small amount of construction fee of $7.3 trillion dollars. This was possible as ICN bought reclamation land at low price. Most of Incheon International Airport’s site (56,198,600 m2) is a result of tideland reclamation project. Thus, ICN was able to reduce the huge expense on land purchase. Its lower break-even point has allowed ICN to set lower landing and parking fees compared to other competitor airports. In this era of high oil price, comparably lower landing and parking fees have worked as positive elements that convinced many airlines to choose Incheon International Airport over the others. As a result, Incheon International Airport was able to attract many airlines and collect landing and parking fees from them accordingly.

<Table 2>Airport Currency Landing Fee Parking Fee Airport Service Charge

(Adult 1person standard)

Japan - JPY 908,500 79,000 2,650

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Kansai

Won 13,946,838 1,212,769 40,681

Japan - Narita

JPY 829,500 79,000 2,040

Won 12,734,069 1,212,769 31,317

Japan –Ube

JPY 230,210 79,000 2,500

Won 3,534,069 1,212,769 38,379

China –Pudong

CNY 19,520 2,928 90

Won 4,181,770 627,265 19,281

HongKong- Chek Lap

Kok

HKD 25,835 4,992 120

Won 4,875,581 942,090 22,646

Singapore- Changi

SGD 3,994 220 20

Won 3,874,334 213,435 19,403

ROK- Incheon

Won 3,111,000 374,000 17,000

*Landing fee comparison based on: B747-400, MTOW 395 ton, 279 passengers *Parking fee comparison based on: B747-400, MTOW 395 ton, 8 hour parking*Exchange rate provided by Korea Exchange Bank on December 31, 2008

As shown in the table above, Incheon International Airport has set the lowest aircraft landing fee and parking fee compared to competing airports in East Asia. Consequently, major airlines, who have been suffering from global economic crisis and high oil prices, chose Incheon as their East Asian hub over other airports in China and Japan.

Incheon’s another airline attraction strategy was to provide cargo containers for passenger carriers. All passenger aircrafts have designated space where they can load passengers’ baggage. The baggage are usually first put into LD3 aluminum containers and then loaded into aircrafts. Each LD3 aluminum container is 114 kilograms, and if as many as 32 containers are loaded into a Boeing 747-400 aircraft, then the containers themselves weight as much as 3,600 kilograms. Airlines, in turn, are burdened with a greater energy cost. Yet, they are hesitant to replace LD3 containers with new, lighter containers that only weigh 69 kilograms because of enormous replacement costs. Incheon International Airport Corporation (IIAC) took this opportunity to provide the lighter containers to airlines at half price. At the same time, the IIAC was smart enough to put their logo on the containers that they sold. Consequently, the airlines profited by purchasing new containers at lower price, while Incheon International Airport also benefited by advertising themselves and their eco friendly vision. The number of containers sold to airlines has been continuously increasing since the project was launched in 2009, and this project is considered one of the most successful marketing strategies of the IIAC.

(2) Current Overview

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While Incheon International Airport’s marketing strategy at the opening of the airport was limited to “cheaper costs,” current strategies have been much diversified. Along with providing lower lending and parking fees, the IIAC is committed to attract more airlines and passengers by holding numerous meetings and conferences.

Incheon International Airport has been actively participating in a number of air transport meetings and conferences since its opening in 2001 and enthusiastically advertised themselves to foreign airlines. In 2011, Incheon International Airport successfully hosted the Route Asia Forum, in which more than 80 airlines participated. While hosting the biggest Route Asia Forum, the IIAC, with its exceptional marketing strategies, promoted 7 new international routes heading to Incheon. Also, by successfully hosting Route Asia Forum, Incheon International Airport rose to one of the most competent candidates to host the World Route Development Forum.

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With these airline attraction strategies, the number of airlines using Incheon International Airport and the number of destinations offered have steadily increased:

Number of Airlines and Destinations Offered <Table 3>Year 2005 2006 2007 2008 2009 2010

Number of airlines 59 63 67 63 62 67

Number of countries 41 43 51 49 53 49

Number of cities 133 142 168 161 177 172

Operation Performance <Table 4>Number of Takeoffs and Landings Q1 & Q2 Entire year

2006 International flights

Yearly 82,891 182,007 

Daily average 458 4992007 International

flightsYearly 100,974 211,404

Daily average 558 5802008 International

flightsYearly 104,245 211,102

Daily average 573 5792009 International

flightsYearly 95,489 198,918

Daily average 528 5452010 International

flightsYearly 100,741 214,835

Daily average 557 589

X. Incheon International Airport’s Service & Accommodation Strategies In modern airport industry, much more emphasis is put on the quantity and quality of service than hardware infrastructure. In order to meet the customers’ needs, Incheon International Airport has strived to provide an outstanding convenience and service excellence to win World’s best airport. Since 2005, Incheon International Airport has won first place in Airport Service Quality (ASQ), monitored by Airports Council International (ACI).

The following are some of many examples of Incheon’s exceptional service excellence:

1. Airport terminal cleanlinessa. Incheon International Airport has undoubtedly the cleanest toilets in the world. In order to

increase the overall cleanliness of the terminal, the IIAC has systematized each member of the staff take full responsibility of his/her allocated area and restroom. Also, the IIAC has continued to distribute new cleaning supplies, including special vacuums for walls and ceilings, in the passenger terminal.

2. Transportationa. The Incheon International Airport Expressway began its service in October 2000. It consists

of 8 traffic lanes and is connected to major freeways of Seoul, Gimpo International Airport, Seoul Ring Expressway, and Northern Incheon.

b. Airport Railroad Express (AREX) that links Incheon International Airport with Gimpo International Airport and Seoul Station also began its service in 2010.

c. Incheon International Airport can also be reached by ferry from Incheon’s Wolmi Island.

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d. In 2010, bus took the biggest share of ground transportation with 57%. 39% of customers reached the airport by car, and 4% by taxi. There are 53 bus routes that connect the airport with major cities. Currently, there are 23 bus routes to Seoul, 6 to Incheon, 13 to the Province of Gyeonggi, and 11 to other major cities of Korea.

e. When the airport first opened in 2001, passengers and customers encountered limited number of ground transpiration, incoherent price system, and illegal taxi touting. In order to fix these problems and improve the quality of ground transportation, the IIAC has hosted meetings with bus and taxi companies every quarter and got a complete survey of customers’ levels of satisfaction. The IIAC set up a long-term plan based on the meetings and surveys, and is trying to provide better ground transportation by increasing the number of bus routes to Seoul Metropolitan Area and other regions, relocating bus stations, enabling credit card payment on limousine buses, and operating midnight limousine bus services to major hotels and stations in Seoul.

3. Attractions within the terminala. Incheon International Airport and the National Museum of Korea are operating Korean

culture experience centers where passengers can experience fine Korean art and design. The Museum of Korean Culture located on the 4th floor of the concourse, displays relics of Korean history and offers an opportunity for foreign visitors to enjoy Korean traditional culture and history. At the Korean traditional handcraft exhibition located in the transfer lounge, passengers can try Korean traditional handcraft while waiting for their flights.

b. Incheon International Airport also offers ‘AIRSTAR TERRACE,’ a cultural, rest area where passengers can enjoy traditional Korean performances and panoramic view of the airport terminal.

4. Variety of accommodations for leisure and conveniencea. Incheon International Airport offers a free internet lounge, sauna, golf course, casino, and

an exceptional business lounge for passengers. The airport also provides roaming service, postal service, car rental service, hair salons, laundry service, and medical service in order to meet basic demands of airport customers. Further, by hosting restaurants of different cuisines, Incheon International Airport once again tries to fulfill different tastes of customers from different backgrounds.

5.  24/7 Servicea. For those who use the airport after midnight, Incheon International Airport offers variety of

services that are available 24 hours a day, 7 days a week. A book café located in the concourse building, for example, offers magazines in different languages for free. Food Capital located in the main terminal offers a selection of dishes that are prepared with organic ingredients. Convenience stores, sauna, and free internet lounge are also open 24 hours a day in order to increase passengers’ levels of satisfaction.

Incheon International Airport not only invests in the quantity of service and accommodation, but it also puts ceaseless effort to improve the quality of service and customer satisfaction.

1. Employee Satisfaction: Family program a. In order to create a work environment where the members of the staff can achieve “life

and work balance,” Incheon International Airport provides Family program and strives to build friendly relationship among the employees. The IIAC offers support for child-care programs, gender equality, and even sterility treatment for some female employees. By building a work environment that satisfies every worker, the IIAC looks forward to increase in productivity, better quality of service for customers, and achieve ‘Global Top 5 Air Hub’ in the near future.

2. Foreign language classes for ground transportation workersa. The IIAC has been offering foreign language classes to bus drives and taxi drivers since

2004. Each year, the IIAC has been hosting English competition for taxi drivers to

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encourage more drives to take advantage of foreign language classes offered. Drives who participate in this program not only give a good first impression of the airport and the country, but also increase foreign passengers’ overall level of satisfaction by minimizing communication errors.

3. Promoting safe, kind, and friendly atmospherea. In order to leave a good impression of the airport, the IIAC has been putting much effort in

improving the quality of service. By promoting ‘Kindness Program,’ Incheon International Airport has been giving incentives for member of the staff who has been praised by passengers. At the same time, employees who have been reported unfriendly for 3 times are penalized. The IIAC and its partners have been holding service workshops on a regular basis to make sure every worker can service airport customers more efficiently in a friendly manner.

b. Incheon International Airport operates its own service academy in the passenger terminal in order to ensure service excellence in all fields of operation, including securities, information desks, and maintenance. At the academy, 24 lecturers provide lecturers for greater efficiency and better quality of service. The employers and employees of the IIAC and its partners must take designated lectures each year.

4. Development of airport terminal and vicinitya. The IIAC has designated about 20 million square feet of land within the airport as a tax-

free zone and expects to attract global corporations. The IIAC also provides one-stop service for foreigners who are interested in investing in Incheon Free Economic Zone (IFEZ), where hotels and office buildings are built up.

The Incheon International Airport Corporation (IIAC) has conducted a survey every quarter and measured the levels of satisfaction of 153 major international airports around the world. In the survey, Incheon International Airport won 29 among 34 areas of service and accommodation and placed first for 6 consecutive years with 4.96 points out of 5:

<Table 5>Rank 2005 2006 2007 2008 2009 20101 Incheon Incheon Incheon Incheon Incheon Incheon

(4.96)2 Singapore Hong Kong Kuala Lumpur Singapore Singapore Singapore

(4.83)3 Hong

KongKuala Lumpur Singapore Hong Kong Hong Kong Hong Kong

(4.78)

A customer satisfaction survey of public corporations conducted by the Ministry of Strategy and Finance also shows steady increase in customer satisfaction:

<Table 6>Category 2003 2004 2005 2006 2007 2008 2009 2010Point 71/100 71 78 84 88.2 89.6 93.4 95.7Rank 5 5 5 2 A A AA AA

XI. Differentiation of the Airport Support FacilitiesDifferentiation of the airport support facilities is one of the features that make Incheon International Airport the best airport in the world. The following is an illustration of its differentiated support facilities.

1. Outsourcinga. One of the key factors maintaining Incheon International Airport’s status as the world’s best

is ‘outsourcing.’ Currently, it is only in charge of a few crucial tasks such as airport construction and marketing, and completely outsources the remaining facilities management and operations to 35 companies consisting of 558 individuals.

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Incheon International Airport strictly adheres to SLM (Service Level Management) via SLA (Service Level Agreements). This leads to mutual understanding of requirements and priorities among Incheon International Airport and outsourced companies, and operating firmly by the content of the agreements reduces the likelihood of misunderstanding or disputes.

2. Analysis of Operation Systemsa. Operation System(i) Automated immigration system (KISS: Korea Immigration Smart Service)

Korea Immigration Smart Service (KISS) was first introduced in 2005. It enables automated system, one-stop service, and greater efficiency of immigration officers. Passengers can pass through immigration within 5 seconds once they register their fingerprints and facial photo. With KISS, the waiting time at immigration decreased by 40 percent (or 300 hours annually). This, in turn, led to operation cost reduction of 24,000,000,000 Won. The United Nations chose KISS as one of the most advanced immigration systems, and many Asian countries including China and Vietnam are benchmarking KISS.

(ii) Advance Passenger Information System (APIS)

With APIS, it is possible to gather passenger information before the aircraft lands on the ground. It sorts out potential criminal based on previous records and enables other passengers to pass through customs much quickly. Consequently, it is easier to prevent potential criminal from entering the country. In fact, on January 2010, the APIS captured a Japanese passenger who attempted to enter Korea with 300g of hashish and 10g of ecstasy.

(iii) Consolidated Passenger Information System

Incheon International Airport has introduced the consolidated passenger information system for the convenience of passengers and the acceleration of customs procedures. This method of relating and processing all procedures from issuing the boarding pass to boarding the airplane with arrival and departure is the result of Incheon International Airport’s applying cutting edge information and biometrics technology to arrival and departure processes before any other airport in the world, to automate and simplify the customs procedure. This is yet another example of differentiation that gives Incheon International Airport’s support facilities a competitive edge.

(iv) Consolidated Automation of the Departure Process

Incheon International Airport is developing a method for consolidated automation of the departure process that takes care of all departure processes at once, through the use of electronic passports. Currently, consolidated automation of the departure process, automation of the boarding and transfer processes, and the entry registration system for foreigners are being established, integrated into a newly constructed interface for related systems, and test-run. Processes such as the arrival and departure screening and transfers can also be supported by the electronic passport via real-time connection to flight details, thereby consolidating the departure entry-security-screening procedures into a one stop departure process. Furthermore, this also entails the use of biometrics technology which helps prevent crime through flight transfers and enforce airport security.

(v) Modern signal system

Incheon International Airport has one of the most advanced signal system that directs pilots with the safest angle of entry to the runway and direction with light. Incheon International Airport’s signal system is exceptional because it receives data from Flight Information System (FIS) and automatically calculates the shortest distance from the runway to gates. In fact, throughout the system, the Incheon International Airport could allow more safe and effective movement of the aircrafts on the ground, while relieving the burden on the traffic controller. As well, installation of surface movement and guidance control system allows to distinguish different aircrafts and vehicles throughout representation of different sizes of symbols and objects. On top of

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that, radar information, which controls the stop line of the aircraft, improved service and operation of Step 1 service of operating magnetic circuit.

With the completion of Phase 2 projects, the Incheon International Airport significantly improved safety level of aircrafts’ ground movement, and allowed to build the system that has ability to watch movement of aircrafts, vehicles, routing, guidance, and all other related works under all weather condition. In fact, the system enhanced the capability to minimize the number of aircraft cancellation or turn-back.

c. Cargo System(i) AIRCIS: Air Cargo Information System

In order to overcome the problems of existing air cargo system, and difficulties of real-time cargo tracking, the Incheon International Airport correlated the different ‘air logistics information systems’ from various air cargo companies, and collaborated a site to gather different eyes of all the ‘air logistics’ to be seen at once. In fact, Incheon International Airport has enhanced the ability of real-time tracking system in more time and cost effective ways.

At this point, Incheon International Airport has set the long-term goal to establish the Global Air Logistics system to provide ‘Door to Door’ services of all air cargos, throughout linking their system with International Cargo community System.

(ii) Baggage Handling System (BHS)

Incheon International Airport successfully imposed and commercialized second-stage speed system (HSS: High Speed System) for the first time in Korea. This system allows faster and longer range transportation of luggage (straight section up to 430m/ min), compare to the first-stage speed system, which allows belt conveyor with average speed of 90m per minute. In fact, Incheon International Airport now has ability to classify passengers’ charged baggage about 5 times faster in time, despite of the far apart between the Passenger Terminal and Boarding Terminal.

XII. Difficulties and Challenges after opening.At the time of the construction period, Government of the Republic of Korea planned to develop the airport as the Northeast Asia’s leading hub airport. However, continuing recession of the national economy, lack of accessibility with major cities, and the balanced development of national land policies by construction of the new airport in the Southeastern location were the big obstacles to the success of Incheon International Airport.

In fact, as Incheon International Airport continued to have issues with accessibility, the government broke the formal aviation policy of ‘Incheon International Airport – International’ and ‘Gimpo (in Seoul) Airport – Domestic’. Instead, the government imposed the new policy which allows flight route from Gimpo Airport to Haneda and Kansai in Japan, and Shanghai and Beijing in China. Accordingly, the international passenger in Gimpo airport is expected to surpass 2 million people by the end of 2011, by taking over the passengers of Incheon International Airport.In addition, the government of Busan, Gyeongnam Province has been promoting the construction of airports to serve demand in the Southeastern Korea. As Busan takes 26~27% of the nation’s economic and population growth, it is an inevitable fact that those people will no longer use Incheon International Airport due to the lack of accessibility.

Finally, Incheon International Airport has limitation that it is heavily dependent on the economic condition of the nation. In fact, in July 2011, the passengers of the airport recorded 261 million people, compared to 266 million people during the similar period of last year. The number has decreased by 1.9%. As well, the during the first half of the year 2011, the passengers of Incheon International airport recorded 1,619 million people, while the number

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was 1,814 million people during the same period of the last year. Approximately, 10.8% of number of passengers was dropped.

XIII. The Future of Incheon International Airport – RecommendationIncheon International Airport has been able to reach the current spot, throughout the firm and successful marketing strategies. However, as the other airports in Northeast Asia are rapidly evolving, it is an inevitable fact that Incheon International Airport urgently needs to introduce the new break through marketing strategies.

1. Introduction of the High-Speed Airport Railroad a. Incheon International Airport has established a network of limousine

buses throughout Seoul in order to allow close proximity to the airport for passengers from the metropolitan area. Furthermore, the high-speed airport railroad that first started its operation in December, 2010, enabled passengers to arrive at the airport within 43 minutes from Seoul Station through express trains and 53 minutes through normal public trains. Despite its economical fares and well-organized train schedules compared to the public buses often affected by traffic congestions, the airport railroad services could not attract large number of passengers. Passengers perceived no distinctive difference between the two services; they could easily reach the limousine buses at various locations in Seoul that helped them to arrive at the airport within an hour.

b. Incheon International Airport will be able to realize greater revenues by developing its transportation services which will deliver noticeable differences to the passengers. One example can be the introduction of magnetic levitation trains. Pudong International Airport in Shanghai began its operation of magnetic levitation trains and they enabled passengers to arrive at the airport in 7 minutes from Shanghai which took approximately an hour with public transportation. Passengers could also have extraordinary city sightseeing experiences on these trains. The magnetic levitation trains that once originated from modernistic inspiration will certainly help facilitate the brand value of Incheon International Airport.

c. Meanwhile, environmental pollution and increased level of urban noises would be the major problems associated with the development of magnetic levitation trains. Moreover, considerable amount of required capital may drive up the break-even point of sales making the project less attractive at the initial phase of the development.

2. Development of adjacent citiesa. Currently, Yeongjong new town has been developed as the adjacent city

of the airport. However, due to the lack of urban development and amenities, the passengers, including those who transit their flight at Incheon International Airport, have been revealing disinterests toward the city. For instance, in Hong Kong, within 15 minutes of distance, a large shopping malls have been located, in order to attract passengers and guests. In fact, Incheon International Airport also needs to implement the construction of similar amenities and tourist facilities, in which further development and maximization of profit will be enabled, while the airport could be more competitive as the ‘hub airport’ in Northeast Asia. However, the biggest obstacle before implementing this plan, is a firm partnership between the government of Incheon and the airport.

b. In order to construct new buildings or to purchase the land, a significant amount of capital is required and a firm relationship between the city

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and the airport is inevitable factor. However, the unstable economic condition of Incheon city and real estate and economic downturn in the global economy must be resolved first, before the amenities and new town developments near the airport take place in action.

3. Development of China’s niche marketa. In order for Incheon International Airport to take the place as an

international logistic hub of Northeast Asia, development of niche market throughout linking China’s mainland is significant. According to the Korea Transport Institute’s report from November, 2007, it was revealed that amount of aircraft cargo transportation from Northeast regions of China, such as Qingdao, Dalian, Weihai, Yantai, Beijing, Tanjin, and etc... was approximately 229,704 tons. Among them, about 74,204 tons, which accounts for 32 percent, was being carried throughout Incheon International Airport, while the significant portion of overall cargo volume was compiled by Electronic optional. In addition, most of the 254 respondents have answered that the selecting a logistic/cargo company is heavily dependent on price (75% of respondents), services (59%), and time (27%).

b. When cargo is being transported through Incheon Airport, it is mostly done through SEA&AIR. While it requires about 25-30 more hours, it is generally 20-25% cheaper in terms of price.

c. In case of using Beijing’s international airport, that the process of going through custom at Qingdao, transportation to Beijing’s international airport and whistle of cargo approximately takes 12 hours. As it was identified that the major manufacturers in China prefer to use first class forwarders, and Chinese and Japanese forwarders hesitate to use Incheon International Airport, it is important to train and have Korean first class forwarders in the market, in order to serve potential demand.

d. The increased utilization of Incheon International Airport is expected to be dependent on the success of the Korean forwarders in China’s logistic market. Thus, solving the problem through consulting and organizing community is essential, along with introduction of incentive policy, of which they will also improve capabilities of Korean logistic companies in China. In addition, it is important to strengthen the services for global logistic companies, in order to derive positive perceptions on price competitiveness, level of service, and ease of handling business.

e. Considering that the price is the main criteria for logistics’ selection of the airport, it is important to seek a way to attract air cargo of Chinese manufacturers, throughout analyzing their characteristics on supply chains, and finding possible way to lower the cost of cargo transportation.

XIV. Final summary and conclusion

Opened in 2001, Incheon International Airport was created to handle the significantly increased demand for international air operations, in which the demand was created throughout economic growth and improvement of national income, and liberalization of international travel after the 1980s. As the existing international airport in Gimpo was surrounded by residential area and various obstacles, additional extension of the existing Gimpo Airport was impossible. In fact, the construction of the new airport was pursued as the national project to aim the future state and a role as hub airport in Northeast Asia with 24 hours availability.

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In the beginning of the construction, the new airport was faced with much opposition and the opening was also not free from the pessimistic comments. Opponents have insisted that the unbalanced development of land, natural disasters and environmental degradation are the main issues. As well, difficulty of financing the capital for burying the tideland between Youngjongdo, Yongyudo, Sammokdo, and Sinbyuldo was another concern. Nevertheless, the government was certain that the increased demand of international air operations and improved brand image of Republic of Korea would not only generate more revenue, but also attract potential passengers and air cargo transportation.

Just after three years of operation, in 2004, Incheon International Airport announced a successful start by reaching break-even point. This was a very unusual in the airport business, of which led the significant attention from all around the world. After that, Incheon International Airport imposed four major differentiated marketing strategies to grasp its position as a hub airport of Northeast Asia. Those marketing strategies were implemented in order to 1) differentiate duty free market, 2) attract various airlines, 3) provide exceptional services and amenities, and 4) create supporting facilities of the airport.

a. Unique duty-free marketing strategy: Incheon International Airport is the only airport that has a consolidated brand, named Airstar Avenue. Under a consolidated duty-free shop, passengers benefit from free internet, book café, bar, and gallery that are provided and operated by Airstar Avenue. Also, Airstar Avenue operates traditional culture experiment center, Korean culture experiment center, and traditional handcraft experiment center where foreign passengers can make handcrafts and fans by themselves. With these, Airstar Avenue not only increases the amount of time passengers spend in duty-free shops but also strives to advertise Korean culture.

b. Airline attraction strategy: Incheon International Airport is well known for its lowest landing fee and parking fee among competing airports in East Asia. Also, by providing lighter containers at half price and hosting major air transportation forums and conferences, Incheon International Airport successfully attracted many airlines in a relatively short period of time.

c. Service and Accommodations: With its cleanliness, convenient ground transpiration, attractions within the terminal, numerous leisure facilities, and 24-hour service, Incheon International Airport is attracting more and more transfer passengers. Further, by promoting friendly environment, Incheon International Airport Corporation (IIAC) tries to maximize efficiency of its staff. It also strives to meet the needs of foreign visitors by providing foreign language classes to ground transportation staff.

d. Exceptional Operation Systems: By introducing newer systems and continuously updating old infrastructure, the IIAC successfully increased efficiency, lowered operation costs, and promoted safer environment. At the same time, it substantially decreased immigration process and baggage handling process.

Incheon Airport, which is under the responsibility of Incheon International Airport Corporation (IIAC), has been selected as the best airport in the world for six consecutive years in Airport Service Quality conducted by Airports Council Internatioall, the organization of 1700 airports, from 2005 to 2010. In 2010, Incheon airport achieved the Best Airport Worldwide that has been received for six consecutive years, as well as the Best Arport in Asia-Pacific and the Best Airport 2500 ~ 40000 million. Thus, Incheon airport swept away all three divisions with honors. In addition, Incheon airport has dominated the most recent assessment in 2010 by scoring 4.96 out of 5 in near perfect score. It is shown that Incheon airport receives almost perfect score on every assessment in order to keep its first place against other competitors. Furthermore, Incheon airport has won the Best Airport Worldwide Award conducted by Global Travelers. It is clearly proven above that Incheon International Airport is currently rated as one of the most successful national projects as well as represents the first-class brand of the Republic of Korea.

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There are the challenge of Inchen International Airport, differentiated marketing strategies, and a high quality of service that are significant factors for Incheon Airport to become the best airport in the world since the opening. In order to maintain the Company’s position in the world, Incheon airport is likely to need creative marketing strategies that could be ahead of other competitors. Therefore, Incheon airport should be able to move quickly and efficiently about the possibility of new businesses such as the introduction of high-speed train, the expanded activation around the city, the development of niche markets linking to the Chinese mainland. If the development of high-speed train becomes in reality, it would be a great attraction for travelers and transit passengers being able to tour the city of Seoul within a short period of time. Incheon airport will become one of the tourist attractions and it is expected that the development of a high-speed train will eventually enhance the brand value of Incheon airport with advanced technology. In cooperation with the City of Incheon, Incheon might be able to develop region near the airport by building a large shopping mall and tourist facilities, it has an effect of attracting more travelers and transit passengers.

Finally, if Incheon airport put more efforts on improving the service quality of cargo system, price competitiveness, the ease of handling various services and the development of Korean aviation forwaders, Incheon airport is able to build up a profitable relationship with China in cargo utilization and this relationship might be helpful for Incheon airport to increase profits.

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XV. Reflection on final competitionAlthough it was regrettable that few of our team members were not able to participate in the final presentation due to studying abroad, we were able to manage to prepare the final presentation as one team through online meetings. We were able to leverage our team’s exceptional teamwork skill.

We are honored to receive the excellence award. Throughout the competition, we were able to learn the proud history, ardor for challenge and differentitated strategies of Incheon International Airport. Furthermore, the competition was very significative for us since we were able to strengthen our team spirit and discover our endless possibilities.

Please feel free to contact us to provide any type of advice.

Thank you.

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XVI. Reflection on Competition Participating in this competition has given us the opportunity to learn about different Korean companies and brands that have become number one in its field. Given that all our team members have been studying abroad since early years, it was exceptionally more meaningful for us to learn and study about our homeland’s companies.

By studying and analyzing our team’s choice of company, Incheon International Airport, we learned how it overcame all the hardships it faced. Keys to Incheon International Airport’s successes were not being afraid of challenges, setting specific, measurable, attainable, realistic, and timely goals, and having strategic plans. That is how Incheon International Airport could differentiate itself from the rest of airports in the world. Furthermore, we learned that its hospitality, kindness, and sincere customer service – putting its customers before anything else – was what really impressed its customers.

Just as small kindness and customer service became the foundation to Incheon International Airport’s success, we believe that marketers need to be able to understand its customers’ needs and response to them with creativity.

This competition gave us time to realize the importance of team work, leadership, and group dynamic, once again. Just as Incheon International Airport has become the number one in the world, we wish to become the world’s known marketers.

Thank you.

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XVII. References

Kim YongBum,“Airport Airline Marketing Strategy: For the hub of Incheon Airport”, Korea University of Aviation, 1999

“Theorical Bacground of Airport, The Principle of determining the usage fee of Airport, The Convenient Facilities of Incheon Airport, The Competitiveness Comparison between Incheon Internatioanl Airport and Airports in Asia, The Development Strategy of Incheon International Airport, The Future Development Direction of Incheon International Airport”, 2009

“Incheon International Airport in Northeast Aviation Market”, 2004

“The SWOT Analysis of Incheon Airport Marketing”, 2006

“Incheon International Airport Service Operation and Management”, 2007

“History of Incheon Airport and The In Depth Operation Strategy Analysis based on successful strategies used by Incheon Airport as the hub of Northeast and International Airports”, 2009

“The Success Factors of Incheon International Airport, Management System and Service Analysis”, 2011

<Web Sites>Ministry of Land, Transportation, Maritime Affairs website, http://www.mltm.go.kr

Incheon International Airport website, http://www.airport.kr

Incheon International Airport Corporations website, http://www.airport.kr/iiac

Incheon International Airport Duty Free website, http://www.iiacairstar.kr/kor/pages/main.jsp

<Table References>

Table 1 Incheon International Airport Duty Free website, http://www.iiacairstar.kr/kor/pages/main.jsp

Table 2 Ministry of Land, Transportation, Maritime Affairs website, http://www.mltm.go.kr

Table 3 & 4 Incheon International Airport website, http://www.airport.kr/iiacms/pageWork.iia?_scode=C0507060300

Table 5 & 6 Incheon International Airport website, http://www.airport.kr/iiacms/pageWork.iia?_scode=C0507060400