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1.0 Introduction
AirAsia was initially launched on 18 November 1996 as a Iull-service regional airline
oIIering slightly cheaper Iares than its main competitor, Malaysia Airlines. BeIore 2001, AirAsia
Iail to either suIIiciently stimulate the market or attract enough passengers Irom Malaysia
Airlines to establish its own niche market. The turnaround point oI AisAsia is in 2001, while it
was up to sale and bought by Tony Fernandes. Tony Fernandes then enrolled some oI the
lending low cost airline experts to restructure AirAsia`s business model. He invited Connor
McCarthy, the Iormer director oI group operation oI Ryanair, to join the executive team. In late
2001, AirAsia was relaunched in Malaysia as a trendy, no-Irills operation with three B737
aircraIt as a low-Iare, low-cost domestic airline.
In 2003, AirAsia opened a second hub at Senai Airport in Johor Bahru and launched its
Iirst international Ilight to Bangkok. AirAsia main base is the Low Cost Carrier Terminal
(LCCT) at Kuala Lumpur International Airport (KLIA). Through their philosophy oI Now
Everyone Can Fly`, AirAsia has sparked a revolution in air travel with more and more people
around the region choosing AirAsia as their preIerred choice oI transport. Consequence, AirAsia
has successIully positioned itselI in customers` mind. Its net proIit Ior the second quarter ending
31 December 2004 was reported RM 44.4 million, a 323 increase over the previous quarter
(AirAsia, 2005).
Vision oI AirAsia is to be the largest low cost airline in Asia and serving the 3 billion
people who are currently underserved with poor connectivity and high Iares. Strategy oI AirAsia
includes saIety, low Iare, service and simplicity.
Mission oI AirAsia is creating a globally recognized ASEAN brand, maintain the highest
quality product, embracing technology to reduce cost and enhance service levels.
AirAsia has been a successIul low cost carrier (LCC) operating in Asia region Ior these
past Iew years and inIormation technology (IT) is one oI the major enablers oI AirAsia`s low
cost business model. Thus, in this assignment, I am going to analyze type oI IT implemented by
AirAsia in their company. Besides that, competitive Iorce, value chain models and business
strategy also one oI the topic include in this assignment.

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.0 Competitive forces and competitive strategies of AirAsia
Kenneth C.Laudon and Jane P.Laudon, 2010 claim that, Iirm that do better` than others are
said to have a competitive advantage over others. They either have access to special resources
that other does not, or they are able to use commonly available resources more eIIiciently. In any
event, they do better in terms oI revenue growth, proIitability, or productivity growth, all in the
long run translate into higher stock market valuations than their competitors. Competition is a
positive and healthy characteristic in business.
AirAsia can survive and succeed in the long run is it successIully developed strategies to
conIront Iive competitive Iorces. Michael Porter`s competitive Iorces model is inIormation
systems contribute to strategic advantages. In Porter`s model, the strategic position oI the Iirm
and its strategies are determined not only by competition with its traditional direct competitors
but also by Iour other Iorces in the AirAsia`s environment that include new market entrants,
substitute products, customers, and suppliers.
To succeed in the increasing competitive marketplace, Air Asia needed necessary to be
reached out globally by looking into Iive Iactors oI competitive strategies, namely cost
leadership, innovation, growth, alliance, and diIIerentiation strategy.

.1 Rivalry among existing competitors
The rivalry among existing competitors in the Five Force model is high when competition is
Iierce in a market and low when competition is more complacent. Visible dimensions on which
rivalry is based include quality, price and innovation. One oI the existing competitors oI AirAsia
is Malaysia Airline (MAS).
Product diIIerentiate is a competitive strategy that adopted by AirAsia to conIront with the
existing competitors. It uses inIormation system to enable new product and services, or greatly
change the customer convenience. J`OT (September 2008) claimed that, E-ticketing is one oI the
product diIIerentiations Ior AirAsia.
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In May 2002, AirAsia introduce a website that enabled online payment by users. In
comparison, AirAsia`s major competitor, Malaysia Airlines to-date has not done so, providing
only arrival and departure schedules on-line. E-ticketing or online booking system was the issue
oI a booking code at the conclusion online transition that replaced the traditional airline ticket. E-
ticketing seemed to be a win` solution Ior AirAsia Company. It oIIered the company a chance to
make considerable saving in both trade terms as well as in invoicing and internal accountancy
procedures. It was very attractive to customers, who may beneIit Irom a service oIIer both
technological advanced and provide a high intrinsic value.

. Bargaining power of supplier
The market power oI suppliers can have a signiIicant impact on Iirm proIits, especially
when the Iirm cannot raise prices as Iast as supplier. Increasing prices and reducing the quality oI
its products are potential means used by suppliers to exert power over Iirms competing within an
industry. The more diIIerent supplier a Iirm has the greater control it can exercise over suppliers
in terms oI price, quality, and delivery schedule. (Kenneth C.Laudon and Jane P.Laudon , 2010).
The airline supply business is mainly dominated by Airbus and Boeing. For this reason, there is
not a lot oI cutthroat competition among suppliers. Also, the likelihood oI a supplier integrating
vertically is not very likely. In other words, we probably would not see suppliers starting to oIIer
Ilight service on top oI building airlines. (Investopedia.com, 2009)
Innovation strategy used by AirAsia to create new product or services that include IT
components. It may involve radical changes to the business process with IT that dramatically cut
costs, improve quality and eIIiciency. AirAsia successIully adopted this strategy with Iully
computerized system Ior its customers to book the air tickets through its website. The E-
commerce inIrastructure developed by the company allowed collection and central storage oI
sales and marketing data. Air Asia used these data to enable collection to drive decision support
tool Ior planning and marketing. Thus, the innovation oI the technology in the company enables
them to have a strong ties and loyalty with the supplier.

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.3 Bargaining power of buyer
A proIitable company depends in large measure on its ability to attract and retain
customers, and charge high price. The power oI customers grows iI they can easily switch to
another company because the widely use oI internet. However, the bargaining power oI buyers in
the airline industry is quite low. AirAsia has a competitive method which is changing the price
Irom time to time. For instance, the price Ior weekend is relatively expensive than weekday.
Every major airline has a loyalty program similar to that oI low cost airline.
Competitive strategy that used by AirAsia is Low Cost Leadership. Air Asia generates
signiIicant cost savings by sending inIormation via internet, rather than by Iax or post. It could
use its web site to publish in a cost eIIective way, which public domain inIormation such as
product brochures, contact details, vacant seats, and other important inIormation. The company
saves on the cost oI running bricks and mortar` outlets and could reach national markets without
having to develop a physical distribution network. Most important was the company could save
cost on customer service by enabling customers to serve themselves. (J`OT, September 2008)
.4 Threat of substitute products or services
The threat oI substitute product or services is high when there are many alternatives to a
product or services, and low when there are Iew alternatives Irom which to choose. (Steven Hang
and Maeve Cummings 2008) The less substitute products and services, higher the powers Ior
AirAsia company to control pricing and higher their proIit margins. Some oI the substitute
service that customer can choose include railway, car, bus or other airline company that depends
on the convenient, time and money oI the transportation consume.
To deal with the threat oI substitute product or services, AirAsia become the low cost
producer among the airline industry. With the average Iare being 40-60 lower than its Iull-
service competitor, AirAsia has been able to achieve strong market stimulation in the domestic
Malaysian air market (Thomas 2003). For instance, the Iare Ior the trip Irom Kuala Lumpur to
Penang on AirAsia starts Irom RM39 comparing to trip by bus charge RM40 and RM80 by car.
The eIIect oI attractive low Iare is more travelers switching Irom bus to air and loyalty to
AirAsia Company.
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.5 Threat of new entrants
In a Iree economy with mobile labor and Iinancial resources, new companies are always
entering the marketplace. However, airline industry is signiIicant block Ior entering because oI
the high capital cost, requires special expertise, resources and knowledge that is hard to obtain.
Besides that, government also create barrier Ior new entrants. Government restricts competition
through the granting oI monopoly and regulation. It is rarely to have new entrants into airline
industry. II there is a new entrants into airline industry, AirAsia will reduce their ticket`s price
and implement product diIIerentiation in order to retain their customer. As a result, there is a
price war in the market to be the low cost producer whereas; it also could be an advantage in
innovation oI product or services.
In a diIIerentiation strategy, AirAsia seeks to be unique in its company along some
dimensions that are widely valued by customer. In August 2003, AirAsia became the Iirst airline
in the world to introduce a new system Ior booking ticket by using SMS. They use SMS to book
their seat, check Ilight schedules, and obtain latest updates on AirAsia promotion by using
mobile phone. It is convenience to the entire guest and become the Iirst choice Ior the customer.
ThereIore, it is diIIicult Ior new entrants enter into airline industry Ior competing with AirAsia.
3.0 Value Chain Model
Although the Porter model is very helpIul Ior identiIying competitive Iorces and
suggesting generic strategies, it is not very speciIic about what exactly to do, and it does not
provide a methodology to Iollow Ior achieving competitive advantage. However, the value chain
model highlights speciIic activities in the business where competitive strategies can best be
applied (Porter, 1985) and where inIormation system are most likely to have a strategic impact.
This model identiIies speciIic, critical leverage points where a Iirm can use inIormation
technology most eIIectively to enhance its competitive position.
The value chain model views the Iirm as a series or chain oI basic activities that add a
margin oI value to a Iirm`s product or services. These activities can be categorized as either a
primary activities or support activities. Table 1 and table 2 is the analysis value chain model oI
AirAsia Company (Sandy HoIman Aruan, 10 April 2005).
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Activities Description
I
n
b
o
u
n
d

l
o
g
i
s
t
i
c

Landing slots
acquisition
Landing slots were scarce resources and also possessed critical
value in airlines industry (OECD, 1997).
AirAsia needs to ensure that it had suIIicient landing slots to
support its Ilight schedules.
AircraIt leasing or
purchasing
SEA market`s promising growth (Oum et al, 2000) would
convince AirAsia to keep extending its Ileet to capture more
proIits.
AircraIt parts and
Iuels purchasing
It is important to monitor the budget Ior this activity, as it aIIects
around 30 to overall cost (Corporate Iinancial report).
O
p
e
r
a
t
i
o
n

Transporting
passenger
These are the main resources to Air Asia Ior creating proIits.
AircraIt ground
maintenance
AirAsia various method in driving down the cost Ior this activity
showed a great eIIect in suppressing the cost low.
Flight scheduling
Tight competition with other competitors in acquiring limited
landing slots pushed AirAsia to plan its Ilight schedule careIully.
A well planned schedule and keeping it on time, enable AirAsia to
add more value on its brand as on time delivery air carrier.
O
u
t
b
o
u
n
d

L
o
g
i
s
t
i
c

AirAsia only provides transportation services; no signiIicant outbound logistic process
can be identiIied.
S
e
r
v
i
c
e

Call center
system
To tackle problems with customers enquiries.
M
a
r
k
e
t
i
n
g

a
n
d

S
a
l
e
s

Advertising and
promotion
Important activities to popularize the brand oI AirAsia. Intensive
advertising and promotion has brought more than Iive million
customers to use AirAsia services (Corporate website, 2005).
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Computer
Reservation
System
This is a strategic enabler Ioe AirAsia to compete with other
competitor. Online sales through this system captured more than
50oI AirAsia revenue (Corporate website, 2005).
By optimizing the system, AirAsia can develop more analytical
tools in delivering precise and right decisions on time, such as
Customer Relationship Management (CRM) or E-business
(Taneja, 2002)

Table 1 Primary activities in AirAsia

Support Activities Description
Firm inIrastructure Formulate strategic decision Ior AirAsia and encourage its
employee in supporting the strategy.
HR Management Provide recruitment and training to employees to keep them
highly skilled and eIIicient.
Technology Develop methods in operating and maintaining aircraIt that
suppress the cost lower.
Procurement Search the best quality product among suppliers without driving
the cost high.

Table Support activities in AirAsia
To summarize, AirAsia has developed a considerable value chain in its approach to the
strategy. The value Ior these activities really added a signiIicant amount in its pursuit to provide
low price air transportation services. However, there is no evidence whether AirAsia has already
implemented Iurther management inIormation more analytical capabilities, such as Customer
Relationship Management or Business Intelligence, in its computerized system. By
implementing such technologies, AirAsia be able to bring better decision in proper time at proper
place. (Sheehan, 2003)
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4.0 Types of Information technologies use in Airasia
Undeniable, AirAsia was among the most active in the adoption and application oI
InIormation Technology (IT). InIormation Technology usage was expanding very Iast, especially
with incorporation oI computer technology in reservations and ticketing system since the mid
1970`s (Timmer, P., 1999).
AirAsia adopt internet reservation system to reduce its operating costs. AIter AirAsia
launching the internet reservation system, revenue increased Irom 167.8 million MYR in
Iinancial year 2000/2001 to 222.3 million MYR in Iinancial year 2001/2002. Revenue Ior the
period Irom July to December 2002 was 114 million MYR.
AirAsia takes the lead among companies in Malaysia in the eIIective use oI inIormation
and communications technology (ICT) to advance business operations and oIIer superior
services. AirAsia`s extensive and successIul use oI modern ICT to support operations across all
10 ASEAN countries and China earned Ior the airline recognition Irom The Association oI
Computer and Multimedia Industry, Malaysia (PIKOM), the country`s largest and Ioremost ICT
industry association. On 14 November 2008, Airasia received a PIKOM ICT leadership Awards.
Besides that, Airasia also received CIO Top 100 Honoree Ior excellence in strategic IT
deployment awards in Year 2003.
There are many types oI IT that implemented by AirAsia include Akamai technology,
Computer Reservation System (CRS), Enterprise Resource Planning System (ERP), Advance
Planning & Scheduling (APS), E-commerce and vista gadget.






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4.1 Akamai technologies
On Apr 30, 2009 AirAsia and Akamai Technologies, Inc. announced a long term
partnership that is expected to Iurther strengthen AirAsia's market share in the highly
competitive aviation industry. Akamai is the global leader in powering rich media, dynamic
transactions and enterprise applications online.
Akamai's Dynamic Site Acceleration solutions deliver website perIormance up to Iive
times Iaster than the origin web inIrastructure and handles the speciIic requirements oI
dynamically generated content without a costly hardware build out. By leveraging Akamai's
globally distributed delivery network oI 48,000 secure servers equipped with specialized
soItware and deployed in 70 countries. AirAsia will provide a premium online experience to
their customers with improved site speed and perIormance. It is very crucial to support their ever
expanding Ileet and route network. (Akamai Technologies, Inc., Apr 30, 2009)
4. Enterprise Resource Planning System (ERP)
In order to increase the eIIiciency oI operational perIormance and manage its supply
chain, AirAsia had implemented the ERP system. It is a system Iocusing on capturing
transactions in daily operations and helping AirAsia to save its operational costs as well as to
increase the eIIiciency and integrity in its operation (MicrosoIt Press Pass, 2005). However,
conventional ERP system implemented by AirAsia does not provide Ilexibility and intelligence
required to analyze data Ior better supply chain management.
4.3 Advance Planning & Scheduling (APS)
APS system optimizes AirAsia`s supply chain management. It works as the brain oI
supply chain activities (Ahmed, 2004) by gearing activities in relation with suppliers and
customers requirements. APS system clusters and classiIies customer orders, Iorecasts Iuture
IulIillment requirements, checks resources availability and sets order priorities. The inventory
planning, demand Iorecasting, and maintenance management capabilities Iunctions enable
airlines and aircraIt manuIacturers and other suppliers to have collaboration strategy in managing
inventory, maintenance schedule, and design collaboration.

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4.4 Computer Reservation System (CRS)
AirAsia had been investing much massive automation into its business. In the past oI
couple year, AirAsia developed CRS (Open Skies soItware by Navitaire) to automate ticket
handling. It has helped the company to growth at a dramatic pace. "Navitaire's Open Skies
technology has truly enabled AirAsia's growth Irom 2 million passengers to 7.7 million
passengers in less than two years. Open Skies scaled easily to accommodate our growth." (Tony
Fernandes, AirAsia CEO)
Open Skies is an integrated web-based reservation and inventory system. It includes
internet, call center, airport departure control and more. It is a direct sales engine that eIIectively
eliminates the middleman (such as travel agents) and the sales commissions that need to be paid
to them. Centralized customer data is also maintained by Open Skies and this helps AirAsia to
track booking and schedule Ilight activities with real time, on demand reporting Ieature. The vast
booking inIormation that is provided online to the guest acts as a Iorce that brings more
customers to use the web site thus reducing the customer support costs. An important Ieature is
that Open Skies seamlessly integrates with the already implemented Yield Management System
YMS so that the systems can be used in unison Ior pricing and revenue maximization and driving
down the costs oI operation at the same time. This CRS enabled AirAsia to introduce the Iirst
ticketless travel option and also provides Ieatures such as advanced boarding passes. In addition
to online booking that enabled the growth oI AirAsia as these Ieatures attracted customers that
did not have the time Ior purchasing tickets Irom counters and coming early Ior securing a seat
on the aircraIt. (Charles Kho, Sandy HoIman Aruan, Christian Tijitrahardja, and Ramaratnam
Narayanaswamy, 2005)
AirAsia have proposed to implement a Wireless Delivery System (WDS) to expand its
reach via mobile phones. With this method, potential customers will be able to book tickets via
their mobile phones. This is a strategic move Ior growth as the Asia PaciIic region has a larger
population oI mobile phone users rather than internet users.



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4.5 E-commerce
In May 2002, 5 months aIter it changed its operating model, AirAsia implemented an
internet reservation system, which allowed on-line payment. AirAsia made a bold move to
introduce a website that enabled payment by users. There are only a small number oI Malaysian
businesses having electronic commerce websites and even Iewer having web sites which enabled
on-line payment. In comparison, AirAsia`s major competitor, Malaysia Airlines to-date has not
done so, providing only arrival and departure schedules on-line.
As we know, E-Commerce had a many types such as Business-to-Business (B2B),
Business-to-Customer (B2C), and other types. In e-Commerce, AirAsia belong in B2C because
that company tries to directly sell they service Ior customer. AirAsia has progressively launched
value added services into the Ilight options. In 2007, AirAsia had introduced the web check in.
This made AirAsia the Iirst airline in Malaysia to oIIer the ability to check in online and print out
boarding passes. This service enables the passengers to get a low price and choose seats at ease.
(Chan, September 23, 2008) Devasahayam, 2003 state that advantage oI AirAsia`s use oI
electronic commerce is that customers Irom other parts oI the world are able to use the airline
services as noted by Tony Fernandes, the CEO about passengers Irom the US and UK, who did
their bookings on the Internet.
AIter launching web check in and kiosk check in, Chan claim that AirAsia will later
introduce PDA check in. With an e-commerce web site, anything that the customer does Ior
themselves, like searching Ior airline Ilights, entering his billing inIormation and signing up Ior
an e-mail conIirmation. In August 2003, AirAsia went a step Iurther with a new e-commerce
initiative, when it introduced reservation and payment oI tickets via Short Messaging System
(SMS) through mobile phone services (M-commerce). The airline claimed that the initiative was
the Iirst oI its kind in the world.
Accordingly, we can conclude that AirAsia had achieved a creditable turnaround to
become a proIit-making airline Irom a loss-making one. However, the airline recently reported
that since launching the internet reservation system, it had obtained more than 50 million MYR
in revenue through the services. AirAsia also reported that 40 oI sales are Irom the internet,
with the remainder coming Irom the other channels.
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4.6 Vista Gadget
Vista Gadget is a gadget or application that sits on your computer desktop delivering live
updates` oI our Iare promotions as and when they are introduced on airasia.com. In 1 February
2007, AirAsia has launched its new AirAsia Vista Gadget that will allow customers to instantly
manage and access live travel inIormation and web based services directly Irom their Windows
Vista desktop computers. The AirAsia sidebar gadget was developed by The Media Shoppe
Berhad (TMS), a MicrosoIt certiIied independent solutions provider, Ior the Windows Vista
platIorm. The gadget will allow AirAsia customers to access live travel inIormation, such as
itineraries, destinations and pricing directly Irom the Windows Vista interIace. (Asia Travel
Tips.com, 1 February 2007)
The Windows Vista gadget is only more than a hundred kilobytes in size, TMS CEO
Chris Chan said. He added that the gadget was developed in less than a week, and allows
AirAsia to gather customer preIerences that are useIul in targeted marketing campaign. TMS also
developed the carrier's airline management system that includes a customer online booking
portal. Aaron Tan added, the Vista gadget will allow AirAsia to create greater brand awareness
among customers, while supplementing its existing marketing channels through its web site,
print media and e-mail lists.
Kathleen Tan - AirAsia Executive Vice President, (1 February 2007) mentioned that this
gadget will also help them boost their e-commerce business. The Vista powered AirAsia gadget
will enable their customers to keep up to date with latest news and travel promotions, and
continue to drive traIIic back to AirAsia website. Windows Vista making it easier than ever Ior
peoples to Iind and connect to their inIormation. Windows Vista will help generate commercial
and economic opportunities in Malaysia by creating jobs, enabling organizational eIIiciencies
and helping to solve business challenges Ior their customers, partners and the IT industry as a
whole. AirAsia`s Tan said they are conIident that this strategic collaboration with Windows
Vista technology will stimulate even more people to Ily.



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5.0 Competitive advantages or disadvantages of E-commerce strategy
On the internet, customers can easily collect inIormation without travelling to AirAsia
counter. There were some Iactors that Iorm the competitive advantage and disadvantage Ior
AirAsia implemented e-commerce in providing low cost air transportation services.
The usage oI e-commerce is to increase the competitiveness oI business, promoted online
booking, and helped people dispel oI the aIraid to shop online because oI the network security.
Competitive in the business allow AirAsia to improve technological innovation in the
inIormation technology industry besides business objective. Advance soItware such as
encryption used by AirAsia ensures the security oI payment and detail oI the customer. By using
e-commerce, company can access to customer to collect inIormation and introduce service to
meet customer`s needs.
As an airline competing in the low cost market, price becomes the most inIluencing
Iactor in AirAsia`s strategy. E-commerce will reduce the administrative cost by selling the Ilight
ticket on internet. Customer can make price and quality comparison between AirAsia and its
competitor. To manage e-commerce eIIectively and eIIiciently, AirAsia have to employ
promotion strategies diIIerent Irom those used by its competitors. AirAsia used a simply way Ior
customer to access into the website Ior inIormation searching. AirAsia oIIer promotions to
customer Ior locked them to meet the competitive advantage. It can also improve their
relationship with customer.
Disadvantage oI e-commerce is the eIIective oI employee. With the support oI
technology, employee will be less motivated in their work running and eventually will aIIect the
company`s perIormance. Employee is bored to work because they are more depending on the
technology working. Thus, their creation in the operation process becomes low. Besides that,
implementing e-commerce will lead to some people loss their job because they do not understand
how to Iunction the computer.
Other disadvantage oI e-commerce is server. The company needs to invest higher cost Ior
the server and hardware. II the server Ialls into trouble, it will inIluence the business. Some oI
the time, AirAsia`s web site is showing 'timed out. Thus, many customers even other country`s
customer diIIicult to connect the web page.
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6.0 WebSite
6.1 Values where Web site has provided for customers and business
AirAsia has created an environment that speed up the use oI ICT across all segments oI
the community. It provides extensively value Ior all customers and business aIter it introduces
the use oI web site or e-commerce. Usage oI web site encourages the company to improve the
innovation and proIit oI the business in order to become a most preIerence web site among the e-
business industry.
Usage oI web site is very convenience Ior businessman or those people who are busy in
their working. They do not need to drive and queue up at the counter to book the Ilight ticket. So,
the customer does not cost too much oI time and money Ior buying the Ilight ticket. Convenient
oI the web site allow people look Ior the promotion anytime and everywhere. It can increase the
potential customer to make transaction iI it is cheaper than their competitors. AirAsia provide a
premium online experience to their customers with enhanced site speed and perIormance.
Existing customers can also keep in touch with the latest oIIers or promotion through the
web site. It can reduce the man power Ior promoting in traditional method. Value oI the business
with using the web site is innovation and eIIectively in organization. Web site helps the business
to progress the technology and the data in marketing. It also introduced the ticketless ticketing
system with the means oI reduce the cost oI resources or paper recycle.
AirAsia Group CEO Dato` Sri Tony Fernandes said that ICT has enabled them to oIIer
cutting edge products and to continue to oIIer quality service to their constantly expanding
passenger base. AirAsia`s use oI ICT is second to none in the airline industry. All areas oI their
business are supported by ICT, which allows them to be Iast and eIIicient in servicing the guests,
who use the technological tools to, among others, book seats, check Ilight schedules, pre-order
meals and buy holiday packages. ICT has been instrumental in the success oI AirAsia.
'Over 80 percent oI Airasia`s Ilight bookings are done via the internet. We also utilize
mobile technology to disseminate inIormation to our guests via handheld devices. Guests could
look Iorward to Iurther convenience through the services oI our selI check-in kiosks and web
check-in Iacility, he added.
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6. Impact on AirAsia`s business if the Web site was not available
LiIe in the 21st century is Iull oI technological advancement and in this technological age
it is very diIIicult Ior a business to survive without a web site. Businesses without a web site in
today's date tend to lose large number oI its potential customers. Each and every individual
preIer the internet to look out Ior their desired products or services. The number oI search
engines is increasing day by day and iI the business is not on these engines it tends to lose their
customers to the competitors. As we can see that the case study shows the internet reservations
grew Irom 0 in Iinancial year 2000/2001 to 25 in Iinancial year 2001/2002.
There is a huge impact on AirAsia`s business iI the web site was not available. It will
increase the number oI customer loyalty switching cost to another company. II there is no web
site, customer will totally move to their competitor company due to the web site conveniently.
Customer needs a web site Ior checking the seat available, price, promotion and others
inIormation. Without a web site, customer will take time and money Ior receive the inIormation
at the counter and it is very inconvenient Ior them.
Second, the business is a low cost producer, without web site, the company need to pay
higher cost on the operation. They need to employ more man powers like traditional marketing in
controlling data, promoting and selling the service. Besides that, it also wastes the paper to send
the inIormation to the customer and less eIIiciency in time consuming. It also reduces the
revenue oI AirAsia because oI the higher cost that need to pay.
Third, there is no product diIIerentiation compare to the competitors. Competitors oI
AirAsia will take all their business because the advance in technology. While oI the web site not
available, customer cannot receive up to date inIormation, hence all the possible transaction will
be replaced by the competitors. Besides that, it can also lead to increase new entrants into airline
industry with advance technology than AirAsia. So, it reduces the proIit and customer loyalty.
Nowadays, web site is the essential Ior most oI the people to get inIormation. When the
web site was not available, it is direct aIIected the business oI AirAsia in selling the Iight ticket.
The business oI AirAsia is become less concentrated by all the people and it will be Iorget aIter a
time period. AirAsia without a web site, it is like a salesman without his business card.

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.0 Conclusion
AirAsia has exposed us an insightIul example in showing how a keen and critical
strategic movement may drive a company that was almost bankrupt back into shape. While
AirAsia management was providing a suitable business environment, its employees
demonstrated a highly productive on using uniIorm aircraIt also put into account.
By implement the mission and vision oI the company, AirAsia is entered a market with
great success. It introduces ticketless ticket system, automation with IT, reduced cost and
improved the quality oI service. With those entire Iactors combined together, AirAsia has shown
how synergies between management, employee and its environment can develop a competitive
advantage that brought AirAsia to be the contender as market leader in the competition.
With the above type oI IT implementations, it is clear that the business strategy and the
IT strategy are aligned to Ior AirAsia to operate on a low cost model. Implementation oI IT in
AirAsia Company brings a lot oI advantages towards the technology industry and airline industry.
AirAsia innovate a lot oI IT that reduce the cost and higher the proIit. Besides that, it also brings
beneIit to people that pay Ior less money to receive the airline services and also increase the
standard oI living Ior all the people with the slogan that 'everyone can Ily.
In the invisible society, web site has been take place in the human transaction place. It
changes the characteristic oI people with using the advantage oI e-commerce to purchase the
Ilight ticket. Without the web site, there would be a huge impact on the business and the
convenient oI the customer Ior online transaction. It is because people are too depending on the
use oI technology and preIer to acquire the promotion by the company. AirAsia Company wills
loss a massive proIit iI the web site is not available. Web site that creates by the AirAsia
Company brings a lot oI value and competitive advantage to business and also customer.
Consequently, AirAsia is become the most preIerence and Iirst choice oI the airline
industry among Asian country. SuccessIul oI AirAsia Company is a pride occasion Ior the
country. It will also continue to innovated new technology in order to improve the economic and
technology progress.

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.0 References:
1) James A. O`Brien and George M. Marakas (2007), Enterprise InIormation Systems, 13
th

Ed, The McGraw-Hill Companies, Inc, NY. Chapter 2.
2) Steven Hang and Maeve Cummings (2008), Management InIormation System, 7
th
Ed,
The McGraw-Hill Companies, Inc, NY. Chapter 1.
3) Kenneth C.Laudon and Jane P.Laudon (2010), Management InIormation System, 11
th
Ed,
Pearson Education, Inc., Upper Saddle River, New Jersey. Chapter 3.
4) Sandy HoIman Aruan (10 April, 2005), Might oI AirAsia: Internal Analysis perspective,
University oI Melbourne.
5) AirAsia.com (12 December 2008), ICT Award Testimony to AirAsia`s Technology
Excellence, http://www.airasia.com.my/site/bn/en/pressRelease.jsp?id3883d155-
7I000010-1c2ec050-a1d3ce28
6) J`OT (19 September 2008), Organizational Cases,
http://organizationalcases.blogspot.com/2008/09/case-air-asia.html
7) AirAsia In The Press (13 May 2004), New kid AirAsia in CIO Top 100 honours list, The
Star, In Tech http://www.airasia.com/site/my/en/pressRelease.jsp?id10d720I7-
c0a8c85d-eb784700-875848d4&typeread
8) Navitaire (2005), Open Skies by Navitaire, Navitaire.com
http://www.navitaire.com/resanddist/openskies.asp
9) Asia Travel Tips.com, (1 February 2007), Air Asia launches AirAsia Vista Gadget,
http://www.asiatraveltips.com/news07/12-WindowsVista.shtml
10)Charles Kho, Sandy HoIman Aruan, Christian Tijitrahardja, and Ramaratnam
Narayanaswamy (2005), Air Asia- Strategic IT, University oI Melbourne,
http://sandygarink.tripod.com/papers/AASITA.pdI
11)Chan (September 23, 2008), E-commerce Review oI AirAsia.com, http://digital-
hack.blogspot.com/2008/09/e-commerce-review-oI-airasiacom.html
12)Aaron Tan (January 31, 2007), AirAsia rolls out Vista 'gadget', ZDNet Asia,
http://www.zdnetasia.com/news/soItware/0,39044164,61985996,00.htm
13)The Connors Group, Inc. (Apr 30, 2009) AirAsia Signs 10-Year Deal with Akamai to
Boost Online PerIormance and Reliability, Source: Akamai Technologies, Inc,
http://www.tradingmarkets.com/.site/news/Stock20News/2299532/
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.0 Appendix
.1 Article
12 uecember 2008
ICT Award Testimony to AirAsia`s Technology Excellence
KUALA LUMPUR, 12 DECEMBER 2008 - AirAsia takes the lead among companies in
Malaysia in the eIIective use oI inIormation and communications technology (ICT) to
advance business operations and oIIer superior services.
AirAsia`s extensive and successIul use oI modern ICT to support operations across all ten
ASEAN countries and China earned Ior the airline recognition Irom The Association oI
Computer and Multimedia Industry, Malaysia (PIKOM), the country`s largest and Ioremost
ICT industry association.
The association conIerred on AirAsia the PIKOM ICT Organization Excellence Award.
AirAsia Group CEO Dato` Sri Tony Fernandes received the award Irom Datuk Dr.
Maximus Johnity Ongkili, Minister oI Science, Technology and Innovation, during the
association`s recent annual leadership awards ceremony in Kuala Lumpur.
The association conIerred on AirAsia the PIKOM ICT Organization Excellence Award.
AirAsia Group CEO Dato` Sri Tony Fernandes received the award Irom Datuk Dr.
Maximus Johnity Ongkili, Minister oI Science, Technology and Innovation, during the
association`s recent annual leadership awards ceremony in Kuala Lumpur.
'Our investment in technology to grow the business across all Ironts is bearing Iruit. ICT
has enabled us to oIIer cutting edge products and to continue to oIIer quality service to our
constantly expanding passenger base. AirAsia`s use oI ICT is second to none in the airline
industry. All areas oI our business are supported by ICT, which allows us to be Iast and
eIIicient in servicing our guests, who use our technological tools to, among others, check
Ilight schedules, book seats, pre-order meals and buy holiday packages. ICT has been
instrumental in the success oI AirAsia
'Over 80 percent oI AirAsia`s Ilight bookings are done via the internet. We also utilize
mobile technology to disseminate inIormation to our guests via handheld devices. Guests
could look Iorward to Iurther convenience through the services oI our selI check-in kiosks
and web check-in Iacility, he added.
PIKOM noted that AirAsia has 'created an environment that accelerates the all-pervasive
use oI ICT across all segments oI the community.
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PIKOM also said that 'AirAsia has, almost literally overnight in corporate terms,
demonstrated the strategic value oI ICT to increase the competitiveness oI businesses,
promoted online booking, and helped dispel the myth that people are aIraid to shop online
because oI network security Iears.
PIKOM`s annual awards recognize outstanding ICT industry leaders and users. PIKOM
counts among its members over 1,000 companies engaged in the whole range oI ICT
products and services. PIKOM`s member companies account Ior 80 oI Malaysia`s ICT
trade.

. Plagiarism
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