P. 1
Air Asia

Air Asia

|Views: 11,420|Likes:
Published by Faiaze Ikramah

More info:

Published by: Faiaze Ikramah on Jun 10, 2011
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as DOC, PDF, TXT or read online from Scribd
See more
See less

12/17/2015

pdf

text

original

Air Asia Thai Air Asia Limited Section 1: Company Background In the past, domestic air routes were

limited to only few players; such as Thai Airways, Bangkok Airways, Air Andaman, and Phuket Air. Prime Minister Thaksin Shinawat announced the opening of Thai air routes in 2002 and this has induced a lot of airlines to enter the market, especially low cost airlines, which have already been widely and well accepted in scores of countries. In Southeast Asia, at that time, Air Asia Malaysia was considered as one of the most well known budget airlines and operating in many Asian countries. After long-going negotiating process with local companies, on November 12, 2003, Air Asia Malaysia agreed to enter the partnership with Shin Corporation Public Ltd., in forming Thai Air Asia Limited. Using the catchy and effective slogan of "Now everyone can fly", Thai Air Asia has completely changed the new ground of airline industry. People no longer look at flying as an expensive choice of transportation, Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES rather one of the economically justified ways of traveling to domestic and international destinations. Air Asia has considerate advantages over other airlines in many ways. Firstly, its experience of being in this industry for long time contributes to the already established service standard, operational expertise, infrastructure readiness, as well as bargaining power with suppliers. According to the survey done by www.lowcostairline.org, the travelers ranked Air Asia as number 8 of their most favorite low cost airlines. Secondly, Shin Corp, local partner, is very powerful business entity as it has highly diversified portfolio and many strategic business units in media industry. This gives Air Asia the competitive edge in terms of creating awareness of the brand and budget airline industry as a whole. There was a big buzz when Air Asia offered incredibly low airfare in the first 3 months. Moreover, because both giants, Air Asia Malaysia and Shin Corp, have great financial...

Analysis Of Air Asia STRATEGIC MANAGEMENT ASSIGNMENT #1 AIR ASIA 1. a) AirAsia’s vision:

• To be established as the leading low-cost carrier in the Asian region. AirAsia’s mission: • A low cost airline carrier that offers five-star service with 95% of on-time performance. • To be able to provide affordable airfares, at the same time promoting Malaysian hospitality and the local food. • To focus on customer’s needs by stimulating demand and offers the lowest fares, comprehensive distribution channel and developing various products and services. AirAsia’s objective: • Aims to carry 70 million passengers a year, within six years starting from 2014. • Turn the low-cost carrier terminal at the KL International Airport into the regional hub for budget travel. • Plans to introduce more routes, add frequencies and develop the existing ones. b) AirAsia’s competence: Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES • A low-cost no frills airline, with an extensive regional network in Asia that caters people of all income levels. AirAsia’s core competence: • Offers low-cost and affordable airfares • Offers in-flight services that promote Malaysian hospitality and a huge variety of the local food. • Offers internet and mobile services as mediums for check-in and booking. AirAsia’s distinctive competence: • A low cost carrier which offers five-star service where everybody can fly. c) Opportunities: • AirAsia will have the opportunity to promote Malaysian tourism, which in return will increase the company’s revenue. • Within the South-East region, AirAsia can tap on a lot of opportunities since there is huge potential for customers that consist of foreign workers from neighbouring countries such as Indonesia, Myanmar and Vietnam. • AirAsia...

asian financial crisis in 1997. no-frills carrier Is this Essay helpful? Join OPPapers to read more and access more than 450. Air Asia was established initially by DRB-Hicom Bhd in late 1996. and landings being doubled with the tyres. a tiny route network and nearly RM 40 million in debts. Southwest Airlines was established in 1971 and had been profitable every year since 1973. By Dec 2002.1 million passengers and most debts settled. Air Asia’s LCC runs short-haul (less than 3 hours) and is low-cost.4 million. Government studied Tony’s proposal to start a LCC carrier and refused to issue a new licence and had requested Tony to buy over an existing airline. Times Warner Music. Safety and service were given same priority as cost cutting measures. Cost cutting measures such as : Fuel consumption being cut by half. . Air Asia started with routes from KL.000 just like it! GET BETTER GRADES serving routes within Asia. the revenue was stated to be RM 113 million and profits of RM 19. and then from Senai Airport in Johor in 2003.The Air Asia Establishment The Air Asia Story Inspired by the LCC business model of Southwest Airlines inspired Tony. Ryanair (Ireland) and easyJet (London) are the largest LCC in Europe and follow the same business model. Air Asia was re-launched in January 2002. with its 2 x Boeing 737-300s. from music industry had RM 1 million in hand (mortaged house and sold off Times Warner Share Options) to pump into Air Asia. Then model adopted by Europe after liberalization of aviation industry. 1. Problems raised were resolved within 24 hours as a KPI. Tune Air. First day of operations started with RM 1 promotional price. set up by Tony and his investors bought Air Asia over from DRB-Hicom on 8th Dec 2001 for a token sum of RM1. Tony Fernandez (VP. with fares lower than bus ticket for local destinations and even gave away free tickets. SEA).

AirAsia has flown over 55 million guests across the region and continues to spread its wings to create more extensive route network through its associate companies. undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM10 (US $2. 666 1. AirAsia flies to over 61 domestic and international destinations with 108 routes. AirAsia has since started a Thai AirAsia subsidiary. AirAsia) formed a partnership and set up Tune Air Sdn Bhd (Tune Air). added Singapore itself to the destination list. Thai AirAsia and . Rajab (Chairman. turning a profit in 2002 and launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed.. AirAsia become an award winning and Is this Essay helpful? Join OPPapers to read more and access more than 450. To date. AirAsia has been expanding rapidly since 2001 where Dato' Tony Fernandes later proceeded to engineer a remarkable turnaround. while flights to mainland China (Xiamen) and the Philippines (Manila) were started in April 2005. Flights to Vietnam and Cambodia followed later in 2005. and started flights to Indonesia.6). Dato’ Tony Fernandes along with Dato’ Pahamin Ab.603 Air Asia Advertising Types COMPANY INTRODUCTION Air Asia Berhad was set up by Dato' Tony Fernandes in 2001. and operates over 400 flights daily from hubs located in Malaysia.50). 2001 which Air Asia was originally founded. In 2003. Dato’ Kamarudin bin Meranun (Deputy Group Chief Executive Officer.000 just like it! GET BETTER GRADES the largest low cost carrier in Asia with leading low fare airline in the Asia. AirAsia opened a second hub at Senai Airport in Johor Bahru near Singapore and launched its first international flights to Thailand.Air Asia Financial Performance FY Ended 30th June (RM Millions) 2002 2003 2004 2005 2006 2007 Revenue 217 330 392 Pretax Profit/(Loss) (1. AirAsia).058 1.. Flights to Macau started in June 2004. an airline holding company then bought over AirAsia from government-owned conglomerate DRB-Hicom on December 2. AirAsia) and Abdul Aziz bin Abu Bakar (Director. Starting with only two planes till now AirAsia owns more than 72 aircrafts. In December 2001. Thailand and Indonesia.

000 just like it! GET BETTER GRADES the government legislation is one of the barriers for entering airlines industry. Thus. the global economic crisis has limited the new entrant and also reducing the upgrade of planes in the immediate future. Air Asia placed a large amount of order from Airbus in order to. Those five forces are now used to determined Air Asia’s strengths and weaknesses which are shown as below: Threat of Entry There is a high barrier entering airlines industry since it requires high capital to set up everything such as purchase or lease air craft. This not only affects the timeline set by Air Asia but also influence their profit.. Power of suppliers Every industry has someone to play the role as suppliers.. Simerly) However. However. new entry has to create so called brand loyalty. . this is reducing treat to Air Asia too. and etc. hire staffs. the power of suppliers is quite high since there are only two major suppliers which are Airbus and Boeing hence there are not many choices to airline industry. Thus. Thus.( Roy L. Consumers always choose the product or service they really trust. MAS has been protected by Malaysia government on the route to Sydney and Seoul Incheon. instead of creating brand awareness. Nevertheless. this has reduced the treat to Air Asia.. Power of the suppliers is important as it will affect the industry. Is this Essay helpful? Join OPPapers to read more and access more than 450. Moreover. to enter this industry not only required high capital but also have to take some time to create brand awareness. In airline industry. Porter claimed that there are five competitive forces which can shape every industry by identify and analysis those five forces(appendix) and thus determine strengths and weaknesses of the industry.Porter's Five Forces Porter’s five forces Michael E. both suppliers provide almost same standard aircrafts and hence the switching to Air Asia is low. set up office. Moreover. For example. AirAsia is also spreading the amazing experience to exciting destinations.Indonesia AirAsia. Hence. Therefore Air Asia find itself very difficult getting a new route from government. brand awareness is quite important in this industry.. Air Asia.

Toward this analysis we obviously know that the popularity of Air Asia in Malaysia. Why Do So Many People Fly With Air Asia? A young Asian brand gone global. there is Is this Essay helpful? Join OPPapers to read more and access more than 450. Being the best in the industry and the top digital brand in Asia. there are 86% of people who know about Air Asia airlines. Air Asia is the World’s Best Low-Cost Carrier and the Airline of the Year for 2009 & 2010.. Besides that. Air Asia now flies to over 70 destinations in 19 countries. the findings show that most of the respondents agree that the price of the Air Asia’s ticket is reasonable and it is making flying possible for everyone. Based on the data collection from the questionnaire and the bar chart show in appendices 2. Strengths * Low cost operations * Consist of less management level * Do things effectively and focused management * Penetrate and stimulate to potential markets * Multi-skilled staffs means encouragement of workforce and efficient result * Single type fleet minimize the maintenance fee Weaknesses * Service resource is limited by lower costs * Limited human resources (could not handle irregular situation) * Government interference and regulation on airport * Deals and passenger compensation * Heavy dependence on outsourcing * Financing more and more seats (Load factors under pressure) * Aircraft financing costs swelling Opportunities * Long drag flight is an trial to get undeveloped market share * Differentiation from traditional LCC (Low Cost Carrier) model by adding customer services or operation as full service airline with low. In general..000 just like it! GET BETTER GRADES .The internal factors (strengths and weaknesses) and external factors (opportunities and threats) of Air Asia.SWOT Analysis ---. The main finding is to find out that why do so many people fly with Air Asia.

Anthony-Claret CSN: 31217-2008-22-15 EXECUTIVE SUMMARY The term "marketing mix" became popularized after Neil H. I will discuss and analyze AirAsia Airline within the context of this marketing concept described above. low fare business concept of Air Asia so that affordable air travel can become a reality. Air Asia Understanding Marketing Mix in Air Asia Airline Bhd Author: Onwutalobi. while AirAsia remains as the operating company. “The Concept of the Marketing Mix”. Borden published his 1964 article titled.68 million shares) in AirAsia from DRB-Hicom.76% of people had fly with Air Asia before and the major passengers were among teenagers. ORGANIZATIONAL ANALYSIS Company Background AirAsia Malaysia is second national airline. People who fly with Air Asia just need to pay for only what they need. most people argued that this framework was particularly useful in the early days of the marketing concept when physical products represented a larger portion of the economy.25 per cent equity (51. this terminology has become a common knowledge in the business world and has played a pivotal role in shaping most companies’ business processes and models. Bangkok International Airport in Thailand. This is because Air Asia is Asia’s first low-cost carrier compare with other airlines. ticket-less airline in the Southeast Asian region. . with marketing more integrated into organizations and with a wider variety of products/services and markets.000 just like it! GET BETTER GRADES of the marketing mix employed to attract the chosen market Finally. There is no-frills. However. I will discuss the threats to the long-term success of the airline with reference to the current marketing mix in order to overcome certain service shortcomings. Since then. In this article. hassle-free. Today. This shows that the air ticket of Air Asia can be afford by different stages of people even teenagers. This is why so many people choose to fly with Air Asia and agree that the air ticket of Air Asia is more reasonable compare to other airlines. Identifying the target market and highlighting some Is this Essay helpful? Join OPPapers to read more and access more than 450. On 8 December 2001. Air Asia lets customer choose what they truly need on every single flight so that there is no extra cost and burden for the customer. It was the first successful low cost. Johor Bahru in Malaysia. is so astonishing and surprising that this concept is still very appropriate and relevant. Tune Air Sdn Bhd is the holding company. 1 AirAsia currently operates over 100 point-to-point domestic and international flights from its hubs in Kuala Lumpur International Airport ( KLIA) and Senai Airport. Tune Air Sdn Bhd officially acquired 99. one of Malaysia’s giant conglomerates. and Soekarno-Hatta International Airport in Jakarta.

Air Asia has its own objectives and goals. Fernandez proceeded to engineer a remarkable turnaround. This was after great deliberation as the initial offer was fifty cent. Flights to Macau started in June 2004. Bhd. .000 just like it! GET BETTER GRADES and added Singapore in its destination list as well as commenced flights to Indonesia. In 2003.Indonesia. After decades in the industry. undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1. while flights to mainland China (Xiamen) and Philippines (Manila) started in April 2005. Air Asia broke the monopolization of airline business in Malaysia which was controlled by Malaysia Airlines System. Time Warner executive. and then they took a step/monopoly by breaking into the south-east market and currently having plane flying internationally. It was originally initiated by a government-owned multinational firm which is DRB-Hicom. Air Asia has since then started a Thai subsidiary Is this Essay helpful? Join OPPapers to read more and access more than 450.d) AirAsia Corporate. Its main motto was to make flying possible for everyone... turning a profit in 2002 and launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed. Air Asia Air Asia airline is one the Malaysian’s most preferred airlines because of their low cost airline. Flights to Vietnam and Cambodia followed later in 2005 and to Brunei and Myanmar in 2006. Air Asia opened a second hub at Senai Airport in Johor Baharu near Singapore and launched its first international flight to Bangkok. the latter by Thai Air Asia which is a sister company for Air Asia. The airline was established in 1993 and began its operations on 18 November 1996. Air Asia started off by introducing flight services locally. it has created a route network that spans through more than 20 countries. 1 (n. Tony Fernandez acquired the corporation with the sum of one ringgit through his company Tune Air Sdn. The airline has a major debt problem which caused it to nearly collapse.

. 4 P’s Stimuli Product: Nasi Lemak (2 USD only on Air Asia morning flight) .Internet.000 just like it! Package B. Business sector Factor Air Asia * Internal: attract more customers. Product: Purchased Snack . Promotion: 50% Place: Bangkok to Kuala Lumpur. . Identify and describe the main stages of the purchase decision making process for the business sector and consumer sector by using a model of buyer behavior. . RM 8 RM9 Package A. Evaluate RM 7.with the dream of making flying possible for everyone business. Included a half of boiled egg and peas.. Price : RM 9.Tuna Sandwich. Air Asia 1.Traditional Breakfast of Malaysian people. Together with our associate. Promotion: no discount Place: Is this Essay helpful? Join OPPapers to read more and access more than 450. * External: to expand their business in Malaysian market. Price : RM 8. Package C. Release to provide food service to customers Search -In the response from customers.

. Taiwan and India are offered as low as RM199 for one-way path 4 P’s Stimuli . Malaysian people. Freight rates to Australia. Tianjin RM699 and RM799. Taiwan. RM549. Buyer response Purchase amount Post purchase Consumer sector Factor Air Asia * Internal: low cost. China. RM599 Chengdu.GET BETTER GRADES Penang to Bangkok. * Freight rates charged External: comfortable with a moderate rate. Purchase Buyer Black Box -Low price.Nasi Lemak. Product: Snack attack .MAGGI "Hot Bowl" Seafood Tom Yam Flavor Price : RM 7 Promotion: no discount Place: Kuala Lumpur to Penang. Included a half of boiled egg and peas at Bangkok to Kuala Lumpur. Hangzhou.traditional breakfast of -Place. Search -internet Evaluate Air line first class Class Economy Premium fares as low as RM529 to India (Delhi and Mumbai).

That means.. more people will fly.Product: Premium rate for Australian destinations Price. if prices for flights are being reduced. AirAsia until today has flown more than 55 million passengers in and around Asia (Air Asia. {text:bookmark-start} {text:bookmark-start} The Business Environment Needed for the Firm to Adapt {text:bookmark-end}. Air Asia is one of the businesses that have successfully adopted cost leadership through operational effectiveness and efficiency.000 just like it! GET BETTER GRADES to reach excellent standard around the world. With its expanding strategy as objectives Is this Essay helpful? Join OPPapers to read more and access more than 450. airline concepts are based on the assumption that airline traffic grows in line with the economy and that cutting prices will only lead to a decrease in revenues. The cost advantages have enabled Air Asia to become the Asia’s leading low fare airline. a 323% increase over the previous quarter. Air Asia has successfully positioned itself in customers’ mind. . It is based on the low-cost. 2005).. Revolutionized and Reinvented by Tony Fernandez in 2001.4 million. Traditionally. The concept of Air Asia is based on the belief that demands for short-haul air transport is price flexible. AirAsia has also ventured into other market that complements with the airlines business. It has started franchises like the tunes hotels and red box couriers to gain maximum efficiency in and around the airline business. Air Asia Economic Analysis -Mba Table of Contents {text:bookmark-start} {text:bookmark-start} Background {text:bookmarkend} {text:bookmark-end} A successful example of a Malaysian no frills airline is Air Asia. With the introduction of the ‘no-frills’ concept to the Malaysian market. Air Asia has proven this theory wrong and goes from strength to strength by actually increasing the size of the market and more recently by taking away passengers from the major airline competitors. no-frills model of the US carrier Southwest.. Its net profit for the second quarter ending 31 December 2004 was reported RM 44. marketing in Asia has been the key player to achieve success.

25 per cent equity (51. Bhd. AirAsia failed to attract enough passengers Is this Essay helpful? Join OPPapers to read more and access more than 450.-based Southwest Airlines and Dublin-based Ryanair.68 million shares) in shares from DRB-Hicom via his company Tune Air Sdn. They started their operations on 1996.S.. Today the airlines are operating in Malaysia. Without looking back. On 8 December 2001. After starting their operations for few years. AirAsia was also facing problems such as the demise of Tan Sri Yahaya Ahmad and 1997-1998 Asian financial crisis. AirAsia offers a simple service at fares lower than those offered by other full-service airlines. when the company was taken over by the new Air Asia management. Due to 19971998 Asian financial crisis. AirAsia continues to defy the odds. 2001.Air Asia Strategic Mgt Plan (Smp) EXECUTIVE SUMMARY It has been a great pride in the history of AirAsia that despite the challenges that they have faced. AirAsia has grown to become the largest low-cost carrier in Asia.000 just like it! GET BETTER GRADES to establish its own niche market. Thailand and Indonesia. Tony Fernandes transformed AirAsia as a low fare airline together with Conor McCarthy. AirAsia was established to create a new. Air Asia has earned a reputation as a consistent performer no matter what the external environment.000 talented. Since December 8. the former Ryanair director of group operation.Example 1 . Known of its corporate tagline “Now everybody can fly”.. With more than 6. hardworking and committed employees and a market capitalization in excess of RM2billion. ORGANIZATIONAL ANALYSIS Company Background AirAsia is Malaysia’s second national airline was incorporated in 1993 as a fullservice regional airline under DRB-Hicom. with a token sum of one ringgit. AirAsia was heavily indebted. Air Asia 07 March 2010 Blue Ocean Strategy Example in Asia . music mogul Dato’ Seri Tony Fernandes decided to retire from music industry and purchased 99. It was modelled on U. They have seen a future in which their success is not constrained by resources or opportunity. AirAsia became the first successful low cost and ticket-less airline in the Southeast Asian region.

as found in rural areas. students or graduates. etc. reduce costs and at the same time. Air Asia is able to focus on the factors that actually bring value to customers. look at the factors that are granted by the industry. increase the value for customers . In addition. etc.Value Innovation. . This will help Air Asia. as already The authors of Blue Ocean Strategy. * Entrepreneurs in Malaysia and the ASEAN Region Non-customers: * Government Personnel * Those who can not afford to buy expensive tickets. With the four activities of the framework proposed by the Blue Ocean StrategyAuthors.000 just like it! GET BETTER GRADES of flights Make: * Online Booking System * Point to point travel system With this strategic move. Current airline customers: * Customers who are cheap to buy the expensive tickets from Malaysia Airlines and regional airlines. Air Asia has managed to avoid the red sea (in competition with Malaysia Airlines and regional airline like Tiger Air. easy reservation system. Malaysia Airlines and regional airline irrelevant implemented. and that the important factors to customers.One of the major changes that the airline industry have changed is the inclusion of aviation budget. Example of a strategic step as follows: Delete: * Over the counter booking * Free Food / Beverage Air * Class seat reservation : Reduce * "Luxury" facilities provided by the airport lounge * N. Air Asia has many strategic step to ensure that they are doing. such as point-to-point travel system. Ground Services * Seat Quality Raise: * Concentrate on the main differentTarget * Increase the frequency Is this Essay helpful? Join OPPapers to read more and access more than 450. Air Asia is not in a position to seek current customers. Good example in Malaysia is Air Asia.). Jet Air.

The concept is in the direction of Blue Ocean market. Background of AirAsia Air Asia was initially launched in 1996 as a full-service regional airline offering slightly cheaper fares than its main competitor. The company we selected is AirAsia Berhad... As a largest and successful firm in the particular industries. That will be one of the factors that the company can maximize their profit in the future. we need to explain type of market structure that this company can be categorizes into and also explain the characteristics of that market structure. it was founded by a government-owned conglomerate DRB-Hicom... do an analysis on cost.With the success of the Blue> Ocean who dare to Air Asia. On 2 December 2001. Besides that. Microeconomics Analysis Of Air Asia Introduction The purpose of this assignment is to apply the concept of microeconomics in analysis of the company that listed in Bursa Malaysia. Described the background and the type of products or services offered by this company. “Now Everyone Can Fly”. With the unmistakable tagline. quality service and dependability.. and profit of this company. AirAsia has made flying affordable for more than 61million. in other businesses such as hotels and Tune Tune Money. As we know Air Asia is one of the famous airline companies in Malaysia. revenue. Every value of figure that includes in the annual report was calculated to get the analysis of the market structure and also sketch of every particular graph.000 just like it! GET BETTER GRADES is truly Asia’s leading airline with the widest route connectivity and largest customer base. AirAsia is a name synonymous with low fares. Originally. By using the annual report from this particular company of at least 3 years. With over 110 routes across 13 countries. All types of figure in balance sheet and income statement will be calculated and showed by graph to prove the difference figures in the particular years. AirAsia Is this Essay helpful? Join OPPapers to read more and access more than 450. . Malaysia Airlines. We are required to select one of the companies that listed in Bursa Malaysia. the heavily-indebted airline was. it is suitable to be an example of the oligopoly competition because there are only a small number of firms that joined or operates business in this sector.

This is partly contributed by the diverse background of the executive management teams which consists of industry experts and ex-top government officials. Thai Air Asia Limited Section 1: Company Background In the past.Swot Analysis Of Air Asia SWOT analysis of AirAsia Strengths Firstly. Prime Minister Thaksin Shinawat announced the opening of Thai air routes in 2002 and this has induced a lot of airlines to enter the.000 just like it! GET BETTER GRADES US and Europe. Thirdly. they managed to get big discount for aircraft purchase which is also more fuel efficient compared to Boeing 737 planes which is being used by many other airline. Secondly... and Phuket Air. the management team is also very good in their strategic formulation and execution. Southwest’s people strategy (employee comes first) and Easyjet’s branding strategy (linking with other service providers like hotels. Bangkok Airways... Besides the normal print media advertising & promotions. car rental). They are Ryanair’s operational strategy (no frills. landing in secondary airport). This has helped AirAsia to open up and capture a sizeable market in Thailand. AirAsia is a brand name which is very well established in Asia Pacific. Shin Corp (formerly owned by the family of former Thai Prime Minister . Air Asia has indeed a strong management team. For example. With their strong working relationship with Airbus. such as Thai Airways. This is clearly known as it has very strong links with the governements and airline industry leaders.Thaksin Shinawatra) holds a 50% stake in Thai AirAsia. domestic air routes were limited to only few players. Air Andaman. For example. their partnership with other service providers such as hotels and hostels. AirAsia’s top management also capitalised on promotions through news by being very “media friendly” and freely sharing the latest information on Air Asia as well as the airline industry. Air Asia Pest Analysis .. The strategy that they have formulated at the beginnings was a clever blend of proven strategies by other low cost airlines is Is this Essay helpful? Join OPPapers to read more and access more than 450.

Macau. this analysis also helps to identify AirAsia's competitive strategy and analyse how the strategy is implemented to gain competitive advantage.2 Economic In spite of stiff competition from Malaysian Airline (MAS). Bilateral agreement is one of the obstacles in the way of truly pan-Asia budget carriers.Purpose The purpose of this analysis is to conduct an environmental analysis in the context of AirAsia's international business operations. AirAsia's low-cost carriers offering cheap tickets and few in-flight services are gaining attraction. Cambodia. AirAsia has formed 2 successful joint ventures in Thailand through Thai AirAsia. Background on AirAsia AirAsia was set up by Dato' Tony Fernandes in 2001. Beijing. Vietnam and Myanmar.. describing the major variables involved and the impact of the specific threats and opportunities confronted by AirAsia besides that.000 just like it! GET BETTER GRADES through AWAIR. China. Fernandes and his partners set up Tune Air Sdn Bhd (Tune Air). Now. Thailand.. and Indonesia Is this Essay helpful? Join OPPapers to read more and access more than 450. an airline holding company then bought over AirAsia. Threat of terrorism. The budget airline industry in south-east Asia has been underdeveloped because the aviation market is tightly regulated by bilateral air rights agreements. Starting from 2 aircraft till now AirAsia owns 28 and has carried more than 223 millions guest through its low fares travel. Indonesia.1 Political Flying outside Malaysia is difficult. AirAsia has become one of the most successful airlines in the Southeast Asian region and the pioneer of low cost and no frills travel in Malaysia. people is afraid to fly after the September 11 terrorist attacks incident. In December 2001. 2.0 External Environment Analysis 2. and in key destinations like Bangkok. Landing charges at so-called "gateway airports" and navigation charges are often prohibitively expensive. secondary airports. Hong Kong and Singapore there are no cheaper. 2. Philippines. What Are The Dilemmas Facing Air Asia? . The airline now flies to over 40 destinations in Malaysia.

000 just like it! get better grades market Product differentiation Regional international flight .000 just like it! GET BETTER GRADES squeeze out unprofitable competitors Large potential Is this Essay helpful? Join OPPapers to read more and access more than 325. focused and effective management Simple business model that provides low prices Penetrate and stimulate to potential markets Multi-skilled staff means efficient and incentive workforce and reduced staff More seats per aircraft Single type fleet minimize maintenance fee Brand name Weakness Service resource is limited by lower costs Non-central location of secondary airports Brand is vital for market position and developing it is always a challenge Heavy reliance on outsourcing New entrants to provide the price-sensitive services Limited human resources Government interference Regulation on airport Opportunities Long haul flight Differentiation from traditional LCC model by adding customer services or operation as full service airline with low fare Ongoing industry consolidation has opened up prospects for new routes and airport deals High fuel prices will Is this Essay helpful? Join OPPapers to read more and access more than 450.What Are The Strategic Dilemmas Facing Air Asia? SWOT ANALYSIS Strengths Low cost operations Aggressive.

New routes Threats Entrance of other LCCs Accident. terrorist attack. focused and effective management Simple business model that provides low prices Penetrate and stimulate to potential markets Multi-skilled staff means efficient and incentive workforce and reduced staff More seats per aircraft Single type fleet minimize maintenance fee Brand name Weakness Service resource is limited by lower costs Non-central location of secondary airports Brand is vital for market position and developing it is always a challenge Heavy reliance on outsourcing . airport departure Key challenges Increasing competition because of increasing number of low cost airline competitors.. and aggressive competition against the large or traditional airline companies Customer decrease because of poor economy Rising of the fuel prices Higher labor cost Inadequate infrastructure Route and flight utilization Safety and.. and disaster and affect customer confidence Aviation regulation and government policy Increase in operation cost in producing value-added services System disruption due to heavily reliance on online sales Other airlines start cut costs to compete High fuel price Government policy Security charges. What Are The Strategic Dilemmas Facing Air Asia? SWOT ANALYSIS Strengths Low cost operations Aggressive. landing charges.

and aggressive competition against the large or traditional airline companies Customer decrease because of poor economy Rising of the fuel prices Higher labor cost Inadequate infrastructure Route and flight utilization Safety and security issues of aircraft crash or being attacked . terrorist attack. airport departure Key challenges Increasing competition because of increasing number of low cost airline competitors. landing charges.New entrants to provide the price-sensitive services Limited human resources Government interference Regulation on airport Opportunities Long haul flight Differentiation from traditional LCC model by adding customer services or operation as full service airline with low fare Ongoing industry consolidation has opened up prospects for new routes and airport deals High fuel prices will squeeze out unprofitable competitors Large potential Is this Essay helpful? Join OPPapers to read more and access more than 450.000 just like it! GET BETTER GRADES market Product differentiation Regional international flight New routes Threats Entrance of other LCCs Accident. and disaster and affect customer confidence Aviation regulation and government policy Increase in operation cost in producing value-added services System disruption due to heavily reliance on online sales Other airlines start cut costs to compete High fuel price Government policy Security charges.

they managed to get big discount for aircraft purchase which is also more fuel efficient compared to Boeing 737 planes which is being used by many other airline. the management team is also very good in their strategic formulation and execution. Strategy.. Air Asia has indeed a strong management team. Objectives. Besides the normal print media advertising & promotions. car rental). Thirdly. For example. It is an internal. landing in secondary airport). Mission. They are Ryanair’s operational strategy (no frills.. With their strong working relationship with Airbus.000 just like it! GET BETTER GRADES teams which consists of industry experts and ex-top government officials. Southwest’s people strategy (employee comes first) and Easyjet’s branding strategy (linking with other service providers like hotels. |[pic] |[pic] . Tactics. Secondly. This is clearly known as it has very strong links with the governements and airline industry leaders. Air Asia AirAsia Strategic Management Report |[pic] | |[pic] | SWOT analysis of AirAsia Strengths Firstly.AIR ASIA VMOST ANALYSIS VMOST is an acronym for Vision. Shin Corp (formerly owned by the family of former Thai Prime Minister .Thaksin Shinawatra) holds a 50% stake in Thai AirAsia. The strategy that they have formulated at the beginnings was a clever blend of proven strategies by other low cost airlines is US and Europe. This has helped AirAsia to open up and capture a sizeable market in Thailand. AirAsia is a brand name which is very well established in Asia Pacific. AirAsia’s top management also capitalised on promotions through news by being very “media friendly” and freely sharing the latest information on Air Asia as well as the airline industry.This is partly contributed by the diverse background of the executive management Is this Essay helpful? Join OPPapers to read more and access more than 450.

. Influence of economy. Political Analysis Political Analysis mainly states about the aviation acts and regulation which needed by aviation company such as Air Asia to operate their business. Pest Analysis (Air Asia) Introduction PEST Analysis is the Political.000 just like it! GET BETTER GRADES such as Air Asia has to develop me method on how to connect with the society’s lifestyle. Political issues may cause problems in the outcome of the company. Some of the political factors that may affect a company are events that affect the operation of the company. Social culture and Technology analysis that a company does to determine the overall business environment. therefore regarding an aviation company such as AirAsia political events will affect the result. political factor considers the impact of legislatives changes. the social drive is a crucial part on PEST analysis.. . The PEST analysis examines the impact of each of the factor on the company.For example. demographics. Technological point of PEST analysis relates with competing technology development with other competitors and effective information and communication between the market and the company. and media. stability of economy. Creating and developing a social culture takes time and effort and a new motive driven company Is this Essay helpful? Join OPPapers to read more and access more than 450. inflation levels and such helps the company make better decision on how to operate their company effectively. Economic. A PEST analysis is a look at the external environment of a company or a business that plays an important role in managing and decision making of a company. stability of the economy and event that related with the government and politics that may affect the business. The political arena has a huge influence upon the regulation of businesses. It is crucial for a company to consider its environment before relating with the public or customers.. such as interest rate.. Political stability is inessential to create a safe economy market that enables the market to grow.. Thus. their partnership with other service providers such as hotels and hostels. Besides that. and the spending power of consumers and other businesses.

Air Asia Marketing Case Study Group – 6 Sec.C .

• • • • • . It was re-launched in Jan 2002 as an LCC(Low Cost Carrier) after takeover by Tony Fernandes.• AirAsia is a Malaysian low-cost airline. after launching as an LCC. Initially it was a Malaysian Govt. It operates scheduled domestic and international flights. AirAsia is a pioneer of low-cost flights in Asia and is the largest Asian nofrills airline. Air Asia converted from a debt ridden company to a profit making company. controlled company. In a very short time.

Australia. 2009 Servicing 18 countries.• •••• ••• • • •• The airline was established in 1993 by a Malaysian government-owned conglomerate DRB-Hicom and started operations on 18 Nov 1996. 2005 . 2006 Mar – Main Hub moved from KLIA to neighbouring specifically built LCC terminal 2006 Aug – Domestic Route rationalisation arrangement with MAS. .000 just like it! GET BETTER GRADES Thai Air Asia in partnership with Thai Shin Corporation.Starts regional flights to neighbouring countries. 2008 May – 25th consecutive quarter of profitability since 2002.26 2002 Jan – Re-launched as first no frills LCC. 2001 Dec – Tony Fernandez takes over the loss making AirAsia for US$ 0. Formation of Is this Essay helpful? Join OPPapers to read more and access more than 450. 2007 . 2004 Nov – Listing on the Malaysian stock exchange.Indonesia Air Asia established. First long haul flight to Gold Coast. 84 Aircrafts. 136 routes. Becomes largest airline in Malaysia. hubs in Jakarta and Bali.‘Air Asia X’ launched. 627 flights per day in the asia pacific route. took over two third(96 out of 118) of MAS’s loss making routes. 2002 Dec – First profit of US$ 6 million 2004 .

rising fuel prices leading to streamlining of operations to enhance the value chain.. carriers are entering into new strategic alliances with each other..•Change in ownership pattern FROM Government owned or Supported TO Private. •In order to increase efficiency. •Deregulation in airline industry leading to greater competition and pricing freedom. •Fierce competition. . •Emergence of Low Cost.

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->