Analyze the current situation facing MAS and Air Asia using the internal and external strategic environmental analysis model. Discuss what aspects and why did their collaboration take place. The goal of an organisation is to reach and achieve optimal purpose. They want to make the most out of their atmospheres and existing environments in order to their accomplishment. External factors are the one that affect an organization indirectly, such as: •Political •Social-cultural •Technological •Economical •Legal External factor are the opportunities and threat to the company according to SWOT Analysis. There also Internal factors which need to be considered, that is which involves directly to an organization such as: •Customers •Competitors •Suppliers •Public •Employees •Shareholders and etc. Internal factors – The strengths and weaknesses to the organization. This business strategy theory is very useful to help aviation researchers to make sense the current competitive pressure under which airlines all around the world seem to be. Business Strategy is a formulation of how the business unit intends to compete in its given business sector.


It is to emphasize the hospitality of its cabin crew instead of the airline‟s extensive network and its premium cabin and economy class cabin products. Air 2 . different with most other airlines which tend to emphasize aircraft and an extensive route network. Air Asia has several subsidiaries and associate company to support its operation. MAS’s strength can be Air Asia’s Weaknesses or vice versa. Promotion or Brand Awareness MAS had put their full effort on their branding and publicity and it have revolved primarily around flight crew. This shows that.Cost Carrier‟ 2011. Its introduction promotion fare attracted huge publicity and travellers who used to pay higher prices. Besides that. Passion for Guests' Satisfaction. Received many award such as the „Best Asian Low. MAS runs an incentive training program for all cabin and its flight crew to ensure the customers are obtain the best service. MAS reflect competencies and capabilities of their core business which differentiate the company with other company based on value. Safety. Air Asia Air Asia is a Low Cost Carrier (LCC). „World Best Low Cost Airline‟. Air Asia operates domestic and international flights and is Asia‟s largest low fare. MAS have their own branding strategy which involves its flight attendants to promote its airline. When we study the two airlines we can define the SWOT Analysis. Maximise Shareholders' Value. Transparency in decision-making and information sharing. no frills airlines. It is also remain as one of the only six carrier globally to be accredited as a „five-star airline‟. Air Asia believes in Leanest Cost Structure. As a pioneered in low cost air transportation in Asia. price and services. Mas have won more than 100 awards in the past decade including the „Best Airline To Asia‟ and „World‟s Best Cabin Crew‟. ATW Value Airline of The Year 2012 and many more. there are customers wanted MAS‟s services and customer‟s preferences on this airline. Air Asia was able to penetrate and stimulate potential market by maximizing media exposure and brand awareness promotion without high marketing expenses. This clearly shows that MAS is recognized world -wide and the brand name is recognizable.Let us look the comparison between Mas and Air Asia in terms of their Internal and External Factors. Malaysia Airlines (MAS) The Malaysian Airlines are tightly regulated by the government of Malaysia. Air Asia operates over 200 flights a day over 75 domestic and international routes.

MAS introduced a new concept of flying. Air Asia receives a lot of complaints from customers on their services. brand presence in foreign countries and relationship. As a result. which involves global sponsorship and advertising. selling tickets to passengers directly and minimizing labour and overhead costs. recruitment cost. Cost Management For MAS. it‟s due to pricing and revenue management. This is to enables customers to have a change in life while flying with MAS.Asia was major sponsorship for Manchester United. Overall. The increase in fuel alone has added nearly USD64 billion to the industry cost structure. The cost factor was taken into consideration particularly fuel –have increased. low yield per available seat kilometre („ASK‟) poor yield management. market share and profitability by eliminating provision of costly inflight services. low long-term maintenance contracts rates and low airport fees. Its successful negotiations for its low aircraft rates. the cost incurred was quite high such as an increase in fuel prices. Special request on meals for children and vegetarians are also available in MAS. flying a standard fleet. It has to maintain its Low Cost concept so we as the customers have to pay for all the meals and itinerary sold by Air Asia. This is one of Air Asia‟s weaknesses. They offer a range of 37 menus over 8 week of rotation to ensure that frequent travellers will be able enjoy variety of meals. Changes in customer preference Customers control the purchasing power due to needs and desire. low in business travels to other location or from Malaysia to other location. Good customer service is essential especially when competition is getting intense. other than employee turnover.g. inefficient route network and high operating cost. 3 . For example. depending on the preferences of individual. They have to diversify their new routes and operate new destinations to be recognized. sales and distribution. enable Air Asia to provide the lowest fares. psychographic and geographical factors. Air Asia was able to reduce its overhead and investments in equipment. This is also due to difference in traffic mix for e. For eg. introducing varieties of meals from continental to western. increased in maintenance and repair cost. Complaints on flights delay being charged for a lot things and could not get refund for cancellation. Air Asia has managed to achieve lower prices to attain high passenger loads. Air Asia did not control the purchasing power due to the desire of its customers. The price of fuel has increased rapidly by over 168%. MAS need to expand its business extensively throughout the country. This is because of demographic factors.

MAS have also established Supplier‟s Forum for supplier‟s relationship management. 4 . Firefly is new low-cost community airline which currently offers 14 weekly flights to Kota Bahru.Relationship with Stake holders MAS have taken proactive approach in engaging its stakeholders (government.The price can be too expensive to provide the customer value or too cheap to sustain the cost of production and market activities. Launch of Firefly In year 2007. Asia Xpress. Air Asia’s excellent negotiation and lobbying skills with governments. economic and political review and proper channel of distribution. Launch of Air AsiaX. Malaysian Airlines(MAS) secured regulatory approval to launch Firefly. Fly Asia Xpress. As a result. partners. MAS has entered various new code-sharing partnership agreements. Weaknesses Reasons of airline Failure: This is applicable to both airline which is MAS and Air Asia      Incorrect segmentation : Trying to penetrate into the wrong market (domestic or international) Incorrect Pricing. The Product Itself. Tune Hotels and Tune Money. Lack of Research and Development –No proper study on the needs of customers. This will also connect 3 most popular tourist destinations that are Penang. Air AsiaX offers long –haul services from KL to Australia and China using Air bus A330. home and motor vehicle insurance as well as prepaid card. Tune Money is Asia‟s first „no-frills‟ online financial service which comprises life. suppliers) through a new External Relations Department to help meet its various interests.The product does not provide benefit that is not valued by customers. Malaysia‟s first community airline. interest and action. Kuala Terengganu and Langkawi and seven weekly flights to Phuket and Koh Samui from Penang. Kuantan. Koh Samui and Phuket. It is expected to become profitable to tap into a potential customer base of 100 million in the Indonesia-MalaysiaThailand Growth Triangle. airport authorities. Tune Hotel and Tune Money Air Asia launches associate companies such as Air Asia X. Incorrect Communication Mix-failure to crate the required level of awareness. international partners and suppliers have been critical success factors to the company especially in supporting its business development and planning strategies.

Threat. if there is terrorism happened in any country that MAS or Air Asia flies. MAS and Air Asia has to stop their flights for a certain period of time.0%. 5 . For example. This will decrease the confidence level of customers over the airlines as well as it affects the revenue. this will affect the other destination as well. CIMB and Air AsiaX will be the major advisor of all the MAS‟s daily activities and the share swap is to establish a framework to explore the possibilities of mutual co-operation. This is applicable for all airline MAS or Air Asia.Terrorism Terrorism will diminish tourism and confidence in the airlines. MAS‟ operating margin for the quarter was -12. which pushed the airline deeply into the red. as we know MAS or Air Asia flies to more than 80 countries. which surged 41% in the period. The Collaboration The collaboration between MAS and Air AsiaX took place to save MAS financial deficiency because it eventually leads to execution of the raising competitors to Air Asia. The deteriorating operating performance reflects the drastic increase in operating costs. led chiefly by fuel. This is not predictable event. and a weaker cargo performance. As a result. It might happen in many ways of terrorism either in certain countries or it might happen in the plane itself.

restructuring administration functions which allowed employees to perform multiple roles within a simple and flat organizational structure. It shows that Malaysia Airlines is a service company that has strong policy in the business industry. Price MAS are better known as one of service companies that providing airline service to its customers. Air Asia‟s policy focus on maximizing efficiency and productivity. This motivates the employees. It has operations in six continents and covers over 100 different locations. all employees were offered a wide range of incentives. Internal factor involve (5M's) of an organization which is as follows: •Management •Manpower •Machine •Material •Money. As a 5 stars airline company the cost needed for the maintenance and convenience are quite high and this will affect the real cost that will be purchased by the customers. while keeping staff costs at levels consistent with low –cost carrier industry standard. Research shows that the cost of living in Malaysia is not really high compare to other country like Hong Kong. resulting in an effective and focused workforce. Its talented management team always plays the most important role in planning and controlling every single action in their service system to perform the best brand experience. MAS‟ business strategy shows that their target market is customers with high income. MAS‟s management team always have their own strategies to make sure that they are able to take this challenge as their opportunity to enhance their reputation and quality of the service. 6 . Management MAS have strong and well.planned organizational structure. How would you assess the current status of MAS and Air Asia in terms of the degree to which their internal resources and capabilities provide the basis for competitive advantage? Discuss your view to what extend do you or not believe the share swap deal between the two airlines was a positive steps. MAS‟s customers are international flight customers so when compared with other airlines company the cost offered are much more expensive. MAS are also engaged in Maintenance and Cargo services. Although salaries offered to employees are below the rival.Q2. Air Asia‟s case. a flatter hierarchy improved (speed up) communication. Air Asia implemented flexible work rules.

More than 40% are losses on routes and 10-15% above corresponding revenue. Air Asia managed to be more effective in implementing as budget airlines even though many other airlines try to imitate Air Asia. MAS used Long Haul Carrier meanwhile Air Asia is using Low Cost Carrier. customers may also get it at selected post office and designated bank teller machine (ATM) Competitive Advantage For MAS and AirAsia Rivalry Highly Competitive industries generally earn low returns because the cost of competition is high. 7 . This sustainable (cost) competitive advantage for Air Asia as it is rare and difficult to imitate. This will incur additional cost for distribution. MAS should practices to use Internet Booking Engines (E-Commerce) and automation in selling tickets online that will be one of the opportunities for MAS Air Asia is the first airline in South Asia to utilize e-ticketing. and agent commission.2 billion in the first quarter. Air Asia was one of the major competitive to MAS because of their low fare price on ticketing. Technology MAS is still practising the old fashion method of selling tickets at the MAS tickets counters at the airport or using agencies.S cents. but it is difficult to compete.13 U. Air Asia managed to achieve cost per average per kilometre of 2. They saved on the cost of issuing physical tickets and eliminated the need for the large and expensive reservation systems. the lowest for any airlines in the world.Only a small group of people in Malaysia can effort to fly using MAS because of the high ticket price. To purchase an Air Asia tickets. It is difficult to take over Air Asia because even though there are other Low Cost Carrier operating but the pricing cannot compete with Air Asia. Year 2011 MAS have loss a net of RM1. Most of MAS‟s customers have switched from them to Air Asia making MAS to loss.

customers may like MAS because of comfort ability compare to Air Asia and don‟t mind to pay more. personal preferences and convenience in this matter. If the borrowing is cheap then the chances of more airliners entering the industry is higher. Air Asia has to maintain their low price and cannot invest on luxury aircrafts. We may consider time. Power of Buyers The bargaining power of buyers in the airline industry is quite low. money. air travel is still the preference for extensive travels. Brand name recognition plays a vital role and frequent fliers also play a role in the airline industry. An Airline with strong brand name and incentives can often lure a customer even if their prices are higher. Threat of New Entrant They are always a chance for new entrant to penetrate the airline industry. Air Asia is more convenience in purchasing tickets than MAS. MAS may reach on time or faster than AIR Asia.Power of Supplier The airline supply business is mainly dominated by Boeing and Airbus. The more new airline enters the market. This shows that the brand awareness between these two airlines is not a major challenge. MAS have to come out with new types of promotions and marketing method to get hold of their customers. Lack of spare aircrafts is the causes of flights delays. For Malaysia. the more saturated it become to everyone. MAS uses the Boeing and Airbus as their flights meanwhile Air Asia only uses Airbus to maintain its low cost. Availability of Substitutes For Asian countries there is air travel industry is not a threat compare to foreign countries whereby their substitutes is the train. Customers dissatisfaction is in term of meal provision. MAS have already classified as „World‟s Five-Star Valued Carrier‟ and maintain its five-star product and services. Air Asia is cheaper compare to MAS. MAS have strong brand recognition because luxury carrier and it is well known internationally. MAS now have to win back its customers to fly with them by catering the customers‟ needs that is price and advance technology. There is not much competition among suppliers. Air Asia is recognized worldwide because of its Low Cost Carrier. often delays in flights and etc. Definitely there is high cost incurred when switching airplanes. 8 . MAS is now implementing several Horizon Solution like    Implementing SITA ticketing Re-engineering fares strategy Implementing revenue integrity Air Asia is not compatible in the factor of price but their services are quite poor. But we must look at the ability to compete on the services offered.

MAS and Air Asia collaboration which was announced on 9 August will affect the customers the most. Beside that millions of new passengers flying around may also contributed to economic growth across the country as well consumed their goods and services of MAS. 9 . Those turboprop planes introduced more destinations with reasonable price. The Malaysian Government believes that when this collaboration took place will lead MAS to improve in the revenue and customer’s support and Air Asia will be paid for by Malaysians in the form of higher tickets prices. cabin crew. This benefited the customers more with alternative for MAS Airlines which is a „five-star carrier‟. Earlier MAS was having the opportunities to fly to more destinations at affordable prices and MAS itself have introduce a new airline that is community carrier –firefly. support personnel and many other staff when new flights are introduced. poorer service . Upon this there will be new recruits for flight crew. less flights and less job prospect.

MAS. evaluation and selection of the best alternative strategy appropriate to the analysis. mid and long term plan. This process primarily analytical not action oriented.Two Class (dilution of seating capacity) 10 . Following Porter‟s generic competitive strategy MAS and Air Asia operates on different business models. Product Features of Air Asia and MAS Brand Air Asia –One brand. MAS follows a differentiation strategy and charge a fare premium.Complex structure+ yield management Product Seating Air Asia – One Product . Malaysia Airline industry is in oligopoly market structure where it consist of one full service carrier (FSC) MAS and Firefly. Relate and discuss which of Porter‟s competitive strategies best matches the grand and sub strategies originally used by MAS and Air Asia.low fare .Q3. seat assignment. Fares Air Asia -Simplified fare structure –(60%-70% cheaper than MAS‟s fare) MAS.Brand extension : fare + service. free seating MAS. Air Asia uses a cost leadership strategy. What type of strategies should they be reviewing for the use in the short. As a full service carrier. Due to the different strategic positioning Air Asia and MAS differ in their customer value propositions as well as target market segments. This process involves examining external and internal environmental factors.low fare. Class Segmentation Air Asia-One Class (high density) MAS. small pitch. Grand Strategy is a strategic planning or long range planning. Before the government‟s domestic liberalization exercise opened up the market to allow Air Asia to join the industry. MAS industry is tightly regulated by the government and was dominated by the state controlled.Multiple integrated product –Generous pitch.

Complimentary extras. MAS. code share. offer reliability.Ticketless. Turnaround time Air Asia – 25 minutes.Low Turnaround: congestion /labour. MAS.Online and direct booking MAS. Aircrafts utilizations Air Asia. Connections Air Asia.Very high MAS – Medium to high: union contracts. global alliances Customer Service Air Asia – Generally under performs.Check In Air Asia – Ticketless MAS. direct and travel agent. Inflight Air Asia – Pay to amenities.Primary Distribution Air Asia. IATA ticket contract Airport Air Asia -Secondary (mostly ) MAS. MAS. MAS.Point to point.Online. 11 .Full service.Interlining.

Operational activities Air Asia.g. Japan Airlines (JAL) and Thai Airways. financial service . The demand outlook for Asian aviation is still strong. Across Asia. with its combined population of over 500 million.Core(flying). in particular.Extension: e. MAS has become even more competitive with the rapid increase of the low cost carrier (LCC) segment. Fortunately. Malaysia Airlines (MAS) has not focused adequately on the finest segment of the market. Meanwhile. scheduling complexities. due to the valiant efforts of their MAS team. maintenance . extending to tour operations. myriad islands and under.Focus on the primary product. on-board sale. The marketing efforts have been mostly focused on sales promotions rather than brand-building. But intensifying sales efforts could only generate low yields insufficient to cover an increasingly uncompetitive cost structure. Ancillary revenue Air Asia – Advertising.Aircraft Air Asia. Unreasonable enthusiasm in aircraft orders by Asian airlines is creating a situation of capacity over-supply and excessive price competition. ramped-up access to credit cards and the Internet and increased crossborder trade.term trends. 12 . is well-placed for aviation growth. MAS expected the current Southeast Asian regional fleet to triple in the next decade. This is rightfully an exciting market for all participants in the aviation industry. continued growth of the Middle Eastern full service carriers and revival in the fortunes of Asian full service carriers such as Garuda. cargo. Southeast Asia. ASEAN passenger demand to be double by 2020. MAS is still flying high in service standards. MAS.Multiple type. there is huge growth in disposable income.Single type: commonality MAS. This strong demand outlook is however clouded by both possible near-term shocks and certain long.developed road and rail infrastructure. and their product quality has fallen. cargo. MAS.

and they count on the support of all stakeholders in this process. emphasise the natural cost-competitiveness as a hub and utilise alliances and partnerships to significantly „punch above the weight‟. they will achieve „virtual scale‟. they also planning in strengthen their sales and marketing functions. coordinate their commercial functions and synchronise operations with similarly-minded airline partners. MAS‟s network shall include routes where the premium travellers will want to go. Air AsiaX to full compliance with global anti-trust legislation. Persistent cost focus Upon usage of new aircraft. are relentlessly focused on 4 initiatives to achieve a recovery to profitability for the 2013-2015 financial years. While Malaysia may be relatively small in the Asian arena. business partners and Malaysians at large. expand the network. MAS will also exploit Malaysia‟s competitive cost position to lower their costs. MAS shall expand their network to cover the world‟s major economic regions and hubs. In the long term. Using a combination of tie-ups. customers.MAS’s grand strategy is to become the preferred premium carrier. MAS will make these decisions in the best interests of their employees. MAS will follow a two-step approach in achieving this vision in short-term. 13 . and get back on firm financial stability. Smaller yet profitable network. each with hightech passenger services. Lower fuel bills and maintenance expenses to be reduced in early stage itself. MAS believed they will achieve saving in procurement through the collaboration with AIR Asia . Win back customers. MAS will then focus on a set of „game changers‟ that will help them to build a robust and sustainable business for the future. and where MAS can win in terms of competitive position and home advantage. MAS intend to take delivery of 23 aircraft in 2012. MAS is shrinking to grow. This will create the broadest selection of network options for their customers and deliver an industryleading cost position. 3. Besides introducing these products. 2. Their strategy is to win back the hard earned loyalthy of customers. shareholders. MAS is planned to focus on keeping overhead and optional expenditure to minimum. but they harness the countries geo-economic centricity in ASEAN. MAS objective is to realise the savings from the improved efficiency. 1. well-positioned for the coming consolidation of the Asian aviation marketplace. Going forward.

higher than industry norms • Timeliness in disclosing information 6. Leanest Cost Structure • Efficient and simple point to point operations • Attracting and retaining hardworking and smart people • Passion for continuous cost reduction 3. Keeping it simple Instead of running a complex business MAS plan to ensure proper focus on the core business that is „flying the customers‟ Air Asia’s Grand Strategy will be as follows: 1. Transparency • Transparency in decision-making and information sharing • Optimum disclosure .4. Passion for Guests' Satisfaction • Maintain simplicity in every application • Practice the unique and friendly AirAsia experience at every opportunity • Recognise the linkage between guests' satisfaction and long-term success 4. Safety • • • Comply with the highest International Aviation Safety Standards and practices Keep operations simple and transparent Ensure the security of our People 2. Human Capital Development • Invest in both hard and soft skills • Recognise all our People as contributors to our success • Reward excellence and individual contributions • Maintaining one brand across the Group 14 . Maximise Shareholders' Value • Resilient profit growth through our lower cost base • Expansion of the AirAsia network in a prudent and disciplined manner • Invest and enhance the AirAsia brand to increase investors' returns 5.

it will be number one in the minds of consumers. low complexity and profitability are always the foundations of building a strong business. The company must continue to be dedicated to cost-efficiency and expansion. While a strong foundation does not guarantee a solid house. it is the only basis upon which to build. It is a message that is well understood by each AirAsia employee and it is their tradition. To the consumer. Strategy 15 .7. AirAsia will not just be number one in size. This is the passion of AirAsia and the company will never lose sight and passion of being the best. giving added confidence and assurance. a strong AirAsia brand is a sign of dependability and leadership. 8. Cost-efficiency.

AirAsia‟s utilization per aircraft is 12 block hours per day. who doesn't have to worry about collecting tickets before traveling.How LCC offer such low fares? The key to delivering low fares is to consistently keeping cost low. Pilots. LCC are unforgiving to no show passengers and do not offer refunds for missed flights. Therefore every system process must incorporate the best industry practices. Among many of the frills that AirAsia has do away are. the cost of flight to the airline is the same. a FSC might do about 8 block hours per day. 1. printing. •Ticketless airlines. among others. Passengers receive a generic boarding pass and they will have to take any of the available seats. On average. flight attendants. and cost-effective for the airlines (paper. Everything else is considered to be luxury item or “frill”. The key components of the LCC business model are the following. AirAsia‟s turnaround time is 25 minutes. Airlines waste a lot of money when passengers do not show up for a flight due to refunds and rescheduling. Less hassle for the customer. A fast turnaround is critical to ensure time spent of the ground is minimal – an airline makes money when the aircraft is flying. distributing). so who needs frequent flyer miles programme then. •No refund. •No free food & beverages. High aircraft utilization Aircraft is kept flying as much as possible. 3. not when the aircraft is parked. 2. which means. No frills The underlying business for a LCC is to get a person from point A to point B. Streamline Operations Making the process as simple as possible is the key of a successful LCC. •No loyalty programme. that there is no need for 16 . Attaining low cost requires high efficiency in every part of the business and maintaining simplicity. •Free seating. the first flight starts as early in the morning commercially possible and the final flight typically ends at midnight. compare that against 1 hour for a FSC. •Single type of aircraft. of which can be acquired for a small fee. mechanics and operations personnel are specialized in a single type of aircraft. There is no assigned seating. Why give away something that you don‟t appreciate? Passengers are most welcome to purchase food & drinks at an affordable price from the cabin crew. Whether a passenger shows up or not. We believe our customers are loyal to our low fares.

4. Operating from so called secondary airports is cheaper than from the bigger major airports and they are also a lot less congested and “turnaround times” for aircraft are a lot shorter. you can by purchasing Xpress boarding. No arrangements have been made with other airline companies on connecting flights. on possibilities of flight transfers. and passengers are free to sit where they choose. 6.costly re-training of staff. This way we can ensure the homogeneity of service throughout the company. i. Should you want to have the privilege to choose your seats. London . FSC always blows the budget by complicating their distribution channels by integrating their systems with multiple Global Distribution Systems. for example. Low cost carriers mostly fly to and from airports that are not necessarily the busiest. Furthermore. FSC relies on travel agents and from their posh sales office. For example. These are often referred to as secondary airports. such as in Myanmar. nor on having the luggage labeled and passed through from one flight to another. for maintaining a stock with parts for different types of aircraft. AirAsia has an established system to sell our tickets to the most remote and technology deprived locations. for knowledge and skills in order to operate and maintain different types of aircraft with their own characteristics. Basic Amenities •Secondary airports. Point to point network Point to point network. or for new work requirements.e first class. For instance. •Standard Operating Procedures. AirAsia can cater to the most sophisticated European traveller via internet and credit card sales. 5. 17 .Heathrow. Almost all AirAsia flights are short-haul (3 hour flight or less). SOPs are important to ensure same level of competence among all the staff. •Business Lounges. Lean Distribution System Distribution costs are something that FSC most often ignore.Stanstead rather than London . Forget about it. Very often. There is only one class seating. And at the same time. to minimize fees AirAsia fly into Clark Airbase which is 70km away from Manila as appose to flying into Manila Ninoy Aquino airport. •Single class seating. LCC shuns the hub-and-spoke system and embraces the simple point-to-point network. LCC will keep their distribution channel as simple as possible and will cover the whole spectrum of the clientele profile.

which would otherwise have been reflected in the fares. This is the most cost effective distribution channel.aerlinesmagazine. The bulk of sales (±65%) are done via the airline‟s website.com www. •Sales office. Furthermore.•Internet Sales. •Travel agents.airasiamastieup. Ticket sales can be done via telephonically.com www.com 18 .com www. 2012) [online]:Available www. they do not use.com www.com/splash/index.centreforaviation.airasia.V April. which again are reflected in their pricing.en. Also. whereby the fares are paid using a credit card. AirAsia only has a few sales offices.wikipedia. nor participate in the world wide reservation systems and thus save costs. We only establish a call centre if we are confident the sales derived from the centre will be worth it.org/wiki/Strategic management. LCC avoids reliance for sales via travel agent as much as possible. This means that the airlines do not pay any commission to a travel agent.html www. (Sujatha. we are not fixated with having our sales office in the posh side of town. •Call centres. this is a simple and cost effective method. as they do not use travel agents.malaysiaairlines.

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