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1.0 Introduction ³Without a strategy the organization is like a ship without rudder, going around in circles´. (Joel Ross and Michael Kami) Nowadays, the competition among airplane industries is very tough. According to Daniel Chan (2000), with just about two years to go to the turn millennium, air wars over Asia are hotting up, with some of the world¶s biggest airlines engaged in intense over Asian skies. Each Of Airplanes Company in the world trying to conduct some strategies to compete with another competitor in their industry. A lot of airplane companies come out with different strategies to make their company better than their competitors. To compete with their competitor in the business environment, a company needs to make a strategy to achieve their long terms objective and can be successful for doing their business. Moreover, to be successful in their long terms objective and their business, company need to identify their strategic management, because with good strategic management company can be achieving their vision and mission to achieve the successfulness in their busin ess. Regarding this issues, the strategic management becomes important due to the following reason such as globalization to survival their business, and than e-commerce become the critical success to the company nowadays. The two following reason are need to take into consideration, and than to be successful in the company management, a company needs to consider the company ability and how to integrating it with the as well as main factor in the internal and external factor. The main factor in the internal and external factor can be identified with SWOT analysis. The internal factor can take a look into strength and weakness in a company, and for the external factor, a company can look at opportunities and threats in the external environment. Furthermore, according to Daniel Chan (2000), the airline industry is a unique and fascinating industry. It captures the interest of a wide audience because of its glamour, reach, and impact on the large and growing numbers of consumers/travelers worldwide. Based on this statement, airline industry become the greatest opportunity for AirAsia. The growing numbers/travelers worldwide can be the wonderful opportunity for AirAsia for running their business. In addition, to captures and attract a customer to choose AirAsia as an airline option, AirAsia need to develop and create a wonderful strategy and come out with special offering to their customer to successfully in their business. On this paper, I would like to identify and analyze the AirAsia Company strategic management: ³ How AirAsia can be a leader in the lowest cost carrier in the airplane industry´. I¶m interested to more deeply identify and analyze the strategic management in AirAsia Company because AirAsia have a lot of achievement and awards since year 2001 until present and than they have the greatest strategy which is can make AirAsia to be a leader in the world¶s low cost carrier in airline industry. And than, AirAsia is one of the companies with good company strategic management and has a successful story in the airplane industry in the world. AirAsia now becoming the leading low cost carrier airline in the world and the achievement that AirAsia received to ascertain that AirAsia is one of the best airplane companies. The achievement that AirAsia received in 2009 on the last awards and recognition is the best low cost airline in the world. In Addition, on this paper will be structured into four sections. Section 1.0 is introduction, Section 2.0 covers about AirAsia Current issues, in this section will be discusses about why AirAsia need to consider a strategy, and AirAsia current issues. Section 3.0 mainly discusses about AirAsia business strategy, this section also will be discusses about why AirAsia stressed to be low cost carrier in airline industry, AirAsia SWOT (strength, weakness, opportunity, and threat) analysis,
organizing. Operational effectiveness and strategy are both essential to superior performance but they work in very different ways. Based on the statement. leading. 2. I will discuss about the AirAsia current issues: how to be low cost carrier in airline industry. AirAsia need to consider a strategic management as the important things in their company. To learn how the companies create strategies and put them into action. Based on that This became more intense in the 1990s as traffic volumes were squeezed statement.0 AirAsia Current issues: how to be low cost carrier leader in airline industry On this section. AirAsia need to come out with the greatest strategy to compete with their rival in the same industry. Even companies adopt general management to sustain profitability by reducing the defe cts or costs. and identify of current issues in AirAsia Company. Strategy is about competitive position that the company performs different activities from rivals or performing similar activities in different ways. Moreover. a company needs to support themselves with a good strategic management. the organization or company nowadays is faced with constantly changing external environments and needs to ensure that its own internal resources and capabilities are more than sufficient to meet the needs of the external environment. and improving operations process in order to increase productivity. complex. and also the Asian air travel market has always been intense.0 would be the last section is conclusion for this paper. This section involve.1 Why AirAsia need to consider a strategic management Why a company needs to consider a strategic management nowadays? According to Daniel Chan (2000). why AirAsia need to consider a strategic management. Why AirAsia need to consider strategic management? The first reason is because the airline industry is a unique and complex industry. Without the right strategic management. the competition for the Asian air travel market has always been intense. they may not succeed in the competition because they perform only similar activities better than competitors but do not create distinctive competitiveness. Organizations or companies do not e xist simply to survive in the market place but want to grow and prosper in a competitive environment. and controlling may not sufficient and supportive for the organization succeed in the world of complex environments. AirAsia company as a company that joined in the airplane industry business need to thinking strategically and also must preparing a good strategic management. traffic volume also would be increase. Additionally. . When the competition in the airplane industry becoming though. To understand and how take an action about external and internal environment. and than what is the current issues that happen in AirAsia Company. the second reason why AirAsia need to consider a strategic management because in a company nowadays. And than. The AirAsia strategic management needs to effectively and efficiently prepare and implement in the AirAsia company management.and also AirAsia business strategy to solve the current issues. firms must undertake an analysis of their external and internal environment. . they perform only operational effectiveness but not strategy. and rapidly change. its possible AirAsia could not be able be compete with the complex business environment in the airline industry. the complexity and unique of the airline industry. This section will discusses the importance of developed and consider strategic management in AirAsia Company. 2. AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve their business successfully. The strategy that AirAsia need is not just how to reduce cost and make the operational activities running effectively. the executives or strategists should examine carefully an aspect of strategic management. Furthermore. the competition among airplane industry will become more grow. It concerns about the process to manage the company internally but do not concentrate more on creating competitiveness regarding environments affecting the organization. since the 1970s. Because of this reason. But. section 4. general management which is the process of achieving organizational goals by engaging in the four major functions of planning. In order to make sense of what is going on around them.
AirAsia flies to over 61 domestic and international destinations with 108 routes. according to Dawna and Blaise (2005). governments. and operates over 400 flights daily from hubs located in Malaysia. The underpinning of strategic management hinge upon managers gaining an understanding of competitors. In addition. With the cost-efficiency. With a fleet of 72 aircrafts. ³now everyone can fly´ nowadays has been phenomena in Airlines industry. AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve their business successfully. Dawna and Blaise said. and customers worldwide. eliminate paperwork. Regarding to the importance of strategic management for AirAsia Company. not just how to reduce cost and make the operational activities running effectively. the most successful carriers came to . The globalization also forced AirAsia Company to survival for business. the key to their current success has been to cut costs t o the bone through lower salaries and reduced overhead . AirAsia with the ordinary symbol but with strong brand. 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. Air Asia is need to aware and consider with the strategic management. Nowadays. In total. Thai AirAsia and Indonesia AirAsia. E-commerce is becoming a business tool. track inventory. the most successful carrier in the airline industry allowing them to exert greater control over pricing and capacity. why AirAsia company needs to consider and stress to a strategic management? This is because. Ecommerce also has become a vital strategic management and allows a company to sell products. Moreover. Established on 12 December 2001. distributors. advertise. Every company has a same chance and opportunity for doing their business. The globalization consideration impacts virtually all-strategic decisions in a company. Thailand and Indonesia. but the price of the airline ticket also can influencing the customer to use an airline company. to become an award winning and the largest low cost carrier in Asia. the current issues in AirAsia Company are how to achieve to be a lowest carrier in the world in Airplane industry. the third reason. the next part will discusses about the current issues that happened in AirAsia Company. The globalization makes a rapid change in the business environment. Regarding to this issues. AirAsia Company can compete with . In airline industry nowadays. In conclusion. AirAsia has been such a big phenomenon in airline industry especially in Asia. dominate their hub markets allowing them to exert greater control over pricing and capacity Based on this statement. The first reason why strategic management becomes important is because the globalization. bypass intermediaries. 2. low complexity and profitability are always the cornerstones of building a strong business. they will failed to compete with their rival or competitors in their business. To date. But. markets. according to Haddad (2003). suppliers. For those company doesn¶t aware and take this as important consideration. not just a local basis. and higher profitability. customer not only looks at the service that airline company offered to them. the strategic management becoming important du to the following reason is because e the rapid development in E-Commerce. and share information. improved products. The reason of the airline industry is a unique and complex industry. Furthermore. creditors. The price and quality of firm¶s products and services must be competitive on a worldwide basis. electronic commerce is minimizing the expense and cumbersomeness.2 AirAsia current issues The leading low fare airline in the Asia ± AirAsia has been expanding rapidly since 2001.In addition. To see and appreciate the world from the perspective of others has become a matter of survival business. shareholders. AirAsia is one of the airline companies who more focused with the strategy how to reduce inefficiency and make it low possible fare in the world. purchase supplies. strategic management becomes important in AirAsi due to the a following reasons. prices. and the last one is because the effect of globalization and E-commerce becoming an effective tool in a company nowadays.
Moreover. AirAsia business strategy also centered on cost leadership.0 AirAsia Business Strategy: how to implement and achieve it. As the implication. The demand for lowest cost carrier is will be growing rapidly. In order to sustain its competitive advantage. and it must create value. Operation effectiveness and outstanding efficiency are the two main characteristics of low cost business including in AirAsia. it needs to have its costs under control. it more focused about the importance of strategic management for AirAsia Company a what is the nd current issue in AirAsia Company that was happening. would be involved with the question. Efficiency creates savings that are then passed on to guests so that affordable air travel can become a reality. Costs that do not add value must be contained. On the previous section. Moreover. according to Daniel Chan (2000). AirAsia as an industry company which is more focusing in the low cost carrier airplane industry need to consider to make the lowest possible cost to compete with the other competitors in their airplane industry. AirAsia needs to leverage its competency in creating cost advantages across multiple value chains. It must be cost-efficient and profitable. Everything that can make inefficiencies must be reduced and possibly to eliminate. As all airlines in low cost carrier (LCC) industry compete on costs. low fare business concept and feels that keeping costs low requires high efficiency in every part of the business. AirAsia builds and sustains its competitive advantage by providing services at a price that simply lower than competitors price. The LCC industry attractiveness and profitability will attract many full services airlines to launch its version adding the degree of rivalry in this industry. Based on the Datuk Tony Fernandez said. Thailand. one of the generic strategies is the cost leadership leadership in AirAsia Company is already approving because AirAsia more focused and concentrated in the lowest cost carrier in airplane industries. current market leader of LCC in Malaysia. Through . why AirAsia stressed to be low cost carrier in airline industry.1 Why AirAsia stressed to be low cost carrier in airline industry Datuk Tony Fernandez as CEO of AirAsia Berhad said his philosophy is very clear: before a business can grow. 3. On the next section. On this section. AirAsia. hassle-free. based on the environmental scanning performed.the other competitor in the airline industry if they can cut costs through lower salaries and reduced overhead. The cost generic strategies (1985). it is the critical ingredient to operate a successful business. What a Datuk Tony Fernandez said is very strong opinion about their company to running their business. In addition. the demand for low cost carrier (LCC) industry will keep growing rapidly. ³How much lower can your cost reduce? You¶re already the lowest in the world!´ My direct answer is if we do not strive to be more efficient and choose to be complacent ± our days are numbered. The very small price are offered to the customer also can give biggest affect in this business. Furthermore. To achieve the lowest possible cost. AirAsia can be possibly competing with another airplane industries if they can make efficiencies to reduce cost and make the low possible fare than another airplane industries. AirAsia Company has some strategy to achieve it. reduced and even eliminated. AirAsia needs to offer the lowest possible fare in order to win the competition in the current markets served as well as new markets. AirAsia need to make a consideration and more stressed to be lowest cost carrier in the airline industry. I have been asked by various people. According to Porter¶s . I would like to discuss about AirAsia business strategy: how to implement and achieve it. 3. Based on that statement. In conclusion. I would like to discuss about AirAsia business strategy. and Indonesia. the current issues in AirAsia Company are more focused in the competition of the cost among an airplane industry. The cost that they have to running there must be efficient and reliable. This is a continuous task we have to face head on year on year. these moves but a very small price to pay for continued and greater access to the world¶s most prospective air travel markets. will face competition from both existing and new players. it can be the great opportunity for AirAsia Company to run their business. And than what is AirAsia SWOT analysis and how AirAsia solves the current issues in their company. AirAsia wanted to be a leader in the lowest cost for run their business. On this section. AirAsia believes in the no-frills. AirAsia can be growing in the airline business if they can control their cost.
And also. 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 airlines y y The management team is also very good in strategy formulation and execution. AirAsia believes to compete in the airline industry. and threat in AirAsia. and threat). . without the protection of national airlines brought about by deregulation. the reason why AirAsia more stressed to be low cost carrier in airline industry because: 1. with their strong working relationship with Airbus. To be successful in the company management. ` 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. In addition. The purpose of this analysis are for identify the internal and external factor that AirAsia need to consider to be low cost carrier in airplane industry. For example. The best philosophy of AirAsia µnow everyone can fly¶ means to giving an opportunity to all the people to flight with the lowest possible fare and making them can flight even they only have the less money. Demand for low cost carrier (LCC) industry will keep growing rapidly. The lowest possible fare that AirAsia was implementing is the best strategy that they are used to compete with their rivals in the airplane industries. AirAsia was becoming an Airline company that is chosen by so many customers. AirAsia believes with the lowest fare that they are offering to the customer. As Air Asia continuously strives to promote air travel. opportunities and threats in AirAsia Company. I would like to discuss about the AirAsia SWOT analaysis 3. with there believes to make a low possible fare for to the customer. opportunities. Shin Corp (formerly owned by the family of former Thai Prime Minister ± Thaksin Shinawatra) holds a 50% stake in Thai AirAsia. According to Johnston (1996). it must be cost-efficient and profitable. Costs that do not add value must be contained. 2. 1. and it must create value. AirAsia also need to make analysis about their SWOT (strength. And than the best philosophy of AirAsia µnow everyone can fly¶ means to giving an opportunity to all the people to flight with the lowest possible fare.AirAsia philosophy of µNow Everyone Can Fly¶. weakness. Opportunities and Threats Analysis are one of the important things in a company. This has helped AirAsia to open up and capture a sizeable market in Thailand. This is partly contributed by the diverse background of the executive management teams that consists of industry experts and ex-top government officials. they can attract customer more than their rival in the airplane industries. 3. The main factor in the internal and external factor can be identified with SWOT analysis. They are Ryanair¶s operational strategy (no frills. a company needs to consider the company ability and how to integrating it with the as well as main factor in the internal and external factor. opportunity. This SWOT analysis is for identifying the internal (strength and weakness) and external (opportunities and threats) factor for AirAsia Company to achieve their goals and objectives to be low cost carrier company in airline industry. to achieve the lowest possible fare in the low cost carrier airplane industry. Air Asia has sparked a revolution in air travel with more and more people around the region choosing AirAsia as their preferred choice of transport. The strong links with the government and airline industry leaders is one of the strength of AirAsia Company. In conclusion. These are the strength. In conclusion. On the next part. On this section. AirAsia also seek to create excitement amongst their guests with they range of innovative and personalized service. Weaknesses. Strengths Air Asia has a very strong management team with strong links with governments and airline industry leaders. I will identify one by one the strength. reduced and even eliminated. weakness.2 AirAsia SWOT analysis Strengths. weakness. building alliances as strategy became necessary for many airlines to stay competitive and gain access to a global market too huge for any existing airline to dominate.
However. AirAsia have to ensure proper and continuous maintenance of the planes which will also help to keep the overall costs low. Opportunities There are 2 major events that are taking place now or going to take place in less than 6 months from now. there will be also some reduction in overall travel especially by casual or budget travelers. It is a competitive disadvantage not to have its own MRO facility AirAsia receives a lot complaint from customers on their service. car rental firms. is the ³ASEAN Open Skies´ allows unlimited flights among ASEAN¶s regional air carriers beginning December 2008. Their partnership with other service providers such as hotels and hostels. This will definitely increase the competition among the regional airlines. is the ever-increasing oil price. Citibank (AirAsia Citibank card) has created a very unique image among travellers. With the help of AirAsia Academy. y . The increasing oil price at the first glance may appear like a threat for AirAsia. The workforce is very flexible and high committed and very critical in making AirAsia the lowest cost airline in Asia. Thailand and Indonesia) and over 100 planes currently owned and about another 100 planes to be received in the next few years. But now. Examples of complaints are around flight delays. The links with Manchester United (one of the world¶s most famous football teams) and AT&T Williams Formula One team have further boosted their image to a greater extend beyond just the this region y AirAsia is the low cost leader in Asia. AirAsia has successfully created a ³low-cost airline mentality´ among their workforce. y y 1. However. First. y AirAsia¶s brand name is well established in Asia Pacific. is the ³ASEAN Open Skies´ agreement that has been reached. But being a low cost leader. with few hubs (Malaysia. Southwest¶s people strategy (employee comes first) and Easyjet¶s branding strategy (linking with other service providers like hotels. Second. strategy y 1. Thus. Good customer service and management is critical especially when competition is getting intense. Air Asia¶s local presence in few countries such as Indonesia (Indonesia AirAsia) and Thailand (Thai AirAsia) has successfully ³elevated´ the brand to become a regional brand beyond just Malaysia. with the ³first mover´ advantage as well as its strengths in management. AirAsia an upper hand because its cost will be still the lowest among all the regional airlines. Alliance with Galileo GDS (Global Distribution System) that enables travel agents from around the world to check flight details and makes bookings have also contributed to their string brand name. hospitals (medical tourism). being charged for a lot of things and not able to change flight or get a refund if customers could not make it. AirAsia¶s top management also capitalized on promotions through news by being very ³media friendly´ and freely sharing the latest information on Air Asia as well as the airline industry. AirAsia has a great opportunity to capture some of the existing customers of full service and other low cost airline¶s customers. The excellent utilization of IT The excellent utilization of IT have directly contributed to their promotional activities (email alerts and desktop widget which was jointly developed with Microsoft for new promotions). Besides the normal print media advertising & promotions.landing in secondary airport). brand building exercise (with over 3 million hits per month and on the most widely surfed booking engines in the world) as well keep the cost low by enabling direct purchase of tickets by consumer thus saving on airline agent fees Weaknesses Air Asia does not have its own maintenance. Second. repair and overhaul (MRO) facility. It may be a good strategy when they first started with only Malaysia as the hub and few planes to maintain. car rental).
the IT infrastructure can continuously sense the changing business needs and respond by provisioning or redeploying resources to match the demands of the business. y There is also some opportunity to partner with other low cost airlines. The strategy that AirAsia was implementing to make they are being a successful in low cost carrier and can compete with other competitors in this field of business are: y 1. In this system. AirAsia implemented current IT such as yield management system (YMS). Moreover. improved products. For example.formulation. and reacts to the behavior of customer to maximize revenues for the organization. to maximize their IT. Most of the full service airlines have or planning to create a low cost subsidiary to compete directly with AirAsia. In conclusion. this agreement can be seen as more of an opportunity. According to this statement. I would like to discuss about the AirAsia strategy to solve the current issues: How AirAsia can be a leader in the lowest cost carrier in the airplane industry. landing rights and landing slots (time to land). Maximized IT and implementing E-commerce in AirAsia business Nowadays. In total. After I¶m discussed about the SWOT analysis.3 AirAsia business strategy to solve the current issues Regarding to the airplane industries issues that is low cost carrier was becoming an important issue if AirAsia want to compete with other airplane industry that is involved with low cost carrier business. AirAsia is one of the airplane companies. This creates a larger market and a huge opportunity for all low cost airlines in this region including AirAsia. advertise. Changi airport in Singapore charges SGD21 for every person who departs from Singapore. E-commerce is becoming a business tool. For example. purc hase supplies. strategy execution. bypass intermediaries. electronic commerce is minimizing the expense and cumbersomeness. AirAsia¶s profit margin is about 30% and this has already attracted many competitors. Users¶ perception that budget airlines may compromise safety to keep costs low. AirAsia . eliminate paperwork. Yield management system as revenue management system it understands. which is implementing E-commerce and maximized their information technology usage to make the efficiency and effectively in their company and make possible low cost carrier in their business. security charges and landing charges are beyond the control of airline operators This is a threat to all airlines especially low cost airlines that tries to keep their cost as low as possible. strong brand and ³low-cost´ culture among its workforce. anticipates. As Virgin to tap into they exist strengths or competitive advantages such as brand name. The population of Asian middle class will be reaching almost 700 million by 2010. According to Pultorak (2004). computer reservation system (CRS). Threats Certain rates like airport departure. E-commerce can change the way of doing busines nowadays. y y y 1. and enterprise resource planning (ERP) system . track inventory. Singapore Airlines has created a low cost carrier Tiger Airways. and higher s profitability. the SWOT analysis that AirAsia have is on of the major component to make AirAsia more strength in their business and can make they are able to compete with the same low cost carrier airline industry. and share information. 3. E-commerce also has become a vital strategic management and allows a company to sell products. when the business strategy and IT are aligned. E-commerce becomes a major success to Airplane Company to make effectively and efficiency in their business. Lets we discuss the current IT that AirAsia implemented one by one.
the other system that AirAsia implemented is customer reservation system (CRS). As a result. Seats are available at various prices in different points of time. the emphasis is on the word planning. this system are very customer friendly because the entire customer if want to buy or make a reservation a ticket directly via online. the last system that AirAsia used in maximized IT to meet the lowest cost during their business activities is the implementation of enterprise resource system (ERP). computer reservation system (CRS). 2005) As a result. all routes so that both the seat and the route are effectively priced for all the flights. 1. y . and no need to come to the ticket counter. It means the lowest cost can possibly achieve. In addition. By this system. Furthermore. efficiency. AirAsia can make efficiency to know their customer using IT technology with lowest cost. How AirAsia implemented this strategy to make operation effectiveness and outstanding efficiency? To make this strategy successfully implemented: AirAsia move from the traditional business into modern business by implementing E -commerce and maximize the information technology (IT) in their business. After that. ERP represents a comprehensive . it is a system focusing on capturing transactions in daily operations and helping AirAsia to save its operational costs as well as to increase the efficiency and integrity in its operation (Microsoft Press Pass. From the view of managers in a company.used it to takes into account the operating costs and aids AirAsia to optimizes price and allocate capacity to maximize expected revenues. A reservation done at a later date will be charged more than the one done earlier ± for the same seat) v Route (By adjusting prices for routes/destinations that have a higher demand when compared to others). The optimization is done on two levels in AirAsia: v Seat (Every seat is considered an opportunity to maximize revenue. It is a direct sales engine that effectively eliminates the middleman (travel agents) and the sales commissions that need to be paid to them. customer satisfaction. The effective method however is to combine these two levels for all flights. It includes Internet. reduce financial month-end closing processing times. (Microsoft Malaysia). fast and secure in buying a ticket already met. In conclusion. AirAsia can understands the behavior of their customer and offering the effectives and efficiency strategy and also can allocate capacity to maximize the expected revenue. it is an integrated web-based reservation and inventory system. ERP is the system that integrated comprehensive software to make the IT system is more effectively and efficiently. and speed up reporting and data retrieval processes. The implementation of E-commerce can reduce the cost of travel agents. the system that AirAsia implemented by using strategy to maximized the IT system (yield management system (YMS). software approach to support decisions concurrent with planning and controlling the business Based on the definition. by using this system effectively. call center. by using this yield management system. and enterprise resource planning (ERP) system) can be a great strategy to make AirAsia more effective and efficiency and possibly able to reduce the cost and eliminated inefficiency in their business. and less of ticketing paper cost. AirAsia can reduce the cost and eliminates the middleman (travel agents) and the sales commission to pay them. By using this system. airport departure control and more. By implementing this package AirAsia is looking to successfully maintain process integrity. And than. Operation effectiveness and outstanding efficiency One of the AirAsia strategies to solve the current issues/problem in the lowest carries competition among the LCC airline industry is to make operation effectiveness and outstanding efficiency.
AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve . Implemented outsourcing in their business To make the lowest carrier in airplane industry. control. and than e-commerce become the critical success to the company nowadays. AirAsia also can reduce cost in IT system activities which is can make possible more cost in their business. AirAsia competency is not in IT. AirAsia also can reduce risk. The strategic management becomes important due to the following reason such as globalization to survival their business. The decision in outsourcing has several benefits such as cost. How AirAsia can be a leader in the lowest cost carrier in the airplane industry? To be a leader in the low cost carrier. And than for the competency. And than AirAsia also trying to reduce by using better maintenance management. AirAsia need to consider about their strategic management. AirAsia can easily to control all the system that is outsourced to another vendor or company. By using outsourcing. By implemented outsourcing in the IT field. But. some of outsourced example that AirAsia did are in AirAsia computer reservation system (CRS) by Navitaire Open Skies Technology Company. AirAsia more preferred to used or implemented outsource system in this strategy. because it can give mor lowest e cost. and also implementing AirAsia X. The control in this strategy also gives benefits because AirAsia function only to be a controlled a system that is AirAsia used.0 Conclusion The competition among airplane industries is very tough. AirAsia can save large proportion of its maintenance cost contributes approximately 9% to the overall cost of a n airline. With this strategy. a company needs to consider the company ability and how to integrating it with the as well as main factor in the internal and external factor. and than implementing enterprise resource planning (ERP) by Microsoft Corporation. The reason why need to consider strategic management because the first reason is because the airline industry is a unique and complex industry.y y AirAsia also choose the route by adjusting prices for routes/destinations that have a higher demand when compared to others. AirAsia can achieve their goals and objective into the lowest carrier airplane in the world. reduce risk. and it can make AirAsia not spend their financial to cover the risk factor in this strategy. firstly. by using the better maintenance management. and also competitive advantage. and also can easily control by AirAsia and than more fast in AirAsia company. The second reason. Furthermore. by using outsourcing. By implemented outsourcing in their business strategy will provide: 1. According to Gloker (2002). Each Of Airplanes Company in the world trying to conduct some strategies to compete with another competitor in their industry. In conclusion. AirAsia also face with challenged to make a decision in terms of efficiency in their business how it will acquire the system. more effectively and efficiently. To compete with their competitor in the business environment. those are the Air Asia strategy to make Operation effectiveness and outstanding efficiency in their business. By implemented outsourcing more better than in house operation. In the strategy that AirAsia used and implemented. y y y y y Cost benefits to AirAsia because it can be eliminated in more resource consumption (time financial). a company needs to make a strategy to achieve their long terms objective and can be successful for doing their business. AirAsia have two options in this strategy: in house building or outsourcing. After that. the strategy that AirAsia need is not just how to reduce cost and make the operational activities running effectively. The implementation of outsourcing also can give competitive advantage in AirAsia because the strategy can be greater rather than created by AirAsia itself. 4. competency.
´Emerald management and development 19: 484.´ Emerald management and development 19: 473 Chan.asp on 2 0th October 2005 Gloker. (1985).p-109 Microsoft (2005) Budget Airlines in Asia Pacific Fly High on Microsoft Business Solutions.foxit.com/malaysia/press/linkpage4285.L. Operation effectiveness and outstanding efficiency. (2005). AirAsia. (2000). (2002).al. C. Thomas E.microsoft.´ management development 19(Emerald journal ): 489 Chan. and the last one is implemented outsourcing in the AirAsia business. Fifth edition.scribd. (2000). Jr (2005).53 http://www. et. (2003). et al. S. How AirAsia can solve the current issues to be a low cost carrier leader in airplane industry? The first is to identify and analyze the SWOT analysis.´ managing service quality 15(Emerald journal): 344. ³Catch him if you can´. (2005). Berry.E. (2004. (2000). W. C. Chan. AirAsia. D.their business successfully. D. August. Aruan. S.´Emerald management and development 19: 483.com/doc/2516371/Strategic-Management Pultorak. July). and than to solve the current issues with some strategies such as Maximized IT and implementing E-commerce in AirAsia business. D. S. September 15. ³Competitive Strategy: Creating and Sustaining Superior Performance. ³The development of the airline industry from 1978 to 1998 A strategic global overview. Business and IT Sunchronization. McGraw-hill . References Chan. H. The current issues in AirAsia Company are more focused in the competition of the cost among an airplane industry. Haddad. Aruan.com/doc/2516371/Strategic-Management Rhoades. Manufacturing planning and control for supply chain management. (2000). et al. M. Asian Business. L. Retrieved from http://www. C. (2000).´Emerald management and development 19: 473 ± 488.scribd. http://www. Aruan. The Airline Industry More Than Just Transportation .. Vollman. AirAsia.net/download/beyond_align. D. http://www. ³Partnership Up in the Air´.Strategic IT Initiative. (1996). et al. (2005).Strategic IT Initiative. Beyond Alignment.93 -4 Chan.scribd. D. Faculty of Economics and Commerce University of Melbourne: 3.. ³Air wars in Asia: competitive and collaborative strategies and tactics in action. Retrieved from http://us. ³Air wars in Asia: competitive and collaborative strategies and tactics in action.pdf 22nd October 2005 Kho. pp. Faculty of Economics and Commerce University of Melbourne: 8. ³Air wars in Asia: competitive and collaborative strategies and tactics in action. D. Faculty of Economics and Commerce University of Melbourne: 9. H. Porter. AirAsia as an industry company which is more focusing in the low cost carrier airplane industry need to consider to make the lowest possible cost to compete with the other competitors in their airplane industry. C..com/doc/2516371/Strategic-Management http://www. ³Air wars in Asia: competitive and collaborative strategies and tactics in action. D. (2005). W. Business Week.airasia.com Kho. H.Strategic IT Initiative. H. and B. Johnston. ³Strategic imperatives and the pursuit of quality in the US airline industry.´ New York: The Free Press. the third reason because a globalization and implementing E commerce. Kho. p.
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