Air Asia was established in 1993 and is the largest airline in Malaysia.

It is a Malaysian
low-cost airline that began operations in 1995 and has domestic and international routes
to over 25 countries. It operates from a central hub at Malaysia’s Kuala Lumpur
International Airport and has one of the lowest costs per kilometer per seat in the world.
Tony Fernandes is the co-founder and CEO of Air Asia.

Primary Activities
 INBOUND LOGISTICS- Finding shortest routes, cut off price, fuel efficiency
 OPERATIONS- Raw materials, adding value through production.
 OUTBOUND LOGISTICS- Online ticket booking, boarding pass printouts
 MARKETING & SALES- Advertisements and sponsorships
Support Activities
 HRM- Talent Management, Hiring
 TECHNOLOGY- Online Booking System, ERP
 PROCUREMENT- Suppliers Relations, Subcontracting
Strategy
 Air Asia as a low-cost airline
 It has the lowest cost per seat kilometer
 Air Asia follows the cost leadership strategy
 It aims to eliminate excess costs throughout the value chain, enabling the
organization to pass on the savings to customers as well as enjoy higher profit
margins.
The Air Asia Value Chain and Competitive Advantages:
 Ground Operations
By keeping the boarding process simple and ground-waiting times extremely minimal,
Air Asia massively cuts down on-the-ground costs.
 Service
Air Asia does not offer additional services for flight travel, such as in-flight meals or
airports, to minimize service costs and to reduce maintenance times between flights. It
should also be remembered that Air Asia makes full use of its planes, carrying out
flights that are not fully occupied rarely.
 Connectivity
Air Asia uses point-to-point connectivity, meaning that the flights land at each terminal
and airport has a route available. This ensures a highly connected network, efficient
aircraft utilization (by onboarding passengers at each connectivity point) and
streamlined operations.
 Safety Standards
Consumers very often equate a low-cost product or service with low quality or in the
case of an airline–as dangerous. Air Asia also focuses heavily on the safety procedure
to counter these myths, ensuring that their fleet is maintained regularly. AirAsia
Academy has also been established to train flight crew on safety measures and superior
service.
 Technology
The integration of online booking technology has enabled Air Asia to go paperless as
well as save time on on-boarding procedures and ticket processing requests.
 Marketing
Airline travel can get very expensive, and by offering some of the world’s least-
expensive tickets, Air Asia is able to aggressively market themselves as the safest and
the lowest cost airline carrier across both domestic and international routes.
Air Asia has created multiple competitive advantages across its value chain in the form
of:
 Standardization of Training and Maintenance
 Technological Integration for Faster and Easier Online Reservations
 Minimal On-Ground Time Spent by Aircrafts
 Optimal Utilization of their Fleet
 Frequent and Short-Haul Flights
 Limited but Well-Trained Service