CASE ANALYSIS

(AIR ASIA)

Submitted by:
Maagad, Jan Andre

Macawi, Alyana

Maglasang, Sophia Jo Carmella

Mayor, Maria Isabella

Mofar, Christine Grace

Mun, Hyun Woong

Nollora, Kaydge Andri

Submitted to:

Mr. Ray Michael S. Homeres

 CASE ANALYSIS
BACKGROUND OF THE CASE
Air Asia was set up in 2001 and many people doubt them. But in 2005 it was announced that they would
give away 10,000 free seats to select Southeast Asian destination, for them it is their way of celebrating
their 3 years of successful flying. Air Asia is one of the most successful airlines in Southeast Asia with its
low cost and no-frills travels. The low fares and fast-growing operations made them the top in news.
Air Asia wants to maintain their image as a low-cost airline that's why they set low prices to newly
opened destination to capture customers. Air Asia was the first airline in South East Asia to launch a low-
cost carrier. They believed that if they will take their passenger to their destination on time with low
fares the passengers will be loyal to them. Even though their major competitor launched an "everyday
low price", Air Asia was able to make a solution for that and maintain their company reputation as a
low-price competitor in airline industry. 

I. Case Point of View 

“AirAsia’s accomplishments and success today is a reflection of the public’s trust and faith in
the company,” said Tony Fernandes, CEO of AirAsia. This case study evaluates the Air Asia’s
objectives of getting more customers from the perspective of low-cost carrier (LCC),
particularly with regards to maintaining their company reputation as a low-priced
competitor. 
II. Statement of the Problem 
Air Asia is well known for their low-cost fares but because of factors that the price of
gasoline is increasing and the low-cost fares of competitors, Air Asia is having a hard time to
maintain their low-cost fares

III. Objectives 
 To serve people with low flight flares and number one when it comes to lowest cost of
flying in Asia. 
 To become a leading airline organization with maintained product, service
quality, and a low-priced fare.      

IV. Areas of Consideration

A. Company Operation  
 Strengths:  
 Price - low cost operation, consistently delivers lowest fares 
 LCC - first in South East Asia to launch a low-cost carrier. The single type
of fleet minimizes maintenance fee and easy for pilot dispatch 
 Large mass market share - Asia sets a low price for the air fares for the newly
opened destination that's why they capture large mass of market share  
Weaknesses: 

 Service resource – Resources are limited because of the low cost they want to

maintain, limited human resource could not handle irregular situation 
 Customer feedback - receives a lot of complaints from customers because of
their operation and service  
 Brand - very important in market position. developing and improving it is always
a challenge. And Air Asia’s heavy reliance on outsourcing has pros and cons like
they want to maintain their image as low-cost airline but the other cost like
their maintenance are increasing.  
Opportunities:

 Partnership - Air Asia have the opportunity to partner with other low-cost

airlines 

 Market target - Asian people who are in middle class and it will accessible to

them and that means the number of customers will grow. 
Threats: 
 Image - feedback of other customers are bad and it will make them have a bad
image because of certain issues 
 Operation cost - rising fuel cost, rising labor cost, rise of other LCCs in market

B. Services Offered
Strengths:  
 Low fares and its fast-growing operations 
 The staffs of Air Asia which are the Pilots, cabin crews, ground staff,
and engineers are well trained to operate the facilities of this low-cost carrier.
 They were    taught through digital technology to provide the best service and
most passionate people, thus owning a responsive and multi-skilled staff.  
Weaknesses: 
 The charge for the excess baggage is not the same when checking in online and
at the airport. 
 Unpredictable change in plane fuel prices might result to the increase of Air
Asia’s fare. 
Opportunities:
 Should be open for new and different ventures 
 Improving their Facilities        
 Add more flight destination to increase profit 
Threats: 
 Increase maintenance 
 Has a lot of competitors 
 Manage the shifting in costs of fuel 
 Maintain their vast fleet of aircrafts 

V. Alternative Courses of Action 

1. Consider increasing prices 
Advantages: Increase of profits and spending on the improvement of services 
Disadvantages: Goes against the company’s belief where they can send their customers
anywhere with low prices
2. Improve company services 
Advantages: Improvement of overall airline services
Disadvantages: Increase of airline fares
3. Improve advertisement and promotional activities 
Advantages: The airline will gain more customers and its profit will increase via sales
Disadvantages: Adds to the cost of production and airlines fee will increase 

VI. Recommendation
The Air Asia is suggested to consider increasing prices, so their profit will increase and will
help in improving the services of the company.