KOLEJ PROFESIONAL MARA

BANDAR MELAKA

Business Ethics in Islam

MGT2723

SESSION 3 2022/2023

Class: DBF5A

Application Of Islamic Business Ethics in The Organisations

( AirAsia )
Video link: https://youtu.be/rdVuyJDObb0

Prepared by:

NAME STUDENT ID
MUHAMMAD SHAFIQ HAKIM BIN MUHAMAD KHARANI BMF21-07-019
MUHAMMAD SYAHMI BIN MUHAMMAD ZULHELMI BMF21-07-020
AHAMD NAHDAN BIN KASYFUN NAZIR BMF21-01-012
WAN MUHAMMAD ATIQULLAH BIN WAN MOHD SUKRI BMF21-07-011

Prepared for:
MASFUFAH BINTI AB RAHIM
Date of Submission:
3 March 2023

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Table of Contents
ACKNOLEDGEMENT.................................................................................................................... 1
INTRODUCTION ................................................................................................................................ 1
COMPANY BACKGROUND ................................................................................................................. 2
1) VISION, MISSION AND VALUES ................................................................................................. 2
-VISION...................................................................................................................................... 2
-MISSION................................................................................................................................... 2
-VALUES .................................................................................................................................... 2
2) ORGANISATION CHART (AirAsia) .............................................................................................. 3
3) ABOUT AirAsia GROUP .............................................................................................................. 4
 High Aircraft Utilisation ......................................................................................................... 4
 Low Fare, No Frills ................................................................................................................. 4
 Point to Point Network ......................................................................................................... 5
AirAsia CORE BUSINESS .................................................................................................................... 6
ETHICAL BUSINESS OF THE COMPANY .............................................................................................. 7
1) COMPANY’S VIEW ON ETHICAL PRACTICES ............................................................................... 7
2) Airasia ethical code of conduct ................................................................................................. 8
2.1Employee ............................................................................................................................. 8
2.2Competitors ......................................................................................................................... 8
2.3Customers ............................................................................................................................ 9
3) Corporate Social Responsibility (CSR) Activities Performed by The Company ......................... 10
4) Company Ethical Issue and Problem Solving ............................................................................... 13
5) AirAsia View on Halal Business Practices .................................................................................... 13
5.1 IKHLAS for Muslim Traveler................................................................................................... 13
5.2 Various Umrah Packages ....................................................................................................... 14
5) Comments Or Opinions Regarding the Business And How The Company Solved The Issue And All
Of These Must Be Based On Islamic Perspective............................................................................. 15
6)Recommendations On How to Improve The Company's Ethical Business Behaviour Must Be
Based On Islamic Perspectives. ....................................................................................................... 16
CONCLUSION .................................................................................................................................. 18
REFERENCES .................................................................................................................................... 18
APPENDIX ....................................................................................................................................... 19

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ACKNOLEDGEMENT
First of all, we would like to thank Madam Masfufah, who was a constant source of inspiration.
He encouraged us to think creatively and motivated us to work on this assignment without
giving it a second thought. He expressed full support and provided us with the different
teaching aids that were required to complete this assignment. He believed in us even when
we could not believe that we could do it. We are also thankful to every member of this group.
It was each individual’s contribution that made this assignment a success. We were always
there to lift each other up, and that was what helped us stay together till the end.

We thank our parents for always trusting in us and teaching us to believe in our abilities and
strengths and never give up until the goal is achieved. We are thankful to all our friends who
extended their moral support, and above all, we are thankful to God for being with us and
giving us the wisdom and ability to do this assignment.

INTRODUCTION
Malaysian multinational low-cost airline Capital A Berhad, doing business as AirAsia, has its
headquarters close to Kuala Lumpur. In terms of fleet size and destinations, it is Malaysia's
largest airline. More than 165 locations in 25 different countries are served by scheduled
domestic and international flights offered by AirAsia.

The history of AirAsia's founding is legendary in the aviation sector. When Tony Fernandes
and Kamarudin Meranun acquired a struggling airline in 2001 with two aircraft and 200
employees, they converted it into the fourth largest in Asia with more than 200 aircraft and
21,000 employees spread out over Malaysia, Thailand, Indonesia, the Philippines, and other
countries. With accessibility, affordability, and affordability as its pillars, AirAsia has
transported more than 600 million passengers to more than 160 locations in its network. It has
connected people and places with the goal of serving the underprivileged, and with to its well-
known motto, "Now Everyone Can Fly," it has been highly recognised for democratising air
travel in the area.

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COMPANY BACKGROUND
1) VISION, MISSION AND VALUES
-VISION
To be the largest low-cost airline in Asia and serving the 3 billion people who are currently
underserved with poor connectivity and high fares.

-MISSION
1. To be the best company to work for whereby employees are treated as part of a big
family.
2. Create a globally recognised ASEAN brand.
3. To attain the lowest cost so that everyone can fly with AirAsia.
4. Maintain the highest quality product, embracing technology to reduce cost and
enhance service levels.

-VALUES

1. Dare to Dream
Progress comes from innovation. Both require change to happen.

2. People First
Care for our people, care for our guests.

3. Make it Happen
Learn fast and deliver more with less.

4. Be Guest-Obsessed
Understand deeply what our guests want. Then give them more than they expect.

5. One AirAsia
We are one airline, with one vision, and one people.

6. Safety Always
Safety is everyone's responsibility; it starts with you.

7. Sustainability Spirit
Acting today for a better tomorrow.

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2) ORGANISATION CHART (AirAsia)

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3) ABOUT AirAsia GROUP
With 293 flights, 90 of which are classified as unique routes, AirAsia is the top low-cost carrier
in ASIA and ASEAN and doesn't require an introduction. By flying over 435 million passengers
and expanding from 2 aircraft in 2001 to 205 aircraft as of the end of 2017, the Group, which
consists of AirAsia Group Berhad (Consolidated AOCs - AirAsia Malaysia, AirAsia Indonesia,
AirAsia Philippines, AirAsia Thailand, AirAsia India, and AirAsia Japan), strengthened its
position as the industry leader.

AirAsia has grown tremendously during the previous sixteen years, going from an airline with
two aircraft operating six routes in Malaysia in January 2002 to serving over 119 destinations
in 21 countries. As of 28 February 2018, it had a market capitalization of just over RM14.6
billion and employed more than 20,000 people. It is the only airline that is truly ASEAN, serving
the 3.3 billion people in the region from 23 hubs spread across six nations: Kuala Lumpur,
Kota Kinabalu, Kuching, Penang, Johor Bahru, and Langkawi in Malaysia; Bangkok, Phuket,
Chiang Mai, Krabi, U-Tapao (Pattaya) and Hat Yai in Thailand; Jakarta, Bali, Medan and
Surabaya in Indonesia; Manila, Kalibo (Boracay) and Cebu in Philippines; Bengaluru, Delhi
and Kolkata in India; and Nagoya in Japan.

Tune Air Sdn. Bhd., founded in 2001 by Tan Sri Tony Fernandes, Dato' Pahamin Ab. Rajab,
Datuk Kamarudin Meranun, and Dato' Aziz Bakar, acquired loss-making, indebted AirAsia
from HI COM Holdings Berhad (now DRB-HICOM Berhad) for the pittance of RM1. This
marked the beginning of the quest to democratise air travel. The resourceful group took
immediate action to pay off the airline's debts before rebranding and relaunching AirAsia as a
low-cost carrier.

The Group's whole business strategy is based on a low-cost concept, which necessitates
lean, straightforward, and effective operations. To achieve this, a number of crucial tactics
have been used, including:

 High Aircraft Utilisation

AirAsia focuses on high frequency and high turnaround of flights, both of which add
to customer convenience and greater cost efficiencies. Its turnaround of 25 minutes
is the fastest in the region.

 Low Fare, No Frills

This means no frequent flyer miles or airport lounges in exchange for lower fares.
Guests have the choice of paying for in-flight meals, snacks and drinks.

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  Point to Point Network
All short-haul AirAsia flights (four-hour flight radius or less) and medium- to long haul
AirAsia X flights are non-stop, doing away with the need for human resources,
physical infrastructure, and facilities at transit locations.

Also, a decision was reached in December 2004 to replace the current fleet of outdated Boeing
B737s with the more fuel-efficient, dependable, and economical Airbus A320s, which have a
larger capacity. The Company now has the biggest and newest A320 fleet in the area as a
result. Airbus A320ceo and A320neo make up 183 of its 205 aircraft, and the Group aims to
quadruple the size of its narrowbody fleet to 500 aircraft by 2027.

At a cost/ASK (available seat kilometre) of 3.07 (US cents) as of FY2017, these techniques
taken together have made AirAsia the most affordable airline in the world. This was
accomplished without endangering safety. Safety operations are given the utmost importance,
and AirAsia abides by the rules established by regulators in all the nations where it conducts
business. To guarantee that its fleet is constantly in top shape, the Company also collaborates
with the most reputable maintenance companies.

The success of AirAsia has been significantly influenced by the creative use of technology,
starting with online booking. In March 2002, it became the first airline in Asia to provide
ticketless travel, enabling customers to make reservations by phone and paying with a credit
card. It has improved its IT infrastructure over time to make consumer transactions easier and
to give the Company additional savings. In 2010, AirAsia announced New Skies, a booking
Technology breakthrough that enables consumers to better manage their online reservations.
Since the emergence of social media, platforms like Facebook, Twitter, and blogs have been
crucial to the Group's efforts to improve its customer relationships. In terms of fan base,
AirAsia is actually acknowledged as the most well-liked airline in the area on Facebook.

Over the years, the Company has received various honours in recognition of its dedication to
best practises. The airline AirAsia has earned the title of Best Low-Cost Airline in the World
for nine years in a row (2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, and 2017), which is
perhaps most notable. This honour from the London-based aviation consultancy Skytrax
represents the views of over 20 million travellers from across the world who were surveyed.
As it expands its wings more and farther across the sky, AirAsia is proud of this endorsement
and determined to live up to customers' expectations by continuing to keep costs low while
offering the best standards of service and efficiency.

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AirAsia CORE BUSINESS

AirAsia offers a range of products and services including flight tickets, hotel bookings, car
rentals, and travel insurance. The company is known for its affordable prices and wide range
of destinations, making it a popular choice for travellers on a budget. The cost of AirAsia flight
tickets can change depending on a number of variables, including the travel class, the
destination, the season, and the time of year (economy or business). To get the best deal,
checking rates from different vendors is always a good idea. There are various things that can
affect the price of an airplane ticket. Here are some of the most common ones:

1. Seasonality: Admission costs can change based on the time of year. Costs may
be higher during peak travel seasons such as holidays or summer months.

2. Supply and demand: Airplane ticket pricing can be adjusted by supply and demand.
If a flight is in high demand and there are only a limited number of tickets available,
the price is likely to be higher.

3. Distance: The flight's distance may also have an impact on the cost of the ticket.
Generally, the cost of longer trips is higher than the cost of shorter flights.

4. Booking window: Depending on how far in advance a ticket is purchased, the price
may change. Typically, getting your reservation in early will help you get a better
deal.

5. Prices of airline tickets may be impacted by fuel costs. In order to cover their
expenditures, airlines may raise ticket rates when fuel prices are high.

6. Airport fees and taxes: The cost of a ticket may also be impacted by airport and
government fees and taxes. The cost of the ticket frequently includes these
charges.

7. Diseases can potentially affect airplane ticket prices, particularly if there is a

significant outbreak or pandemic

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ETHICAL BUSINESS OF THE COMPANY
1) COMPANY’S VIEW ON ETHICAL PRACTICES

Low-cost airline AirAsia, which is based in Malaysia, has a Code of Business Ethics that
underlines its dedication to moral business conduct. The following topics are included in the
AirAsia website’s Code of Corporate Ethics:

1. Business Ethics: AirAsia is dedicated to conducting business with integrity, honesty, and
ethical behaviour. These values are expected of all employees by the company.

2. Conflict of Interest: AirAsia workers are expected to avoid circumstances in which their
personal interests may conflict with the interests of the company. Employees are expected to
declare any conflicts and seek help on how to resolve them.

3. Confidentiality and Data Protection: AirAsia values its customers' and employees' privacy
and expects its workers to protect confidential information.

4. Fair Competition: AirAsia is dedicated to fair competition and will not engage in any conduct
that may violate antitrust laws or result in unfair business practices.

5. Gifts and Entertainment: AirAsia workers are not permitted to give or accept gifts or
entertainment that could be interpreted as inappropriate or influencing business decisions.

6. Anti-Bribery and Corruption: AirAsia is committed to adhering to anti-bribery and corruption

legislation and expects its workers to report any suspected infractions.

7. Sustainability: AirAsia is dedicated to reducing its environmental effect and supporting

environmentally friendly practices.

8. Human Rights: AirAsia is dedicated to upholding human rights and expects its workers to
do the same.

In general, the AirAsia Code of Corporate Ethics encourages moral conduct, accountability,
and transparency. It establishes expectations for employee conduct and reaffirms the
business' dedication to moral business practices.

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2) Airasia ethical code of conduct

2.1 Employee
The AirAsia company provide various training and skill enhancement for their
employee. The employee also can work in healthy and safe working environment. The
company also foster inclusivity and positive relationship through employee engagement
programs.

One of AirAsia employee values propositions has been to "Dare to Dream," which
means that AirAsia encourage their Allstars (AirAsia employee) to make ambitious ambitions
and work with them to achieve their objectives (AirAsia Sustainability Report 2020). As ardent
supporters of ongoing professional training and development, AirAsia believe in giving their
Allstars the opportunity to grow in order for them to reach their full potential. Every year, AirAsia
cabin crew go through recurring training, written and practical tests, and role plays of
emergency situations to prepare them to keep calm and manage problems in a systematic
manner. Air Asia keeps improving their supportive and constructive management by being
supportive and responsive in listening to its employee for any ideas for reducing cost.

AirAsia strive to attract and retain the greatest personnel by providing an appealing
work atmosphere that recognizes everyone's thoughts and positively embraces varied
perspectives. As of the end of 2020, the Group employed a total of 18,848 people, with 65%
of them being men and 35% being women. Male dominance in operational functions skews
the gender distribution (AirAsia Sustainability Report 2020).

AirAsia embrace an equal opportunity culture and do not discriminate based on

gender, age, or ethnicity, and we also endeavor to give opportunities for people with disabilities
(AirAsia Sustainability Report 2020).

2.2 Competitors
AirAsia is dedicated to fair competition and will not engage in any conduct that could
violate antitrust laws or result in unfair business practices. The main AirAsia’s strategy to
competing other airline companies is in a manner, they promote low-cost price for flight. Low-
cost strategy also known as “Cost Leadership strategy”. Reaching the lowest cost position
means that a firm's competitors will be hesitant to fight on price since, in the event of a price
war, the low-cost company will continue to generate profits after its competitors' earnings have
been competed away. And hence, for example, through cost and product differentiation, as
well as the levelling power of the Internet and information technology, it has become

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increasingly difficult for many organizations to discover ways to differentiate themselves from
their competitors, and rivalry has grown. In relation to its downsides, this threat can also be
mitigated by two price techniques. First, the low-cost leader might set its pricing to match that
of higher-cost competitors. Nevertheless, doing so lessens the likelihood of competitors
imitating the low-cost enterprise. Because of this, matching a competitor's prices costs market
share and sales volume. As a result, the cost-leader firm earns a higher-than-average profit
at this competitive pricing.

AirAsia's corporate motto of "Now Everyone Can Fly" inspired a revolution in air travel,
with more and more people choosing Air Asia around the region. In the competitive airline
sector, AirAsia maintains helpful and constructive management by being supportive and
responsive in listening to its employees for cost-cutting proposals. Even though the flight cost
is cheaper than the other airline company, they maintain their service and product quality. A
low-cost corporation can charge lower pricing for its goods or services than its high-cost
competitors. The low-cost firm's lower price will attract many clients and grow its market share
and sales volume, but at the cost of a lower profit. Because of the lower degree of technology,
the low-cost strategy reflects the demands of a consumer who wants a low-cost service but
requires highly individualized care.

And, as part of their "Everyone Can Fly" motto, AirAsia's weapon for cornering its
competitors is the effect on lowering costs, which has propelled AirAsia to the top of the low-
cost air carrier industry and one of the successful airline company in Asia. Regarding on that,
Air Asia Team believes by through on their outstanding regional passenger base, high levels
of quality service and committed customer relationships would leave them well positioned to
keep providing cost savings and growth significantly to the AirAsia while also increased
profitability.

2.3 Customers
To keep their relationship between the customers, AirAsia provide the best services,
promotes affordable prices, quality customer services and safety. To attract guests or
customers, they use key strategies in their business. The first key which is High Aircraft
Utilization for focusing on high number of flight and fast turnaround times. This will increase
passenger comfort and maximize cost efficiency. The flight turnaround takes 25 minutes only,
the fastest in Southeast Asia. The turnaround time (TAT) is the time in which a landed aircraft
is enabled to take-off for a new flight. The second keys, Low fare, no frills. To maintain the
low-cost of the services, they excluded the loyalty program or an airport lounge. The third keys
are, Direct Aviation Network. They can reduce the utilization of ground employees, physical

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infrastructure, and facilities at transit airports by doing so. Short haul is a flight lasting
anywhere from 30 minutes to 3 hours. Medium haul is defined by flights lasting between 3-6
hours. And lastly, long-haul flights are those that extend beyond 6 hours, whilst an ultra-long-
haul flight is in the air for over 12 hours.

With the continued rise of online booking sites, consumers now have a variety of
options for comparing and contrasting services that are already accessible in the market.
Because the sector is price sensitive, consumers are continuously looking for low-cost
bargains, which invariably leads to fierce price competition among industry competitors.
Furthermore, AirAsia offers online booking systems such as "Go Vacation" and "Get A Room,"
which allow AA to generate revenue by adding a service fee into hotel pricing (AirAsia Berhad,
Annual Report 2009). AirAsia thinks that by leveraging the power of online, social media may
serve as a conduit of communication for low-cost promotions, new route launches, contests,
flight schedule updates, and guest support services. Besides, it develops a platform to ensure
the group's brand image remains current through its website and various social media
networks.

Domestic air travel may not be practicable in most ASEAN countries, making train and
road transportation more appealing alternatives. Consumers, on the other hand, are likely to
consider not just the expense of travel, but also the time it takes to reach their respective
destinations. As a result, to persuade consumers to fly domestically, AirAsia needs maintain
its low tickets and shorten journey time. AirAsia operates a single-class service with no in-
flight facilities such as complementary food and entertainment, loyalty programs, or airport
lounges. AirAsia's frequent flights have made travel more convenient for passengers, as the
airline has the fastest turnaround time in the ASEAN area at 25 minutes. This has resulted in
increased aircraft utilization, lower costs, and increased airline and employee productivity
(AirAsia, Annual Report 2009).

3) Corporate Social Responsibility (CSR) Activities Performed by The Company

To better inform and encourage community participation in climate action, AirAsia has
made strides. The objectives included identifying the airline's support pillars, which will include
environmental sustainability. The commitment to the community is represented in the
Company's sustainable tourism activities in AirAsia's Sustainability Manifesto. In addition, the
Company also has disaster response initiatives, as it is aware of vulnerability to disasters.
Contributing to the community, namely by assisting the community in improving the level of
living and the quality of the surrounding environment, is part of the Company's social and

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environmental responsibility, as stated in Article 1 Point 3 of the LLC Law. Community
development initiatives are another critical component of the SDGs.

Besides the COVID-19, the Business remained committed to meeting its corporate
social obligation to all its stakeholders. Furthermore, the application of corporate social
responsibility (CSR) confirms the Company's adherence to the applicable regulatory
framework, such as Law No. 40 of 2007 on Limited Liability Companies (LLC Law). To
demonstrate its commitment to responsibility, the Business publishes annual reports and a
specialized sustainable report based on the Global Reporting Initiative (GRI) framework.
Following the establishment of the Sustainable Development Goals (SDGs) in 2015, the
Company has worked with AirAsia Group to align its CSR aims with the seventeen SDGs.
AirAsia's Sustainability Manifesto outlines eight important goals in the areas of carbon, energy
consumption, waste, water consumption, sustainable tourism, goods and services,
governance, and culture.

To reduce the negative environmental impact of air travel, the company has made a
significant commitment to environmental improvement, as seen by the priority areas of
AirAsia's Sustainability Manifesto. Human actions that disregard environmental sustainability,
both in daily life and in business, have been linked to a variety of natural calamities. The
modern period has significantly benefited global society, as evidenced by the rapid expansion
of industrialization and technology, but this must be balanced with our efforts to maintain the
planet's existence. As an aviation firm, the Company recognizes its role in providing global
connectivity, as well as the environmental consequences of its operations, including as a
significant carbon footprint and greenhouse gases (GHG). To reduce the negative
environmental impact of air travel, the company has made a significant commitment to
environmental improvement, as seen by the priority areas of AirAsia's Sustainability Manifesto.

In terms of energy management, the company performed an energy audit to detect

consumption leaks and subsequently mitigation measures that may be implemented. As a
result of this procedure, the Company enforces rigorous power use limits at its workplaces,
such as lighting operation between 7 a.m. and 5 p.m. and air conditioning operation between
8 a.m. and 6 p.m. In 2020, The above endeavor is part of Perseroan's contribution to the
AirAsia Group's aim of reducing annual electricity use in office environments. Following those
activities, as well as the pandemic that has limited many people's activities in public locations
throughout 2020, the Business recorded 964 kWh of electricity use.

Besides of taking care on energy management, every year the Company calculates
the carbon intensity ratio to determine the level of emissions produced by its flights. In 2020,
the Firm reported carbon emissions of 232,549.59 tons, a 69.8% drop over the previous year's

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emissions. The Company's above-mentioned result moves AirAsia Group one step closer to
accomplishing its objective of reducing overall GHG emission development by 2021. Other
measures include responsible travel, a collaboration with Airbus to investigate the utilization
of additional sustainable fuel sources, the implementation of carbon dashboards, and other
efforts to reduce power and fuel consumption.

Furthermore, all human actions, whether they are in the office or at home, they
will produce waste. Waste, if not properly managed, can cause substantial environmental
issues, such as severe marine contamination caused by plastic, as has been widely reported
around the world. Recognizing the foregoing, the company initiated a drive to reduce the
usage of single-use plastics. This is accomplished in the Company's workplace environment
by encouraging employees to bring their own food and beverage containers as well as cutlery,
or the #BYOCCC campaign (Bring your own cup, container & cutlery). This program, which
pertains to the Company's aviation operations, is promoted to all Allstars, partners, and
consumers. This aligns with AirAsia Group's goal of eliminating single-use plastic waste in the
office by the end of 2020 and on board by the end of 2025. Not only does the Business seek
to reduce plastic trash, but it also strives to reduce aviation consumption waste by improving
logistics management on each flight route. At the group level, the goal is to minimize waste
consumption by 20% by 2020. In terms of paper consumption, global demand for paper,
including in Indonesia, has been responsible for worldwide deforestation. To reduce paper
usage, the company implements regulations that optimize paper use while also maximizing its
electronic infrastructure to support business processes. The company currently records paper
use at five sheets per person per day and has conducted an environmental audit on paper
use. According to audit data, as many as 178,270 print jobs employed the duplex printing
mechanism, resulting in 786,980 sheets of paper saved (29.94%), or a total of 94.96 saved
trees each year. Furthermore, the company promotes waste sorting by material by
implementing the 3Rs of reduce, reuse, and recycle.

The AirAsia company also recognized the importance of source of water. Water, as
one of the most essential sources of energy, must be appropriately handled, as does water
usage. The company has implemented several water-saving initiatives, such as a water-
efficiency campaign and the construction of absorption wells. The company also measures its
consumption volume per square meter per year on a regular basis. As a result, the Firm
recorded a consumption of 0.301 m3/m2/year in 2020. The Firm used 2.897 m3 in total, with
2.618 m3 from the water company and 279 m3 from deep wells.

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 The AirAsia company's Corporate Social Responsibility initiatives demonstrate that
they not only prioritize their profit from the aviation industry, but they also highlight the
relevance of environmental considerations.

4) Company Ethical Issue and Problem Solving

Unlawful and immoral advertising by AirAsia may have misled viewers on both acts (Contract
Law 1950 and Misrepresentation Act 1967). It's because AirAsia failed to convey the true costs
in their advertisements. There are additional fees that are not disclosed in the advertisement.

The ministry has admitted that there were no problems with incorrectly interpreting AirAsia's
commercials and that they weren't meant to deceive. The ministry has nevertheless noted that
confusion may have developed as a result of a failure to comprehend the commercials,
particularly among first-time AirAsia travellers who are unfamiliar with the airline's distinctive
and cutting-edge idea. Tan Sri Muhyiddin Yassin, the Minister of Domestic Trade and
Consumer Affairs, has also stated that as the low fare programme is still a relatively new idea,
AirAsia should explain it to customers.

"We appreciate the minister's suggestion, and we have road shows scheduled to reach out to
more individuals and promote the idea of reduced fares. According to Tony Fernandes, CEO
of AirAsia, "we will continue to promote our affordable rates as we have done in the past. He
adds, "Whether you receive an RM 1.99 fare or any other fare, it is always a low fare when
you purchase a seat on AirAsia. Our lowest fare can save you up to 80%, and even our top
fare is 20% cheaper than competing full-service airlines' highest fare. We will continue our PR
efforts to inform the public about this issue because we recognise that some individuals,
mostly those who are travelling on our planes for the first time, may not be familiar with the
notion.

The advertisements employed by AirAsia are comparable to those of other low-cost carriers
like EasyJet, RyanAir, and Virgin Blue, who are subject to tougher regulations regarding
advertising in their respective nations.

5) AirAsia View on Halal Business Practices

5.1 IKHLAS for Muslim Traveler
IKHLAS, Capital A's platform for Muslim-friendly travel and lifestyle, which enables
Muslims to fulfil their religious requirements conveniently, affordably, and easily while also
leading a shariah-compliant lifestyle, was formally launched on Thursday (Oct 20).

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 Muslim travelers can now travel with IKHLAS in confidence thanks to a partnership
with authorized umrah (Muslim pilgrimage) operators Ikhlas Com Travel and Umrah Sdn Bhd.
IKHLAS offers a wide variety of carefully curated, cost-effective halal travel packages at
extensive destinations across the entire AirAsia network.

The all-inclusive IKHLAS travel packages include South Korea, a popular vacation
destination for Muslims, with a Muslim-friendly itinerary so that travelers may see Seoul in the
winter, spring, or while travelling by train to Busan, starting at just RM3,790.

In addition, Muslim tourists may visit Bali, Indonesia, with outbound packages
beginning at RM390 per pax, without worrying about access to halal cuisine.

Phuket, Bangkok, and Krabi are three more well-known Muslim-welcoming cities in Thailand.

IKHLAS launched in April 2020 and used the COVID-19 pandemic's downtime for
development to become the full-fledged Muslim-friendly travel and lifestyle platform of AirAsia
Super App.

IKHLAS is now able to provide a variety of inexpensive umrah and other vacation
packages as a result of the restart of AirAsia X flights to Jeddah and many more fascinating
locations.

Digital access to religious rituals like Qurban and Zakat as well as other shariah-
compliant lifestyle services like Aqiqah, Fidyah, and Sadaqah are also offered on the IKHLAS
platform.

In addition, IKHLAS offers a shopping option called Shop with IKHLAS that has over
1,000 items, including food, clothing, books, jewelry, and home goods.

5.2 Various Umrah Packages

IKHLAS also offers a variety of umrah packages, with costs beginning at RM5,990.
Beginning on November 16, 2022, AirAsia X will offer flights from Kuala Lumpur to Jeddah.
These flights are designated Umrah Lite, Umrah Jejak Rasul, and Umrah Hawa.

The 9D/7N Umrah Light package, which costs RM5,990, will leave on Nov. 19; the
12D/10N Umrah Jejak Rasul package, which costs RM7,890, will leave on Nov. 16; and the
13D/11N Umrah Hawa package, which costs RM7,690, will leave on Dec. 21, 2022.

Capital Datuk Kamarudin Meranun, the executive chairman of AirAsia, stated that the
company's primary focus is on connecting travelers to locations at the cheapest prices. He

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also stated that he has always envisioned adapting the company's success into a shariah-
compliant travel ecosystem.

“With IKHLAS, we are marrying both travel and religious obligation into one convenient
and accessible platform for Muslim travellers, enabling them to travel with confidence,” he
said.

IKHLAS was the brainchild of Tony Fernandes, CEO of Capital A Group, and Kamarudin.

Ikhlas Kamarudin, the CEO of IKHLAS, added that "in only two short years, we have
managed to develop the IKHLAS platform enormously, supporting the Muslim communities
and organizations through a digital ecosystem and revolutionizing the way they carry out their
deen (religious requirements)."

In addition to the pre-made umrah packages that we currently provide, he continued,

"We will also be introducing more adaptable, DIY travel and umrah options, where travelers
can customize their trips by selecting their flights, hotels, activities, and other add-ons that are
specifically curated for Muslims." – Oct 23, 2022

5) Comments Or Opinions Regarding the Business And How The Company Solved The
Issue And All Of These Must Be Based On Islamic Perspective.

AirAsia is a Malaysian low-cost airline that has been operating for over two decades.
Over the years, the company has faced several challenges, including a decline in revenue due
to the COVID-19 pandemic. In response to the crisis, the company has taken several
measures to reduce costs and increase revenue. From an Islamic perspective, AirAsia's
actions can be evaluated in light of several ethical principles and values, such as honesty,
transparency, and social responsibility.

One of the most significant challenges that AirAsia faced in recent years was the
COVID-19 pandemic, which caused a significant decline in air travel demand. To address this
issue, the company implemented several measures, including cutting costs, renegotiating
contracts, and exploring new revenue streams. In June 2020, AirAsia announced that it would
be terminating its joint venture with Japan's ANA Holdings Inc. This move was seen as a cost-
saving measure and a strategic shift towards focusing on the company's core markets in
Southeast Asia.

In addition to cost-cutting measures, AirAsia has also taken steps to increase revenue.
In September 2020, the company announced that it would be launching a "super app" that
would allow customers to book flights, hotels, and other travel-related services. The app would

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also feature a digital wallet that could be used to pay for purchases both online and offline.
This move was seen as a strategic shift towards becoming a digital lifestyle company, rather
than just an airline.

From an Islamic perspective, AirAsia's actions can be evaluated based on several

ethical principles and values. For example, honesty and transparency are important values in
Islam. AirAsia's decision to terminate its joint venture with ANA Holdings Inc. was seen as a
transparent move to reduce costs and focus on the company's core markets. Similarly, the
company's decision to launch a super app was seen as a transparent move to diversify its
revenue streams and become a digital lifestyle company.

Another important value in Islam is social responsibility. In response to the COVID-19

pandemic, AirAsia has taken several measures to support its employees and the wider
community. In March 2020, the company announced that it would be deferring salary
payments for senior employees and implementing a pay cut for all other employees. However,
the company also announced that it would be providing financial assistance to employees
affected by the pandemic, as well as donating face masks and other medical supplies to
frontline healthcare workers.

In summary, AirAsia has encountered various obstacles in recent times, such as a

drop in profits due to the pandemic. Nevertheless, the company has implemented various
strategies to cut expenses and generate more income. Looking at the situation through an
Islamic lens, AirAsia's behaviour can be measured against ethical principles and values,
including honesty, transparency, and social responsibility. All in all, the company has acted
transparently and responsibly, providing support to both its employees and the broader
community during a difficult period.

6) Recommendations On How to Improve The Company's Ethical Business Behaviour

Must Be Based On Islamic Perspectives.
1. Transparency: AirAsia could further enhance transparency by disclosing more
information about its operations and financial performance. For example, the company could
provide more detailed reports on its financial statements, corporate governance, and
sustainability practices. This would help to build trust with stakeholders, including customers,
employees, investors, and regulators.

2. Social responsibility: AirAsia could strengthen its social responsibility initiatives by

developing programs that benefit the wider community. For example, the company could

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partner with local charities or non-profit organizations to support education, healthcare, or
environmental initiatives. This would align with Islamic values of charity and social
responsibility.

3. Fair treatment of employees: AirAsia could ensure that its employees are treated fairly
and ethically. This could involve providing a living wage, safe working conditions, and
opportunities for professional development. The company could also develop a code of ethics
and conduct that outlines its expectations for employee behaviour and encourages a culture
of honesty and respect.

4. Sustainability: AirAsia could focus on sustainability by implementing eco-friendly

practices and reducing its carbon footprint. This could involve investing in renewable energy,
reducing waste and pollution, and promoting sustainable tourism. This would align with Islamic
values of stewardship and responsible resource management.

5. Customer satisfaction: AirAsia could improve its ethical behaviour by placing a greater
emphasis on customer satisfaction. This could involve investing in customer service training,
developing fair and transparent pricing policies, and ensuring that customer feedback is taken
seriously and acted upon. In conclusion, AirAsia can improve its ethical business behavior
from an Islamic perspective by focusing on transparency, social responsibility, fair treatment
of employees, sustainability, and customer satisfaction. By aligning its business practices with
these principles and values, AirAsia can enhance its reputation and build a stronger
relationship with its stakeholders.

To sum up, AirAsia can enhance its ethical business practices based on Islamic perspectives
by prioritizing transparency, social responsibility, fair treatment of employees, sustainability,
and customer satisfaction. By aligning its operations with these principles and values, AirAsia
can strengthen its reputation and establish a more robust connection with its stakeholders.

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CONCLUSION
In Conclusion, AirAsia has success to be the largest Malaysian multinational low-cost
airline. We have learned that it is important to have good ethical business practices in a
company to take care consumer, employees, shareholders with professional and high
services. We also learned that CSR activities have a big impact to the company which is it will
make the consumer support the company with using their product. Ethical Issue that they have
face have been solve with efficient way and explain it back to the customer that doubt with the
real flight ticket price. We will take AirAsia's study as our future guide.

REFERENCES
About Us. (n.d.). Retrieved from airaisa: https://newsroom.airasia.com/about-us

AirAsia and AirAsia X win top CSR Awards. (2017, July 21). Retrieved from airasia :
https://newsroom.airasia.com/news/2017/7/20/airasia-and-airasia-x-win-top-csr-awards

AirAsia Ethical Issues. (n.d.). Retrieved from Google:

https://www.google.com/search?q=airasia+ethical+issues&rlz=1C1UEAD_enMY945MY945&
sxsrf=AJOqlzVP23nAc-4OyvmJg9g-
ksoLsxn8Mg%3A1677860356836&ei=BB4CZODXMraXseMP-7-
gyA0&oq=airasia+ethics+&gs_lcp=Cgxnd3Mtd2l6LXNlcnAQARgCMgQIIxAnMgQIIxAnMgYIAB
AWEB4yBQgAEIYDMgUIA
CODE OF BUSINESS CONDUCT. (n.d.). Retrieved from capital A:
https://www.capitala.com/business_conduct.html#:~:text=At%20AirAsia%2C%20we%20obe
y%20all,and%20pursue%20the%20same%20beliefs.

Corporate Social Responsibility. (n.d.). Retrieved from AirAsiax:

https://ir.aaid.co.id/social_responsibility.html

Lianah, J. (2017, May 4). Legal & Ethical Issues in AirAsia Advertisment. Retrieved from Prezi:
https://prezi.com/nt-4f4sruubu/legal-ethical-issues-in-airasia-
advertisment/#:~:text=AirAsia%20made%20an%20illegal%20and,not%20stated%20in%20th
eir%20advertisement.

Mission, Vision and Values. (n.d.). Retrieved from AirAsiax: http://www.airasiax.com/mission.html

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APPENDIX

AirAsia Logo AirAsiax Logo

Capital A Logo

AirAsia Founder
Tony Fernandes
(CEO of AirAsia) Ikhlas Founder
Datuk Kamarudin Meranun
(Executive Chairman of AirAsia)

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