Air Asia

Air Asia  Thai Air Asia Limited Section 1: Company Background In the past, domestic air routes were limited to only few players; such as Thai Airways, Bangkok Airways, Air Andaman, and Phuket Air. Prime Minister Thaksin Shinawat announced the opening of Thai air routes in 2002 and this has induced a lot of airlines to enter the market, especially low cost airlines, which have already been widely and well accepted in scores of countries. In Southeast Asia, at that time, Air Asia Malaysia was considered as one of the most well known budget airlines and operating in many Asian countries. After long-going negotiating process with local companies, on November 12, 2003, Air Asia Malaysia agreed to enter the partnership with Shin Corporation Public Ltd., in forming Thai Air Asia Limited. Using the catchy and effective slogan of "Now everyone can fly", Thai Air Asia has completely changed the new ground of airline industry. People no longer look at flying as an expensive choice of transportation, Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET GE T BE BETT TTER ER GR GRAD ADES ES rather one of the economica e conomically lly justified ways of traveling to domestic and international international destinations. destinations. Air Asia has considerate advantages over other airlines in many ways. Firstly, its experience of being in this industry for long time contributes to the already established service standard, operational expertise, infrastructure readiness, as well as bargaining power with suppliers. According to the survey done by www.lowcostairline.org, www.lowcostairline.org, the travelers ranked Air Asia as number 8 of their most favorite low low cost airlines. airlines. Secondly, Shin Corp, Corp, local partner, partner, is very very powerful powerful business entity as it has highly diversified portfolio and many strategic business units in media industry. This gives Air Asia the competitive edge in terms of creating awareness of the brand and budget airline industry as a whole. There was a big buzz when Air Asia offered incredibly low airfare in the first 3 months. Moreover, Moreover, because both giants, Air Asia Malaysia and Shin Corp, have great financial...

Analysis Of Air Asia STRATEGIC MANAGEMENT ASSIGNMENT #1 AIR ASIA 1. a) AirAsia’s vision:

• To be established as the leading low-cost carrier in the Asian region. AirAsia’s mission: • A low cost airline carrier that offers five-star service with 95% of on-time performance. • To be able to provide affordable airfares, at the same time promoting Malaysian hospitality hospitality and the local food. • To focus on customer’s needs by stimulating stimulating demand and offers the lowest fares, comprehensive distribution channel and developing various products and services. AirAsia’s objective: • Aims to carry 70 million passengers a year, within six years starting from 2014. • Turn the low-cost carrier terminal at the KL International Airport into the regional hub for budget travel. • Plans to introduce more routes, add frequencies and develop the existing ones. b) AirAsia’s competence: Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET GE T BE BETT TTER ER GR GRAD ADES ES • A low-cost no frills airline, with an extensive regional network network in Asia that caters people of all income levels. AirAsia’s core competence: • Offers low-cost and affordable airfares • Offers in-flight services that promote Malaysian hospitality and a huge variety of the local food. • Offers internet and mobile services as mediums for check-in and booking. AirAsia’s distinctive competence: • A low cost carrier which offers five-star service where everybody everybody can fly. c) Opportunities: Opportunities: • AirAsia will have the opportunity to promote Malaysian tourism, which in return will increase the company’s revenue. • Within the South-East region, AirAsia can tap on a lot of opportunities since there is huge potential for customers that consist of foreign workers from neighbouring neighbouring countries such as Indonesia, Myanmar and Vietnam. • AirAsia...

 The Air Asia Establishment  The Air Asia Story Inspired by the LCC business model of Southwest Airlines inspired Tony. Southwest Airlines was established in 1971 and had been profitable every year since 1973.  Then model adopted by Europe after liberalization of aviation industry. Ryanair (Ireland) and easyJet (London) are the largest LCC in Europe and follow the same business model. Air Asia was established initially by DRB-Hicom Bhd in late 1996, asian financial crisis in 1997. Government studied Tony’s proposal to start a LCC carrier and refused to issue a new licence and had requested Tony to buy over an existing airline.  Tune Air, set up by Tony and his investors bought Air Asia over from DRB-Hicom on 8th Dec 2001 for a token sum of RM1, with its 2 x Boeing 737-300s, a tiny route network and nearly RM 40 million in debts.  Tony Fernandez (VP, Times Warner Music, SEA), from music industry had RM 1 million in hand (mortaged house and sold off Times Warner Share Options) to pump into Air Asia. Air Asia’s LCC runs short-haul (less than 3 hours) and is low-cost, no-frills carrier Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES serving routes within Asia. Air Asia was re-launched in January 2002, with fares lower than bus ticket for local destinations and even gave away free tickets. First day of operations started with RM 1 promotional price. Air Asia started with routes from KL, and then from Senai Airport in Johor in 2003. By Dec 2002, the revenue was stated to be RM 113 million and profits of RM 19.4 million, 1.1 million passengers and most debts settled. Cost cutting measures such as : Fuel consumption being cut by half, and landings being doubled with the tyres. Safety and service were given same priority as cost cutting measures. Problems raised were resolved within 24 hours as a KPI.

Air Asia Financial Performance FY Ended 30th June (RM Millions) 2002 2003 2004 2005 2006 2007 Revenue 217 330 392 Pretax Profit/(Loss) (1.6)...

666

1,058

1,603

Air Asia Advertising Types COMPANY INTRODUCTION Air Asia Berhad was set up by Dato' Tony Fernandes in 2001. In December 2001, Dato’ Tony Fernandes along with Dato’ Pahamin Ab. Rajab (Chairman, AirAsia), Dato’ Kamarudin bin Meranun (Deputy Group Chief Executive Officer, AirAsia) and Abdul Aziz bin Abu Bakar (Director, AirAsia) formed a partnership and set up Tune Air Sdn Bhd (Tune Air), an airline holding company then bought over AirAsia from government-owned conglomerate DRB-Hicom on December 2, 2001 which Air Asia was originally founded. AirAsia has been expanding rapidly since 2001 where Dato'  Tony Fernandes later proceeded to engineer a remarkable turnaround, turning a profit in 2002 and launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM10 (US $2.50). Starting with only two planes till now AirAsia owns more than 72 aircrafts. AirAsia become an award winning and Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES the largest low cost carrier in Asia with leading low fare airline in the Asia. In 2003, AirAsia opened a second hub at Senai Airport in Johor Bahru near Singapore and launched its first international flights to Thailand. AirAsia has since started a Thai AirAsia subsidiary, added Singapore itself to the destination list, and started flights to Indonesia. Flights to Macau started in June 2004, while flights to mainland China (Xiamen) and the Philippines (Manila) were started in April 2005. Flights to Vietnam and Cambodia followed later in 2005. AirAsia flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs located in Malaysia, Thailand and Indonesia. To date, 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, Thai AirAsia and

Indonesia AirAsia. AirAsia is also spreading the amazing experience to exciting destinations...

Air Asia- Porter's Five Forces Porter’s five forces Michael E. Porter claimed that there are five competitive forces which can shape every industry by identify and analysis those five forces(appendix) and thus determine strengths and weaknesses of the industry. Those five forces are now used to determined Air Asia’s strengths and weaknesses which are shown as below:

 Threat of Entry  There is a high barrier entering airlines industry since it requires high capital to set up everything such as purchase or lease air craft, set up office, hire staffs, and etc.  Thus, this has reduced the treat to Air Asia. Moreover, brand awareness is quite important in this industry. Thus, to enter this industry not only required high capital but also have to take some time to create brand awareness. Consumers always choose the product or service they really trust. Thus, instead of creating brand awareness, new entry has to create so called brand loyalty. Hence, this is reducing treat to Air Asia too.( Roy L. Simerly) However, Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES the government legislation is one of the barriers for entering airlines industry. For example, MAS has been protected by Malaysia government on the route to Sydney and Seoul Incheon. Therefore Air Asia find itself very difficult getting a new route from government. This not only affects the timeline set by Air Asia but also influence their profit. Power of suppliers Every industry has someone to play the role as suppliers. Power of the suppliers is important as it will affect the industry. In airline industry, the power of suppliers is quite high since there are only two major suppliers which are Airbus and Boeing hence there are not many choices to airline industry. Nevertheless, the global economic crisis has limited the new entrant and also reducing the upgrade of planes in the immediate future. However, both suppliers provide almost same standard aircrafts and hence the switching to Air Asia is low. Moreover, Air Asia placed a large amount of order from Airbus in order to...

SWOT Analysis ---- The internal factors (strengths and weaknesses) and external factors (opportunities and threats) of Air Asia. Strengths * Low cost operations * Consist of less management level * Do things effectively and focused management * Penetrate and stimulate to potential markets * Multi-skilled staffs means encouragement of workforce and efficient result * Single type fleet minimize the maintenance fee Weaknesses * Service resource is limited by lower costs * Limited human resources (could not handle irregular situation) * Government interference and regulation on airport * Deals and passenger compensation * Heavy dependence on outsourcing * Financing more and more seats (Load factors under pressure) * Aircraft financing costs swelling Opportunities * Long drag flight is an trial to get undeveloped market share * Differentiation from traditional LCC (Low Cost Carrier) model by adding customer services or operation as full service airline with low...

Why Do So Many People Fly With Air Asia? A young Asian brand gone global, Air Asia is the World’s Best Low-Cost Carrier and the Airline of the Year for 2009 & 2010. Being the best in the industry and the top digital brand in Asia, Air Asia now flies to over 70 destinations in 19 countries. In general, the findings show that most of the respondents agree that the price of the Air Asia’s ticket is reasonable and it is making flying possible for everyone. The main finding is to find out that why do so many people fly with Air Asia. Based on the data collection from the questionnaire and the bar chart show in appendices 2, there are 86% of people who know about Air Asia airlines. Toward this analysis we obviously know that the popularity of Air Asia in Malaysia. Besides that, there is Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES

76% of people had fly with Air Asia before and the major passengers were among teenagers. This shows that the air ticket of Air Asia can be afford by different stages of people even teenagers. This is because Air Asia is Asia’s first low-cost carrier compare with other airlines. There is no-frills, hassle-free, low fare business concept of Air Asia so that affordable air travel can become a reality. People who fly with Air Asia just need to pay for only what they need. Air Asia lets customer choose what they truly need on every single flight so that there is no extra cost and burden for the customer. This is why so many people choose to fly with Air Asia and agree that the air ticket of Air Asia is more reasonable compare to other airlines. Air Asia Understanding Marketing Mix in Air Asia Airline Bhd Author: Onwutalobi, Anthony-Claret CSN: 31217-2008-22-15 EXECUTIVE SUMMARY The term "marketing mix" became popularized after Neil H. Borden published his 1964 article titled, “The Concept of the Marketing Mix”. Since then, this terminology has become a common knowledge in the business world and has played a pivotal role in shaping most companies’ business processes and models. However, most people argued that this framework was particularly useful in the early days of the marketing concept when physical products represented a larger portion of the economy. Today, with marketing more integrated into organizations and with a wider variety of products/services and markets, is so astonishing and surprising that this concept is still very appropriate and relevant. In this article, I will discuss and analyze AirAsia Airline within the context of this marketing concept described above. Identifying the target market and highlighting some Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES of the marketing mix employed to attract the chosen market Finally, I will discuss the threats to the long-term success of the airline with reference to the current marketing mix in order to overcome certain service shortcomings. ORGANIZATIONAL ANALYSIS Company Background AirAsia Malaysia is second national airline. It was the first successful low cost, ticket-less airline in the Southeast Asian region. On 8 December 2001, Tune Air Sdn Bhd officially acquired 99.25 per cent equity (51.68 million shares) in AirAsia from DRB-Hicom, one of  Malaysia’s giant conglomerates. Tune Air Sdn Bhd is the holding company, while AirAsia remains as the operating company. 1 AirAsia currently operates over 100 point-to-point domestic and international flights from its hubs in Kuala Lumpur International Airport ( KLIA) and Senai Airport, Johor Bahru in Malaysia; Bangkok International Airport in Thailand; and Soekarno-Hatta International Airport in Jakarta,

Indonesia. 1 (n.d) AirAsia Corporate...

Air Asia Air Asia airline is one the Malaysian’s most preferred airlines because of their low cost airline. The airline was established in 1993 and began its operations on 18 November 1996. It was originally initiated by a government-owned multinational firm which is DRB-Hicom. The airline has a major debt problem which caused it to nearly collapse. Time Warner executive, Tony Fernandez acquired the corporation with the sum of one ringgit through his company Tune Air Sdn. Bhd. This was after great deliberation as the initial offer was fifty cent. Fernandez proceeded to engineer a remarkable turnaround, turning a profit in 2002 and launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1. In 2003, Air Asia opened a second hub at Senai Airport in Johor Baharu near Singapore and launched its first international flight to Bangkok. Air Asia has since then started a Thai subsidiary Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES and added Singapore in its destination list as well as commenced flights to Indonesia. Flights to Macau started in June 2004, while flights to mainland China (Xiamen) and Philippines (Manila) started in April 2005. Flights to Vietnam and Cambodia followed later in 2005 and to Brunei and Myanmar in 2006, the latter by  Thai Air Asia which is a sister company for Air Asia. Air Asia started off by introducing flight services locally, and then they took a step/monopoly by breaking into the south-east market and currently having plane flying internationally. Air Asia has its own objectives and goals. Its main motto was to make flying possible for everyone. Air Asia broke the monopolization of airline business in Malaysia which was controlled by Malaysia Airlines System. After decades in the industry, it has created a route network that spans through more than 20 countries.

with the dream of making flying possible for everyone business. Together with our associate...

Air Asia 1. Identify and describe the main stages of the purchase decision making process for the business sector and consumer sector by using a model of buyer behavior. Business sector Factor Air Asia * Internal: attract more customers. * External: to expand their business in Malaysian market. Release to provide food service to customers Search -In the response from customers. - Internet. Evaluate RM 7. RM 8 RM9 Package A.

Package B.

Package C.

4 P’s Stimuli Product: Nasi Lemak (2 USD only on Air Asia morning flight) - Traditional Breakfast of Malaysian people. Included a half of boiled egg and peas. Price : RM 9. Promotion: 50% Place: Bangkok to Kuala Lumpur. Product: Purchased Snack - Tuna Sandwich. Price : RM 8. Promotion: no discount Place: Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it!

GET BETTER GRADES Penang to Bangkok. Product: Snack attack - MAGGI "Hot Bowl" Seafood Tom Yam Flavor Price : RM 7 Promotion: no discount Place: Kuala Lumpur to Penang. Purchase Buyer Black Box -Low price. - Nasi Lemak- traditional breakfast of  -Place. Malaysian people. Included a half of boiled egg and peas at Bangkok to Kuala Lumpur. Buyer response Purchase amount Post purchase Consumer sector Factor Air Asia

* Internal: low cost. * Freight rates charged External: comfortable with a moderate rate. Search -internet Evaluate Air line first class Class Economy Premium fares as low as RM529 to India (Delhi and Mumbai), Taiwan, RM549, RM599 Chengdu, Hangzhou, Tianjin RM699 and RM799. Freight rates to Australia, China, Taiwan and India are offered as low as RM199 for one-way path 4 P’s Stimuli

Product: Premium rate for Australian destinations Price...

Air Asia Economic Analysis -Mba  Table of Contents {text:bookmark-start} {text:bookmark-start} Background {text:bookmarkend} {text:bookmark-end} A successful example of a Malaysian no frills airline is Air Asia. Revolutionized and Reinvented by Tony Fernandez in 2001. It is based on the low-cost, no-frills model of the US carrier Southwest. The concept of Air Asia is based on the belief that demands for short-haul air transport is price flexible. That means, if prices for flights are being reduced, more people will fly. Traditionally, airline concepts are based on the assumption that airline traffic grows in line with the economy and that cutting prices will only lead to a decrease in revenues. With the introduction of the ‘no-frills’ concept to the Malaysian market, Air Asia has proven this theory wrong and goes from strength to strength by actually increasing the size of the market and more recently by taking away passengers from the major airline competitors. With its expanding strategy as objectives Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES to reach excellent standard around the world, marketing in Asia has been the key player to achieve success. Air Asia is one of the businesses that have successfully adopted cost leadership through operational effectiveness and efficiency. The cost advantages have enabled Air Asia to become the Asia’s leading low fare airline. Air Asia has successfully positioned itself in customers’ mind. Its net profit for the second quarter ending 31 December 2004 was reported RM 44.4 million, a 323% increase over the previous quarter. AirAsia until today has flown more than 55 million passengers in and around Asia (Air Asia, 2005). AirAsia has also ventured into other market that complements with the airlines business. It has started franchises like the tunes hotels and red box couriers to gain maximum efficiency in and around the airline business. {text:bookmark-start} {text:bookmark-start} The Business Environment Needed for the Firm to Adapt {text:bookmark-end}..

Air Asia Strategic Mgt Plan (Smp) EXECUTIVE SUMMARY It has been a great pride in the history of AirAsia that despite the challenges that they have faced, AirAsia continues to defy the odds. Since December 8, 2001, when the company was taken over by the new Air Asia management, AirAsia has grown to become the largest low-cost carrier in Asia. Today the airlines are operating in Malaysia, Thailand and Indonesia. With more than 6,000 talented, hardworking and committed employees and a market capitalization in excess of RM2billion, Air Asia has earned a reputation as a consistent performer no matter what the external environment. They have seen a future in which their success is not constrained by resources or opportunity. ORGANIZATIONAL ANALYSIS Company Background AirAsia is Malaysia’s second national airline was incorporated in 1993 as a fullservice regional airline under DRB-Hicom. They started their operations on 1996. After starting their operations for few years, AirAsia failed to attract enough passengers Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES to establish its own niche market. AirAsia was also facing problems such as the demise of Tan Sri Yahaya Ahmad and 1997-1998 Asian financial crisis. Due to 19971998 Asian financial crisis, AirAsia was heavily indebted. On 8 December 2001, music mogul Dato’ Seri Tony Fernandes decided to retire from music industry and purchased 99.25 per cent equity (51.68 million shares) in shares from DRB-Hicom via his company Tune Air Sdn. Bhd. with a token sum of one ringgit. Without looking back, Tony Fernandes transformed AirAsia as a low fare airline together with Conor McCarthy, the former Ryanair director of group operation. Known of its corporate tagline “Now everybody can fly”, AirAsia became the first successful low cost and ticket-less airline in the Southeast Asian region. AirAsia offers a simple service at fares lower than those offered by other full-service airlines. It was modelled on U.S.-based Southwest Airlines and Dublin-based Ryanair. AirAsia was established to create a new...

Air Asia 07 March 2010 Blue Ocean Strategy Example in Asia - Example 1

One of the major changes that the airline industry have changed is the inclusion of  aviation budget. Good example in Malaysia is Air Asia. Air Asia has managed to avoid the red sea (in competition with Malaysia Airlines and regional airline like Tiger Air, Jet Air, etc.), look at the factors that are granted by the industry, and that the important factors to customers. With the four activities of the framework proposed by the Blue Ocean StrategyAuthors, Air Asia has many strategic step to ensure that they are doing, Malaysia Airlines and regional airline irrelevant implemented. Example of a strategic step as follows: Delete: * Over the counter booking * Free Food / Beverage Air * Class seat reservation : Reduce * "Luxury" facilities provided by the airport lounge * N. Ground Services * Seat Quality Raise: * Concentrate on the main differentTarget * Increase the frequency Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES of flights Make: * Online Booking System * Point to point travel system With this strategic move, Air Asia is able to focus on the factors that actually bring value to customers, such as point-to-point travel system, easy reservation system, etc. This will help Air Asia, reduce costs and at the same time, increase the value for customers - Value Innovation. In addition, Air Asia is not in a position to seek current customers, as already The authors of Blue Ocean Strategy. Current airline customers: * Customers who are cheap to buy the expensive tickets from Malaysia Airlines and regional airlines. * Entrepreneurs in Malaysia and the ASEAN Region Non-customers: * Government Personnel * Those who can not afford to buy expensive tickets, as found in rural areas, students or graduates.

With the success of the Blue> Ocean who dare to Air Asia, in other businesses such as hotels and Tune Tune Money. The concept is in the direction of Blue Ocean market....

Microeconomics Analysis Of Air Asia Introduction  The purpose of this assignment is to apply the concept of microeconomics in analysis of the company that listed in Bursa Malaysia. We are required to select one of the companies that listed in Bursa Malaysia. Described the background and the type of products or services offered by this company. Besides that, we need to explain type of market structure that this company can be categorizes into and also explain the characteristics of that market structure. By using the annual report from this particular company of at least 3 years, do an analysis on cost, revenue, and profit of this company. All types of figure in balance sheet and income statement will be calculated and showed by graph to prove the difference figures in the particular years.  The company we selected is AirAsia Berhad. As we k now Air Asia is one of the famous airline companies in Malaysia. AirAsia is a name synonymous with low fares, quality service and dependability. With over 110 routes across 13 countries, AirAsia Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES is truly Asia’s leading airline with the widest route connectivity and largest customer base. With the unmistakable tagline, “Now Everyone Can Fly”, AirAsia has made flying affordable for more than 61million. As a largest and successful firm in the particular industries, it is suitable to be an example of the oligopoly competition because there are only a small number of  firms that joined or operates business in this sector. That will be one of the factors that the company can maximize their profit in the future. Every value of figure that includes in the annual report was calculated to get the analysis of the market structure and also sketch of every particular graph. Background of AirAsia Air Asia was initially launched in 1996 as a full-service regional airline offering slightly cheaper fares than its main competitor, Malaysia Airlines. Originally, it was founded by a government-owned conglomerate DRB-Hicom. On 2 December 2001, the heavily-indebted airline was...

Swot Analysis Of Air Asia SWOT analysis of AirAsia Strengths Firstly, Air Asia has indeed a strong management team. This is clearly known as it has very strong links with the governements and airline industry leaders.This is partly contributed by the diverse background of the executive management teams which consists of industry experts and ex-top government officials. For example, Shin Corp (formerly owned by the family of former Thai Prime Minister - Thaksin Shinawatra) holds a 50% stake in Thai AirAsia. This has helped AirAsia to open up and capture a sizeable market in Thailand. With their strong working relationship with Airbus, 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 airline. Secondly, the management team is also very good in their strategic formulation and execution. The strategy that they have formulated at the beginnings was a clever blend of proven strategies by other low cost airlines is Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES US and Europe. They are Ryanair’s operational strategy (no frills, landing in secondary airport), Southwest’s people strategy (employee comes first) and Easyjet’s branding strategy (linking with other service providers like hotels, car rental).  Thirdly, AirAsia is a brand name which is very well established in Asia Pacific. Besides the normal print media advertising & promotions, AirAsia’s top management also capitalised on promotions through news by being very “media friendly” and freely sharing the latest information on Air Asia as well as the airline industry. For example, their partnership with other service providers such as hotels and hostels,...  Thai Air Asia Limited Section 1: Company Background In the past, domestic air routes were limited to only few players; such as Thai Airways, Bangkok Airways, Air Andaman, and Phuket Air. Prime Minister Thaksin Shinawat announced the opening of Thai air routes in 2002 and this has induced a lot of airlines to enter the...

Air Asia Pest Analysis

Purpose  The purpose of this analysis is to conduct an environmental analysis in the context of AirAsia's international business operations, describing the major variables involved and the impact of the specific threats and opportunities confronted by AirAsia besides that, this analysis also helps to identify AirAsia's competitive strategy and analyse how the strategy is implemented to gain competitive advantage. Background on AirAsia AirAsia was set up by Dato' Tony Fernandes in 2001. In December 2001, Fernandes and his partners set up Tune Air Sdn Bhd (Tune Air), an airline holding company then bought over AirAsia. Now, AirAsia has become one of the most successful airlines in the Southeast Asian region and the pioneer of low cost and no frills travel in Malaysia. The airline now flies to over 40 destinations in Malaysia, Thailand, Indonesia, Macau, China, Philippines, Cambodia, Vietnam and Myanmar. AirAsia has formed 2 successful joint ventures in Thailand through Thai AirAsia, and Indonesia Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES through AWAIR. Starting from 2 aircraft till now AirAsia owns 28 and has carried more than 223 millions guest through its low fares travel. 2.0 External Environment Analysis 2.1 Political Flying outside Malaysia is difficult. Bilateral agreement is one of the obstacles in the way of truly pan-Asia budget carriers. Landing charges at so-called "gateway airports" and navigation charges are often prohibitively expensive, and in k ey destinations like Bangkok, Beijing, Hong Kong and Singapore there are no cheaper, secondary airports. The budget airline industry in south-east Asia has been underdeveloped because the aviation market is tightly regulated by bilateral air rights agreements.  Threat of terrorism, people is afraid to fly after the September 11 terrorist attacks incident. 2.2 Economic In spite of stiff competition from Malaysian Airline (MAS), AirAsia's low-cost carriers offering cheap tickets and few in-flight services are gaining attraction...

What Are The Dilemmas Facing Air Asia?

What Are The Strategic Dilemmas Facing Air Asia? SWOT ANALYSIS Strengths Low cost operations Aggressive, focused and effective management Simple business model that provides low prices Penetrate and stimulate to potential markets Multi-skilled staff means efficient and incentive workforce and reduced staff  More seats per aircraft Single type fleet minimize maintenance fee Brand name Weakness Service resource is limited by lower costs Non-central location of secondary airports Brand is vital for market position and developing it is always a challenge Heavy reliance on outsourcing New entrants to provide the price-sensitive services Limited human resources Government interference Regulation on airport Opportunities Long haul flight Differentiation from traditional LCC model by adding customer services or operation as full service airline with low fare Ongoing industry consolidation has opened up prospects for new routes and airport deals High fuel prices will Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES squeeze out unprofitable competitors Large potential Is this Essay helpful? Join OPPapers to read more and access more than 325,000 just like it! get better grades market Product differentiation Regional international flight

New routes  Threats Entrance of other LCCs Accident, terrorist attack, and disaster and affect customer confidence Aviation regulation and government policy Increase in operation cost in producing value-added services System disruption due to heavily reliance on online sales Other airlines start cut costs to compete High fuel price Government policy Security charges, landing charges, airport departure Key challenges Increasing competition because of increasing number of low cost airline competitors, and aggressive competition against the large or traditional airline companies Customer decrease because of poor economy Rising of the fuel prices Higher labor cost Inadequate infrastructure Route and flight utilization Safety and...

What Are The Strategic Dilemmas Facing Air Asia? SWOT ANALYSIS Strengths Low cost operations Aggressive, focused and effective management Simple business model that provides low prices Penetrate and stimulate to potential markets Multi-skilled staff means efficient and incentive workforce and reduced staff  More seats per aircraft Single type fleet minimize maintenance fee Brand name Weakness Service resource is limited by lower costs Non-central location of secondary airports Brand is vital for market position and developing it is always a challenge Heavy reliance on outsourcing

New entrants to provide the price-sensitive services Limited human resources Government interference Regulation on airport Opportunities Long haul flight Differentiation from traditional LCC model by adding customer services or operation as full service airline with low fare Ongoing industry consolidation has opened up prospects for new routes and airport deals High fuel prices will squeeze out unprofitable competitors Large potential Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES market Product differentiation Regional international flight New routes  Threats Entrance of other LCCs Accident, terrorist attack, and disaster and affect customer confidence Aviation regulation and government policy Increase in operation cost in producing value-added services System disruption due to heavily reliance on online sales Other airlines start cut costs to compete High fuel price Government policy Security charges, landing charges, airport departure Key challenges Increasing competition because of increasing number of low cost airline competitors, and aggressive competition against the large or traditional airline companies Customer decrease because of poor economy Rising of the fuel prices Higher labor cost Inadequate infrastructure Route and flight utilization Safety and security issues of aircraft crash or being attacked

AIR ASIA VMOST ANALYSIS VMOST is an acronym for Vision, Mission, Objectives, Strategy, Tactics. It is an internal...

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| SWOT analysis of AirAsia Strengths Firstly, Air Asia has indeed a strong management team. This is clearly known as it has very strong links with the governements and airline industry leaders.This is partly contributed by the diverse background of the executive management Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES teams which consists of industry experts and ex-top government officials. For example, Shin Corp (formerly owned by the family of former Thai Prime Minister - Thaksin Shinawatra) holds a 50% stake in Thai AirAsia. This has helped AirAsia to open up and capture a sizeable market in Thailand. With their strong working relationship with Airbus, 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 airline. Secondly, the management team is also very good in their strategic formulation and execution. 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. They are Ryanair’s operational strategy (no frills, landing in secondary airport), Southwest’s people strategy (employee comes first) and Easyjet’s branding strategy (linking with other service providers like hotels, car rental).  Thirdly, AirAsia is a brand name which is very well established in Asia Pacific. Besides the normal print media advertising & promotions, AirAsia’s top management also capitalised on promotions through news by being very “media friendly” and freely sharing the latest information on Air Asia as well as the airline industry.

For example, their partnership with other service providers such as hotels and hostels,...

Pest Analysis (Air Asia) Introduction PEST Analysis is the Political, Economic, Social culture and Technology analysis that a company does to determine the overall business environment. A PEST analysis is a look at the external environment of a company or a business that plays an important role in managing and decision making of a company. It is crucial for a company to consider its environment before relating with the public or customers.  The PEST analysis examines the impact of each of the factor on the company. Thus, political factor considers the impact of legislatives changes, stability of the economy and event that related with the government and politics that may affect the business. Influence of economy, such as interest rate, stability of economy, inflation levels and such helps the company make better decision on how to operate their company effectively. Besides that, the social drive is a crucial part on PEST analysis. Creating and developing a social culture takes time and effort and a new motive driven company Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES such as Air Asia has to develop me method on how to connect with the society’s lifestyle, demographics, and media. Technological point of PEST analysis relates with competing technology development with other competitors and effective information and communication between the market and the company. Political Analysis Political Analysis mainly states about the aviation acts and regulation which needed by aviation company such as Air Asia to operate their business. The political arena has a huge influence upon the regulation of businesses, and the spending power of  consumers and other businesses. Political stability is inessential to create a safe economy market that enables the market to grow. Political issues may cause problems in the outcome of the company. Some of the political factors that may affect a company are events that affect the operation of the company; therefore regarding an aviation company such as AirAsia political events will affect the result...

Air Asia Marketing Case Study Group – 6 Sec- C

• AirAsia is a Malaysian low-cost airline. Initially it was a Malaysian Govt. controlled company. It was re-launched in Jan 2002 as an LCC(Low Cost Carrier) after takeover by Tony Fernandes. It operates scheduled domestic and international flights. AirAsia is a pioneer of low-cost flights in Asia and is the largest Asian nofrills airline. In a very short time, after launching as an LCC, Air Asia converted from a debt ridden company to a profit making company. • • • • •

• •••• ••• • • ••  The airline was established in 1993 by a Malaysian government-owned conglomerate DRB-Hicom and started operations on 18 Nov 1996. 2001 Dec – Tony Fernandez takes over the loss making AirAsia for US$ 0.26 2002 Jan – Re-launched as first no frills LCC. 2002 Dec – First profit of US$ 6 million 2004 - Starts regional flights to neighbouring countries. Formation of  Is this Essay helpful? Join OPPapers to read more and access more than 450,000 just like it! GET BETTER GRADES  Thai Air Asia in partnership with Thai Shin Corporation. 2004 Nov – Listing on the Malaysian stock exchange. 2005 - Indonesia Air Asia established, hubs in Jakarta and Bali. 2006 Mar – Main Hub moved from KLIA to neighbouring specifically built LCC terminal 2006 Aug – Domestic Route rationalisation arrangement with MAS, took over two third(96 out of 118) of MAS’s loss making routes. Becomes largest airline in Malaysia. 2007 - ‘Air Asia X’ launched, First long haul flight to Gold Coast, Australia. 2008 May – 25th consecutive quarter of profitability since 2002. 2009 Servicing 18 countries, 84 Aircrafts, 136 routes, 627 flights per day in the asia pacific route.

•Change in ownership pattern FROM Government owned or Supported TO Private. •Deregulation in airline industry leading to greater competition and pricing freedom. •In order to increase efficiency, carriers are entering into new strategic alliances with each other. •Fierce competition, rising fuel prices leading to streamlining of operations to enhance the value chain. •Emergence of Low Cost...