Airasia Bcg Matrix

7.0 BCG Matrix

High Market Growth

AirAsia China AirAsia Thailand

AirAsia Japan

AirAsia Philippines

AirAsia India

High Market Share

Low Market Share

AirAsia Malaysia

Asia Aviation Capital Ltd.

Low Market Growth

Figure: AirAsia’s Market Share in 2016  Source: AirAsia’s Annual Report 2016, https://www.airasia.com/cdn/docs/common-docs/investorrelations/airasia-annual-report-2016.pdf 

7.1 Stars

 AirAsia Thai (2016) 1. 16% increase in passenger volume 2. 10% increase in revenue to THB 32.47bil 3. 22% total market share

AirAsia Philippines (2016) 1. 11% increase in passenger volume 2. 21% increase in revenue to PHP 10,814.6mil 3. 11% total market share

Figure: Market share and growth of AirAsia Thai and Philippines in 2016 Source: AirAsia’s Annual Report 2016, https://www.airasia.com/cdn/docs/common-docs/investorrelations/airasia-annual-report-2016.pdf 

Figure: Performance of AirAsia Thailand in 2016 Source: AirAsia’s Annual Report 2016, https://www.airasia.com/cdn/docs/common-docs/investorrelations/airasia-annual-report-2016.pdf 

Figure: Performance of AirAsia Philippines in 2016 Source: AirAsia’s Annual Report 2016, https://www.airasia.com/cdn/docs/common-docs/investorrelations/airasia-annual-report-2016.pdf 

 AirAsia Thai and Philippines are categorised as Stars under AirAsia, indicating that both subsidiaries are holding high market share with high market growth. In 2016, total market share of AirAsia Thai is 22% along with 16% of market growth, leading to 10% increase in total revenue to THB32.47bil. AirAsia Philippines whose total market share is 11% experienced a total growth of 11% along with 21% of revenue growth.

 AirAsia Thai and Philippines are generating high revenue for Nike and is expected to generate more revenues in the future. Hence, it needs more supports for AirAsia Thai and Philippines to maintain their position in current market. AirAsia ran various campaigns and activities in Thailand and Philippines. Despite, AirAsia i s adding 6 and 5 Airbus A320 to Thailand and Philippines respectively. 7.2 Question Mark

 AirAsia India 1. 59% increase in revenue to INR 8.25bil 2. 68% increase in passenger volume to 2.5mil 3. 4% of total market share from 1.7% in 2015 Figure: Market share and growth of AirAsia India in 2016 Source: AirAsia’s Annual Report 2016, https://www.airasia.com/cdn/docs/common-docs/investorrelations/airasia-annual-report-2016.pdf 

Figure: Market share and growth of AirAsia India in 2016 Source: AirAsia’s Annual Report 2016, https://www.airasia.com/cdn/docs/common-docs/investorrelations/airasia-annual-report-2016.pdf 

 AirAsia India is falling under this category since it is holding little market share yet experiencing rapid growth, 68% market growth, attributed to booming domestic tourism. Despite, AirAsia Japan and China which are new are falling into Question Mark. This mainly because both Japan and China are new, yet highly potential with the reason that both are the top largest Asian market. (Lccs Reach 10% Market Share In Domestic Japan. Partnerships Become Likely - But Complex 2017)

Question Marks also known as problem children, indicating that products falling under this category are consuming a lot of money yet bringing minimal return or even making loss. For instance, Japan who was making loss in 2015 and 2016. However, since AirAsia India, Japan and China are having the potential to turn into stars,  AirAsia is investing more. For instance, AirAsia is adding 2 Airbus A320 and introducing self-check-in facilities in India. 7.3 Cash Cow

 AirAsia Malaysia 1. 49% total Market share in 2015 & 2016 2. MYR 6.297bil in 2015 & 2016 Figure: Market share and growth of AirAsia Malaysia in 2016 Source: AirAsia’s Annual Report 2016, https://www.airasia.com/cdn/docs/common-docs/investorrelations/airasia-annual-report-2016.pdf 

Undoubtedly, AirAsia Malaysia is a cash cow, holding high market share with low market growth. In fact, AirAsia Malaysia is performing steadily where there is no fluctuation in market share. AirAsia’s brand is incredibly strong in Malaysia. It is the

market leader in Malaysia, holding 49% of market share and is generating reasonable profits, RM6.297bil. This indicates that AirAsia Malaysia is generating high profits to AirAsia but due to low market growth, the investment required will be low. Hence, profits generated from AirAsia Malaysia could be very supportive in funding development of other subsidiaries.

Figure: Performance of AirAsia Malaysia in 2016 Source: AirAsia’s Annual Report 2016, https://www.airasia.com/cdn/docs/common-docs/investorrelations/airasia-annual-report-2016.pdf 

7.4 Dog  Asia Aviation Capital Ltd. is AirAsia’s subsidiary, focusing on aircraft leasing and

after-market services. This subsidiary is falling under dog due to its low market share and minimal growth. Dogs are normally considered as cash traps and are suggested to divest, avoiding resources wastage.

Lately, AirAsia confirmed its decision to dispose Asia Aviation Capital with $1mil as part of its monetisation plan, supporting its future expansion like Philippines and Indonesia’s IPOs. (Puspadevi 2017)

Reference List: 1. Check In For Your Flights Via Kiosk | Kiosk Check-In | Airasia  (2017) available from [11 November 2017] 2.  Airasia Launching Self Bag Drop In Malaysia - PASSE NGER SELF SERVICE  (2015) available from [11 November 2017] 3. Gangadharan, G., Gangadharan, G., Gangadharan, G. and Gangadharan, G. (2016)  Airasia Launched Self Bag Tag At KLIA2  [online] available from [11 November 2017] 4. Hew, V., Chan, J., Low, E., Tam, I., Writer, S., Writer, S., Wee, L., Hew, V., Hew, V., Tay, V., Tay, V., Tay, V., Wee, L., Tay, V., Tam, I., Bruinsma, C., Wee, L., Hew, V., Hew, V., Tay, V., Tay, V., Wee, L., Choo, E., Llamas, C., Xuan, O. and T, C. (2016)  Airasia Gets More Data Focused With New JV  [online] available from [11 November 2017] 5. Hew, V., Tam, I., Rao, M., Manjur, R., Writer, S., Writer, S., Wee, L., Hew, V., Hew, V., Tay, V., Tay, V., Tay, V., Wee, L., Tay, V., Tam, I., Bruinsma, C., Wee, L., Hew, V., Hew, V., Tay, V., Tay, V., Wee, L., Choo, E., Llamas, C., Xuan, O. and T, C. (2017)  Airasia Gets Aggressive In China Market, Signs JV To Operate Budget Carrier  [online] available from [11 November 2017] 6. Lccs Reach 10% Market Share In Domestic Japan. Partnerships Become Likely - But Complex (2017) available from [12 November 2017] 7. Puspadevi, S. (2017) Airasia Upbeat About Concluding Asia Aviation Deal By This Year Business News | The Star Online  [online] available from [12 November 2017]