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Intsm air asia 25-10-2012
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Intsm air asia 25-10-2012

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AIrAsia in Vietnam

AIrAsia in Vietnam

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  • 1. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM BM026-3-3 INTSM INTERNATIONAL STRATEGIC MANAGEMENT Student Name Chan Chee Mang Student ID TP021569 Intake No and Course UC3F1201 IBM Assignment Title and Description AirAsia in Vietnam (Individual Assignment) Module Code BM026-3-3 INTSM Lecturer Halmi Bin Yusoff Hand in Date 19th October 2012 Word Count 2684Asia Pacific University of Technology & Innovation Page | 1
  • 2. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMExecutive SummaryAirAsia has been able to engage in foreign markets like Thailand and Indonesia by entrymode of joint venture. As all eyes are on Vietnam now, it is also important for AirAsia totake the opportunity to capture the vibrant and highly potential aviation market in the country.With detail research on the PEST environment in Vietnam, AirAsia could understand theVietnam market better, exploiting the opportunities and overcoming the threats. Hence,coming up with strategies according to AirAsia‟s strengths and weaknesses, and providingVietnam AirAsia‟s products that are suitable to the Vietnam market.According to Daniel Chan (2000), since the 1970s, the competition for the Asian air travelmarket has always been intense. This became more intense in the 1990s as traffic volumeswere squeezed. Based on that statement, the competition among airplane industry willbecome more grow, traffic volume also would be increase, and also the Asian air travelmarket has always been intense. When the competition in the airplane industry becomingthough, complex, and rapidly change, AirAsia company as a company that joined in theairplane industry business need to thinking strategically and also must preparing a goodstrategic management. The AirAsia strategic management needs to effectively and efficientlyprepare and implement in the AirAsia company management. Why AirAsia need to considerstrategic management? The first reason is because the airline industry is a unique andcomplex industry. Based on the statement, the complexity and unique of the airline industry,AirAsia need to come out with the greatest strategy to compete with their rival in the sameindustry. Without the right strategic management, its possible AirAsia could not be able becompete with the complex business environment in the airline industry.Furthermore, the second reason why AirAsia need to consider a strategic managementbecause in a company nowadays, general management which is the process of achievingorganizational goals by engaging in the four major functions of planning, organizing, leading,and controlling may not sufficient and supportive for the organization succeed in the world ofcomplex environments. It concerns about the process to manage the company internally butdo not concentrate more on creating competitiveness regarding environments affecting theorganization. Even companies adopt general management to sustain profitability by reducingthe defects or costs, and improving operations process in order to increase productivity, theymay not succeed in the competition because they perform only similar activities better thancompetitors but do not create distinctive competitiveness.Asia Pacific University of Technology & Innovation Page | 2
  • 3. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMAdditionally, they perform only operational effectiveness but not strategy. Operationaleffectiveness and strategy are both essential to superior performance but they work in verydifferent ways. Strategy is about competitive position that the company performs differentactivities from rivals or performing similar activities in different ways. To learn how thecompanies create strategies and put them into action, the executives or strategists shouldexamine carefully an aspect of strategic management.Moreover, the organization or company nowadays is faced with constantly changing externalenvironments and needs to ensure that its own internal resources and capabilities are morethan sufficient to meet the needs of the external environment. Organizations or companies donot exist simply to survive in the market place but want to grow and prosper in a competitiveenvironment. In order to make sense of what is going on around them, firms must undertakean analysis of their external and internal environment. To understand and how take an actionabout external and internal environment, a company needs to support themselves with a goodstrategic management.Because of this reason, AirAsia need to consider a strategic management as the importantthings in their company. The strategy that AirAsia need is not just how to reduce cost andmake the operational activities running effectively. But, AirAsia needs to come out with thestrategy that can make competitive position that the company performs different activitiesfrom rivals or performing similar activities in different ways to achieve their businesssuccessfully.In addition, the third reason, why AirAsia company needs to consider and stress to a strategicmanagement? This is because, strategic management becomes important in AirAsia due tothe following reasons. The first reason why strategic management becomes important isbecause the globalisation. The globalisation consideration impacts virtually all-strategicdecisions in a company. The globalisation also forced AirAsia Company to survival forbusiness. To see and appreciate the world from the perspective of others has become a matterof survival business.The underpinning of strategic management hinge upon managers gaining an understanding ofcompetitors, markets, prices, suppliers, distributors, governments, creditors, shareholders, andcustomers worldwide. The price and quality of firm‟s products and services must becompetitive on a worldwide basis, not just a local basis. The globalization makes a rapidchange in the business environment. Every company has a same chance and opportunity forAsia Pacific University of Technology & Innovation Page | 3
  • 4. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMdoing their business. For those company doesn‟t aware and take this as importantconsideration, they will failed to compete with their rival or competitors in their business.Moreover, the strategic management becoming important due to the following reason isbecause the rapid development in E-Commerce. Nowadays, E-commerce is becoming abusiness tool. E-commerce also has become a vital strategic management and allows acompany to sell products, advertise, purchase supplies, bypass intermediaries, track inventory,eliminate paperwork, and share information. In total, electronic commerce is minimizing theexpense and cumbersomeness, improved products, and higher profitability.Asia‟s leading low cost airline, AirAsia started its business journey as a LCC in Malaysia. In2001, AirAsia began to develop from an airline with debts to now be among the mostprofitable airline in Asia. Throughout these years, AirAsia has also developed and improvedby transforming itself to a travel dealer instead of just an average airline by introducing Do-It-Yourself packages to its travelers. No doubt that AirAsia faced competition from foreignplayers, but still, AirAsia was able to secure a significant market share in Malaysia. However,in order to gain higher sales volume, AirAsia must begin to penetrate other new foreignmarkets.From the research being done, it is important for AirAsia to start by entry mode of jointventure and introducing the “Go Holiday” package in order to test the market and analyze theamount of competition that AirAsia will face during its entry into Vietnam market. Then,with knowledge on the competitiveness of the Vietnam market and understanding ofVietnam‟s travellers‟ needs and wants, AirAsia would be able to compete with the majorplayers in Vietnam more efficiently by providing relevant products which could improve itscompetitiveness by concentrating on low cost and service quality, ultimately increasing theprofit of AirAsia.In conclusion, Air Asia is need to aware and consider with the proper international strategicmanagement while expanding their business in Vietnam. The reason of the airline industry isa unique and complex industry, not just how to reduce cost and make the operationalactivities running effectively. But, AirAsia needs to come out with the strategy that can makecompetitive position that the company performs different activities from rivals or performingsimilar activities in different ways to achieve their business successfully, and the last one isbecause the effect of globalization and E-commerce becoming an effective tool in a companynowadays.Asia Pacific University of Technology & Innovation Page | 4
  • 5. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMTable of ContentsExecutive Summary ................................................................................................................... 21.0 Introduction to AirAsia ................................................................................................... 72.0 Analysis of External Environment ................................................................................ 11 2.1 Vietnam Airline Market using PEST Analysis ......................................................... 11 2.1.1 Political Situation ............................................................................................... 11 2.1.2 Economic Condition .......................................................................................... 12 2.1.3 Social-Cultural ................................................................................................... 13 2.1.4 Technology and Infrastructure Factors .............................................................. 15 2.2 Opportunities for AirAsia.......................................................................................... 17 2.2.1 Opportunities of AirAsia in Vietnam Airline Market ............................................. 17 2.3 Threats faced by AirAsia........................................................................................... 19 2.3.1 Threats faced by AirAsia in Vietnam Airline Market ............................................. 193.0 Analysis of Internal Environment ................................................................................. 20 3.1 Strengths of AirAsia .................................................................................................. 20 3.1.1 Exploitation and Accesses to Latest Technology .............................................. 20 3.1.2 Low-Costs Business Model ............................................................................... 20 3.1.3 Single Aircraft Type which gives lower turnaround time ................................. 20 3.1.4 Strong Management Team ................................................................................. 21 3.1.5 Established Brand and Reputation ..................................................................... 21 3.2 Weaknesses of AirAsia ............................................................................................. 23 3.2.1 Over-Relying on Online Sales ........................................................................... 23 3.2.2 Limited Customer Service ................................................................................. 23 3.2.3 Too Dependent on Outsourcing ......................................................................... 234.0 Generating Strategies with TOWS Matrix for AirAsia ................................................ 245.0 Entry Strategies for AirAsia.......................................................................................... 276.0 Marketing Strategies for AirAsia ....................................................................................... 28 6.1 Maximized IT and implementing E-commerce in AirAsia business ............................. 28 6.2 Generate new Product Package Strategy ........................................................................ 286.0 Conclusion .................................................................................................................... 307.0 References ..................................................................................................................... 318.0 Appendices .................................................................................................................... 37 8.1 Appendix 1 ................................................................................................................ 37 8.2 Appendix 2 ................................................................................................................ 37Asia Pacific University of Technology & Innovation Page | 5
  • 6. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM 8.3 Appendix 3 ................................................................................................................ 38 8.4 Appendix 4 ................................................................................................................ 38 Vietnam Visitors - Vital Statistics .................................................................................... 38 8.5 Appendix 5 ................................................................................................................ 39 8.6 Appendix 6 ................................................................................................................ 39 8.7 Appendix 7 ................................................................................................................ 40 8.8 Appendix 8 ................................................................................................................ 40 8.9 Appendix 9 ................................................................................................................ 41Asia Pacific University of Technology & Innovation Page | 6
  • 7. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM1.0 Introduction to AirAsiaAirAsia was established in the year 1993 and starting its operation in 1996, founded by DRB-Hicom, a government-owned conglomerate (AirAsia, 1996). Time Warner bought over theheavily indebted airline in 2001and latter re-executive by Tony Fernandes‟ corporation- TuneAir Sdn Bhd with 1 Ringgit Malaysia which is USD 0.26 at that time. However, AirAsia stillowned a huge debt of RM 40 million which is around USD 11 million (AirAsia, 2001). TonyFernandes taken his role in turning the company and started to produce the flight serviceprofits in 2002 by launching new routes in Malaysian states from its hub in Kuala Lumpur(the capital city of Malaysia). The market segment of Low-Cost Carrier (LCC) of AirAsiaoperation had become impactful in the flight service industry with the promotional faresundercutting the former monopoly operator which is Malaysian Airlines (AirAsia, 2002).Later on, Tony Fernandes expanded the flight business internationally and became the firstand most successful Low-Fare airline with more than 75 destinations in Asia includingThailand, Indonesia, Philippines, Japan, Australia, India and China (AirAsia, 2008).The spans of route network is the result the leading airline continues to pave the way for low-cost aviation through innovative solutions, efficient processes and passionate approach alongwith tourism business line together with the associate companies-AirAsiaX (Focusing on thelow-cost, long-haul segment), Thai AirAsia, Indonesia AirAsia, Philippines‟ AirAsia Inc andAirAsia Japan believing in “Now Everyone Can Fly” (AirAsia, 2010). As we can see, rhemain competitive advantage of AirAsia is AirAsia.com, using the Internet Infrastructurewhich is E-Commerce strategy (online transaction) effectively with no boundaries across thenation and works internationally, striking with the globalisation trend.Asia Pacific University of Technology & Innovation Page | 7
  • 8. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMThe vision of AirAsia is to be the largest low cost airline in Asia and serving the 3 billionpeople who are currently underserved with poor connectivity and high fares (AirAsia, 2007).Furthermore, AirAsia also has the missions of (1) To be the best company to work forwhereby employees are treated as part of a big family, (2) Create a globally recognizedASEAN brand, (3)To attain the lowest cost so that everyone can fly with AirAsia, and(4)Maintain the highest quality product, embracing technology to reduce cost and enhanceservice levels (AirAsia, 2007).The aviation industry in Vietnam currently is relatively small. However, as year passes, it isgrowing rapidly due to the trend in globalisation. With this reason, AirAsia will stand out inVietnam because its low fare offers as there are not many competitors. Also, the governmentof Vietnam is taking part in privatising large state organisations incorporating Vietnam‟smain airline as one of the step for opening up to foreign direct investment (FDI).AirAsia’s Values Key StrategiesSafety First (Partnering The single most important criterion in an area that AirAsia willwith the world‟s most never compromise on. AirAsia had complied with the conditionsrenowned maintenance set by regulators in all the countries where the airline operates.providers and Others than that, AirAsia had also partners with the world‟s mostcomplying with the renowned maintenance providers to ensure that theirs fleet iswith world airline always in the best condition. The power of supplier is high due tooperations.) the airplane manufacturers only Boeing and Airbus. In addition, the switching cost for the Boeing and Airbus is pretty low because it can sell same standards to another airline. However, to make up an airplane needs high technique and specialist so it is rarely possible for AirAsia to extend and integrate their operation into supplier part.High Aircraft In relates with this term, AirAsia‟s high frequency flights haveUtilisation made it more convenient for guests to travel. AirAsia as the fastest(Implementing the in the region, had implements as a quick turnaround of 25regions fastest turn minutes.T his has resulted for AirAsia in high aircraft utilisation,around time at only 25 lower costs and greater airline and staff productivity, whilst enableminutes, assuring lower them to gain more profits through removed frills service andcosts and higher removed chair booking and extensive crew drilling on performingAsia Pacific University of Technology & Innovation Page | 8
  • 9. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMproductivity.) quick turnaround. AirAsia had replaced their aging Boeing B737 aircraft with the Airbus A320 aircraft in Thailand and Indonesia. This was led to an all Airbus fleet provides them with an opportunity to stamp their dominance as the ASEAN airline throughout the AirAsia Group by the end of 2010. In addition, with also their unmatched network connectivity, frequency and full- fledged Airbus operation along with their low cost operations and low-fare model, so AirAsia will enjoy a substantial edge over competitors around them.Low Fare, No Frills AirAsia targets guests who are prepared to do away with frills such(Providing guests with as meals, frequent flyer miles or airport lounges in exchange forthe choice of fares lower than those currently offered without comprising oncustomizing services quality and service. For example, the guests of AirAsia have thewithout compromising choice of buying exclusively prepared meals, snacks and drinkson quality and from their in-flight service at an affordable price. AirAsia putservices.) emphasis on lowering all avoidable costs to sustain low fares and remain profitable, even on low yields. What AirAsia do is cut the cost of operating the flights on their chosen routes by flying to and from airports that offer cheaper take-off and landing fees. Besides, AirAsia end free meals and drinks during flights as travellers do not expect excellent service. Also, AirAsia does not allocate specific seats to passengers and there is only one class.Streamline Operations One of the key for AirAsia‟s success was made by the process as(Making sure that simple as possible. AirAsia was worked towards a single aircraftprocesses are as simple fleet, this actually greatly reduced duplicating manpoweras possible.) requirements as well as stocking of maintenance parts. The area is vast, the cultures diverse, the economies vibrant and the travel links – well, that‟s where AirAsia spotted the opportunity. Some are innovative ideas inspired by the talented people of AirAsia and some are simple but functional moves that came from other sources.Asia Pacific University of Technology & Innovation Page | 9
  • 10. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMLean Distribution AirAsia offers a wide and innovative range of distribution channelsSystem (Offering a to make booking and travelling easier for its guests. AirAsia‟swide and innovative ticket-less service provides a low cost alternative to their overallrange of distribution guest in issued printed tickets.channels to makebooking and travellingeasier.)Point-to-Point Network The LCC model adopts the simple point-to-point network. In(Applying the point-to- AirAsia, their flights are short haul (four-hour flight radius or less),point network keeps whilst their sister airline AirAsia X focuses more on the medium tooperations simple and long haul flights (more than four-hour flight radius). Thecosts low.) underlying business is to fly a person from point A to B.(Sources from: AirAsia.com)Asia Pacific University of Technology & Innovation Page | 10
  • 11. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM2.0 Analysis of External Environment2.1 Vietnam Airline Market using PEST Analysis The following is the PEST analysis including political situation, economic condition,social-cultural situation and technology factors of airline environment in Vietnam. From theinformation of PEST analysis on Vietnam, various opportunities can be examined for AirAsiaentering into Vietnam airline market. Nevertheless, there are also threats that AirAsia mayface if AirAsia decide to enter Vietnam airline market.2.1.1 Political SituationFor years, Vietnam‟s government policies have been operating under a communist regime, inactual fact, Vietnam truly welcomes foreign direct investment (FDI) and enhancing traderelations (Thompson G., 2009). “Doi Moi” which means economic renovation is establishedby Vietnam in the year 1986 aiming to open up the country to foreign investment. TheCommunist Party of Vietnam remains committed to market-oriented reforms and they do notexpect major shifts in policy direction over the next five years. The one-party systemimplemented in Vietnam is usually contributing to short-term political stability (BusinessMonitor International, 2011). The ruling communist party‟s authority is often intimidated bythe corruption among government bureaucrats (Business Monitor International, 2011).The Communist Party of Viet Nam has held power since unification. The decisions of itsleadership constitute national policy that the Executive (Central Committee) and theLegislature (National Assembly) are required to follow. At provincial and city level, PeoplesCommittees have considerable influence as their approval is a prerequisite for alldevelopment projects and expenditure in their jurisdiction. The official Party policy is"democratisation within a one party state". The powers of the Communist Party weremodified in the revised Constitution of 1992, which required Party organisations to act withinthe law, and gave increased authority to the Prime Minister and the National Assembly. Day-to-day policy advice comes from the Party Secretariat (made up of some 14 Politburo and160 Central Committee members). The Central Committee considers key policy issuesseveral times per year, and five-yearly Party Congresses ratify major policy changes. The10th Party Congress, held in April 2006, led to significant changes in the Party leadership,although Nong Duc Manh retained the key position of General Secretary. The NationalAssemblys June 2006 session subsequently confirmed a new Government leadership,including new President, Prime Minister and key Cabinet ministers. The new GovernmentAsia Pacific University of Technology & Innovation Page | 11
  • 12. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMincludes some relatively younger ministers and is considered a first step towards installing anew generation of leaders. Vietnams human rights record is gradually improving.Government monitoring and control of all facets of the political, social, economic, andreligious lives of the people is reducing in some areas but is still intrusive and at times erratic.Satellite television and the internet are now available, though internet use is monitored.Religious and media freedoms are closely controlled, and political pluralism has yet to beaccepted.2.1.2 Economic ConditionVietnam is the world‟s 22nd fastest growing economy with GDP growth estimated to reach6.3% in 2013 and 6.5% in 2014 (Thanh Nien News, 2012). Urbanization in Vietnam has beenaccelerating recently, with a UN projection suggests that the urban population will exceed therural population by 2040 (The World Bank in Vietnam, 2011). Economic lift has broughtmany people out of poverty in Vietnam, with poverty rate falling from 37.4% in 1998 to14.5% in 2008 (The World Bank, 2012).A renewed period of economic reform began in 1986 with the goals of improving livingstandards and encouraging foreign investment through more open economic policies. Theinitial steps of economic reform "doi moi" had been gradual. But during the 1990s, enhancedinstitutional support and steadily improving infrastructure made Vietnams growth rate one ofthe highest in the region. This growth brought impressive gains in incomes and in the qualityof life of the Vietnamese people. The investment-led growth of the mid-1990s began to tailoff even before the Asian financial crisis dealt a further blow. Investor expectations were notbeing met, and many projects suffered from excessive bureaucratic interference. However,the cautious economic policies of the government enabled the economy to avoid the seriousbalance of payments, fiscal, and banking crises common elsewhere in the region. Since 2000,GDP growth rates have continued to track strongly, reaching 8.3% in 2007, but droppingback to an estimated 6.2% in 2008. In recent times, the Government has had to focus itspolicy efforts on avoiding a macroeconomic crisis; however, with inflation likely to havepeaked and the merchandise trade deficit having eased back, there are now concerns thatpolicymakers will become complacent, with the government potentially shifting its focusback to boosting growth rather than stabilising the economy. The government has started toheed the calls of donor governments and investors for greater transparency, reform of theSOE, financial and trading sectors, and improved public sector governance. ImplementationAsia Pacific University of Technology & Innovation Page | 12
  • 13. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMhas been slow, however, and Viet Nam retains a strong commitment to state enterprise andoutmoded financial and trade regimes. Reforms and restructuring have reduced the numbersof state owned firms to around 6,000, but despite preferential access to credit through thestate banking sector, these enterprises are not growing strongly enough to absorb the growingnumbers of unemployed. Vietnams growth over the medium term depends on whether itbecomes a truly multi-sector economy in which private businesses are able to grow andcompete in an undistorted environment with the same freedoms as state enterprises. In 2007,FDI inflows exceeded governments expectations and credit growth rose by approximately 50percent. However, forecasts for growth are being scaled down in light of rising inflation andother signs the Vietnamese economy is overheating.2.1.3 Social-CulturalAnnual population growth rate from year 1999-2009 is 1.2%, with total population as of year2009 is 85.85 million (United Nations, 2012). Gap widens between rich and poor with growthof income inequality since 2002 (KTSG, dtinews, 2012) and availability of large and trainedworkforce at low cost. If we explore the Vietnamese culture through the lens of the Hofstede5-D Model, we can get a good overview of the deep drivers of Vietnamese culture relative toother world cultures (Geert Hofstede, 2012).Power distance - This dimension deals with the fact that all individuals in societies are notequal – it expresses the attitude of the culture towards these inequalities amongst us. Powerdistance is defined as the extent to which the less powerful members of institutions andorganisations within a country expect and accept that power is distributed unequally. Vietnamscores high on this dimension (score of 70) which means that people accept a hierarchicalorder in which everybody has a place and which needs no further justification. Hierarchy inan organisation is seen as reflecting inherent inequalities, centralization is popular,subordinates expect to be told what to do and the ideal boss is a benevolent autocrat.Challenges to the leadership are not well-received (Geert Hofstede, 2012).Individualism - The fundamental issue addressed by this dimension is the degree ofinterdependence a society maintains among its members. It has to do with whether people´sself-image is defined in terms of “I” or “We”. In Individualist societies people are supposedto look after themselves and their direct family only. In Collectivist society‟s people belongto „in groups‟ that take care of them in exchange for loyalty. Vietnam, with a score of 20 is aAsia Pacific University of Technology & Innovation Page | 13
  • 14. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMcollectivistic society. This is manifest in a close long-term commitment to the “member”group, be that a family, extended family or extended relationships. Loyalty in a collectivistculture is paramount and overrides most other societal rules and regulations. Such a societyfosters strong relationships, where everyone takes responsibility for fellow members of theirgroup. In collectivistic societies, offence leads to shame and loss of face. Employer oremployee relationships are perceived in moral terms (like a family link), hiring andpromotion take account of the employee‟s in-group. Management is the management ofgroups (Geert Hofstede, 2012).Masculinity or Femininity - A high score (masculine) on this dimension indicates that thesociety will be driven by competition, achievement and success, with success being definedby the winner or best in field – a value system that starts in school and continues throughoutorganisational behaviour. A low score (feminine) on the dimension means that the dominantvalues in society are caring for others and quality of life. A feminine society is one wherequality of life is the sign of success and standing out from the crowd is not admirable. Thefundamental issue here is what motivates people, wanting to be the best (masculine) or likingwhat you do (feminine). Vietnam scores 40 on this dimension and is thus considered afeminine society. In feminine countries the focus is on “working in order to live”, managersstrive for consensus, people value equality, solidarity and quality in their working lives.Conflicts are resolved by compromise and negotiation. Incentives such as free time andflexibility are favoured. Focus is on well-being, status is not shown (Geert Hofstede, 2012).Uncertainty avoidance (UAI) - The dimension Uncertainty Avoidance has to do with theway that a society deals with the fact that the future can never be known: should we try tocontrol the future or just let it happen? This ambiguity brings with it anxiety and differentcultures have learnt to deal with this anxiety in different ways. The extent to which themembers of a culture feel threatened by ambiguous or unknown situations and have createdbeliefs and institutions that try to avoid these is reflected in the UAI score. Vietnam scores 30on this dimension and thus has a low preference for avoiding uncertainty. Low UAI societiesmaintain a more relaxed attitude in which practice counts more than principles and deviancefrom the norm is more easily tolerated. In societies exhibiting low UAI, people believe thereshould be no more rules than are necessary and if they are ambiguous or do not work theyshould be abandoned or changed. Schedules are flexible, hard work is undertaken whennecessary but not for its own sake, precision and punctuality do not come naturally,innovation is not seen as threatening (Geert Hofstede, 2012).Asia Pacific University of Technology & Innovation Page | 14
  • 15. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMLong term orientation - The long term orientation dimension is closely related to theteachings of Confucius and can be interpreted as dealing with society‟s search for virtue, theextent to which a society shows a pragmatic future-oriented perspective rather than aconventional historical short-term point of view. Vietnam scores 80, making it a long termorientation culture. Societies with a long-term orientation show an ability to adapt traditionsto a modern context that is pragmatism, a strong propensity to save and invest thriftiness,perseverance in achieving results and an overriding concern for respecting the demands ofVirtue. The countries of South East Asia and the Far East are typically found at the long-termend of this dimension (Geert Hofstede, 2012).2.1.4 Technology and Infrastructure FactorsVietnam is aiming to accomplish its development plan for the aviation sector by 2020including further expansion for aircraft fleet, building and upgrading airports, and developingbetter airport operations and air traffic management (Moye E., 2012). According to theInternational Air Transport Association (IATA), by 2014, Vietnam will become the world‟sthird fastest-growing market for international passengers and freight, and the second-fastestin the number of domestic passengers (Moye E., 2012). The World Economic Forum‟s 2010Global Enabling Trade Report rated Vietnam 103 out of 125 countries for availability andquality of transport infrastructure (Australian Government, 2012). The government has alsoimplemented a 3-year discount scheme in April 2010 to provide charges relief to airlines atVietnam‟s major airports (IATA, 2011). Now, Vietnam has a world class air navigationservice provider (IATA, 2011).Vietnam Foreign Relations From the early 1990s Vietnam moved quickly to restorerelations with the international community. 1995 was a historic year for Vietnam, with itsentry into the Association of South East Asian Nations (ASEAN), increasing integration intothe global economy (especially a framework agreement with the European Union), and theestablishment of formal relations with United States. China will continue to be Vietnamssingle most important bilateral relationship. The two countries regularly exchange high-levelvisits and are currently building a closer relationship. A treaty delineating the land borderbetween the two countries was concluded in December 1999, thus resolving a longstandingbilateral dispute. Other tensions, for example over the contested territory of the SpratleyIslands in the South China Sea, have been prevented from spilling over into broader high-level relations. Membership of ASEAN is central to Vietnams economic development andAsia Pacific University of Technology & Innovation Page | 15
  • 16. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMinternational economic integration strategies. Around 30% of Vietnams trade is with ASEANcountries. Under the ASEAN Free Trade Area (AFTA) and the ASEAN Investment Area thisco-operation is expected to continue to grow. Viet Nam is an increasingly active member ofASEAN, having hosted both the Sixth ASEAN Summit in 1998, the ASEAN RegionalForum (ARF) Post Ministerial Conference in 2001, and successfully hosted the fifth AsiaEurope Meeting (ASEM) in 2004. In 1998 Vietnam was admitted to full membership ofAPEC, and hosted this Summit in November 2006. Vietnam has formally acceded to theWTO (January 2007) and is currently undertaking the role of non-permanent member of theUnited Nations Security Council for the 2008-2009 year.Asia Pacific University of Technology & Innovation Page | 16
  • 17. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM2.2 Opportunities for AirAsiaThere are 2 major events that are taking place now or going to take place in less than 6months from now. First, is the ever increasing oil price? Second, is the “ASEAN Open Skies”agreement that has been reached? The increasing oil price at the first glance may appear likea threat for AirAsia. But being a low cost leader, AirAsia an upper hand because its cost willbe still the lowest among all the regional airlines. Thus, AirAsia has a great opportunity tocapture some of the existing customers of full service and other low cost airline‟s customers.However, there will be also some reduction in overall travel especially by casual or budgettravellers. The “ASEAN Open Skies” allows unlimited flights among ASEAN‟s regional aircarriers beginning December 2008 (AirAsia, 2008). This will definitely increase thecompetition among the regional airlines. However, with the “first mover” advantage as wellas its strengths in management, strategy formulation, strategy execution, strong brand and“low-cost” culture among its workforce, this agreement can be seen as more of anopportunity. There is also some opportunity to partner with other low cost airlines as Virginto tap into their existing strengths or competitive advantages such as brand name, landingrights and landing slots (time to land). The population of Asian middle class will be reachingalmost 700 million by 2010. This creates a larger market and a huge opportunity for all lowcost airlines in this region including AirAsia (AirAsia, 2010).2.2.1 Opportunities of AirAsia in Vietnam Airline MarketAirAsia has a vibrant and high potential in the Vietnam aviation market. First, it is becausethe state constitution of the country itself has planned for expansions and developments ofairlines and airports over the next decade (Centre for Aviation, 2012). Also, Vietnam is alsomoving closer to ASEAN open skies and preparation for necessary steps and following aroute to enter such a regional market has been estimated to be done by 2015 (Vietnam.net,2011). Furthermore, Vietnam is aiming to accomplish its development plan for the aviationsector by 2020 which includes further expansion for aircraft fleet, build and upgrade airports,and develop better airport operations and air traffic management (Moye E., 2012).By the year 2014, Vietnam is assuming to become the world‟s third fastest-growing marketfor international passengers and freight, and the second-fastest in the number of domesticpassengers (Moye E., 2012). Vietnam has a world class air navigation service provider(International Air Transport Association IATA, 2011). According to IATA, improvingefficiency will be critical in maintaining Vietnam‟s competitiveness (Hung Q., 2011).Recently, Vietnam has been nominated as one of the fastest emerging economies todayhaving a huge potential for businesses as the growth in GDP (Thanh Nien News, 2012).Asia Pacific University of Technology & Innovation Page | 17
  • 18. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMMeaning that the country had led to the rapid growth of middle class Vietnamese whichcreates a larger potential market giving the opportunity for AirAsia to become the low-costleader in Asia, and is driving demand for more low-cost flights. (See Appendix 1)This shows that Vietnam has a strong domestic growth rate coupled with its geography; acountry stretching for thousands of kilometres on a north-south axis creates a need for longdistance freight haulage (Business Monitor International, 2011). Currently the country hasonly one Vietnamese LCC which is Jetstar Pacific with account only 16% of total domesticcapacity. (See Appendix 2) The other major domestic markets in ASEAN are Indonesia,Malaysia, Philippines and Thailand which are having LCC penetration rates above 50%(Centre for Aviation, 2012). Vietnam goes second for capacity growth in the region, onlybeaten by Indonesia. (See Appendix 3).In addition, Vietnam‟s domestic market has been growing at double digit clip since 2007,with full-service operator Vietnam Airlines the main beneficiary (Centre for Aviation, 2012).With more low cost carriers (LCC) penetrating Vietnam market, there would be possibility offaster growth which would be a large opportunity for LCC like AirAsia to increase salesgrowth in the Vietnam market with low fares. Furthermore, AirAsia‟s proposal on jointventure with Vietnam‟s local brand VietJet which is 100% privately owned, with 70% stakeheld by local partners and 30% by AirAsia, is seen as a comparative advantage. More rapidexpansions can be made as there is no need for lengthy approval processes by the governmentto emerge new routes or aircraft which the government-owned organisations are facing(Centre for Aviation, 2012).According to Vietnam Travel (2009), over the past 10 years Vietnam has seen anextraordinary growth in tourist numbers of 286% rise since 1998 and in recent year‟s growthhas been as 20% compared to the previous year. Vietnam Travel stated that the airtransportation is the main mode of transport used by tourists travelling to Vietnam. (SeeAppendix 4) Last but not least, the vital factor for airline costs is fuel. (See Appendix 5)Prices for jet fuel are rising swiftly nowadays, prompting airlines to raise fares, tack on newfees, and to consider offering fewer flights or flying smaller planes (Martin T.W., 2011). AsAirAsia‟s focus is on maintaining lowest operating costs, the organisation might not dependmuch on its fares compared to other airlines.Asia Pacific University of Technology & Innovation Page | 18
  • 19. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM2.3 Threats faced by AirAsiaCertain rates like airport departure, security charges and landing charges are beyond thecontrol of airline operators and this is a threat to all airlines especially low cost airlines whichtries to keep their cost as low as possible. For example, Changi airport in Singapore chargesSGD21 for every person who departs from Singapore. AirAsia‟s profit margin is about 30%and this has already attracted many competitors. Most of the full service airlines have orplanning to create a low cost subsidiary to compete directly with AirAsia. For example,Singapore Airlines has created a low cost carrier Tiger Airways. Because of the low costbusiness structure, users tend to have the perception that budget airlines may compromisesafety to keep costs low.2.3.1 Threats faced by AirAsia in Vietnam Airline MarketVietnam does not allow usage of foreign airline brands like other ASEAN countries to protectthe local airline industry, which is the main threat faced by AirAsia. This is also the mainfactor of the low LCC penetration rates in the country because when AirAsia can have thesame look, strategy and model as its other affiliates; it would not be much challenge forAirAsia as the organization has already built up trust and low cost mentality among travellersall around Asia. Instead, AirAsia might not able to face the competition from the strongcompetitors using a local brand, hence failing in Vietnam market.Furthermore, the macroeconomic instabilities in the year 2010 and 2011 are likely to weighon public acceptance of the one-party political system, and operation riot like streetdemonstrations to protest economic conditions could develop into a full-on challenge ofundemocratic rule in Vietnam (Business Monitor International, 2011). In few years to come,Vietnam‟s political condition might not differ much due to the strong domestic control, butthe one-party system might be unsustainable over a longer period of time. The changes inVietnam‟s ruling party of their country‟s political situation would cause impactful effect onthe country‟s economy and perception of foreign investors towards the country‟s prospect.Also, the unstable of the country‟s economy will lead to inflation where increase in prices forgoods and services, but local‟s income remain the same. Travellers including Vietnamese willtend to decrease the intensity to travel which will have an impact on AirAsia‟s revenue.Asia Pacific University of Technology & Innovation Page | 19
  • 20. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM3.0 Analysis of Internal Environment3.1 Strengths of AirAsia3.1.1 Exploitation and Accesses to Latest TechnologyThe excellent utilization of IT have directly contributed to their promotional activities such asemail alerts and desktop widget which was jointly developed with Microsoft for newpromotions, brand building exercise with over 3 million hits per month and on the mostwidely surfed booking engines in the world as well keep the cost low by enabling directpurchase of tickets by consumer thus saving on airline agent fees. Also, flight tickets can bereserve online via AirAsia‟s website (see Appendix 6) or through mobile booking viamobile.airasia.com. Travellers could check their flight status and other promotion itemsonline. In addition, boarding passes are also available on mobile phones which make it moreconvenient and save time for travellers to access it anytime with 24x7 bases. AirAsia is thefirst airline in Southeast Asia to utilize e-ticketing and bypass conventional travel agents. Theorganisation gets to save costs on agent‟s commissions hence reduce intermediary cost, andissuing physical tickets to save printing cost.3.1.2 Low-Costs Business ModelAirAsia has been nominated as Asia‟s low cost leader where the organisation has created alow cost airline mindset among Asian. AirAsia is the low cost leader in Asia. With the helpof AirAsia Academy, AirAsia has successfully created a “low-cost airline mentality” amongtheir workforce. The workforce is very flexible and high committed and very critical inmaking AirAsia the lowest cost airline in Asia. AirAsia is the first airline in Asia tocommence low cost carriers by offering only basic services to travellers. Low operating costssuch as wages, airport fees, and short ground waits are reduced because of the simpleboarding processes. Furthermore, by reducing insignificant operations such as frills andseating arrangements, the organization is able to maximize sales and minimise operationalcosts. With its low operating costs, the service and safety of travellers are still their mainpriority (Dawna and Blaise, 2005).3.1.3 Single Aircraft Type which gives lower turnaround time By having a single aircraft type, AirAsia‟s maintenance is made simplified andcheaper. Due to the same reason, the organization could negotiate aircraft buying terms fromsupplier better and get a more reasonable price. Staffs and training needed are lessened and sodoes infrastructure, equipment and spare parts. In 2004, as a result of its point-to-pointAsia Pacific University of Technology & Innovation Page | 20
  • 21. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMservices which kept flights to no more than 4 hours, AirAsia managed to operate its aircraftfor an average of approximately 13 hours/day with 2.5 hours more efficient than full-servicesairlines which managed to use their aircraft for an average 10.5 hours/day (Abigail Zhu,2012). Therefore, it is a sustainable competitive advantage for AirAsia as this capability isunique and hard to imitate (Haddad, 2003).3.1.4 Strong Management TeamAir Asia has a very strong management team with strong links with governments and airlineindustry leaders. This is partly contributed by the diverse background of the executivemanagement teams which consists of industry experts and ex-top government officials. Forexample, Shin Corp (formerly owned by the family of former Thai Prime Minister - ThaksinShinawatra) holds a 50% stake in Thai AirAsia. This has helped AirAsia to open up andcapture 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 efficientcompared to Boeing 737 planes which is being used by many other airlinesThe management team is also very good in strategy formulation and execution. The strategythat they have formulated at the beginnings was a clever blend of proven strategies by otherlow cost airlines is US and Europe. They are Ryanair‟s operational strategy (no frills, landingin secondary airport), Southwest‟s people strategy- employee comes first, AirAsia staffs mayget lower salaries compare to rivals but staffs are offered ample varieties of incentivesincluding performance-based bonuses, share offers and free-flights. Staffs are more motivatedand focused on their job as they sense that they are part of the organisation and Easyjet‟sbranding strategy (linking with other service providers like hotels, car rental).3.1.5 Established Brand and ReputationAirAsia‟s brand name is well established in Asia Pacific. Besides the normal print mediaadvertising & promotions, AirAsia‟s top management also capitalised on promotions throughnews by being very “media friendly” and freely sharing the latest information on Air Asia aswell as the airline industry. Their partnership with other service providers such as hotels andhostels, car rental firms, hospitals (medical tourism), Citibank (AirAsia Citibank card) hascreated a very unique image among travellers. Alliance with Galileo GDS (GlobalDistribution System) that enables travel agents from around the world to check flight detailsand make bookings have also contributed to their string brand name. Air Asia‟s localpresence in few countries such as Indonesia (Indonesia AirAsia) and Thailand (Thai AirAsia)have successfully “elevated” the brand to become a regional brand beyond just Malaysia. TheAsia Pacific University of Technology & Innovation Page | 21
  • 22. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMlinks with Manchester United (one of the world‟s most famous football teams) and AT&TWilliams Formula One team have further boosted their image to a greater extend beyond justthe this region (Daniel Chan, 2000).AirAsia‟s strong establishment in promoting its branding and marketing is partly because ofbeing Asia‟s first budgeted airline. Promotions capitalise by AirAsia is the regular printmedia advertising and sharing updated news about the organization freely through the news.The organization‟s partnership with hotels and car rental firms has also generated anexclusive figure and value among travellers. In addition, Manchester United as one of theworld‟s most famous football team having AirAsia‟s major sponsorship includinginternational sponsorship and advertising uphold the brand even further beyond the region.July indeed is a month of celebration for AirAsia, where the airline receives not one, but twointernational accolades further confirming that AirAsia is the world‟s best in the globalairline industry, as reported in Aviation Week‟s Top-Performing Airlines 2012 (AirAsia,2012). Besides winning the title of the World‟s Best Low Cost Airline for four consecutiveyears, AirAsia was also named Best Low Cost Airline in Asia for four consecutive years aswell in the same award ceremony (AirAsia, 2012).Asia Pacific University of Technology & Innovation Page | 22
  • 23. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM3.2 Weaknesses of AirAsia3.2.1 Over-Relying on Online SalesAirAsia depends mainly on the process infrastructure of internet technology from booking topurchasing and to payment methods and finally to ticketing, which the organisation may missout the potential prospects within countries with low internet penetration such as Cambodia,Laos. Most of the time, if there is any flight delays; the organisation will be the one at faultfor not being robust enough to handle the bookings efficiently. Also, too dependent oninternet technology will take up a lot of cost in terms of constantly investing in technologicalequipments to sustain its huge network.3.2.2 Limited Customer ServiceWhen the major aspect of LCC is to reduce cost, AirAsia will need to limit their spending onresources especially in human resource and only take in employees who can be multitasked.Because of this, employees wouldn‟t be able to live up to their full potential or focus on acustomer as they have to cater various responsibilities. Furthermore, there are also limitationsto AirAsia‟s services such as not having business class and no frill service when theorganisation couldn‟t provide extra services to meet customer desires and wants. Thisresulted AirAsia receives lot complaints from customers on their service. Examples ofcomplaints are around flight delays, being charged extras and not able to change flight or geta refund if customers could not make it. Good customer service and management is criticalespecially when competition is getting intense.3.2.3 Too Dependent on OutsourcingAir Asia does not have its own maintenance, repair and overhaul (MRO) facility to lowertheir operational cost. AirAsia depends heavily on outsourcing its various operations to othersIt may be a good strategy when they first started with only Malaysia as the hub and fewplanes to maintain. But now, with few hubs (Malaysia, Thailand and Indonesia) and over 100planes currently owned and about another 100 planes to be received in the next few years,AirAsia have to ensure proper and continuous maintenance of the planes which will also helpto keep the overall costs low. It is a competitive disadvantage not to have its own MROfacility. This turns out to be powerful risk to AirAsia‟s responsibility for delays and affecttheir daily operation if the contractors couldn‟t complete the services on time.Asia Pacific University of Technology & Innovation Page | 23
  • 24. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM 4.0 Generating Strategies with TOWS Matrix for AirAsia Strengths Weaknesses Exploitation and Accesses to Latest Over-Relying on Online Technology Sales Low-Costs Business Model Limited Customer Service Single Aircraft Type which gives Too Dependent on Lower Turnaround Time Outsourcing Strong Management Team Established Brand and Reputation Opportunities Strengths – Opportunities Strategies Weaknesses – Opportunities Strategies Rise in the Middle Class  Promoting low costs and lower  Improve quality and Population turnaround time to attract the growing service level with Strong domestic growth domestic market development plan in rate  Utilise strong branding and marketing aviation sector Increase in fuel prices to target the rise in the middle income  Limited service reduces eliminate unprofitable class and growth in leisure travel in costs by targeting competitors Vietnam increment in fuel prices Growth in leisure travel  Making full use of exploitation towards which leads to higher Development plan in internet technology with development fares aviation sector plan in aviation sector  Availability of huge Availability of large and  Exploitation of internet technology amount of skilled trained workforce at low simplifies processes for tourists workforce reduces much cost training needed for handling online sales Threats Strengths – Threats Weaknesses – Threats Strategies Strategies Aviation Rules and  Utilise strong branding and marketing o Modernize Navitaire with Government Policies which targets the aviation rules and tragedy recovery targeting Macroeconomic government policies in Vietnam heavy reliance on online Instabilities  Promoting low cost, lower turnaround sales and macroeconomic time and strong branding in order to instabilities cope with the macroeconomic instabilities Asia Pacific University of Technology & Innovation Page | 24
  • 25. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMAirAsia can take the opportunity on promoting its low-costs flight services and lessturnaround time with Vietnam‟s rapid growth in the aviation market as there are not manylow cost carriers rivals yet in Asian market. For its domestic flights - travelling from oneplace to another for a short distance or period of time, travellers would often consider moreon costs and convenience. AirAsia‟s low cost concept with no frills where travellers flying ata short distance normally only require several traditional passenger services and lowturnaround time where there are more flight options is a competitive advantage. Comparingto road and sea transportation, flights saves more travelling time too (AirAsia, 2010).In addition, AirAsia‟s low cost leadership strategy as sustainable competitive advantagecould capture the growing middle income class population which drives demand for low costflights and leisure travel in Vietnam as well through their strong branding and marketing. Asair transportation is the main transportation mode for leisure travel to Vietnam, AirAsia coulduse its exploitation in internet technology to target the market as well. Travellers get to makereservation for flights and hotels or even for car rentals to make travelling easier and hasslefree. It improves convenience and reduces costs and time. In the aviation sector, “Trust” is akey factor made by AirAsia in making travellers dealing with the airline‟s website to feelmore secure as they would not have to worry about frauds by agents. Hotels and car rentalsreservation online makes things easier for first time travellers to Vietnam as well as theymight not be used to the environment yet.Furthermore, with Vietnam‟s move towards ASEAN open skies and development plan for itsaviation sector, AirAsia will be able to fully exploit its usage on internet technology as wellas reducing costs in terms of its technological equipments. In addition, development plan inaviation sector will also increase the quality and services of the airline to be more efficientsuch as handling bookings and online sales (AirAsia, 2008).Also, with the high availability of huge amount of skilled staffs in Vietnam would enableAirAsia, meaning efficient and motivated workforce helps reduces training time and learningcurve in dealing with its technological equipments. Although there are limited servicesprovided by AirAsia due to promoting low cost, but the airline will gain advantage bytargeting the increment in fuel prices. Increase in fuel prices tends to eliminate unprofitablecompetitors, and airlines often raise fares and flying with smaller planes as fuel is often themajor cost for airlines. But not AirAsia whom most concern is on sustaining lowest operatingcosts.Asia Pacific University of Technology & Innovation Page | 25
  • 26. CHAN CHEE MANG TP 021569 BM026-3-3-INTSMFor instance, although Vietnam‟s aviation rules and government policies restrict usingforeign airline brands to protect local airlines, AirAsia could still penetrate the local marketwith its brand by using an indirect approach by sharing the news of joint venture with a localairline through print media advertising and news. It might be a challenge to penetrate themarket with a local brand, but with the travellers‟ awareness of the joint venture and theairline‟s strong brand and trust built among travellers; it would not be seen as a setback.AirAsia as Manchester United football team‟s major sponsor, the airline could spread thenews even further beyond the region through the international sponsorship and advertising.AirAsia‟s nomination for four years running as Skytrax World‟s Best Low Cost Airlinewould also make the airline the primary choice for air transportation.Subsequently, if Vietnam were to experience macroeconomic instabilities in the future suchas inflation and corruption, it would be wise for AirAsia to promote its low costs philosophy,low turnaround time and strong branding as people would go after low cost targeting limitedservices with no additional charges but safe flights. Inflation reduces the country‟spurchasing power meaning people tend to spend lesser and save more. AirAsia‟s low costphilosophy will be suitable for the rising inflation and having low turnaround time as anadditional advantage to save time. AirAsia could prevail over the issue of corruption in thecountry where there‟s reduction in air travel using its strong branding. AirAsia would betravellers‟ prior choice of air transportation as the airline has built trust and confidenceamong travellers for a safe flight.When AirAsia is highly dependent on its online sales so the airline cannot afford to have thewebsite down because of maintenance or busy traffic. By setting up tragedy recovery usingNavitaire, a direct sales engine service provider, would improve the efficiency of the websitein finding solutions and fixing them. Although offering travellers free 15kg baggageallowance for the ones travelling four hours and above would be opposing with the airline‟sno frills policy, but long term wise would build customer loyalty and retention.Asia Pacific University of Technology & Innovation Page | 26
  • 27. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM5.0 Entry Strategies for AirAsiaBased on the analysis done, it is more viable for AirAsia to enter Vietnam market using jointventure as entry mode in aviation sector because the country forbids 100% of foreignownership. Besides that, domestic flights in Vietnam are still guarded by the country‟s lawprohibiting foreign airlines from entering to protect the local airlines. In 2010, AirAsiaofficially announced that the airline has successfully bought 30% shares of Vietjet Air.Vietjet Air was given the authority to start its operation in 2007 but had been influence by theworld economic crisis in the next years to defer their plan numerous times.Joint venture with a local brand in Vietnam would benefit AirAsia as Asia‟s low cost leaderand largest LCC to be able to expand its operations further in the country, obtaining strongerposition among competitors, increase intra-regional connectivity, and as another opportunityin backing up the ASEAN region as tourism hub. Moreover, the joint venture will alsocontribute to the diversification and needs of air travel in the country and region by offeringadditional options. By using the competitive advantage of both airlines AirAsia and VietjetAir would also promote a more efficient operation and LCC marketing due to the idealcombination in terms of organization administration, technological equipments, experiencesin airline industry, strong branding of AirAsia, and market within the reach of Vietjet Air.In 2007, Vietjet was the first in Vietnam to be formed as a wholly private airline. Now VietjetAir with 70% stake held by local partners and 30% by AirAsia is an advantage as rapidexpansions could be made at a faster pace. Whereas government-owned airlines would haveto go through lengthy approval processes by the government in order to emerge new routes oraircraft. There are various advantages by joint venturing with a local brand in Vietnam butthe major risks faced by AirAsia would be penetrating Vietnam market through a local brandas the country‟s aviation rules and government policies does not allow foreign airlines topenetrate domestic market. The second state-owned airline in Vietnam, Pacific Airline afterjoint venture with Jetstar Airways holding 30% shares manage to transform into JetstarPacific. AirAsia tried to follow the steps of Jetstar Airways by transforming Vietjet Air toVietjet AirAsia parallel with their subsidiary LCCs but the proposal was turn down by CivilAviation Autority of Vietnam (CAAV). Thus, AirAsia would not be able to effectivelyexploit its brand name through a local brand.Asia Pacific University of Technology & Innovation Page | 27
  • 28. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM6.0 Marketing Strategies for AirAsia6.1 Maximized IT and implementing E-commerce in AirAsia businessNowadays, E-commerce is becoming a business tool. E-commerce also has become a vitalstrategic management and allows a company to sell products, advertise, purchase supplies,bypass intermediaries, track inventory, eliminate paperwork, and share information. In total,electronic commerce is minimizing the expense and cumbersomeness, improved products,and higher profitability. According to this statement, E-commerce can change the way ofdoing business nowadays. E-commerce becomes a major success to Airplane Company tomake effectively and efficiency in their business especially for AirAsia expanding in ASEANcountris like Vietnam.AirAsia is one of the airplane companies, which is implementing E-commerce andmaximised their information technology usage to make the efficiency and effectively in theircompany and make possible low cost carrier in their business. According to Pultorak (2004),when the business strategy and IT are aligned, the IT infrastructure can continuously sensethe changing business needs and respond by provisioning or redeploying resources to matchthe demands of the business.Moreover, to maximize their IT, AirAsia implemented current IT such as yield managementsystem (YMS), computer reservation system (CRS), and enterprise resource planning (ERP)system. Lets we discuss the current IT that AirAsia implemented one by one.Yield management system as revenue management system it understands, anticipates, andreacts to the behavior of customer to maximize revenues for the organization. In this system,AirAsia used it to takes into account the operating costs and aids AirAsia to optimises priceand allocate capacity to maximize expected revenues.6.2 Generate new Product Package StrategyAirAsia would be targeting overall middle class population by positioning itself as a low costyet quality carrier. The airline itself is the ideal product to draw and convince customers oftheir basic needs eyeing on product coverage. Hence, various explorations had been done todiscover the possibilities of expansion for product coverage to complement its air offering.AirAsia could enhance on its Do-It-Yourself (DIY) package promotion by “Go Holiday”theme for travellers, introducing travel package including of flight tickets, hotels, and holidayportal at a valuable price as an online service. It offers travellers hassle-free, affordability andflexibility as the growing middle class population in Vietnam‟s concern is mainly onconvenience and budgeted products. Vietnam‟s in-home internet has been increased by overAsia Pacific University of Technology & Innovation Page | 28
  • 29. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM1000% from 1999 to 2008 (See Appendix 7) and mobile phone ownership increased by 33%in 2 years on 2008 (See Appendix 8) is a contribution to the package‟s heavy reliance oninternet technology (Matthaes R., 2008).Travellers are also provided with numerous options from a luxurious five star package to abudget holiday suiting individual needs. In addition, products ranging from airport transfers,tours and activities such as spas and theme parks will be marketed online (AirAsia, 2007).Travellers could conveniently reserve air tickets and hotels at one stop equip with multilanguages to choose from and benefit from having a more attractive rate. With this package,the airline would be able to convert itself from an ordinary flight centric into a travel dealerwhich is a better positioning for the airline competing with channels comprising both onlineand offline.According to the survey done by TNS in 2007, 88% Vietnamese said they are ready to pay ahigher price for healthier foods proving that they are becoming more health conscious. WithAirAsia‟s unique online health package, Go Medic would be able to cater to the growth inhealth tourism (AirAsia, 2007). Currently, Go Medic has formed a partnership with threediagnostic centres with potentially more hospitals and diagnostic centres to be added to theservice (AirAsia, 2007).Asia Pacific University of Technology & Innovation Page | 29
  • 30. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM6.0 ConclusionThe competition among airplane industries is very tough. Each of Airplanes Company in theworld trying to conduct some strategies to compete with another competitor in their industry.To compete with their competitor in the Vietnamese business environment, a company needsto make a strategy to achieve their long terms objective and can be successful for doing theirbusiness. The strategic management becomes important due to the following reason such asglobalisation to survival their business, and than e-commerce become the critical success tothe company nowadays. a company needs to consider the company ability and how tointegrating it with the as well as main factor in the internal and external factor.How AirAsia can be a leader in the lowest cost carrier in the airplane industry? To be a leaderin the low cost carrier, firstly, AirAsia need to consider about their strategic management.The reason why need to consider strategic management because the first reason is because theairline industry is a unique and complex industry. The second reason, the strategy thatAirAsia need is not just how to reduce cost and make the operational activities runningeffectively. But, AirAsia needs to come out with the strategy that can make competitiveposition that the company performs different activities from rivals or performing similaractivities in different ways to achieve their business successfully, the third reason because aglobalisation and implementing E-commerce.The current issues in AirAsia Company are more focused in the competition of the costamong an airplane industry. AirAsia as an industry company which is more focusing in thelow cost carrier airplane industry need to consider to make the lowest possible cost tocompete with the other competitors in their airplane industry in Vietnam market.How AirAsia can solve the current issues to be a low cost carrier leader in airplane industry?The first is to identify and analyse the different strategic analysis, and than to solve thecurrent issues with some strategies such as Joint Venture Entry Strategy, Product PackageStrategy, Maximized IT and implementing E-commerce in AirAsia business, Operationeffectiveness and outstanding efficiency, and the last one is implemented outsourcing in theAirAsia business in Vietnam.Asia Pacific University of Technology & Innovation Page | 30
  • 31. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM7.0 References Abuza, Z. (2004) Vietnam Today [online]. Available from http://www.historyplace.com/pointsofview/vietnam.htm [Accessed 15 September 2012] AirAsia (2012) Corporate profile [online]. Available from http://www.airasia.com/cn/en/corporate/corporateprofile.page [Accessed 15 September 2012] AirAsia (2012) In-flight services [online]. Available from http://www.airasia.com/my/en/flightinfo/inflightservices.page [Accessed 15 September 2012] AirAsia Berhad (2007) Annual Report 2007 [online]. Available from http://www.airasia.com/iwov- resources/my/common/pdf/AirAsia/IR/AA%20Corporate%202007b.pdf [Accessed 15 September 2012] AirAsia Berhad (2007) Bringing ASEAN Closer [online]. Available from http://www.airasia.com/iwov- resources/my/common/pdf/AirAsia/IR/AA%20Corporate%202007.pdf [Accessed 15 September 2012] Airline Leader (2012) Accelerating airline business model realignment [online]. Available from http://www.airlineleader.com/this-months-highlights/accelerating-airline- business-model-realignment [Accessed 15 September 2012] Airline Leader (2012) Vietnam: sowing the seeds for future growth [online]. Available from http://www.airlineleader.com/country-in-focus/vietnam-sowing-the-seeds-for- future-growth [Accessed 15 September 2012] Anh, H. (2011) Vietnam: Opportunities in Aviation Sector – 2011 [online]. Available from http://www.agentschapnl.nl/sites/default/files/bijlagen/Vietnam%20%20Aviation%20sect or%202011.pdf [Accessed 15 September 2012] Anna Aero (2010) China at the forefront of Asian air travel growth; Indonesia and Vietnam booming in 2010; Hong Kong, Japan and Thailand struggle [online]. AvailableAsia Pacific University of Technology & Innovation Page | 31
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  • 33. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM CAPA (2011) Vietjet launch not affected by AirAsia pullout [online]. Available from http://centreforaviation.com/blogs/aviation-blog/vietjet-launch-not-affected-by-airasia- pullout-60658 [Accessed 15 September 2012] CAPA (2011) Vietnam’s LCC market poised for explosive growth as Vietjet AirAsia launches and Jetstar expands [online]. Available from http://centreforaviation.com/analysis/vietnams-lcc-market-poised-for-explosive-growth- as-vietjet-airasia-launches-and-jetstar-expands-58535 [Accessed 15 September 2012] CAPA (2012) Nok prepares to launch international operation in 2013 as Thai Airways drops plans for ultra LCC [online]. Available from http://centreforaviation.com/analysis/nok-prepares-to-launch-international-operation-in- 2013-as-thai-airways-drops-plans-for-ultra-lcc-78996 [Accessed 15 September 2012] Christy, J. (2012) Understanding and Managing Political Risk [online]. Available from http://internationalinvest.about.com/od/globalmarkets101/a/countryresearch.htm [Accessed 15 September 2012] Citrinot, L. (2010) Vietnam confirms AirAsia joint venture [online]. Available from http://www.eturbonews.com/15423/vietnam-confirms-airasia-joint-venture [Accessed 15 September 2012] Delios, A. & Singh, K. (2012) Strategy For Success In Asia, Mastering Business in Asia, John Wiley & Sons (Asia) Pte Ltd Easen, N. (2012) In Asia, a boom in low-cost flights [online]. Available from http://www.bbc.com/travel/blog/20120402-low-cost-flights-in-asia-booms [Accessed 15 September 2012] Encyclopedia of the Nations (2010) Urban population growth (annual %) – Density & urbanization – Environment – World Development Indicators [online]. Available from http://www.nationsencyclopedia.com/WorldStats/WDI-density-urbanization-urban- growth.html [Accessed 15 September 2012] International Air Transport Association (2011) Aviation Opportunities for Vietnam [online]. Available from http://www.iata.org/pressroom/pr/pages/2011-01-14-01.aspx [Accessed 15 September 2012]Asia Pacific University of Technology & Innovation Page | 33
  • 34. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM John, K.D. (2007) Vietnam takes a new political direction [online]. Available from http://www.atimes.com/atimes/Southeast_Asia/IH16Ae01.html [Accessed 15 September 2012] KTSG, dtinews.vn (2012) Gap widens between rich and poor [online]. Available from http://www.dtinews.vn/en/news/024/23400/gap-widens-between-rich-and-poor.html [Accessed 15 September 2012] Matthaes, R. (2008) Consumer Trends [online]. Available from http://www.vinacapital.com/userfiles/file/VN%20TNS%20Consumer%20Trends%20200 8.pdf [Accessed 15 September 2012] McNamara, F. & Troftgruben, V (2012) AirAsia: The World’s Lowest Cost Airline [online]. Available from http://minotstateu.academia.edu/FilizKMcNamara/Papers/1566757/AirAsia_The_Worlds _Lowest_Cost_Airline [Accessed 15 September 2012] Moye, E. (2012) Indoviet 2012 [online]. Available from http://export.gov/trademissions/indoviet2012/eg_main_051226.asp [Accessed 15 September 2012] Naidu, R. (2012) Demand in airlines industry has de-grown, while capacity continues to be added [online]. Available from http://traveltovietnam.cc/Vietnam-Travel- Tips/Vietnam-Travel-News/Vietnam-Lastest-news/590/AirAsia-plans-low-cost-airline-in- Vietnam.aspx [Accessed 15 September 2012] Que, T.T. & Phuc, T.X. (2012) The Doi Moi Policy and Its Impact on the Poor [online]. Available from http://www.socialwatch.org/node/10854 [Accessed 15 September 2012] Rajco Aviation, Top 3 Drivers Account for 64.3% of Total Airline Costs [online]. Available from http://rajcoaviation.com/AircraftEconomicsAirlineCostDrivers.html [Accessed 15 September 2012] Redman, A. & Sai, A. (2012) Opportunities in an urbanizing world, Emerging Market Research Institute, Credit Suisse Sandilands, B. (2010) Jetstar now on collision course with Vietjet, Air Asia’s new venture in Vietnam [online]. Available fromAsia Pacific University of Technology & Innovation Page | 34
  • 35. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM http://blogs.crikey.com.au/planetalking/2010/02/11/jetstar-now-on-collision-course-with- vietjet-air-asias-new-venture-in-vietnam/ [Accessed 15 September 2012] Sidhu, B.K. (2012) Tony Fernandes speaks to StarBiz on AirAsia’s future plans [online]. Available from http://biz.thestar.com.my/news/story.asp?file=/2012/6/15/business/11484860&sec=busine ss [Accessed 15 September 2012] Thanh Nien News (2010) Vietnam Airlines protests AirAsia joint venture [online]. Available from http://www.thanhniennews.com/2010/pages/vietnam-airlines-protests- airasia-joint-venture.aspx [Accessed 15 September 2012] Thanh Nien News (2012) Vietnam is world’s 22nd fastest growing economy [online]. Available from http://www.thanhniennews.com/index/pages/20120622-vietnam-among- 29-fastest-growing-economies-in-the-world.aspx [Accessed 15 September 2012] The Economist (2011) Missing BRIC in the wall [online]. Available from http://www.economist.com/node/18989153 [Accessed 15 September 2012] The World Bank Group (2012) Vietnam [online]. Available from http://data.worldbank.org/country/vietnam [Accessed 15 September 2012] Tirasatayapitak, A., ASEAN Image Positioning: The Case Study Of Vietnam [online]. Available from http://www.ttresearch.org/home/images/2553_4/8.pdf [Accessed 15 September 2012] Travel to Vietnam (2011) AirAsia plans low-cost airline in Vietnam [online]. Available from http://traveltovietnam.cc/Vietnam-Travel-Tips/Vietnam-Travel-News/Vietnam- Lastest-news/590/AirAsia-plans-low-cost-airline-in-Vietnam.aspx [Accessed 15 September 2012] TTRweekly (2011) Thai visits rank 9th in arrivals to Vietnam [online]. Available from http://www.ttrweekly.com/site/2011/03/thai-visits-rank-9th-in-arrivals-to-vietnam/ [Accessed 15 September 2012] Tu, B.D. (2012) Vietnam Airlines adjusts series of business indicators [online]. Available from http://www.intellasia.net/vietnam-airlines-adjusts-series-of-business-indicators- 225530 [Accessed 15 September 2012]Asia Pacific University of Technology & Innovation Page | 35
  • 36. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM United Nations (2012) About Vietnam [online]. Available from http://www.un.org.vn/en/about-viet-nam/basic-statistics.html [Accessed 15 September 2012] US Commercial Service (2012) Doing Business in Vietnam: 2012 Country Commercial Guide for U.S. Companies [online]. Available from http://export.gov/vietnam/build/groups/public/@eg_vn/documents/webcontent/eg_vn_05 1747.pdf [Accessed 15 September 2012] US Commercial Service (2012) Vietnam Market for Airport and Ground Support Equipment, Air Traffic Management Systems, and Aircraft Landing Parts [online]. Available from http://export.gov/vietnam/build/groups/public/@eg_vn/documents/webcontent/eg_vn_05 1754.pdf [Accessed 15 September 2012] Verghese, V. (2012) Asian low-cost airlines think big [online]. Available from http://www.smarttravelasia.com/smallairlines.htm [Accessed 15 September 2012] Vexler, D. (2012) Poor People in Fewer Poor States [online] Available from http://globalbrief.ca/blog/2012/06/06/many-poor-people-in-fewer-poor-states/ [Accessed 15 September 2012] Vietnam Freight Transport Report; Includes BMI’s Forecast (2011) Business Monitor International Ltd Vietnam Travel (2009) Vietnam Tourism Statistics [online]. Available from http://www.vietnamtravel.org/vietnam-tourism-statistics [Accessed 15 September 2012] Vietnam.net (2011) Vietnam moves closer to ASEAN open skies [online]. Available from http://english.vietnamnet.vn/en/travel/13314/vietnam-moves-closer-to-asean-open- skies.html [Accessed 15 September 2012] World Bank (2011) Vietnam Urbanization Review [online]. Available from https://openknowledge.worldbank.org/bitstream/handle/10986/2826/669160ESW0P1130 Review000Full0report.pdf?sequence=1 [Accessed 15 September 2012] World Economic Forum, Asian middle-class to drive growth [online]. Available from http://www.weforum.org/news/asian-middle-class-drive-growth [Accessed 15 September 2012]Asia Pacific University of Technology & Innovation Page | 36
  • 37. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM8.0 Appendices (Please refeer to the attached CD)8.1 Appendix 1Source: Private Equity Indonesia, 2011Available at: http://privateequityindonesia.wordpress.com/investors/8.2 Appendix 2Vietnam domestic capacity by airline type (based on seats per week): 10-Oct-2011 to 16-Oct-2011Source: CAPA – Centre for Aviation and Innovata, 2011Available at: http://centreforaviation.com/blogs/aviation-blog/vietjet-launch-not-affected-by-airasia-pullout-60658Asia Pacific University of Technology & Innovation Page | 37
  • 38. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM8.3 Appendix 3Source: Airline Network News and Analysis, 2010Available at: http://www.anna.aero/2010/05/25/china-at-the-forefront-of-asian-air-travel-growth/8.4 Appendix 4Vietnam Visitors - Vital Statistics(Source: General Statistics Office of Vietnam, Jan 2008 - Oct 2008)By what means do tourists arrive in Vietnam?By air 2,791,556By sea 127,481By road 678,804Source: Vietnam Travel, 2009Available at: http://www.vietnamtravel.org/vietnam-tourism-statisticsAsia Pacific University of Technology & Innovation Page | 38
  • 39. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM8.5 Appendix 58.6 Appendix 6Source: Airasia, 2012Available at: http://www.airasia.com/my/en/home.pageAsia Pacific University of Technology & Innovation Page | 39
  • 40. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM8.7 Appendix 78.8 Appendix 8Asia Pacific University of Technology & Innovation Page | 40
  • 41. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM8.9 Appendix 9AirAsia Group DestinationsIATA AirlineAK AirAsiaD7 AirAsia XFD Thai AirAsiaQZ Indonesia AirAsiaPQ AirAsia PhilippinesJW AirAsia Japan City Country IATA ICAO Airport AK D7 FD QZ PQ JW Refs [1]Abu Dhabi United Arab Emirates AUH OMAA Abu Dhabi International AirportAlor Setar Malaysia AOR WMKA Sultan Abdul Halim Airport [2]Balikpapan Indonesia BPN WALL Sepinggan International AirportBanda Aceh Indonesia BTJ WITT Sultan Iskandar Muda AirportBandar Seri Begawan Brunei BWN WBSB Brunei International AirportBandung Indonesia BDO WICC Husein Sastranegara International AirportBangalore India BLR VOBL Bengaluru International Airport [3]Bangkok Thailand BKK VTBS Suvarnabhumi Airport [3]Bangkok Thailand DMK VTBD Don Mueang International Airport [4]Batam Indonesia BTH WIDD Hang Nadim Airport [5]Beijing China PEK ZBAA Beijing Capital International AirportAsia Pacific University of Technology & Innovation Page | 41
  • 42. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM City Country IATA ICAO Airport AK D7 FD QZ PQ JW RefsBintulu Malaysia BTU WBGB Bintulu AirportBusan [6] South Korea PUS RKPK Gimhae International Airport[begins 28 November 2012]Chengdu China CTU ZUUU Chengdu Shuangliu International AirportChennai India MAA VOMM Chennai International AirportChiang Mai Thailand CNX VTCC Chiang Mai International AirportChiang Rai Thailand CEI VTCT Mae Fah Luang-Chiang Rai International AirportChongqing China CKG ZUCK Chongqing Jiangbei International Airport [7][8]Christchurch New Zealand CHC NZCH Christchurch International AirportClark Philippines CRK RPLC Clark International AirportColombo Sri Lanka CMB VCBI Bandaranaike International AirportDa Nang Vietnam DAD VVDN Da Nang International Airport [4]Darwin Australia DRW YPDN Darwin International AirportDavao Philippines DVO RPMD Francisco Bangoy International Airport [9][10]Delhi India DEL VIDP Indira Gandhi International AirportDenpasar Indonesia DPS WADD Ngurah Rai International Airport [11]Dhaka Bangladesh DAC VCBI Shahjalal International AirportAsia Pacific University of Technology & Innovation Page | 42
  • 43. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM City Country IATA ICAO Airport AK D7 FD QZ PQ JW Refs [12]Fukuoka Japan FUK RJFF Fukuoka AirportGold Coast Australia OOL YBCG Gold Coast AirportGuangzhou China CAN ZGGG Guangzhou Baiyun International AirportGuilin China KWL ZGKL Guilin Liangjiang International Airport [13]Haikou China HAK ZJHK Haikou Meilan International AirportHangzhou China HGH ZSHC Hangzhou Xiaoshan International AirportHanoi Vietnam HAN VVNB Noi Bai International AirportHat Yai Thailand HDY VTSS Hat Yai International AirportHo Chi Minh City Vietnam SGN VVTS Tan Son Nhat International AirportHong Kong Hong Kong HKG VHHH Hong Kong International Airport [14]Hyderabad India HYD VOHS Rajiv Gandhi International Airport [15]Ipoh Malaysia IPH WMKI Sultan Azlan Shah AirportJakarta Indonesia CGK WIII Soekarno–Hatta International AirportJohor Bahru Malaysia JHB WMKJ Senai International AirportKalibo Philippines KLO RPVK Kalibo International Airport KTM VNKT Tribhuvan International AirportKathmandu NepalAsia Pacific University of Technology & Innovation Page | 43
  • 44. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM City Country IATA ICAO Airport AK D7 FD QZ PQ JW Refs [16]Khon Kaen Thailand KKC VTUK Khon Kaen AirportKochi India COK VOCI Cochin International AirportKolkata India CCU VECC Netaji Subhash Chandra Bose International AirportKota Bahru Malaysia KBR WMKC Sultan Ismail Petra AirportKota Kinabalu Malaysia BKI WBKK Kota Kinabalu International AirportKrabi Thailand KBV VTSG Krabi AirportKuala Lumpur Malaysia KUL WMKK Kuala Lumpur International AirportKuala Terengganu Malaysia TGG WMKN Sultan Mahmud Airport [17]Kuantan Malaysia KUA WMKD Sultan Haji Ahmad Shah AirportKuching Malaysia KCH WBGG Kuching International AirportKunming [18] China NNG ZGNN Kunming Changshui International Airport[begins 10 December 2012]Labuan Malaysia LBU WBKL Labuan AirportLangkawi Malaysia LGK WMKL Langkawi International AirportLombok Indonesia LOP WADL Lombok International Airport [19]London United Kingdom STN EGSS London Stansted Airport [9]London United Kingdom LGW EGKK London Gatwick AirportMacau Macau MFM VMMC Macau International AirportMakassar Indonesia UPG WAAA Sultan Hasanuddin International Airport [20]Manado Indonesia MDC WAMM Sam Ratulangi International AirportMandalay Myanmar MDY VYMD Mandalay International AirportMedan Indonesia MES WIMM Polonia International AirportMelbourne Australia MEL YMML Melbourne AirportMiri Malaysia MYY WBGR Miri International Airport [21][22]Mumbai India BOM VABB Chhatrapati Shivaji International AirportAsia Pacific University of Technology & Innovation Page | 44
  • 45. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM City Country IATA ICAO Airport AK D7 FD QZ PQ JW RefsNakhon Phanom Thailand KOP VTUW Nakhon Phanom AirportNakhon Si Thammarat Thailand NST VTSF Nakhon Si Thammarat AirportNanning [23] China NNG ZGNN Nanning Wuxu International Airport[begins 11 December 2012]Narathiwat Thailand NAW VTSC Narathiwat Airport [12]Okinawa Japan OKA ROAH Naha AirportOsaka Japan KIX RJBB Kansai International AirportPadang Indonesia PDG WIPT Minangkabau International Airport [24]Palembang Indonesia PLM WIPP Sultan Mahmud Badaruddin II Airport [9]Paris France OLY LFPO Paris-Orly AirportPekanbaru Indonesia PKU WIBB Sultan Syarif Qasim II International AirportPenang Malaysia PEN WMKP Penang International AirportPerth Australia PER YPPH Perth AirportPhnom Penh Cambodia PNH VDPP Phnom Penh International AirportPhuket Thailand HKT VTSP Phuket International AirportPuerto Princesa Philippines PPS RPVP Puerto Princesa International Airport [25]Ranong Thailand UNN VTSR Ranong AirportSandakan Malaysia SDK WBKS Sandakan Airport [12]Sapporo Japan CTS RJCC New Chitose AirportSemarang Indonesia SRG WARS Achmad Yani International AirportSeoul South Korea ICN RKSI Incheon International AirportShenzhen China SZX ZGSZ Shenzhen Baoan International AirportSibu Malaysia SBW WBGS Sibu AirportSiem Reap Cambodia REP VDSR Siem Reap International AirportSingapore Singapore SIN WSSS Singapore Changi AirportAsia Pacific University of Technology & Innovation Page | 45
  • 46. CHAN CHEE MANG TP 021569 BM026-3-3-INTSM City Country IATA ICAO Airport AK D7 FD QZ PQ JW Refs [26]Solo Indonesia SOC WARQ Adisumarmo International AirportSubang Malaysia SZB WMSA Sultan Abdul Aziz Shah AirportSurabaya Indonesia SUB WARR Juanda International AirportSurat Thani Thailand URT VTSB Surat Thani Airport [27]Sydney Australia SYD YSSY Sydney AirportTaipei Taiwan TPE RCTP Taipei Taoyuan International AirportTawau Malaysia TWU WBKW Tawau Airport [28]Tehran Iran IKA OIIE Tehran Imam Khomeini International Airport [29]Thiruvananthapuram India TRV VOTV Trivandrum International Airport [30]Tianjin China TSN ZBTJ Tianjin Binhai International AirportTiruchirapalli India TRZ VOTR Tiruchirapalli AirportTokyo Japan HND RJTT Haneda Airport [12]Tokyo Japan NRT RJAA Narita International AirportTrang Thailand TST VTST Trang AirportUbon Ratchathani Thailand UBP VTUU Ubon Ratchathani AirportUdon Thani Thailand UTH VTUD Udon Thani AirportVientiene Laos VTE VLVT Wattay International Airport [31][32]Xiamen China XMN ZSAM Xiamen Gaoqi International Airport [33]Wuhan China WUH ZHHH Wuhan Tianhe International AirportYangon Myanmar RGN VYYY Yangon International AirportYogyakarta Indonesia JOG WARJ Adisucipto International Airport(Sources from: The Malaysia Insider 2012- AirAsia)Asia Pacific University of Technology & Innovation Page | 46

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