Case Study Report Air Asia

1. College of Management
Department of Management
University of the Philippines – Visayas
Management BM 230
TO : MARIA THERESA ALBAÑA
UNIVERSITY OF THE PHILIPPINES – VISAYAS
RE : CASE STUDY REPORT
Dear Sir/Madam:
Herewith please find the Case Study Report in compliance with the course
requirements of the course.
Questions:
1. What are the micro and macro environmental factors that have contributed to
the early success of AirAsia?
MACRO ENVIRONMENTAL FACTORS MICRO ENVIRONMENTAL FACTORS
 9/11/2001 terrorist attack
 Apprehension on long distance travel
 Attraction of holidays in nearby countries
 Rising Asian incomes
 Good economic growth
 Increased media coverage of low cost
carriers (LCCs)
 Internet coverage
 High prices of Malaysia Airline Systems
(MAS)
 Rising local incomes
 Discouraged first class travel for
businessmen
2. Discuss the micro and macro factors that would affect AirAsia's performance
in the current competitive environment described in the case
MACRO MICRO
 Rising fuel costs
 2008 Global Financial Crisis
 Heavily regulated industry
 Open Skies agreement with Indonesia,
India, Thailand, and Singapore
 Rising landing costs
3. By focusing on low prices, has AirAsia pursued the best strategy? Why or why
not?
Yes.

2. College of Management
Department of Management
University of the Philippines – Visayas
Management BM 230
It focused on its market strategy of letting everyone fly, by bringing down
costs and making flying more accessible and affordable to ordinary people. It
capitalized on the cost cutting measures of companies by providing a cheaper
alternative to expensive regular airlines by creating a no-frills airline and using
secondary airports, expanding its coverage by partnering with regional airlines.
4. Given AirAsia's current situation with bigger competitors following its
business model, what other recommendations would you make to CEO Tony
Fernandes for the future of his company?
AirAsia can diversify business into not just transportation but also
accommodation and lodging by partnering with hotels and resorts or enter the
business itself. It could also use better forecasting models to take advantage of fuel
surcharges and discounts
Hoping the same meets your standards.
Thank you, I remain
Very truly yours,
MARCELO AUGUSTO A. COSGAYON