A presentation on Air Asia Strategic Management for Past, Present and Future

2. Partha Pratim Mahanta Pranjal Pratim Neog
Dibakar Sinha Samiron Moran
Dipankar Nath Abhijit Ramchiary
25-5, Block H, Jalan PJU 1/37
Dataran Prima, 47301 Petaling Jaya
Selangor Darul Ehsan, Malaysia
Partha Pratim Mahanta
Dibakar Sinha
CASE STUDY Pranjal Ramchiary
Abhijit
Pratim Neog
Dipankar Nath Samiron Moran
MBA 3rd SEMESTER
SECTION- B

3. OBJECTIVES
 To show the profile of our company i.e. Air Asia.
 To know the business strategies and operations of Air
Asia by using different strategy models.
 To show you the future of Air Asia by SWOT analysis.
 To show you some of the future planning with reference to
future growth.

4. CORPORATE
PROFILE
 Our Vision :
AirAsia To be the largest low cost airline in
Asia and serving the 3 billion people
who are currently underserved with
poor connectivity and high fares.
Asia's leading airline.
Our Mission : in 1993 with the dream of making flying possible
 It was established
for To be the best company to work.
everyone
Headquarters : Sepang, Selangor and Malaysia
Create a globally recognized ASEAN brand.
No. of planes (including Joint ventures) : 78 planes
No. of employees : 3,000 employees that everyone can fly with
To attain the lowest cost so
AirAsia.
No. of customers : 16,000,000 per year
Turnover per annum : $60,000,000 product, embracing
Maintain the highest quality
technology to reduce cost and enhance service levels.

5. CORPORATE
PROFILE
 Our Corporate objectives :
Leanest cost structure
Maximize shareholders value
Safety
 Our Valuesfor Guests’ satisfaction
Passion :
Transparency
Safety First, Low Fare and No Frills
Human Capital Development
High Aircraft Utilisation
Streamline Operations
Lean Distribution System and Point to
Point Network

6. WHERE WE FLY

7. Air Asia Airlines
over the years
Dates and years Milestones
18 April 2002 AirAsia became Asia’s first airline to go ticketless.
10 May 2002 It introduced its first online booking.
19 August 2003 It introduced world’s first SMS booking.
8 December 2003 It’s first international flight took off to Phuket.
8 December 2004 It announced a joint venture with PT AWAIR of
Indonesia.
21 February & 29 March 2005 Launched Go-Hostel & Go-Car.
Year 2007 The lowest cost in the World, 51 000 passengers
per day, 54 planes.
Year 2008 Launch of Air Asia X.

8. Business Strategy and
Operations
FREQUENT FLIGHTS SAFETY FIRST LOW FARE NO FRILLS
 Faster turnaround time
 Ticketless service
 Improving aircraft utilization
 Crew efficiency  Internet booking
 Using one type of  Reservations and sales office
aircraft for

saving training cost Easy payment channels and authorized
travel agents
 Nationwide call centers
The airlines complies with the
It’s fares are
The airline ensures fastconditions of the International
significantly lower than
turnaround of about half-an-hour Safety and is regulated
Aviation
those of other
which is the fastest in the region Malaysian Dept. of Civil
by the
operators
Aviation
COST OPTIMIZATION OPERATION GUEST’s CONVENIENCE

9. ANALYSIS

10. SWOT ANALYSIS OF
AIRASIA
Growth in revenue OPPORTUNITY
 Low distribution cost Increasing competition
 Low operational costs Increasing oil price
External Environmental
 Attractive ticket price Substitute products
 Strong Brand presence in Asia Increasing of maintenance cost
 Malaysian government support
 Diversification strategy + Joint ventures
Factor
WEAKNESS Internal Comp- -etence Factor STRENGTH
 Liberalization of ASEAN capital
routes
 Does not have its own maintenance,  Asia’s middle class growth
repair and overhaul (MRO) facility.  The “ASEAN Open Skies” allows
 Receives a lot of complaints from unlimited flights among ASEAN’s
customers on their service. regional air carriers beginning
December 2008.
THREATS

11. PORTER ANALYSIS
OF AIRASIA
Potential Entrants
 Many customers but high Medium
Threat of New
sensibility to prices.
Entrants
 Train, bus and car travel
Medium
areDevelopment of substitute
developing. Industry
products. Competitors Bargaining
Power of
Suppliers Buyers
Buyers
Bargaining
Power of
Suppliers Rivalry Among
Medium
Existing Firms  Hard competition
between Airbus, Boeing, ATR
 Full services Air Line might and others.
Low Threat of Substitute
consider going low cost.
 Development of new low-cost Products or Services
companies.
Substitutes

12. BCG Matrix analysis of AirAsia
according to the country that their fleets are operating
Malaysia
 Indonesia
Brunei
 Macau and
 Thailand  Singapore

13. FUTURE ANALYSIS

14. SWOT Analysis
15 years Down the Line

15. STRENGTH WEAKNESS
Brand Name
Relatively high price
 Long-term future
 High operation cost
 Strong management team
 Investment cost in high technology
 Strategy formulation and execution
 Strong competition
 Low cost leader in Asia
 Excellent utilization of IT
OPPORTUNITY THREATS
Entrance of other LCCs
Demographic advantages
 High fuel price decreases yield
 Growing of Middle Class  Accident, terrorist attack and disaster
 Partner with other low cost airlines and affect customer confidence
 High fuel prices will squeeze out  Aviation regulation and government
unprofitable competitors policy
 Air Asia will get inherent advantage  Increase in operation cost in producing
in long distance travel value-added services
 Developed innovation technology  System disruption due to heavily
reliance on online sales

16. FUTURE STRATEGY
 Layered Adaptive Security
 Travelling planning
 “Equivalent Visual” Operation
 Reservations and ticketing
 “Super Density” Airport
 Frequently flyer program Operations
 Campaign management  Airborne Information Net
 Customer care
 Yield Management System (YMS)
 Business intelligence
 Computer Reservation System (CRS)
Enterprise Resource Planning System
(ERP)

17. FUTURE PLANNING
 To maintain the high level of profitability.
1. Act on the prices :
 Expensive tickets to be distributed when the demand is high
(week-end).
 Prices increasing according to the demand.
 Cheap tickets available during the middle of the week.
2. Act on the cost :
 Offer more on board services/ products to the passengers.
 Taxi booking service
 Internet WIFI access on board Newspapers
 Place advertisings on the plane’s cabin

18. FUTURE PLANNING
 Fund-raising
 Fresh money could be used to finance strategic projects.
 Invest in joint ventures.
 Maintain international development across Asia in association
with local budget airlines.
 It would increase the airline’s offer.
 Diversification
 Acquire new know-how in a view to offer more service to the
consumer.
 E.g. To take over an online travel agency.

19. Conclusion
 The strategies of Air Asia focus more on the management and access of information
rather the creation of irrelevant airline services.
 For this reason, Air Asia has developed a unique set of guiding principles -
simplicity, cost-efficiency and effectiveness.
 Total commitment to these principles makes the airline services of Air Asia very
user-friendly to its customers.
 SWOT analysis of AirAsia with reference to sustainability and future growth shows
more opportunities than threats.
 AirAsia is fully determined to exploit these opportunities and convert more threats
into opportunities for success.

20. THANK YOU