Case Study Of Air Asia: Strategy

Case Study Of Air Asia
1. Introduction
There are two types of organization, which are the profit seeking company and the non–profit
seeking company. A profit seeking company is a company that seeks profit as its primary objective,
which is a complete opposite of a non–profit company that focuses a goal such as helping the
community and that money is only a concern to keep the company operating. Most companies
considered business to be profit seeking, which includes the restaurant, retail stores, insurance
company and many more.
Air Asia Berhad is also known to be a profit seeking company that has been well known for gaining
profit by establishing itself as a leading low cost carrier in Asia. Air Asia Berhad was listed on the
main market of Bursa Malaysia Securities Berhad in November 2004. Since 2001, due to pioneering
the short–haul low–cost carrier model in ASEAN, the airline company has grown from a domestic
airline in Malaysia to the leading low–cost airline in Asia serving around 121 destinations from 16
hubs in ... Show more content on Helpwriting.net ...
It translates the rule into goals, objectives and strategies of the future. The decision make by the top
management will affect everyone in the organization and is responsible for the success and failure of
the company.
In Air Asia, the main function of the top management is to determine the objective of the company,
which in this case is to ensure that the airline stays as a leading low cost carrier airline. When
objective has been determined, it is the top management responsibilities to plan which strategy to be
implemented to ensure objective can be achieved. Top management considers planning as the
starting point of managing necessary tasks. This management will assigns the planning process to
planning department to ensure clear understanding of goals, market and
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Final Year Project Proposal
Feasibility study of setting up a budget airline in Hong Kong
(Success factors of setting up a budget airline in Hong Kong)
Prepared for
Final year project
Coventry University & SCOPE,
City University of Hong Kong
Presented by
Steven
52657161
February 13, 2012 Table of Contents
1. Introduction...................................................P.1
2. Background/ Problem Statement.......................P.1– 3
3. Literature Review.......................................P.3 – 6
4. Aim.............................................................P.6 5. Objectives..................................................P.6 –7
6. Research method..............................................P.7 6.1
Questionnaire.............................................P.7 6.2 Observation................................................P.7
7. ... Show more content on Helpwriting.net ...
As in US, budget airlines have dominated the market as travelers are price driven; in Europe, more
local airports are needed to be opened up to let more budget airlines to fly in; in Asia, there are more
opportunities to expand the whole market but the path is not easy, since the market is still dominated
by the national flag carriers. Besides, they are also supported by the cargo business. (Scott Lee,
2004)
Problems Statement: As we can see, budget airlines' business not only become a trend over the
globe, but also bring out more travelers and so to extend the economy of our own country or region,
however, there is no budget airline at all currently in Hong Kong, what are the reasons? Few years
ago there was once a low cost carrier– Hong Kong Oasis airway which offered "long haul low fare"
was bankrupted after 18 months of operation, why would that happen? An Malaysian budget

airline– Air Asia already developed its third home base in Thailand, meanwhile, there still aren't any
budget airlines setting up in Hong Kong as a home base, why? What are the success factors for a
budget airline to develop? Is there feasibility for a budget airline to set up and form a home base in
Hong Kong?
3. Literature Review:
3.1.Business strategy of Budget Airline: Markus (2005) once said "The business strategy of these
low cost airlines to save costs is to offer no

The Strategy Of Airasia X
Problem Statement
In 2001, AirAsia was founded by Tony Fernandes. After six years, Fernandes realized the company
should create a airline separated from AirAsia to focus on the low cost long–haul market which he
called AirAsia X. Azran Osman–Rani was appointed to the become the CEO of the newly
established company. The company had an initial success by being the first mover. However, there
were some problems that they had to face along the way as they were in a completely new market
using an untried business model. One of the main challenges for the company is the protectionist
measures taken by the Malaysian government to protect the national airline, Malaysia Airlines
(MAS). The other major problem is the limitations on the general ... Show more content on
Helpwriting.net ...
This helped X to increase the seating capacity by 20 percent. X also had a flexible flight schedule as
its aircraft was in the air for 16 hours per day in average, which is much higher than the industry
average of 11 hours per day.
SWOT Analysis
AirAsia X's main strength is the low price that it offers for customers. For most airlines in the
industry, it is extremely difficult to keep the price low for long–haul flights as the full services
offered in most airlines increase the operating costs. In addition, X also benefited from the
expansive network, infrastructure and customers that AirAsia already has that enabled them to grow
fast with good financial outcomes. On the other hand, X's main weakness is the technology. The
website always crashes and the company doesn't have its own database of customers. X also doesn't
enjoy from a strong relationship with the Malaysian Transport Ministry. This can be detrimental to
the company as it finds competing with Malaysia Airlines in some profitable routes to be difficult.
However, X has some opportunities. For example, in order to keep the low price ticket, cooperating
with fuel companies which will offer low fuel price and increasing demand in low cost airlines will
bring profits. The major threat for AirAsia X is the protectionist measures taken by the Malaysian
government that prevented X from flying planes to some destinations with high demand. This would
have been a very

Strengths Of Airasia Berhad
2.1 Strengths
According to Chua et al. (2014), strengths are internal factor that reflect a company's core
competencies. A company can completely control, and fully utilize its strengths to gain benefits for
the company. Airasia Berhad has its own strengths that enable itself to become more competitive in
the airline industry.
2.1.1 Strong Connection With Outsiders
Airasia Berhad has a very strong and cooperative management team. The company acquires
executive management members team with different background from different industries'
professionals and ex–top government officials. Furthermore, the management has a strong
relationship with government and the other airline industry leaders. The strong connection with
outsiders has made AirAsia to become more competitive. For instance, Shin Corp which was
previously owned by the former Thai Prime minister's family holds around half of the AirAsia
Thailand's shares. The connection between the Thai government and Airasia has made a ... Show
more content on Helpwriting.net ...
The company has received a lot of complaints from customers regarding their services. For instance,
the company has received a lot of complaints about the flight delays due to mechanical problem or
other reasons. Next, customers could not get partial refund if they cancel their flights. Moreover,
there are many hidden charges as well. Other than complaints, there is another issue that highlights
the poor quality of services of AirAsia Berhad. That is, customer feedbacks are being ignored
usually. The poor quality of service might cause the customers to lose loyalty and hence fleeing to
other competitors such as Firefly, Malaysia Airline (MAS) and Malindo. It is important for Air Asia
to have a good customer service especially when competition is getting intense in aviation industry.
Air Asia should maintain a better relationship with customers and provide value to customers or
even rectify these

Air Asia: Strategic Management Report
Air Asia: Strategic management report
Intoduction
Air Asia was founded in 1993 and has since grown to be one of the biggest airlines in the world. It
initially operated in Malaysia and currently operates in over 25 countries (Ricart and Wang 2005). It
began operations in October 1996, operating out of Kuala Lumpur as its central location (Ricart and
Wang 2005). The airline was bought by Tune Air in 2001 for one ringgit, the equivalent of 0.26 US
cents, at a time when the company had $10.5 million debt (Ahmad 2010). Tune Air comprised of
three initial Malaysian investors, Tony Fernandes and Connor McCarthy (Ricart and Wang 2005).
With Fernandes, a former Time Warner executive, at the helm, and McCarthy, RyanAir's former
director of ... Show more content on Helpwriting.net ...
The macro environment comprises of six segments, the demographic, economic, political/legal,
socio–cultural, technological and global segments(Hanson, Hitt et al. 2011).
Global segment
Global events such as wars, terrorist attacks and pandemic health threats have a massive impact on
the aviation industry. Terrorism can have massive impact on a region, particularly after a terrorist
attack, such as 9/11, not only does the world economy drop but a huge impact is also felt throughout
the aviation industry. A terrorists primary aim is to instill fear within a group of people (Einav
2003). As was seen after 9/11 where passengers dropped worldwide by 4% due to fear of flying
(Costa, Harned et al. 2002).
A world health crisis can also threaten the aviation industry and tourism industries of many
companies around the world. Not only does it restrict travel between countries but can also have
potentially serious economic side effects, as was seen in 2003 when the SARS virus hit Asia
(Fiorino, Dennis et al. 2003).
Demographic segment
In South–east Asia, more than half of the population live within a five and six hours flying radius
from Bangkok and Kuala Lumpur (Ahmad and Neal 2006). Couple this with the geographic
topography of the region, many parts of South–east Asia is separated by water and Indonesia has
many islands. Surface (land and sea) transportation is not extensively developed and low–cost air
transport services are an

Air Asia Company Profile
Air Asia Berhad Background
Founded : 1993
Hubs : Kuala Lumpur International Airport
Secondary hubs: * Kota Kinabalu International Airport * Senai International Airport * Penang
International Airport
Subsidiaries:
* Thai AirAsia * Indonesia AirAsia * VietJet AirAsia * AirAsia RedTix
Fleet size : 103 (+ 121 orders)
Destinations : 70 in 19 countries
Company slogan : Now Everyone Can Fly
Parent company : Tune Group
Headquarters Registered office : Petaling Jaya, Selangor
Head office : Kuala Lumpur International Airport Sepang, Selangor
Key people : Tony Fernandes (CEO) Azran Osman Rani
Revenue ▲ RM 2.635 billion (2008)
Operating income ▼ RM –416 million (2008)
Net income ... Show more content on Helpwriting.net ...
The routes were transferred back to new Malaysia Airlines subsidiary in East Malaysia, MASwings
from August 2007 since they were pulling down profits.
Asian expansion
On 27 December 2006, AirAsia's CEO Tony Fernandes unveiled a five–year plan to further enhance
its presence in Asia.[7] In the plan, AirAsia will strengthen and enhance its route network by
connecting all the existing cities in the region and expanding further into Indochina, Indonesia,
Southern China (Kun Ming, Xiamen, Shenzen) and India. The airline will focus on developing its
hubs in Bangkok and Jakarta through its sister companies, Thai AirAsia and Indonesia AirAsia.
Hence, with increase frequency and addition of new routes, AirAsia expects passenger volume to hit
18 million by end–2007.
From September 2007, AirAsia's Kuala Lumpur hub is fully operated with A320s while Thai
AirAsia received its first Airbus A320 in October 2007. Indonesia AirAsia received its first Airbus
by January 2008.

Air Asia Group destinations
List of AirAsia destinations and its subsidiaries including Indonesia AirAsia, Thai AirAsia, AirAsia
X currently flies to, as of October 2010.
The individual AirAsia airlines are * AK = AirAsia * D7 = AirAsia X * FD = Thai AirAsia * QZ =
Indonesia AirAsia
Asia
East Asia
People's Republic of China
Chengdu – Chengdu Shuangliu International Airport (D7)
Guangzhou – Guangzhou Baiyun

Thai Airasia Case Study
Safety culture: Thai AirAsia encourages safety environment by proceeding Safety Management
System with safety committee and reporting to CEO to ensure that the company achieve the
sustainable safety culture.
Risk management: The company motivates all employees to realize the importance of risk
management by participating in all processes according to corporate culture.
Corporate Resource
Marketing
Marketing of Thai AirAsia is evaluated by Marketing Mix, product, price, place, and promotion. The
first point is product of Thai AirAsia that is services. The company provides the core service by
providing air travel services along with various assisting services to the passengers, starting from the
services before boarding, inflight services, and other services relatively to all air passenger services
such as checked Baggage, travel insurance, sale of food and beverages on board, car rental and
connecting flight (Fly–Thru) that allows passengers can connect flights with no bag collecting.
Second is pricing. Thai AirAsia offers wide ranges of fare level per route (Dynamic Pricing), in
which factors such as market demand, competition, historical performance and forecasts will be
considered in determining how many seats to ... Show more content on Helpwriting.net ...
The company has adjusted its human resource strategies, including competitive remuneration,
recruitment process, and succession plans. The company attempts to motivate and retain its staff
members by motivation plans on the basis of operating outcome and skill enhancement with staff
training. Additionally, Thai AirAsia has regularly encouraged its employees to participate in
seminars and trainings to facilitate related skill and capability enhancement in alignment with the
business objectives. Investment in human resources increases the capability of Thai AirAsia's
employees and prepares middle– or low–level employees to take on responsibilities of more senior
management

Toyota's Five Competitive Strategies
The five generic competitive strategies which one to employ
–Air Asia–
INTRODUCTION
There are several basic approaches to competing successfully and gaining a competitive advantage
over rivals, but they all involve delivering more value to the customer that rivals or delivering value
more efficiently than rivals. Competitive strategy relates to all the different strategies a company
may do to:
Gain a competitive advantage
Retain existing market share
Capture new market share
Identify and access new market opportunities
Satisfy wants and needs
Provide superior value in a product or service
Position and differentiate the product
Optimize manipulation of the marketing mix
Achieve its goals in the competitive market place
Airline ... Show more content on Helpwriting.net ...
Air Asia is a good basic product with no few frills ( acceptable quality and limited selection)
Air Asia largest low cost with good value airline in Asia and serving the 3 billion people who are
currently underserved with poor connectivity and high fares.
Low prices good values.
Try to make a virtue out of product features that lead to low cost. Air Asia is a low cost airline but
their services is good and better.
A broad cross section of the section Air Asia Market.
Air Asia ability offer buyers something attractively different with other competitor offerings such as
MAS.
Air Asia product have a variation such as their meals they can change the meal from time to time
and also other services with differentiating features.
Air Asia built whatever differentiating features buyers are willing to pay for strive for product

superiority.
Tout differentiating features.
Change a premium price to cover up extra cost of differentiating features
A narrow market niche where Air Asia buyers needs and preferences are distinctly

Airasia Swot Analysis
STRENGTHS WEAKNESSES
Article taken from WSJ dated Wednesday May 02, 2012 "AirAsia Flies Better Without Flag Carrier"
largest budget carrier (Economy of scale)
Very strong management team
Very good in strategy formulation and execution (Economy of scale)
Strong brand equity – AirAsia's brand name is well established in Asia Pacific (Learning Curve)
Cost advantage (Economy of scale)
Market share leadership– AirAsia is the low cost leader in Asia (Economy of scale)
International alliances (Linkages)
Very flexible and high committed workforce (Learning Curve)
Excellent utilization of IT (Capacity Utilization, Learning Curve)
Single type fleet minimize maintenance fee and easy for pilot dispatch (Capacity ... Show more
content on Helpwriting.net ...
However, based on the article, Malaysia Air 's main union leaned on the country 's politicians to
squash the share swap because of concerns about cost cuts. Those fears were well–founded.
Malaysia Air has been bleeding losses because of rising competition and soaring fuel prices. The
tie–up was meant to reduce overlap between the two Malaysia–based carriers on some routes, cut
expenses and help shore up Malaysia Air 's balance sheet. AirAsia 's shares have lost about a quarter
of their value since the swap was announced last year. There is room to rise. According to the
'Winning Customers in the Marketplace model' there are nine criteria that a firm should follow to
enhance their market share, depending on the level of competition and customers needs, these
criterion are all important for customers in selecting a service provider, if AirAsia is able to meet
these measures they can increase their market share and dominate the airline market in its region.
Wining Customers In The Marketplace Model
Availability: AirAsia is always available and accessible to its customers via ecommerce and call
centres 24/7.
Convenience: AirAsia provides convenience to its customers and operates 656 flights daily, 102
routes to 57 destinations in 12 countries. Ticketless booking: Traditionally, authorized plane ticket
agents have to issue plane tickets to customers, who

Low Cost Airline
Company profile | |
Nok Air is a low cost airline in Thailand. Destinations of the flight are served within domestic with
affordable price. Thai Airways International Public Company Limited holds 39% joint venture with
the company. Thai Commercial Securities Co., Ltd. (Thai commercial banks. Co., Ltd. (Thailand),
CPB Equity Company Limited (Crown Property Bureau) and other shareholders include Krung Thai
Bank (Thailand) holds 10%, Dhipaya Insurance Company Limited (Thailand) holds 10%, Pension
Fund holds 10%, King Power holds 5% and Mr. Patee Sarasin holds 5%.
The trademark 'Nok Air ' was first established on February 10 th , 2004 under the company
Sky Asia Co., Ltd. The name 'Nok Air ' is simply and easily to recognize by ... Show more content
on Helpwriting.net ...
At Nok Air they make a great effort to understand the needs and demands of passengers no matter
how complex they may be. As a result they hope to give passengers a level of service that is beyond
their expectations.
Secondly, Nok Air would like to offer the freedom for everyone to have flying as an option, as a
means of transport. In order to achieve this, they try to understand consumer behavior, and how the
airline can make flying as easy and convenient for them as possible.
Lastly, Nok Air holds safety at the heart of the operation. Nok Air aircraft operations comply fully
with the same safety standard as Thai Airways International. Its current aircraft are all newly leased
from Thai Airways with highly experienced cockpit crews.
The price of the air tickets will be competitive with other low cost airlines in the market. With this
strategy, Nok Air hopes to be able to give those who have never flown before, a convenient and
desirable means of transportation. At the same time, Nok Air offers the chance to those that already
are enthusiastic travelers, the opportunity to travel even more often. For these reasons, Nok Air,
hope that they are the choice for travelers.
Microenvironment (Organization analysis) Nok Air is a low cost airline. It is a joint–venture
between Thai Airway International Public Company and private company. The airline has combined
between the service

Social Network
118
Part Two
Understanding the Marketplace and Consumers
VIDEO
TOMS Shoes
Case on how TOMS executes its strategy within the constantly changing marketing environment.
After viewing the video featuring TOMS Shoes, answer the following questions about the marketing
environment: What trends in the marketing environment have contributed to the success of TOMS
Shoes? Did TOMS Shoes first scan the marketing environment in creating its strategy, or did it
create its strategy and fit the strategy to the environment? Does this matter? 3. Is TOMS ' strategy
more about serving needy children or about creating value for customers? Explain.
"Get involved: Changing a life begins with a single step." This sounds like a mandate from a ...
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The airline launched during a turbulent period when people were hesitant to travel due to the
aftermath of the 2001 terrorist attacks. People concerned about long–distance travel started to look
for holidays in nearby countries. The timing worked to the advantage of AirAsia when it started to
fly regional routes. Asians were enjoying the benefits of rising incomes and good economic growth
and although many could not afford long–distance holidays, they were open to the idea of traveling
to nearby countries. In addition, increased media coverage on LCCs helped consumers understand
the no–frills concept. The Internet also provided AirAsia with the opportunity to reach more
customers through online booking. Fernandes is a strong believer in leading by example. He is often
seen working alongside his team as a crew member or baggage handler. This allows him to get to
know his staff better and to listen to customers ' feedback. He insists on a cooperative
MANAGING COST IN A COMPETITIVE ENVIRONMENT
The global financial crisis that started in mid–2008 affected many industries, including the aviation
industry. Fewer business and leisure travelers were flying due to the economic recession.
Corporations and government agencies issued orders, as part of an austerity drive, for less travel or,
when absolutely necessary for their senior employees, for economy–class travel. This became an
opportunity for

Air Asi Executive Summary
Air Asia
Executive Summary
Air Asia is one of main low cost airlines in the world. It's based in Kuala Lampur Malaysia. It's the
biggest airline based in Malaysia and it has more affiliation in other airlines around the than another
airline. They operate domestic and international services all around the world in more than 22
countries. Air Asia has been nominate as the cheapest to fly airlines in the world by New York Times
Magazine, which as lowest as it'll get.0.023 US dollars to be exact and it has been named as the
"pioneer" of low cost airline in all over Asia. Plus they have sponsor Queens Park Rangers football
team Barclay Premier League in the UK.
All around Asia, this particular airline has been a huge success after they founded and began
operations in 1993.Nowadays they have airline affiliations with many Asian nations such as India,
Japan, Philippines etc. This gave the opportunity to enter the mainstream domestic airline business
which accelerated there business. Which makes it cheaper than other regular airlines as well? So due
to these reasons people tend to use these ones.
Air Asia has another long term operation called "Air Asia X". It 's the company's main long term
operation that they have. The company has joint ventures with Australian airline "Virgin group" and
the Canadian airline "Air Canada". They started direct flights from Malaysia to Australia. But to
keep the cost to a minimum the company director avoided Sydney airport. Since it 's expensive

Airasia
1.0 Table of Content
Topic Page
1.1 Brief History on AirAsia 2 – 3
2.0 Macro–Environmental PESTEL Analysis 4 – 12
2.1 Undertake a Macro–Environmental Analysis using the PESTEL Framework
2.2 AirAsia Inflation Rate in Malaysia
2.3 Brief Definition on Unemployment Rate
3.0 Porter's Five Forces 13 – 16
3.1 Analyze the competitive forces within the industry using the Porter's Five Forces Framework
4.0 Carry out a Customer Analysis 17
5.0 Analyze the competitor's by conducting competitor profiling 18 – 20
5.1 Recommendations with regards to competing with competitors
6.0 References 21 6.1 Internet References
1.1 Brief History on AirAsia
Prior to its ... Show more content on Helpwriting.net ...
What goods and services does a government want to provide? To what extent does it believe in
subsidizing firms? What are its priorities in terms of business support? Political decisions can
impact on many vital areas for business such as the education of the workforce, the health of the
nation and the quality of the infrastructure of the economy such as the road and rail system. *
Economic Factors
These include interest rates, taxation changes, economic growth, inflation and exchange rates. As it
can be seen throughout the "Foundations of Economics" book economic change can have a major
impact on a firm's behavior. For examples, * higher interest rates may deter investment because it
costs more to borrow * a strong currency may make exporting more difficult because it may raise
the price in terms of foreign currency * inflation may provoke higher wage demands from
employees and raise cost * national income growth may boost demand for a firm's products
* Social Factors
Changes in social trends can impact on the demand for a firm's products and the availability and
willingness of individuals to work. In the UK, for example, the population has been ageing. This has
increased the costs for firms who are committed to pension payments for their employees because
their staff is living longer.

It also means some firms such as Asda have started to recruit older employees to tap into this
growing labor pool. The

Case Study Of Airasia
In the case of Air Asia strategic management, describe a strategy that made by CEO of Air Asia. And
analyze how Air Asia becomes winning the award of the airline. According to the following vision:
"To be the largest low cost airline in Asia and serving the three billion people who are currently
under served with poor connectivity and high fared". As you can see, the vision statement,it is about
wanting to be the largest low–cost airline company in Asia and delivering low fares and concern
about the services to everyone who need to fly. It can be seen on the corporate philosophy of "Now
Everyone Can Fly" this mean Air Asia gives an opportunity to customers who want fly but confuse
with the prices. To achieve the vision Air Asia set ... Show more content on Helpwriting.net ...
In the case study all of the business models that Air Asia uses is matched with a Low cost carrier
business model such as if the passenger need the food on board they need to pay an extra payment
because no frill to serve, every passenger will sit in the same class. All of the business models will
concern about the lowest cost as much as they can create: For instance: Reducing the personal cost
by providing the multiple role to employees, not only work as a flight attendance but also work as
gate agents. In addition Air Asia keeps operating costs low by uses one type of aircraft which is
Airbus A320. The business model that Air Asia uses can be result in the benefits of an organization
and thus called "Competitive Strategy of Air Asia". Some of the business model that made is better
than other airline, such the promotions that always attract customers, For instance; The price of the
ticket start as 0.99 RM. This strategy is causing over the million of passengers. From all of above It
can be referred that the type of competitive strategy which Air Asia use is 'Cost leadership' which is
a process to serve customers at the lowest cost in order to fulfil the customer needs under the cost
control in an organization. In this large of competitive market, Air Asia beginning in the right ways.
The market positioning strategies and management of Low–Cost Airlines was clear from the
beginning. According to the business model of Air Asia that shown in the case study indicated that
the firm structure can result in Competitive advantage, Air Asia cut costs in every operation such as
aircraft cost, but the performance still provide in a great ways, So Air Asia gain more profit than
rival firms because their operation cost lower than other airlines and because cost reduction is
another way to bring in revenue. Air Asia also find out how to maximize profit, such as sale
Packages (a case study on Air Asia

Advantages Of Airasia The Sky's The Limit
Soo Kyung Song
MKT 102: G Feb. 2, 2016
AirAsia: The Sky's the Limit
According to Principles of Marketing, marketing environment consists of microenvironment and
macroenvironment factors (Kotler and Armstrong 90). On one hand, microenvironment states that a
successful marketing requires building relationships with other company departments, suppliers,
marketing intermediaries, competitors, various public, and customers. On the other hand,
macroenvironment states that there are several opportunities and threats that affect one's company.
These factors include demographic, economic, natural, technological, political, and cultural forces.
There are several factors that affected AirAsia in its early success. The first microenvironment ...
Just like Cebu Pacific, I noticed that AirAsia announces delayed or even cancelled flights very late
or sometimes even right before we try to enter the plane itself. This will cause bad impressions
which will reduce the number of its customers. Thus, AirAsia should announce any possibility of
delays or cancellations at least half a day before the expected flight schedule. If these were
impossible to be foreseen, AirAsia should compensate either by refunding, giving freebies or even
entertaining the customers. Next recommendation is better customer service. Most of the time, they
are not willing to assist the customers in a prompt way. Unlike other LCC stewardess, AirAsia's
stewardesses stay in their areas trying not to be disturbed by the customers. I recommend that they
should properly train themselves how to handle

Air Asia Strategic Analysis
STRATEGIC ANALYSIS OF
AIRASIA
THE BEST LOW–COST CARRIER AIRLINES IN THE WORLD
ASSIGNMENT FOR MICROECONOMICS FACULTY OF ECONOMICS AND BUSINESS
NATIONAL UNIVERSITY OF MALAYSIA
BY: IWAN BUDHIARTA P–46048
MALAYSIA – 2009
I.
INTRODUCTION
1
A low–cost carrier (also known as a no–frills or discount carrier) is an airline that offers low fares
but eliminates all "non–essential" services. The typical low–cost carrier business model is based on:
– –
–
a single passenger class a single type of airplane (reducing training and servicing costs) a simple
fare scheme (typically fares increase as the plane fills up, which rewards early reservations) free
seating (which encourages passengers to board early) direct, point to point ... Show more content on
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Optimise routes and development of new secondary hubs Further enhance route network, venture
destinations previously uncovered Yield enhancement due to benefits of maturity Ancillary
expansion Stage 3 (we are here) Pursue regional expansion & expanding business on existing
platform (ancillary) Expand network to new countries Develop strategic partnership for mutual
benefits Use strong brand to drive new business Stage 2 IPO Capital Raising and become publicly
traded company Strengthen financial sheets Improve company credibility & rating Ability to
negotiate favourable terms with our suppliers Stage 1 Entry to market. Aggressive brand building &
recognition Introduction to the

Analysis Of Airasia
Resources, Capabilities & Core Competencies Analysis
a) Accounting Ratio Analysis In 2004, AirAsia's earnings margin before interest and taxes (16.8),
return on capital employed (14.6) and return on equity (37.7) accounting ratios were above the
industry average – 14.5 is the industry average for earnings margin, 11.6 for return on capital
employed and 21.2 for return on equity. This above average results indicates that the company has
been managed well and thus is able to achieve high above–average returns. The increase in current
ratio from 1.24 (US$49. 206 million / US$39.643 million) to 5.60 (US$230.024 million /
US$41.099 million) also serves as a confident booster to investors and shareholders in that AirAsia's
solvency had strengthened and thus is able to fulfill its debt obligations. In fact, the debt–to–asset
ratio in the last 5 years was low and decreasing too. As a matter of fact, in 2005, it was merely 0.14,
which was comparatively lower than many low cost carriers.
b) Finance Resources
AirAsia's net profit ending Jun 2005 was reported US$29.2 million, a 126% increase year–on–year.
The end of June 2005 financial summary showed that AirAsia, the leading low cost airline in Asia,
had a huge reserve (bank and cash ... Show more content on Helpwriting.net ...
This innovative work allows for quicker turnarounds between flights and helps increase revenues. In
addition, AirAsia is also able to leverage on innovative ideas to derive substantial ancillary revenues
from additional services. For instance, the company also have their own branded credit card and
offers corporate travel services. Consequently, it also develops aircraft advertising by converting its
planes into "flying billboards". The ability to innovate and come up with unique innovations to
lower costs and increase revenues shows that AirAsia possesses substantial quality innovation
resources that are

The Overall Concept Of Public Relations
The purpose of this paper is to identify and discuss various image problems or publicity needs
within a company through their specific Public Relations Campaigns. Through the study and
research of this topic, deeper understanding of the overall concept of Public Relations will hopefully
be attained. A corporate identity or image is the comprehensive image of a corporation, business or
firm from the view of the public, including customers, employees and investors. It is essential that
good corporate image is achieved within a corporation, so that the public may view the corporation
as positive or beneficial. Therefore, if the image of a corporation is affected negatively or perceived
by the public to be bad, it can damage not only the corporation's reputation and credibility, but also
its appeal to the public. Publicity is the distribution of information with the goal of increasing
awareness among the public on a specific concept or entity. This entity may range from a person to
an organization; it can be an object or an idea; it could be anything thinkable. As long as there is a
concept or entity, it can be publicized. The main point of publicity is to have the public gain
awareness on something. In the business world, publicity is usually used to create awareness and
understanding of a corporation, therefore increasing popularity and overall image. There is a famous
saying, "There is no such thing as bad publicity." This sentence is true of publicity in the

What Is The Mission And Mission Of Airasia
Introduction
Airasia was founded by the government on 2 December 2001 and the founder of Airasia is Dato Sri
Tony Fernandes. Airasia can travel around the earth and ascend to become the world's best in the
year 2001. There also have some companies which link with Airasia such as Airasia X , Airasia
Japan , Airasia Thai and other country . In addition, Airasia also is the low cost airline based on
Kuala Lumpur, Malaysia. It is also the first Airline in the region to apply fully ticketless travel and
unassigned seats.
Task1
1.1 Assess the business mission, vision, objective, goals and core competencies on their strategic
planning.
Vision
Airasia want try to be the largest low cost airline in Asia and serving the 3 billion people who
currently underserved with poor connectivity and high fares.
Strategic Planning: They try to do a lot of promotion and low–cost air ticket because Airasia
company want to help everyone can afford the price to buy their air ticket to travel all around the
world.
Mission
Airasia is Malaysia low cost airline. Airasia company try to make the lowest cost of air ticket so that
everyone can try to sit fly travel to everywhere with Airasia because in ... Show more content on
Helpwriting.net ...
Their employees are also very flexible and have high committed and very critical in making their
airfares in the very low cost in Asian. Airasia also serves a very basic need for their passenger.
Airasia ' No Frills' mean that they cutting out the unnecessary offering such as in–flight meals,
baggage allowance, less leg room and reduce the seat pitch just because they want to use the storage
of food place to added more seat and they have no free snack so that they can save the time on the
ground . By the same way, they also can reduce the cost of training the cabin crew and it is also
easier to let them move out and the floor and layout still remain the

Pest Analysis Of Air Asia
Air Asia is a world–wide known airline nowadays. It was being established in December 2001. Air
Asia's website www.airasia.com is the most popular e–commerce and search website. Air Asia
airlines allow people to book their own flight without needed through a travel agent. Air Asia has
become an award winning and the largest low cost carrier in Asia. Air Asia now flies to over 61
countries around the world, with a fleet of 72 aircraft. It has operated over 400 flights daily from
hubs located in Malaysia. Air Asia's famous quote "Now Everyone Can Fly", has sparked a
revolution in air travel with more and more people around the region choosing Air Asia as their
preferred choice of transport.
Air Asia vision is to be the largest low cost airline in Asia and serving the three billions people who
are currently underserved with poor connectivity and high ... Show more content on Helpwriting.net
...
6. Point to Point Network
Applying the point–to–point network keeps operations simple and costs, low.
I. PEST ANALYSIS OF AIR ASIA
a. Political analysis of Air Asia
Air Asia is an airline that operates scheduled international and domestic flights. Bilateral agreement
is one of the main obstacles for low cost carriers. And so does landing charges, it also influences the
low cost airlines which led to the underdevelopment as the aviation market remains tightly regulated
by air rights agreements. Other political rules that affect Air Asia airlines are:
 Government decisions as there are some specific routes, landing rights and ownership which
affect the operations of the airlines.
 Human resource policies also being affected as the recruitment and selection of staffs are based
on racial composition.
Opportunities Threats Privatization and deregulation of goverment presented an opportunity for new
routes and airport deals through open–skies agreements between countries, or the permission of
entry of private

Challenges And Challenges Of Global Market As Indonesia
INTRODUCTION Business Spectator (2014) maintains Indonesia is possibly becoming the world 's
fourth largest economy by 2035–40. Numerous factors committing business opportunities in
Indonesia such as high consumer market, remarkable consumer growth, and abundant natural
resources (Global Indonesian Voices 2013). From managers ' perspective, marketing information
and deep customer insights are remarkably crucial for building customer value and relationship
(Kotler et al. 2013, p. 150). Marketing research in emerging market as Indonesia indeed poses
several challenges to researchers and therefore negatively impact the efficiency of business
decisions. This paper would analyse these challenges in term of infrastructure, socio–culture, ...
It restricts the usage of data collection methods such as email survey and internet survey. These
methods have numerous advantages such as geographic flexibility, accurate real–time data capture,
and cost–effectiveness (Zikmund et al. 2012, p. 164 – 167). Accordingly, associated risks
influencing decision–maker are outdated data, expensive data collection cost and less integration of
data between various markets (Cooper & Schindler 2008, p. 6). On the other hand, limited
accessibility of infrastructure condition also adversely impact geographic coverage of the research
(Greenland & Kwansah–Aidoo 2012, p. 19). For instant roads are dominant transportation in
Indonesia but many road networks are in poor condition and plugging gaps (States News Service
2011). It is, therefore, difficult for researchers to access particular consumer groups while the
heterogeneity of emerging market population is extreme (Burgess & Steenkamp 2006, p. 345). Such
non–probability sampling could lead to the representation bias from decision–makers in which
managers draw similarity and see identical situations where they do not exist (Robbins et al. 2015,
p. 216). Solutions The alternative data source could be a valuable solution for decision–maker to
collect extensive data in limited infrastructure condition. Three alternative data sources

Role Of The Dutch Colonial Rule
In this write–up I will argue that despite factors such as different identities, the largely prevalent
separatist conflicts in Indonesia are mainly based on resources. I will attempt to demonstrate that
identity was instrumentalized in the colonial times to gain political and economic control, and that
spilled over to an internal colonialism in Indonesia in contemporary times. This created the
foundation for the Central government to instrumentalize constructed identities to gain economic
control over the resource rich minority islands, which led to violent separatist conflicts throughout
the archipelago. To begin with we can examine the role of the Dutch colonial rule in the Dutch East
Indies and how they laid the foundation for instrumentalist manipulation. With 13,466 islands, 360
ethnic groups and 719 languages the Dutch were extremely aware of the diversity that prevailed in
this region (The Economist, 2014). These various ethnicities and communities lived in peace prior to
the Dutch role. However upon the exit of the Dutch, this peace was shattered. The main purpose of
exerting control over Indonesia can best be explained by Immanuel Wallersteins world systems
theory. "It characterizes the world system as a set of mechanisms, which redistributes surplus value
from the periphery to the core" (Barfield, 1997). In the capitalist world–system, the West makes up
the 'core', while the regions of Aceh and West Papua make up the 'periphery'. In these regions

The Low Cost Airline: Airasia 2
The Low Cost Airline: AirAsia
A study of opportunities, challenges and critical success factors
LGT 3007 Air Transport Logistics
Introduction
History of low cost airlines
The low–cost concept became a moneymaker in the United States, where it was pioneered in the
1970s by Southwest Airlines, the model for budget carriers elsewhere like Ryanair and easyJet in
Europe.
Definition of low cost airlines
A low cost airline generally has many features that differentiate it from the traditional carriers.
These features include ticketless travel, online ticket sales, no international offices, no frequent flyer
points, no free food and beverages, no inflight magazines, no club lounges, use of secondary city
airports.
Not all low ... Show more content on Helpwriting.net ...
AirAsia with its politically powerful backer may well grow up to bite. This helps it open the
Thailand market.
4.Malaysian government support
The Malaysian government supported the establishment of AirAsia in 2001 to help boost the under–
used Kuala Lumpur International Airport. AirAsia 's flights from Senai are meant to develop Johor
into a transport hub to rival Singapore. AirAsia, therefore, can provide an alternative route to travel
to Bangkok, by using Senai Airport in Johor Bahru, in southern Malaysia.
Opportunities faced by AirAsia in light of internal development
1.Issue of IPO
Kamarudin Meranun, AirAsia 's Executive Director announced the appointment of Credit Suisse
First Boston (CSFB) and RHB Sakura Merchant Bankers (RHB) as the bookrunners for the
company 's upcoming Initial Public Offering (IPO).
The IPO strengthens AirAsia balance sheet, further cuts its existing low costs at 2.5 US cents per
ASK and accelerates our growth plans throughout Asia. The IPO also allows AirAsia to expand its

fleet of 18 Boeing 737–300s.
2.Political connections
Thai AirAsia is a join venture established by AirAsia with Shin Corp. Shin Corp. is owned by the
family of Thailand 's prime minister, Thaksin Shinawatra, and about 900 million baht will be
invested in Thai AirAsia over a five–year period. Shin Corp. oversees the finance and administration
of Thai

Tony Fernandeses: Dream A Fail
Why do you choose that particular entrepreneur/figure? Tony Fernandes– "Dream The Impossible".
Tony Fernandes is a very successful entrepreneur in Malaysia. He made the impossible into
possible. What he did in turning a company which had debt into a profitable company within 2 years
totally amazed the public. Harvey (2012) claims that his partner, Dato Kamarudin and he had no
prior airline experience they transformed AirAsia into one of the fastest–growing and most
successful low fare airline in the world. The unique culture and management style are the main keys
to make AirAsia succeed. Tony Fernandes worked hard to create an environment where "Allstar"
(what AirAsia calls its team members) can learn, grow and achieve his or her own dreams. ... Show
more content on Helpwriting.net ...
During employment, he always look for those who has "hunger in their eyes and passion in their
hearts."
Be clear about your mission is very important to make your businesses successfully. Tony Fernandes
set up his company with a very clear mission statement 'Now Everyone can Fly'. Airasia's low fares
make it possible to bring families together, improve businesses and enables people to explore and
have new adventures. Tony has a very clear mission and vision in organizing his company. This is
what those new entrepreneurs should learn from him. We should know what we want to achieve and
how could we contribute to the society (Harvey, 2012). Besides that, Tony Fernandes is a risk taker.
For example, Tony willing to take a risk and buy an airline company that greatly in debt and he is
able to turn it into profitable company within a short period. He had learned many things from his
experiences and willing to leave his comfort zone. That's why we chose him as our example of
entrepreneur. Tony Fernandes has a very strong entrepreneurial spirit. He has not only owning a
airline company, he also has shares in many business sectors such as drinks company, football club
and Formula One

Foreign Direct Investment : Multinational Enterprise Or...
Introduction One of the most exceptional and economic wonders of the post–war period is the
growth in a new form, known as multinational enterprise or venture (Buckley 1976). Multinational
Enterprise otherwise called a MNE, is characterized as the association which involves itself in
investing resources in a foreign land. Also known as foreign direct investment (FDI), this venture
maintains a value added activities in more than one nation or country other than its home country.
Few of the professional experts distinguish MNE's as two different types, first one being the MNE
organization which manages a set of huge self–governing multi–domestic foreign subsidiaries which
mainly manufactures goods solely for its local market, secondly the organizations who treat their
affiliates with utmost importance as they are considered the most vital part of global network for
creating assets for the organization (Dunning 2008). There are numerous conditions which the
literature has acknowledged to evaluate the Trans nationality of the organizations: – The size and
number of the overseas affiliates or companies the organization actually has control over. – The
number of countries the organization owns the activities such as manufacturing works, offices or
hotels. – Percentage share of the organization's assets worldwide – The extent to which the
ownership of the organization is international The growth of MNE's had been increasingly growing
over the years by earning the most in a foreign

Growth of AirAsia Berhad
History of Air Asia
AirAsia Berhad, is a Malaysian low–cost airline. It operates scheduled domestic and international
flights and is Asia's largest low fare, no frills airline. AirAsia was a pioneer of low cost flights in
Asia. It is also the first airline in the region to implement fully ticketless travel and unassigned seats.
However, as of 5 February 2009, AirAsia has implemented allocated seatings across all AirAsia
flights, including in their sister airlines, Indonesia AirAsia and Thai AirAsia. Its main base is the
Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Its affiliate
airlines Thai AirAsia and Indonesia AirAsia have hubs at Suvarnabhumi Airport, Thailand and
Soekarno–Hatta International Airport, ... Show more content on Helpwriting.net ...
The airline will focus on developing its hubs in Bangkok and Jakarta through its sister companies,
Thai Air Asia and Indonesia Air Asia. Hence, with increase frequency and addition of new routes,
Air Asia expects passenger volume to hit 18 million by end–2007. From September 2007, Air Asia's
Kuala Lumpur hub is fully operated with A320s while Thai Air Asia received its first Airbus A320
in October 2007. Indonesia Air Asia received its first Airbus by January 2008.
Partnership
On 5 April 2007, Air Asia announced a three–year partnership with the British Formula One team
AT&T Williams. The airline brand is displayed on the helmets of Nico Rosberg and Alexander
Wurz, and on the bargeboards and nose of the cars.[8]
Route Expansion
On 27 September 2008, has on its list 106 new routes to be added to its current list of 60 over the
next few years. The number of old routes discontinued has not been publicly disclosed.
Fuel Surcharge Discontinued
On 12 November 2008, Air Asia abolished fuel surcharges. In doing so, it claimed to be the 'first
airline in the world to abolish fuel surcharges'. By May 2008, the airline had flown 55 million
cumulative passengers. In 2010, it has the world's lowest costs for an Airline, at under 2 cents per
seat per kilometer. Obviously, to no one's surprise.
The Airline and Disabled Passengers

[pic]
[pic]
Air Asia 737 with illustrations by Lat (Mohammad Nor Khalid)
Disabled passengers from BEAT 'The Barrier–Free

Air Asia Aims to be the Largest, Low Cost Airline Essay
Air Asia was originally founded by government on 2nd December in year 2001 and was bought by
Tony Fernandes. Air Asia was established in year 1993 and has travel around the world in the hope
of ascending to become the worlds best in year 2001. Air Asia continues to increase alternatives for
low–cost aviation through tremendous innovation, efficiency and passionate approach to business
with a route a network that extent through over 20 countries. Air Asia X, Thai Air Asia, Philippines'
Air Asia Inc., Air Asia Japan and Indonesia are companies that link with Air Asia in Malaysia. In
addition, for the vision part in Air Asia, it aims to be the largest low cost air line in Asia by serving
the 3 billion of people who are currently underserved ... Show more content on Helpwriting.net ...
Innovation in the service provided to the customers should be planned and carry out to maximize the
business performance. The improvement in customer service (CS) for airlines business can be linked
with the measurements of service quality like tangible features (TF), schedule, services provided by
ground staff (GS) and flight attendants (FA), online services (OS), food services (FS) and level of
passenger conciliation. According to Brown (1991), service quality (SQ) is difficult to define
because of the intangible nature of the service offering. The definition of quality may differ from
situation to situation and from person to person. In this study, CS towards SQ was focused on Air
Asia Malaysia. By applying the measurements of SQ like TF, schedule, services provided by GS and
FS, OS, FS and level of passenger conciliation, the researchers have identified the dimension of SQ
that affects the CS. This dimension serves as the most critical dimension for Air Asia. By conducting
this study, the information and results have practical implications for Air Asia' managers as they can
allocate company resources to make improvement for CS. 1.2 Problem Statement A focus of quality
is important to service business and it has acted as a basic for organization to live the competition in
order to get society's

Maximizing Customer Satisfaction
Service quality, in terms of customers' perception, arises from a comparison of what customers
expect that companies should offer with the companies' service performance they perceive
(Parasuraman et al, 1988). In order to maximise customer satisfaction, companies need to know
what service components are important in customers' perception and try to deliver good service
quality with suitable proportions of those components.
According to the ranking of thirteen important attributes of low–cost airlines (Choon 2008), online
questionnaires were specifically conducted to understand Thai customers' expectation of each major
components of domestic budget airlines in Thailand (Appendix x). The questionnaires were
answered by 80 Thai respondents ... Show more content on Helpwriting.net ...
Currently, Nok Air has implemented both selling food/drink and other souvenirs on board and
creating Nok Fan Club membership programme. Nevertheless, customers' expectation shows that if
Nok Air wants to cut down its cost, it can modify some of these services to reduce operational costs.
For instance, comparing to Ryanair's management (Gillen and Lall, 2004), Nok air may not offer
meal services on board as well as sell souvenirs and other merchandises either through the Internet
or through call centre instead. The frequent flyer programme may be unnecessary and can be
withdrawn. Even though it has been operated via website, the company needs to invest many
resources such as staff and system to manage and maintain the programme continuously so as to
keep and increase customer satisfaction.
What is more, there is an issue on facilitated services such as 'Check–in service' and 'Service of
flight attendants', which can be seen from the primary research as hygiene factors. As the hygiene
factor, customers have a standard expectation on those components but they will not appreciate an
additional level of the services (Lockwood, 1994). However, as current strategy and operation, Nok
Air has considerably focused on the quality of hospitality, for example, the friendliness of flight
attendants, which is indicated in Nok Air's slogan, "We Fly Smile" (Nok Air website, 2010). Nok Air
has also tried to

The Code Of Ethics And Ethics Of Airasia Berhad
1.0 INTRODUCTION
1.1 Background of AirAsia Berhad
Asia being the largest continent of the world has always been home to diverse traditions, cultures,
ethnicities and wonders. The country of Malaysia is in the southeastern part of Asia which is a major
tourist attraction. There are numerous international airlines that take visitors and travelers to
Malaysia from all major parts of the globe. There are also a number of domestic flight networks in
Malaysia that takes passengers to their desired destination in the country. It offers regular flights
among most of the Malaysian cities. With the introduction of budget airlines, flights to Malaysia
have come within the range of most people.
AirAsia Berhad is one of the airlines company in Malaysia ... Show more content on
Helpwriting.net ...
It is designed to explain an organization's mission, values and principles, connecting them with
requirements of professional conduct. As a reference, it can be applied to track down related records,
services and other sources connected to ethics inside the company.
Why AirAsia Berhad use the code of conducts in their company? This is because they didn't break
the rules or law in our country. They are also obeying with the laws that have been made by our
government.
Ethics is also about how this company behaves towards each other and the outside world. It is
because they have a lot of customer that have come from over the world. AirAsia Berhad has
specific policies with more details in the respective areas. Our group will discuss about the code of
conducts that have been used in AirAsia Berhad organization which is:
I. Economic Principles
II. Business Integrity
III. Health, Safety and Environment
IV. The community
V. Communication
2.1 Economics

Business Strategy: SWOT Analysis Of Airasia
Executive Summary
In the year 2001, Dato'Sri Tony Fernandes and Dota Kamarudin Meranun had bought over Air asia
for RM 1.00 with a RM 40 million debt. Airasia has been expanding rapidly ever since and become
the leader of low cost airline in Asia and the pioneer of low cost. Airasia continues to expand
worldwide through the innovation, efficient, passionate and right strategy.
This study will use PESTLE model, SWOT analysis and Porter's Five Force Model to examine the
extensive strategy analysis of Airasia that has enabled it to remain its competitive advantage and
leader in the industry. Firstly the PESTLE will be used to analysis the current Macro and Micro
environment. SWOT analysis will be used to analysi AirAsia strengts, weakness, opportunities and
threats. Further analysis using the Porter's Five Force Model to understand Airasia strategic
positioning and competitive advantage within the industry. The study concludes by Airasia must re–
evaluate their strategy from time to time to stay competitive in this industry, with recommendation
to provide more value to customers in order to create brands loyalty.
A) Using the PESTLE framework, you need to undertake an audit of the ... Show more content on
Helpwriting.net ...
The stragtegy Airasia needs os not just how to reduce cost and smoothen then operation activities,
but how to stand out and differentiate itself from other competitors by provide more value to the
customers. For example, Airasia have the competitive advantage for using the diversification
strategy whereby started to venture into Insurance, hotels, telecommunication and car rental
business. For example, Airasia can offer a value package which includes all hotels, car rental,
Insurance in a package to the customers for cheaper price, and in other hand able to save customers
some hassle to look for all these

Low-Cost Carriers vs Full-Service Airlines
Research was conducted to understand passengers' views and attitudes towards Low–Cost Carriers
and Full–Service airlines. The research was focused on a group of passengers with one crowd using
a Low–Cost Carrier and the other using a Full–service airline. The airlines that will be used in the
research are Aer Lingus and Ryanair running in a fully developed European market, and Malaysia
Airlines and Air Asia currently functioning on a recent developing domestic market in Asia. After
conducting the survey, results show that the younger people are more likely to use Low–Cost service
carriers with Ryanair accounting for 24% and Air Asia with 47% who all belong in the age group of
under 25 years. 87% of the age group were travelling to visit ... Show more content on
Helpwriting.net ...
During 2002, Ryanair would charge its one–way fares at about 50 Euros. The Pricing approach
adopted by Ryanair more commonly termed the 'Ryanair effect' had become a popular marketing
strategy worldwide. Part of the Ryanair's strategy for increasing market demand is the distributing of
free tickets. In the first few months of 2003, Ryanair had distributed 100,000 free seats as a way to
celebrate its opening of its new outlet at Bergamo. As a result, Ryanair received 90million
passengers in 2004 and consequently offered 900,000 seats at 90 pence. Researchers have
accumulated that within 5 years time, Ryanair would plan on giving away 50% of its flight tickets
for free. Accordingly passengers' perception of LCCs will thus expect lower fares from Low–Cost
Carriers, especially from Ryanair. Research was drawn to asses the cross–price elasticity of demand
between Low–Cost Carriers and full–Service Carriers. The aim was to figure out the behavioural
patterns of passengers if they are willing to switch from Low–Cost Carriers to traditional airlines if
fare levels reduced significantly. Results show that If Full–Service airlines reduced their fares by
30%, then 45% of Ryanair's passengers and 39% of Air Asia's passengers would be willing to switch
airlines. Even if Low–Cost Carriers in Asia was just relatively a new phenomenon, they have
already adopted strong low fare

Air Asia
NATURE OF BUSINESS
Air Asia leading airline was established with the dream of making flying possible for everyone.
Since 2001, Air Asia has swiftly broken travel norms around the globe and has risen to become the
world's best. With a route network that spans through to over 20 countries, Air Asia continues to
pave the way for low–cost aviation through our innovative solutions, efficient processes and a
passionate approach to business. Together with our associate companies, Air Asia X, Thai Air Asia,
Indonesia Air Asia, Philippines Air Asia and Japan Air Asia.
Focusing on the low–cost, long–haul segment – AirAsia X was established in 2007 to provide high–
frequency and point–to–point networks to the long–haul business. AirAsia X's cost ... Show more
Particularly when new entrants are diversifying from other markets, they can leverage existing
capabilities and cash flows to shake up competition like Apple did when it entered the music
distribution business. The threat of new entry therefore, puts a cap on the profit potential of an
industry. The threat to Air Asia is relatively less as the capital required to enter the industry is quite
high. However, potential new entrants from full service carriers with a surplus capital could be
threats in the future and long–term. * The Power of Buyers
Powerful customer–the flip side of powerful suppliers–can capture more value by forcing down
prices, demanding better quality or more service, and generally playing industry participants off
against one another at the expense of industry profitability. Buyers are powerful if they have
negotiating leverage relative to industry participants, especially if they are price sensitive, using
their clout primarily to pressure price reduction. The bargaining power of the buyers is very high as
now a day's tickets can be booked online and if they can go for the cheapest fares and there is not
much cost involved in it. * Offered Different Product
The threat of a substitute is high if it offers an attractive price

Swot Analysis Of Air Asia
1. Air Asia Background
Air Asia is a World's Best Low Cost Airline. It had been established since 2001 with only two
aircraft. The company started with a debt of USD11 million (MYR 40 million). Starting from year
2001, Tony Fernandes served as Chief Executive Officer. Nowadays, Air Asia has strengthened its
position in the market and it manages to be a great competitor in the airlines industry. Recently, they
have won the World's Best Low Cost Provider and Asia's Best Low Cost Airline for seventh
consecutive year at the Skytrax World's Airline Awards. This proves that the company has served as
a low cost provider.
Currently, they have offered flights to over 100 destinations across Asia and Australia. There are two
types of aircraft which the first aircraft called Air ... Show more content on Helpwriting.net ...
Furthermore, in order to achieve those missions, they have created another mission which is to
provide the best work environment for their employees and treated them as a family. The employees
also are one of the players in companies that contribute to the profitability and ensure that their
operations run smoothly. This situation will make every employee fell their presence in the
company. All employees are required to work together to achieve the targets. Along the way to
achieving it, everyone in the company is heading in the same direction.
The company's main services are airline tickets. In the meanwhile, the company also has provides
other services to support their operations. The services include a car rental services which called Air
Asia car rental. Next, Air Asia cargo offer cargo services. Air Asia Go provides accommodation
services to their customers. Then, Air Asia Red Tix as an entertainment organizer and they also sell
duty free products through online in BIG Duty Free.com. By making diversification in their
products and services, they can maintain the competitive advantages between their

Essay On Loyalty And Loyalty
Customer Satisfaction And Loyalty
Zeithaml and Bitner (2000) defined customer satisfaction as the "customers' evaluation of a product
or service in terms of whether that product or service has met their needs and expectations".
Therefore, satisfaction is a consumer's post–purchase evaluation and affective response to the
overall product or service experience. In other words, what consumer perceives after a product or
service consumption determines his/her satisfaction. Many researches have concluded that
satisfaction can determine the customer loyalty. Customer loyalty defined as "a deeply held
commitment to re–buy or re–use a preferred product/service consistently in the future, thereby
causing repetitive same–brand or same brand–set purchasing, despite situational influences and
marketing efforts have the potential to cause switching behavior. The satisfaction/dissatisfaction
occurring through a matching or mismatching of expectations and perceived performance leads to
loyalty behaviour.
Customer satisfaction was the key factor that affects mostly on service loyalty. Oliver suggested that
satisfaction is a pleasant routine and in order to be effective on loyalty, satisfaction should occur for
the ... Show more content on Helpwriting.net ...
According to the date of Air Asia, customer satisfaction is defined as the result of a cognitive and
affective evaluation, where some comparison standard is compared to the actually perceived
performance. If the perceived performance is less than estimated, customers will be dissatisfied. On
the other hand, if the perceived performance exceeds expectations, customers will be satisfied and
delightful. Otherwise, if the perceived expectations are met with performance, customers are in an
unconcerned or neural stage. In general, increased customer satisfaction leads to higher customer
retention rate, increases customer repurchase behaviour, and ultimately drive higher firm

Characteristics Of Airasia Competitive Strategy
Competitive Strategy
Based on Porter 5 Forces(1980) diagram to build four prominent business strategy, cost leadership,
differentiation which can be combined to build the competitive strategy.
Figure 1
Cost leadership is one of the most common business strategies which refer to the organization's
ability to produce a product or service at a cost below competitors can achieve between AirAsia and
other airlines. However, the implementation of cost leadership strategies requires a consistent focus
on driving costs to generate profit margin. Instead of the offering lower cost price, customer also
considering the differentiation offered by AirAsia which they are willing to pay at any prices.
Choosing the differentiation and characteristics of the products and service recommended or method
in which it is delivered and developing organizational capabilities required to achieve the
fundamental difference is a big challenge for companies (Mohammad Sunman Sarker. 2013).
Presently, tough economy condition =s has enable AirAsia to attract new segment pf customers
specially business traveler seeking cost reduction , as rising unemployment and lack of job security
may lead customer to avoiding expensive leisure flights (Yasmin Yashodha. 2012). However, the
expending route of AirAsia over the year ... Show more content on Helpwriting.net ...
2006). The business model became motivation to other low–cost carrier after it success to all over
the world. The introduction of widely used low air cost airlines in Southeast Asia greatly reduced the
cost barrier to air travel and create a substitute for the ASEAN population especially. Besides,
AirAsia has been dominating the market since AirAsia launch their lowest fare of RM1 on their first
day of operation. Plus, they also successfully put FireFly Airline and Malaysia Airlines (MAS), half
owned government airlines into difficulties of imitation amongst the legacy

Advantages Of Service Quality Of Air Asia
Product/ Service Quality
Nowadays, many people will choose to purchase flight tickets via online. Majority of the people
spend least 3–4 hours to search information about the destination they are going to. Therefore, it
shows the service quality of Air Asia too. If the Air Asia online system is lag and slow, it will
decrease the customer satisfaction. Besides, customers will imagine the same situation happen
during the flight departure time. It might lead a bad image to their consumers. Base on a Verified
Review from SKYTRAX website, Mr. Hanaruddin(Malaysian) at 13th February 2017 says that he
would fly with AirAsia again. He experienced a flight from Kuala Lumpur (KUL) to
Kuching(KCH), he said it was a really nice and comfortable flight. He noticed that AirAsia arrives
earlier or on–time despite being delayed for half an hour. The cabin crew was really friendly. Thus,
this shuts all his negative views towards AirAsia(AK).
Second, Check–In counter is the place that passengers able to check in their luggages and take their
boarding pass. This is the first place where the customer physically contacts with Air Asia's staff, so
the first impression is very important. Therefore, employees should show friendly, polite and
enthusiasm in helping customers. If customers have any question about their flights, ... Show more
So, flight attendant must friendly and responsible to the passengers. If the flight attendants give best
service quality, customer satisfaction level will increase. This will lead to good reputation image and
customer loyalty in the future. SKYTRAX's review, Jackson (Indonesia) 28th January 2017, flight
from Kuala Lumpur (KUL) to Surabaya (SUB) "The cabin staff was kind and helpful. The seat was
standard of LCC. The nasi padang that I bought was delicious. Overall, my experience with AirAsia
was quite

Asia Aviation Public Company Limited
Asia Aviation Public Company Limited
Air Asia is a Malaysian economic airline acquired by Tune Group in 2001. Before acquisition it was
underperforming, but Shuk–Ching Poon and Waring (2010) state that in 2006 the airline company
had a fleet of 35 Boeing and Airbus aircraft. The major success of the company is due to the low–
cost carrier (LCC) business model. Major features of this business model include low service, point
to point mode of travel, heavy utilisation of aircraft, ticketless reservation and flexibility in staff
services. The airline company has carried 45.6 million passengers across 199 routes to 98
destinations across 17 countries (AirAsia Berhad, 2014). Furthermore, the various other services
offered include flight bookings, low fair finder, customised travel, travel insurance and premium
membership options (AirAsia.com, 2016a). The main market of Air Asia is in Malaysia, the market
share in Malaysia is 46%, 19% in Thailand, 11% in Indonesia and 1% India (AirAsia Berhad, 2014).
According to CAPA (2016a) the major competitors of Air Asia include Malindo Air, Cebu Pacific,
Thai Lion Air and Thai VietJet. Furthermore, AirAsia Berhad (2014) show that the company has
operations in countries such as Mauritius, Malaysia, Phillipines and India. This essay will briefly
describe the profit and revenue situation of AirAsia, and then it will analyse the effect of the external
environment factors. Finally a recommendation is provided to reduce the effect of such

Case Study Of Air Asia: Strategy

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