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University of South Pacific
MBA – 439
2013
Business Economics
Group 3
"Now Everyone Can Fly".
Please fasten your seatbelts…
 Revenue: 4Q 12 USD 1.62 Billion
(1 Malaysian ringgit = 0.3257 USdollars)
 Number of employees: 8,000+
 HQ location: Ku...
AirAsia History
• 7 September 2008 - 106
new routes added to its
then-current list of 60.
• On 2 April 2012 Air Asia
had t...
Subsidiaries
• Indonesia AirAsia
• AirAsia Japan
• Thai AirAsia
• Air Asia X
• AirAsia Philippines
• Air Asia India
Destination Map
• 142 routes to 78 destinations
(Over 400 daily flights covering
Indonesia, Malaysia and
Thailand).
• Inte...
FLEET
Fleet size 120 (+355 orders)
Competitors
• EasyJet plc
• Malaysian Airline System
• Ryanair Holdings
• Singapore Airlines Limited
• Tiger Airways.
• So...
Organizational Structure
STRATEGY
Vision
“To be the largest low cost airline in Asia and serving
3 billion people who are currently underserved with
poor co...
Mission
• To be the best company to work for whereby employees
are treated as part of a big family
• Create a globally rec...
VALUES
• Safety first
• High aircraft utilization
• Low fare, no frills
• Streamline operations
• Lean distribution system...
Employees before customers
Financial KPI’s
Third straight increase in quarterly profit as a
surge in passenger numbers helped offset higher
fuel cost...
• Outsourcing
•Limited human resources
•Heavy reliance on IT
• Non-central location of
secondary airports
WEAKNESSES
• Str...
•Entrance of new LCCs
• High fuel price decreases yield
• Regulations and Policies
• Customer confidence affected by
Terro...
• Threat of Entry – Low
• Power of Suppliers – Moderately Low
• Power of Buyers – Very High
•Threat of Substitutes – Mediu...
• Oligopoly – Since Air Asia and MAS are large
firms competing with each other.
• As a oligopoly market structure both fir...
Low Cost Model
• Compete in the budget carrier space, currently dominated
by IndiGo and SpiceJet.
• JPMorgan said. “Challenging to sustai...
Opportunities:
• Vast population.
• Enormous size and
growing middle
class.
Economic Outlook –
Economic Outlook –
Challenges:
• Indian airports are very expensive.
• Jet – Etihad deal looming.
• Regulator uncertainty ...
Awards and Recognition
Sustainable Growth and Competitive
Advantage
•Aggressive in its branding and marketing campaigns
•“Single aircraft type” i...
Conclusion
Innovative mindset and keeping faith in its employees to maintain a
competitive advantage.
Financially shrewd a...
References
http://en.wikipedia.org/wiki/AirAsia
_Group_destinations
http://www.flightglobal.com/blogs/a
sian-skies/2009/10...
Air Asia MBA 439 2013
Air Asia MBA 439 2013
Air Asia MBA 439 2013
Air Asia MBA 439 2013
Air Asia MBA 439 2013
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Air Asia MBA 439 2013

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  • Air Asia is a low fare airline of Malaysia, it had one of the largest number of airplanes and flying destinations. Know what Business Strategy made Air Asia a successful low budget Airline in Asia. SWOT Analysis of Air Asia & Porter Five Forces Model Analysis Watch this Case Study On Air Asia : Copy and open the url in your browser https://www.youtube.com/watch?v=Ad3voE3UnvE
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Air Asia MBA 439 2013

  1. 1. University of South Pacific MBA – 439 2013 Business Economics Group 3 "Now Everyone Can Fly".
  2. 2. Please fasten your seatbelts…
  3. 3.  Revenue: 4Q 12 USD 1.62 Billion (1 Malaysian ringgit = 0.3257 USdollars)  Number of employees: 8,000+  HQ location: Kuala Lumpur, Malaysia  Ownership: Listed on the Malaysian stock exchange  Year founded: 2001  The company grew from two planes in 2002 to a fleet of 120 aircraft flying 30 million people AirAsia
  4. 4. AirAsia History • 7 September 2008 - 106 new routes added to its then-current list of 60. • On 2 April 2012 Air Asia had their first flight from Sydney to Kuala Lumpur. • August 2011, AirAsia agreed to form an alliance with Malaysia Airlines by means of a share swap.
  5. 5. Subsidiaries • Indonesia AirAsia • AirAsia Japan • Thai AirAsia • Air Asia X • AirAsia Philippines • Air Asia India
  6. 6. Destination Map • 142 routes to 78 destinations (Over 400 daily flights covering Indonesia, Malaysia and Thailand). • International routes: •Australia •Brunei, Cambodia •People's Republic of China •India, Nepal •Japan •Laos, Philippines •South Korea, Singapore •Sri Lanka, Taiwan, Vietnam. •Over 400 daily flights covering: Indonesia • Malaysia and Thailand
  7. 7. FLEET Fleet size 120 (+355 orders)
  8. 8. Competitors • EasyJet plc • Malaysian Airline System • Ryanair Holdings • Singapore Airlines Limited • Tiger Airways. • Southwest Airlines • Thai Airways International
  9. 9. Organizational Structure
  10. 10. STRATEGY
  11. 11. Vision “To be the largest low cost airline in Asia and serving 3 billion people who are currently underserved with poor connectivity and high fares.”
  12. 12. Mission • To be the best company to work for whereby employees are treated as part of a big family • Create a globally recognized ASEAN brand • To attain the lowest cost so that everyone can fly with AirAsia • Maintain the highest quality product, embracing technology to reduce cost and enhance service levels
  13. 13. VALUES • Safety first • High aircraft utilization • Low fare, no frills • Streamline operations • Lean distribution system • Point to point network
  14. 14. Employees before customers
  15. 15. Financial KPI’s Third straight increase in quarterly profit as a surge in passenger numbers helped offset higher fuel costs. Net income increased 3.6 percent to 157.8 million ringgit ($52 million) in the three months ended Sept. 30 2012. Revenue rose 15 percent to 1.24 billion ringgit.
  16. 16. • Outsourcing •Limited human resources •Heavy reliance on IT • Non-central location of secondary airports WEAKNESSES • Strong management Team • Strong Strategy and Execution – plan on fuel hedging, buying low cost airbuses. • Low cost Model • Single type fleet • Efficient Operations • First to market with ICT collaboration • Strong Brand Name • Multi-skilled Staff – seamless transition within workforce STRENGTHS INTERNAL SWOT Analysis
  17. 17. •Entrance of new LCCs • High fuel price decreases yield • Regulations and Policies • Customer confidence affected by Terrorist Attacks, Accidents • Increase in operation cost in producing value-added services • System disruption on IT • THREATS • Long haul flights – new routes • High fuel prices – survival of the strongest airlines •Industry consolidation means new routes and airport deals •Recycling routes abandoned by struggling rivals OPPORTUNITIES EXTERNAL SWOT Analysis
  18. 18. • Threat of Entry – Low • Power of Suppliers – Moderately Low • Power of Buyers – Very High •Threat of Substitutes – Medium/Low • Rivalry amongst existing competitors – very high Porter’s 5 Forces
  19. 19. • Oligopoly – Since Air Asia and MAS are large firms competing with each other. • As a oligopoly market structure both firms have ability to control their prices to maximize profits. • Both Air Asia and MAS formed high entry barriers due to economies of scale and limited licences. •However if these two decide to collaborate, it becomes a large monopoly. Market Structure
  20. 20. Low Cost Model
  21. 21. • Compete in the budget carrier space, currently dominated by IndiGo and SpiceJet. • JPMorgan said. “Challenging to sustain higher yields and entry of a new player could put pressure on pricing." • Shares in SpiceJet, India's No. 4 operator by market share, fell sharply. Economic Outlook – Entry into India - The target: "1 million people that travel by train".
  22. 22. Opportunities: • Vast population. • Enormous size and growing middle class. Economic Outlook –
  23. 23. Economic Outlook – Challenges: • Indian airports are very expensive. • Jet – Etihad deal looming. • Regulator uncertainty - Indian govt. • High operating costs.
  24. 24. Awards and Recognition
  25. 25. Sustainable Growth and Competitive Advantage •Aggressive in its branding and marketing campaigns •“Single aircraft type” in use, which results in fixed costs and low cost operations. •Its flat organizational structure •Employees have multiple roles so as to save on costs. •Employees are given opportunities to grow in the organisation. •Available Seat per Kilometre (ASK) - Having the lowest cost on available seat/kilometre ensures efficiency and cost savings.
  26. 26. Conclusion Innovative mindset and keeping faith in its employees to maintain a competitive advantage. Financially shrewd and have dynamic layered-hedge strategy so as to save on fuel costs due to volatile oil prices. Partnerships with various corporate organization and diversify its services such as partnerships with Financial institutions. Not only will this provide extra revenue streams but increase its brand power and image, via indirect marketing. Diversification would also spread risks among partners. It should continue to be aggressive in advertising, innovative and first to market new ideas and seek to enter other countries/regions.
  27. 27. References http://en.wikipedia.org/wiki/AirAsia _Group_destinations http://www.flightglobal.com/blogs/a sian-skies/2009/10/airasia-tries-to- move-low-cost.html McNamara,F, 2013, ‘Academia.edu’ ,Air Asia: The Worlds Lowest Cost Airline, viewed 12 March 2013,

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