Comparison between lowcost and traditional airlines. This is also a great opportunity for air canada to penetrate further into its domestic market. Since airasia is not a publicl y traded company, there are no shares to be tracked. Air asia has to offer the lowest possible fare amongst all airlines in. Air asia has been consecutively designated as the leading lowcost carrier in the asian region. Lean distribution system point to point network business model. History of air asia air asia was established in 1994 and started the operations on 18 november 1996.
As a cheapest airline, airasia is a pioneer in asia. With cost leadership, a set of actions are integrated to produce goodsservices with features that are acceptable to customers at the lowest cost. Airasia has adopted cost leadership as its business level strategy. Air asia faces increases challenge while operating is business outside. In total, fernandes estimates that air asias costs have fallen by 4050% since he took over control. Cost control is emphasised lower cask than airasia 2. Executive summary airasia is well known company for airlines industry especially in all over asia and being one of the market leaders in that industry. Understanding marketing mix in air asia airline bhd. Air asia strategic management recommendations free essay. Mas charged air asia ringgit 3,000 per turnaround, air asia are now conducting their own turnarounds for ringgit 450.
In order to maintain its brand which is famous with low cost carrier and to be consumers preference to choose using its services offered, airasia must be able to complete with competitors and new entrance by doing some sort of strategies. The largest airline in malaysia the business is known to be highly employee centric. Pest analysis for air asia x shows a combination of factors that relate to the political, social, economic and technological advantages that the company has. Pestel analysis of the airlines conducted is as follows. Air asia porters five forces model analysis threat of entry. Air asia was originally set up in november 1996 by conglomerate drbhicom. Air asia s business strategy is centered on cost leadership and targets specific markets which are price sensitive customers including 1 st time fliers who needing the short haul flights. Those five forces are now used to determined air asias strengths and weaknesses which are shown as below. Page 2 contents microeconomics and strategy market structure and industry analysis 3.
Safety first high aircraft utilization low fare, no frills streamline operations lean distribution system point to point network. Airasia, low cost carrier, web design, business model, strategy. Air asia is the leading low fare airline in asia and air asia succeed to become the award winning, asia pacific airlines of the year 2003 by. Mm276 business strategy mm276 business strategy tutorial 5. Industry analysis of the malaysian domestic airline market. Air asia operational information management in strategy. Air asia adopted a number of actions to compete in the industry. Case study on business strategy of air asia swot analysis.
It also discusses the threats to the longterm success of the airline with. The airline industry needs the big amount of startup capital. In august 2011 airasia and mas, malaysias national carrier, announced a partnership called the comprehensive collaboration framework, whereby a share swap deal was agreed between tune air, the owner of airasia, and khazanah nasional, the government backed investment arm owner of mas. Air asia strategic it initiative sandy hofman aruan. Doc air asia airlines company company background air. This paper aims to apply the management process of strategy and analyse the three levels of strategy by which airasia is able to maintain its reputation as the top lowcost carrier lcc in asia. There is a high barrier entering airlines industry since it requires high capital to set up everything such as purchase or lease air craft, set up office, and hire staffs. Air asia has been one of the award winning and largest low fare airlines in the asia expanding rapidly since the year 2001 which is established with the dream of making flying possible for everyone. The definition of strategic analysis may differ from an academic or business perspective, but the process involves several common factors. The business level strategy adopted by air asia is cost leadership strategy. The swot analysis will consist of four components which are. Swot analysis of singapore airlines singapore airlines. Strategic analysis of a leading low cost carrier in the. Air asia swot analysis top air asia competitors, stp.
Cvp analysis and business strategy analysis of air asia. The main goal of this paper is to analyse the business strategy of airasia as a lowcost airline. The report then would delve into an internal analysis whereby the porters 5 forces would reiterate the direct forces that would affect the airline industry and subsequently, airasia itself. Finance tp 0235 uc1f1007bmp af utari asmelia introduction of management 08 fall airasia company analysis background of airasia company dato tony fernandez was the entrepreneur that brought up airasia to be the one of the award wining the largest low fare airlines that is currently well known for now in asia.
With cost leadership, a set of actions are integrated to produce goodsservices with features that are acceptable to customers at the lowest cost, relative to that of competitors. Mentions the strategic actions adopted by airasia in implementing its business level strategy and explains how these strategic actions support airasias cost leadership strategy. Strategic management airasia executive summary airasia is. Singapore airlines, the official flag carrier of singapore is a 7decade old airline headquartered in singapore. Moreover, brand awareness is quite important in this industry. Aviation, an industry where it is full of fluctuations, has always been affected by various factors. Airasia berhad, played crucial roles in the lcc to successfully. Strategic role of information system in business air asia is established on 12 december 2001 by mr. Swot analysis for air asia strengths, weaknesses, opportunities and threats analysis for airasia strengths the first phase of the swot analysis is the strengths analysis for air asia.
This study examines the extensive strategic analysis of airasia berhad that has. The global air purifier market size was estimated at usd 8. In chapter four i will give explanations to the general competitor strategies, to reach. As of 2020, air asia is one of the leading brands in the airlines sector. Pdf airasia in the malaysian domestic airline market. Air asia strategic management 1582 words 123 help me. As a result of implementing aps system, airasia can obtain both.
Air asia, one of the leading low fare airlines in asia, has been expanding rapidly since 2001. Air india provides only passenger transport services. A swot analysis indicated that air asia has strengths in management, operational efficiency and marketing, but has weaknesses in staffing, customer care, and attractiveness to business travellers. Business level strategy of airasia 2120 words bartleby. This paper tries to analyze air asia as the rising star of todays. Porter five force analysis of air asia there is the high barrier entering the airline industry due to some reason.
Just first version of strategic analysis in airasia case. Thirdly, the paper will analyse the results of airasias strategy visavis. As a matter of fact, with the growth in the real estate industry and the growing trend as regards energy efficiency et al will definitely translate to growth in the heating, ventilation and air conditioning hvac industry. Strategic analysis refers to the process of conducting research on a company and its operating environment to formulate a strategy. This had a positive impact on the business model of airasia and surely with the expansion of it sector the positive impact obviously would be there.
Going forward, the demand for heating, ventilation and air conditioning hvac services is projected to rebound in the five years. Air asia is a lowcost airline headquartered in malaysia. Palepu 20 the structure of fundamental analysis includes four components. This case study discusses the factors that contributed to airasias success. Air india is one of the leading airlines in india providing international and domestic travel. Air asia was the first budget airline company which practiced business to commerce b2c transaction in the airline industry in asia. Apart from virgin blue in australia, asia has yet to produce a genuine lowcost carrier. The limitation of this strategy is that airasia would have to first form an alliance with low cost airliners in those regions, which could be a difficult process as proven by the already long list of failed airline alliance such as air canada continental airlines and saberna air france nigel evans, david campbell, george stonehouse, strategic.
It also analyzes the weaknesses that the company regarding the same. Looking at the economic conditions, air asia x is a branch of a stable company called air air. According to internal and external analysis of airasia, they got a good score which shows that they are. It studies the influence of culture and leadership at airasia, the factors contributing to its operational efficiency and the strategic orientation of the airline. Know what business strategy made air asia a successful low budget airline in asia. The study demonstrates the diverse businesslevel, corporate level and competitive strategies of. To be the largest low cost airline in asia strategy. On 2 december 2001, air asia debt is about usd 11 million myr 40 million. Since air asia introduced online booking air ticket through its website in may 2002 and hence used computer network to conduct its business operationally, it had recorded about 40% of the total revenue which were. Pestel analysis of air asia will help to develop a significant understanding of the impact of market liberalization in the asia pacific on the growth and development of air asia. With a fleet of 72 aircrafts, airasia flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs located in malaysia, thailand, and indonesia. Here the aspects market shares, fleet, price and cost comparisons and safety will be investigated in greater detail.
Porters 5 forces analysis on air asia porters 5 forces analysis on air asia threat of new entrants the extent of barriers to entry depends on the strength of. Air asia is a low fare airline of malaysia, it had one of the largest number of airplanes and flying destinations. Strategic analysis overview, examples, levels of strategy. An analysis of the external environment would be done so as to facilitate a direct comparison between the generic elements where airasia has been founded in. Pointtopoint mediumlonghaul services from key malaysian cities 7. A swot analysis is a structured planning method used to evaluate the strengths, weaknesses, opportunities, and threats involved in a project or in a business venture. Jun 03, 2016 air asia is a low fare airline of malaysia, it had one of the largest number of airplanes and flying destinations. On 8 december 2001, tune air sdn bhd officially acquired 99. By implementing such technologies, airasia will be able to bring better decision in proper time at proper place sheehan, 2003. Air asia strategy has been in place less than two years. It is the largest airline in the middle east and the fourth largest globally in terms of passenger volumes, operating the worlds largest fleets of airbus a380 and boeing. This analysis emerges a trend that in this era of boom in it sector, the appropriate use of it is a must for any kind of business.
There are some unique strengths of air asia that others company could not defeat them. The airline which uses the singapore girl as the brand icon has its hub at the busy changi airport and operates flights in south asia, south asia, asia pacific and transpacific routes. Air asia was incorporated on 20 dec 1993 by a governmentowned conglomerate drbhicom and was operating as a fullfrill airline, and bought over by tune management on 8 dec 2001 and relaunched as low. This is also the first airline in global to achieve full flight tickets and distributed seats.
The role of air asia s swot analysis is to help identify and understand the key issues that are affecting their airlines business. The airline which uses the singapore girl as the brand icon has its hub at the busy changi airport and operates flights in south asia, south asia, asia pacific and transpacific routes in addition to the airline business, singapore airlines also has interests in aircraft. Airasia in the malaysian domestic airline market clute journals. The embraer was created in1969 by military government have several strengths, one of them is their strategic place. The product strategy and mix in air india marketing strategy can be explained as follows. It operates the local and an international flight is planned and is a lowest cost airline in asia without any addition service.
This is about to change in malaysia, where air asia has been transformed by its ceo, tony fernandes, and now uses the tagline quoted in the title above. May 01, 2019 singapore airlines, the official flag carrier of singapore is a 7decade old airline headquartered in singapore. 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 air asia maintain the highest quality product, embracing technology to reduce cost and enhance service levels. Organizational analysis company background airasia malaysia is second national airline. Swot analysis of air canada air canada swot analysis. It is not uncommon to see aviationrelated companies keep changing their own strategies to make ends meet.
The fundamental analysis attempts to evaluate the current market price relative to projections of the firms future earnings and cash flow generating potential. If consumers of air asia do not have brand loyalty, then the strength of. It turns out from analysis of aa competitive strengthand its competitors that. Threat of entry there is a high barrier entering airlines industry since it requires high capital to set up everything such as purchase or lease air craft, set up office, hire staffs, and etc. Tony fernandes, the ceo of air asia and expanding rapidly since that. One sector that was partly liberalized was air transport. Air asia bussiness model airasia is one of the award winning and largest low fare airlines in the asia expanding rapidly since 2001. Future growth in air transport could come from the introduction of the new business model represented by lowcost, lowfare carriers. Air asia introduction essay sample new york essays. It was the first successful low cost, ticketless airline in the southeast asian region. Airasia x is the only longhaul lcc currently flying the europeanasia pacific corridor. May 26, 2012 air asia bussiness model airasia is one of the award winning and largest low fare airlines in the asia expanding rapidly since 2001.
Strategic analysis air asia case study linkedin slideshare. According to porters generic strategies 1985, cost leadership is one of them. Air asia strategic management recommendations free essay example. Threat is the last element to address in the swot analysis of air canada. Airasia was the first successful low cost airline in the southeast asian region. The market is anticipated to be driven by rising prevalence of airborne diseases along with rising pollution levels in urban areas. Air asia is a malaysian lowcost airline, where the headquarter is located in kuala. Thirdly, the paper will analyse the results of airasias strategy visa vis operating and. Emirates founded in 1985, is a dubai uae based global airline with operations in more than 83 countries serving 155 airports and boasting a fleet of over 265 aircrafts.
Airasia aa which is, based in malaysia is a wellknown company that is pioneer. Sep 25, 2016 page 2 contents microeconomics and strategy market structure and industry analysis 3. Air india marketing mix 4ps strategy mba skoolstudy. The column of the swot analysis for air asia airlines are. Airasia x is the only longhaul lcc currently flying the european asia pacific corridor.