Premium Essay

Airasia Case Study

In: Business and Management

Submitted By membaca
Words 3654
Pages 15
1. Briefly describe the trends in the global airline industry.

a) Increasing travel demand
Two of the top six U.S. airlines saw their best traffic results in 18 months this past November. While Southwest recorded a 12 percent increase, Continental registered a 2.8 percent increase, respectively, in miles flown per passenger. These figures represent absolute increases in ‘warm bodies’ flown – a more reliable metric than passenger load factor.

Clearly, the slump in air travel is ending. IATA has now revised its passenger traffic estimates for 2010 upwards by 4.5 percent (as against the previous forecast of 3.2 percent in September 2009). An estimated 2.28 billion people are expected to fly in 2010, bringing the total passenger numbers back in line with the peak recorded in 2007.

b) Airline-supplier consolidation
As airlines improve services while implementing aggressive pricing strategies, many plan to forge new links with distributors, including travel management agencies that don’t rely on the traditional GDS connections. A trend that first started two years ago, airlines are expected to continue to implement direct-connect models to manage products and inventories, and establish closer ties with their customers. For example, last October, American Airlines indicated its plans to move all indirect volume to direct connections.

This will change the nature of Airline-GDS relationships. One notable potential by-product of this trend could be GDS / TMC consolidation. With Amadeus and Travel port considering IPOs, the cash raised could be used to purchase a major global TMC. The GDS would like to have a more direct impact on their revenue potential from the carriers and, if this were to occur, a whole new dynamic will impact the already convoluted distribution model.

c) Environmentally-responsible aviation

By March 2010, EU-based airlines must...

Similar Documents

Premium Essay

Airasia Case Study

...AIR ASIA Case Study Report Nikhil Singh Tomer Business Strategy, BMGT 43370 2nd individual Assignment Addressed to Bernard Faughey MSc Project Management FT I the undersigned confirm that the work submitted here is entirely my own work, and that any work of others which is included has been properly referenced and acknowledged according to normal academic guidelines. NAME: Nikhil Singh Tomer Student No. 14202643 Core concepts : Porter’s 5 forces, SWOT Analysis , Analysing the internal environment, Porter’s Value Chain, Competitive advantage within International context(cost analysis and differentiation) 1.0 Porter’s Five Forces: 1.1 Threat of new entrants There is a need of high initial investment to run an airline industry business. This high capital requirement is in the form of buying of aircrafts, staff hiring, pilot hiring, etc. Thus, the threats of new entrants for AirAsia are very low.  AirAsia uses a very simple and effective strategy of selling tickets. People have to buy tickets from AirAsia’s website which they do very easily. Thus, through this process, AirAsia saves a lot of money by not being liable to pay any travel agent. This Strategy of AirAsia is hard to imitate and makes them less vulnerable to new entrants....

Words: 2660 - Pages: 11

Premium Essay

Airasia Case Study

...AirAsia Case Study Abstract—This paper focuses on the company AirAsia. We will be talking about their strategy through out this paper and will also discuss their position in the global market. AirAsia’s strategy is to become the largest low cost airline in Asia; however, their coverage stays within south east Asia, which with our consultation and data presented in this paper we can analyze and seek a path towards a much larger coverage and becoming the leading largest low cost airline in the world. For the sake of this paper, we will be focusing on AiAsia’s partnership with Emirates in the middle east region. Keywords—AirAsia; Strategy; Sustainable Growth; Low-cost Airline; Alliance; Global Market Analysis; Introduction AirAsia, a successful global company based in Malaysia has been transporting people in Asian for over 15 years. The company is however thinking about expanding their coverage through out all Asia; currently they are covering and more focusing in East and Southeast Asia. Analyzing AirAsia’s strategy will help us understand any trends that is either helping them or decreasing their growth, hence, with proper recommendations we would be able to help AirAsia achieve its goal: Becoming the largest low-cost carrier in Asia. Having that said, by looking the global market and the growth rate of AirAsia; the company will be able to become the world’s largest low-cost carrier instead of only Asia....

Words: 2197 - Pages: 9

Free Essay

Airasia Case Study

...THE RISE OF TONY FERNANDES AND AIRASIA IN MALAYSIA1 SHAHRIL EASHAK ISMAIL Monash Asia Institute, Monash University, Caulfield East Vic 3145, Australia Email: seism1@student.monash.edu                                                              1  This paper was presented to the 18 Biennial Conference of the Asian Studies Association th of Australia in Adelaide, 5-8 July 2010. It has been peer reviewed via a double referee process and appears on the Conference Proceedings Website by the permission of the author who retains copyright. This paper may be downloaded for fair use under the Copyright Act (1954), its later amendments and other relevant legislation.  2    The Rise of Tony Fernandes and AirAsia in Malaysia This article discusses the emergence of Tony Fernandes and AirAsia. At first, when AirAsia was relaunched as a Low-Cost Carrier (LCC) under the leadership of Fernandes, no one thought the airliner would survive, let alone become a symbol of the liberalisation of the aviation industry in Southeast Asia. Second, Fernandes, a Malaysian Indian of Portuguese Malaccan descent – obviously not a Bumiputra2 - was able to thrive as an entrepreneur in an environment where the government gave top priority to Bumiputra entrepreneurs. These issues are discussed in this paper. Malaysia’s New Economic Policy (NEP) The Malaysian Government has played a significant role in Malaysia’s rapid economic growth....

Words: 4100 - Pages: 17

Premium Essay

Airasia Case Study

...As stated in the case study, some government regulations have been adjusted, lifted or cancelled and this has brought about a flood of new entrants. While government deregulation is viewed as good news, there are some limitations to the potential of intra-Asia flights. “A major disadvantage of the LCCs in Asia is the smaller geographic areas of domestic economies. As LCCs turn their attention to international routes for expansion opportunities, they would confront regulatory constraints applying in international markets.” (Zhang, 2008). This is key to the development and continued growth of the low cost carriers in Southeast Asia. There are also many challenges and pitfalls when it comes to running an airline, especially if the profit margins are thin. With any airline, be it full service carrier or a low cost carrier, fuel cost is always going to be at the top of the list. Fuel costs for an airline, as a percentage of operating costs, typically runs from 20% to 40%, depending on the price of oil in any given time period (please refer to Appendix A). The next biggest cost associated with running an airline would customer service and operations. The case study does indicate that AirAsia has entered into an alliance with another low cost carrier Jetstar from...

Words: 1474 - Pages: 6

Premium Essay

Airasia Case Study

...Safety first – AirAsia partners with renowned maintenance crews and complies with world airline regulations. The company does not own a maintenance shop. Everything with maintenance and repair is outsourced to keep costs down. High aircraft utilization – having the fastest turnaround time in the region, they assure lower costs and higher productivity. AirAsia has the newest and most efficient fleet flying in the Asia region. The planes have a single seating class and hold more passengers than competitors. This allows for more revenue per flight. Low fare, no frills – keeps ticket prices cheap. Customers have the ability to customize for an extra fee. AirAsia focuses on price sensitive customers. Keeping lower prices is better for both the passenger and the airline. Streamline operations – simple is good. Using all the same planes saves on training pilots, contracting mechanics, and replacing parts. Lean distribution system – book flights online or on the phone. No travel agents. Passengers do not even use tickets. They simply show photo identification and are allowed to board the plane. This saves booking/ticketing costs. Point to point network – A to B, or A to C service, no B to C service. Standardized short routes ensure quick turnaround times and high load volume. Using secondary airports saves on runway costs. Using this philosophy, Air Asia outperformed the...

Words: 2563 - Pages: 11

Premium Essay

Yugioh

...The Low Cost Airline: AirAsia A study of opportunities, challenges and critical success factors LGT 3007 Air Transport Logistics [pic] 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 cost airlines have these features, and not all airlines that have some of these features are low cost airlines. For example, Virgin Express is a low cost airline, but it still offers complimentary coffee and inflight magazine, and they are based at Brussels primary airport. Case Study—AirAsia Story of AirAsia Air Asia, as the second Malaysian National Airline, provides a totally different type of service in line with the nation's aspirations to benefit all citizens and worldwide travellers. Such service takes the form of a no frills - low airfares flight offering, 40%-60% lower than what is currently offered in this part of Asia....

Words: 3403 - Pages: 14

Premium Essay

Management Airlines

...AirAsia has been a long-standing competitor in the airline industry. Bought over by Tony Fernandez just as it was about to go bankrupt, he managed to turn the structure of the company around and made it profitable. From a regular full-cost airline, it was now a budget airline. Providing its main service of transport, with little importance paid to luxuries and more focus was put into perfecting customer service and time for money. As more budget airlines such as Jetstar Singapore and Tiger Airways Singapore started to come into competition, AirAsia had to start changing their management plans in order to be able to be the first choice for customers, in terms of rates and service. AirAsia stuck to one aircraft type to minimize training and maintenance costs. Tony Fernandez also started off his team of employees to work as one. This created a strong bond between the employees that in turn shows in customer service. Despite the fact that they were a budget airline, employees were shown respect and awarded for performance, thus creating a sense of pride in working for AirAsia. Classical management theories had been first founded by three people who go by the name of Max Weber, Henri Fayol and Lyndall Urwick . They opened the door way to three different classical approaches such as the scientific management, administrative and the bureaucratic approach (Pryor ,2011)....

Words: 2417 - Pages: 10

Free Essay

Air Asia

...THE RISE OF TONY FERNANDES AND AIRASIA IN MALAYSIA1 SHAHRIL EASHAK ISMAIL Monash Asia Institute, Monash University, Caulfield East Vic 3145, Australia Email: seism1@student.monash.edu                                                              1  This paper was presented to the 18 Biennial Conference of the Asian Studies Association th of Australia in Adelaide, 5-8 July 2010. It has been peer reviewed via a double referee process and appears on the Conference Proceedings Website by the permission of the author who retains copyright. This paper may be downloaded for fair use under the Copyright Act (1954), its later amendments and other relevant legislation.  2    The Rise of Tony Fernandes and AirAsia in Malaysia This article discusses the emergence of Tony Fernandes and AirAsia. At first, when AirAsia was relaunched as a Low-Cost Carrier (LCC) under the leadership of Fernandes, no one thought the airliner would survive, let alone become a symbol of the liberalisation of the aviation industry in Southeast Asia. Second, Fernandes, a Malaysian Indian of Portuguese Malaccan descent – obviously not a Bumiputra2 - was able to thrive as an entrepreneur in an environment where the government gave top priority to Bumiputra entrepreneurs. These issues are discussed in this paper. Malaysia’s New Economic Policy (NEP) The Malaysian Government has played a significant role in Malaysia’s rapid economic growth....

Words: 4100 - Pages: 17

Premium Essay

Marketing

...Alliances are also important and AirAsia has been working closely with Jet Star since 2010.   a) What are the micro and macro environmental factors that have contributed to the early success of AirAsia?   b) Discuss the micro and macro factors that would affect AirAsia’s performance in the current competitive environment described in the case?   c) By focusing on...

Words: 314 - Pages: 2

Premium Essay

Swot Analysis Of Airasia

...Introduction 3 1.1 Brief Description of the Report 3 1.2 Current Situation 3 1.3 Company Background 4 1.3.1 AirAsia 4 1.3.2 Vision and Mission 4 2. Strategy and the Industry 4 2.1 Analysis and Evaluation of industry Strategy 4 2.2 Global Forces that Impact the Industry 5 2.3 Importance of an Effective Strategy 5 3. Environmental Analysis and the Strategy 6 3.1 Corporate Strategy 6 3.1.1 Evaluation of Current Strategies 7 3.2 Analysis of the Internal Environment 8 3.3 Analysis of the Resources and Capabilities 9 3.4 Analysis of the External Environment 10 3.5 Proposed Change Strategy 11 4. The Relevance of Strategy Models/Frameworks 11 4.1 Discussion and Application of the Models 11...

Words: 3104 - Pages: 13

Premium Essay

Airasia

...Air Asia’s main hub is at Kuala Lumpur International Airport as well as the head office of the company and its affiliated airlines, Thai Air Asia and Indonesia Air Asia, have hubs in Suvarnabhumi Airport and Soekarno-Hatta International Airport.In this assignment,we will obtain information about AirAsia more. TASK A: DEFINITION OF MARKETING #1: * “Marketing is the management process responsible for identifying, anticipating and satisfying customer requirements profitably”. Source: Chartered Institute of Marketing (CIM) (http://www.studymode.com) DEFINITION OF MARKETING #2: * "Marketing is human activity directed at satisfying needs and wants through exchange process." Source: Philip Kotler (http://www.learnmarketing.net/marketing.html) COMPARISON   All two definitions mention specifics of marketing and give an a concept about marketing today. One important thing,...

Words: 4252 - Pages: 18

Premium Essay

Conpany Culture

...CHALLENGES OF AIRASIA 9 9. CONCLUSION 9 10. REFERENCES 10 11. APPENDIX 10 1. Organizational Structure 10 2. Survey 10 1. INTRODUCTION Our group would like to study about successful organization to enhance our learning experience. We have discussed few topics and finally AirAsia was selected for our group project because AirAsia is one of the role model for Low Cost Carrier industries. We also conducted a survey on low cost airways (Appendix 1). Tony Fernandez is a great leader and he has unique strategy, his courage lead AirAsia as a one of the powerful organization. Tony launched AirAsia just after the 9/11 attacks, possibly one of the worst periods to kick start a...

Words: 3791 - Pages: 16

Premium Essay

Pestle of Royal Dutch Shell

...Talent Solutions Case Study AirAsia Business Challenge Company Profile AirAsia, the leading and largest low-cost carrier in Asia, services an extensive network of 85 destinations. Within 10 years of operations, it has carried over 152 million guests and grown its fleet from just two aircraft to 106. The airline today is proud to be a truly ASEAN (Association of Southeast Asian Nations) airline with established operations based in Malaysia, Indonesia, Thailand, Philippines and Japan. This is complemented by AirAsia X, its low-cost long-haul affiliate carrier that currently flies to destinations in China, Australia, Taiwan, Nepal, Korea and Japan. AirAsia was named the World’s Best Low Cost Airline in the annual World Airline Survey by Skytrax for four consecutive years, from 2009 to 2012. Since 2001, AirAsia has swiftly risen to become one of the leading low-cost carriers in the world. In Malaysia where its headquarters and other key corporate functions are based, one of its key human resource challenges has been to stay ahead of the growth curve by sourcing for quality candidates to fill critical high-level positions within the company. AirAsia had been advertising on social media networks such as Facebook and Twitter as well as other job portals to fill non-executive or executive roles....

Words: 862 - Pages: 4

Premium Essay

Air Asia

...Arts 51 (2012) 11164-11171 AirAsia Berhad: Strategic analysis of a leading low cost carrier in the Asian region Yasmin Yashodha Taylor’s University Lakeside Campus, No. 1 Jalan Taylor's, 47500 Subang Jaya, Selangor Darul Ehsan, Malaysia. A R TI C L E I N F O Art i c l e h i st ory : Received: 9 July 2012; Received in revised form: 13 October 2012; Accepted: 30 October 2012; K ey w or d s Strategic analysis, Region, Low cost, Extensive. ABSTRACT This study examines the extensive strategic analysis of AirAsia Berhad that has enabled it to sustain its competitive advantage as Asia’s leading low cost carrier (LCC). The study demonstrates the diverse business-level, corporate level and competitive strategies of AirAsia Berhad, played crucial roles in the LCC to successfully penetrate the under-served market segment of the airline industry within the ASEAN region. An in-depth analysis using a wide array of academic resources, relevant financial, legal and management resources and authorized websites, including face-to-face interviews were used to provide a more consequential comprehension on the varied business and international strategies that were implemented by AirAsia Berhad. This research exhibits critical analysis pertaining to the current macro environment of the aviation industry which includes the PESTEL framework and Porter’s Industry Analysis....

Words: 6757 - Pages: 28

Premium Essay

Air Asia Mis System

...AirAsia flies 20 million passengers in five years m-Travel.com Asia’s low fare airline AirAsia has surpassed its 20 millionth passenger mark in June this year. AirAsia, established in December 2001, has expanded from a two-aircraft operation to a fleet of 45, serving a regional network spanning 10 countries covering Malaysia, Thailand, Indonesia, Macau, China, Philippines, Vietnam, Cambodia, Singapore and Brunei. With the recent confirmation of 40 Airbus order, AirAsia’s total order now stands at 100 aircraft with 30 options. Kathleen Tan, executive vice president – commercial, said the milestone is “a strong testament to the appeal of our low fares and the strength of our unbeatable product – brand new modern fleet of Airbus 320, fun and friendly service, convenient booking channels and an extensive regional route network of 2,450 weekly flights.” Operating from six hubs, the continued roll out of Airbus fleet will increase AirAsia’s capacity to facilitate an aggressive expansion programme within the group through added new frequencies and launching of new routes. Over last six months, AirAsia has launched exciting new routes to Phnom Penh, Siem Reap, Brunei, Hanoi, Krabi, Solo and Pekan Baru. With recently added frequencies, AirAsia now flies five times daily to Bangkok, and four times daily to Jakarta from its Kuala Lumpur hub. ...

Words: 432 - Pages: 2