Premium Essay

Mas Aviation Industry

In: Other Topics

Submitted By shashi15
Words 5929
Pages 24
International Business & Economics Research Journal – December 2005

Volume 4, Number 12

AirAsia In The Malaysian Domestic Airline Market: Empirical Analysis Of Strategy
Mok Kim Man, (Email: mkimman@ums.edu.my),Universiti Malaysia - Sabah, Malaysia Jainurin Bin Justine, (Email: Jainurin@ums.edu.my), Universiti Malaysia - Sabah, Malaysia

ABSTRACT This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. Firstly, the paper will provide a general background of the airline industry, in particular the Malaysian domestic airline market and a summary of an analysis of the industry using Michael Porter’s Five Forces Analysis. Secondly, the paper will provide a brief background of AirAsia and Malaysia Airlines. Thirdly, the paper will analyse the results of AirAsia’s strategy vis-àvis operating and financial performance. Finally, the paper will conclude a summary of AirAsia’s achievement of the past and present and prospect for the future.

INDUSTRY BACKGROUND Airline Industry The airline industry is very competitive with existing airlines having to compete with each other as well as with new entrants from time to time. For every success such as Singapore Airlines and Southwest Airlines, there are plenty of failures such as Pan Am, TWA, Swissair, Sabena, Ansett, People Express, Go, Buzz and so on. Major Characteristics There are three major characteristics of the airline industry namely its product nature, its expenditure structure and its market entry conditions. Airlines’ product is homogeneous or undifferentiated, causing significant competition in markets, which are free from regulations and economic barriers. High capital and operating expenditure is another important characteristic of the airline industry. Aircrafts, airlines’ major capital expenditure, are very costly to acquire. For operating...

Similar Documents

Free Essay

Private Jets in China

...Private jets industry belongs to general aviation aircraft domain and is one the important area of general aviation industry development. General aviation aircraft industry in the United States is most developed with about 224,000 private jests, accounting more than 78% of the total in the world. In China, the total number of private jets is only about 200, much less than that of US. But the private jets market is full of opportunities. According to a recent report, in China, there are about 825,000 multi-millionaires, 51,000 billionaires. It is estimated that more than 300,000 people will become the potential buyer of private jets in the near future. This attractive piece of cake will undoubtedly make the world’s aircraft manufacturers salivating. But the income of Chinese is not a reason that constrained the development of private jets market in China. The law and policies concerning the private jets are far behind the market, discouraging the development of the private jets industry. China has been strictly controlling its low-altitude airspace. If you want to conduct a cross-provincial flight, you need to make official application one week ahead, making it inconvenience of the private flight. Also, the lack of private airport is another reason that constrains the development. A low-standard airport of private jets only required a 10-metre-radius ground and a 20-meter-long runaway. However, there are less than 10 standard private airports in China, compared to the number......

Words: 619 - Pages: 3

Premium Essay

Mas External Analysis

...System Berhad (MAS) Malaysia Airlines (MAS), the countries’ national carrier was incorporated on 12th October 1937. First known as Malayan Airways Limited (MAL), it was a joint initiative of Ocean Steamship Company of Liverpool, the Straits Steamship of Singapore and Imperial Airways which proposed to Colonial Straits Settlement government to run an air service between Singapore and Penang. MAL’s first commercial flight was on 2nd April 1947. By the time of Malaysia formation in 1963, Malayan Airways Limited (MAL) changed its name to Malaysia Airlines Limited. Borneo Airways was incorporated soon after. Singapore’s separation from Malaysia saw the company renamed to Malaysia-Singapore Airlines (MSA) in 1965. In 1972, MSA went separate ways to become Singapore Airlines (SIA) and Malaysia Airline Limited (subsequently renamed to Malaysia Airline System (MAS)) independently. As of 31st December 2013, MAS operates a fleet of total 147 aircrafts (108 MAS + 39 Subsidiary). Other MAS subsidiary providing air services included MASkargo, Firefly and MASwings. MAS has been suffering from losses continuously since year 2011 even though revenue and passenger increased in the year 2013. Coupled with the MH370 and MH17 tragic incidents in year 2014, Malaysia government called for a recovery plan to be executed to turn MAS back to profitability. The recovery plan was put together by Khazanah Nasional (Federal government Investment Arm, which happens to be majority stakeholder of MAS)......

Words: 2254 - Pages: 10

Free Essay

Airasia Case Study

...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. After the independence in August 1957, the economy shifted from agriculture to industrialisation; an import-substitution strategy was adopted to reduce dependency on primary sector and simultaneously diversify the economy. By the late 1960s, with the exhaustion of import substitution, the Malaysian government made the......

Words: 4100 - Pages: 17

Free Essay

Air Asia

...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. After the independence in August 1957, the economy shifted from agriculture to industrialisation; an import-substitution strategy was adopted to reduce dependency on primary sector and simultaneously diversify the economy. By the late 1960s, with the exhaustion of import substitution, the Malaysian government made the......

Words: 4100 - Pages: 17

Premium Essay

Strategic Management

...this report, we have provided the recommendations for AirAsia to increase their performance. 1.0 INTRODUCTION 2.1 Company Background Asia’s 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. Air Asia was named the World’s Best Low Cost Airlines in the annual World Airline Survey by Skytrax for five year consecutive years in 2009, 2010, 2011, 2012 and 2013 and has been ranked Top 5 among the most recognized and admired airlines in the Asia Pacific Top 1000 Brands 2008. 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, AirAsia X, Thai AirAsia, Indonesia AirAsia, Philipines’s AirAsia Inc and AirAsia Japan. AirAsia is set to take low-cost flying to an all new high with our belief, “Now Everyone Can Fly”. 2.2 History AirAsia was established in 1993 and commence operation in 1996. AirAsia had rather a shaky start and the...

Words: 13364 - Pages: 54

Premium Essay

Air Asia & Mas

...Question 1 Analyze the current situation facing MAS and AirAsia using the internal and external strategic environment analysis model. Discuss what aspects and why did their collaboration take place. Answer Background to AirAsia A ‘no-frills’ airline is defined as one “That uses charter and/or scheduled flights to offer bargain-basement fares. Budget airlines usually land at and take-off from secondary airports, do not provide in-flight meals or refreshments, and may not even offer numbered seat allocation. Their ticket prices are fixed and non-refundable in case of a cancellation or no-show”. AirAsia is one of the fastest growing airline companies in the world, with a reputation as a low-cost, ‘no frills’ airline. It was originally a government owned business; yet, due to heavy debt, it was bought by former Time Warner executive Tony Fernandes in 2001, and this is where the real story begins. Their vision, under the slogan "Now Everyone Can Fly", is “To be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares”,(ii) and their mission is, under the banner of 'Affordable Airfares', “To attain the lowest cost so that everyone can fly with AirAsia,” without any compromise to Flight Safety Standards, as well as, creating a worldwide recognizable brand with a ‘family’ atmosphere within working conditions for employees. (iii) These statements clearly show AirAsia’s value. Cost......

Words: 2819 - Pages: 12

Premium Essay

Why Collabration Take Place Between Mas and Airasia

... TABLE OF CONTENTS QUESTIONS 1:- Analyze the current situation facing MAS and AIRASIA using the internal and external strategic environmental analysis model. Discuss what aspects and why did their collaboration take place? INTRODUCTION Various industries, specifically in airline business are attempting to improve their services to draw new passengers and travellers and to retain old passengers and travellers, and this objective is part of their business as well as their marketing model. In order to adjust with the stiff competition in the airlines business, airlines industries tend to come up with various businesses models and model to be competitive. Additionally, because of increasing competition among substitute industries, firms like AIRASIA, AIRASIA X and MAS. Airlines adopt strategic model to marketing and expend their market reach as well give better and satisfying service delivery to their target market. To sustain the market position as well as advantage business market model to management and marketing are being developed and utilized. MAS, AirAsia share swap not a win-win deal From its inception, it has not been plain sailing for the planned share swap between two of the country's most bitter airline rivals — Malaysia Airlines (MAS) and AirAsia — given the many issues involved. "The collaboration between MAS, AirAsia and AirAsia X was flawed from day one because it cannot bring in a rival. From the start,......

Words: 3087 - Pages: 13

Premium Essay

Human Factors

...Human Factors in Aviation Safety Final Paper Curtis D. Hudson Embry-Riddle Aeronautical University Human factors in aviation isn’t a new concept but at the time when the Hubble telescope, and stealth bombers were still fresh ideas, Human factors was just now hitting its stride. In 1988, Earl Weiner and David Nagel coincidently released a book titled Human Factors in Aviation (Salas, Maurino and Curtis). During this time, HF was still being slowly accepted and established as a practice to help increase the awareness and improve aviation safety. This period is also significant because prior to then, Human Factors researchers were not involved with aviation system designs and were normally included upon design completion. The incorporation of having HF researchers involved in the design process helped the role evolve and expand the field research. As students of HF research we are aware of the importance of the technology and design of the cockpit, crew resource management (CRM), health and judgment of the crew and how automation plays a role in aviation. This was also a somewhat foreign practice in the beginning. Human Factors researchers were limited to the cockpit and overall cabin technology design. It can be argued that Human Factors in Aviation played a big role in the way business is conducted now compared to before this book was written. When we hear of an aviation mishap, particularly a plane crash, the first thing that comes...

Words: 727 - Pages: 3

Premium Essay

Swot Analysis Of Airasia

...Table of Contents Executive Summary 2 1. 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

Strategy Management

...qwertyuiopasdfghjklzxcvbnmqwertyui opasdfghjklzxcvbnmqwertyuiopasdfg hjklzxcvbnmqwertyuiopasdfghjklzxcv bnmqwertyuiopasdfghjklzxcvbnmqwe Strategic Management report for University of Sunderland rtyuiopasdfghjklzxcvbnmqwertyuiopa Ryanair sdfghjklzxcvbnmqwertyuiopasdfghjkl zxcvbnmqwertyuiopasdfghjklzxcvbn mqwertyuiopasdfghjklzxcvbnmqwerty uiopasdfghjklzxcvbnmqwertyuiopasdf ghjklzxcvbnmqwertyuiopasdfghjklzxc vbnmqwertyuiopasdfghjklzxcvbnmqw ertyuiopasdfghjklzxcvbnmqwertyuiop asdfghjklzxcvbnmqwertyuiopasdfghjk lzxcvbnmqwertyuiopasdfghjklzxcvbn mrtyuiopasdfghjklzxcvbnmqwertyuiop asdfghjklzxcvbnmqwertyuiopasdfghjk lzxcvbnmqwertyuiopasdfghjklzxcvbn 11/11/2011 xxxxxxxxxx SIM336 i “How has Ryanair managed to become number one airline in Europe” Table of Contents 1. 2. 3. 4. 5. 6. 7. 8. 9. Introduction ..................................................................................................................... - 3 Company Background..................................................................................................... - 3 Competitive Advantage ................................................................................................... - 4 Porter’s five Forces ......................................................................................................... - 5 PESTEL Analysis ............................................................................................................ - 8 Porter’s generic strategies ..............................

Words: 3540 - Pages: 15

Premium Essay

Strategic Analysis Report

...Strategic Analysis Report Flux Consulting – Airline Division Queensland University of Technology MGB309 – Strategic Management Pei San Chew – 0 8000492 Tutor: Christophe Garonne (Tutorial 8) Word Count: 2160 1.0 Executive Summary The air transportation industry within Australia is highly competitive. However, there is solid evidence and a strong indication that Virgin Australia can seize power over the current market and outrun its competitors for its long-term survival. Virgin Australia should optimise opportunities and remain competitive by either strengthening its alliance with SIA or outsourcing to a specialist company in ground handling. The key challenge for the company is to create strategies that ensures effectiveness. The strategies will draw upon previous internal and external analysis conducted and focus on developing strategic alliances and strategic outsourcing. This report analyses the benefits and limitations of these potential strategies and provides practical recommendations to ensure long-term strategic sustainability. The results of the evaluation between the two strategies illustrate that the first strategy is more appropriate for Virgin to be sustainable in the long-term. There are several advantages that Virgin possesses which includes its strategic alliance’s strong position in the Asian market, and its ability to integrate newly planned flight routes. This means that Virgin is able to benefit from the strengths of its alliance.......

Words: 3801 - Pages: 16

Free Essay

Overview of Aviation Privatization in Europe, African and Asian Country

...PUBLIC SECTOR ACCOUNTING (PSA 521) OVERVIEW OF AVIATION PRIVATIZATION IN EUROPE, AFRICAN AND ASIAN COUNTRY PREPARED BY: NUR IZZAH IWANI BT IBRAHIM@ABD RAHMAN 2010554633 NURUL HARYANIE BT MISRAN 2010572197 WANDEE BT JAMIL 2010558697 GROUP : AC220 8B PREPARED FOR : ASSOCIATE PROFESSOR DR. ASMAH ABDUL AZIZ PERSONAL BIOGRAPHY NUR IZZAH IWANI BT IBRAHIM @ ABD. RAHMAN 2010554663 NURUL HARYANIE BT MISRAN 2010572197 WANDEE BT JAMIL 2010558697 Contents ABSTRACT 3 KEYWORDS 3 INTRODUCTION 4 OVERVIEW OF AVIATION PRIVATIZATION IN EUROPE, AFRICAN AND ASIAN COUNTRIES 5 Argentina – Its pitfall and the problems behind it 5 Turkey – A Privatization through BOT 7 Kenya Airways – A Successful Story 9 Malaysian Airlines Considering Privatization 10 Germany-Fully privatized and partially privatized 12 Privatization in United Kingdom 14 IMPLICATION OF PRIVATIZATION 16 RECOMMENDATIONS 17 REFERENCES 18 ABSTRACT This paper focuses on the privatization of airports in six different countries which are Argentina, Turkey, Germany, United Kingdom, Malaysia and Kenya. The analysis aims to highlight the objectives, implementation and the government rules towards privatization of airports. This paper also aims to identify to what degree privatization contributes to or enhances the performance of the airports. The study measures the change in any given indicator of......

Words: 4737 - Pages: 19

Premium Essay

Entrepreneurship Assignment

...which bring him to the success in his business and the background information of the companies. Table Of Contents 1. Background 2 2. Environmental Conditions 3 • Political 3 • Economic 3 • Social 3 • Technology 3 3. Approach, Attitude and Behaviour 4 4. The Strategies 5 5. Conclusion 6 6. References 7 Background In Malaysia, the general demand of travelling by airplane in the country arising, however the affordability for all was the concern. Malaysia Airline System (MAS) was the only one national carrier and had to operate as a local airline too. The government recognized the issue faced, so the second airline AirAsia by a joint venture with a local corporate company DRB-Hicom was formed in 1993 and began operations on 18 November 1996 to take care for the local destinations while MAS can concentrate on the international routes. With the poor management, AirAsia was failed and accumulated debt of...

Words: 1690 - Pages: 7

Premium Essay

Air Asia

...1.0 Introduction AirAsia originally was founded by government and on 2 December 2001 was bought by Tony Fernandes. AirAsia was established in year 1993. AirAsia has travel around the earth and ascend to become the world’s best in year 2001. AirAsia continues to spread out the way for low-cost aviation through the innovation, efficient and passionate approach to business with a route a network that extent through over 20 countries. There are some companies which link with AirAsia such as AirAsia X, Thai AirAsia, Philippines’ AirAsia Inc., AirAsia Japan and Indonesia. In addition, for the vision part in AirAsia, AirAsia aims to be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares. While for the mission of AirAsia, AirAsia wants to be the best airline company to work whereby employees are treated as part of the big family. Besides, AirAsia try to maintain the lowest cost hence everyone can fly with AirAsia. Highest quality product, embracing technology to lower the cost and improvement in service levels will be maintained by the AirAsia airline also. Lastly, create a globally recognized ASEAN brand will be the mission part of AirAsia. In the values part, AirAsia will implement trough the following key strategies which are: * Safety * Low fare, no frills * Lean distribution system * Point to point network * High aircraft utilization * Streamline operation The......

Words: 4256 - Pages: 18

Premium Essay

Airasia X Strategic Managment

...AIRASIA X BHD Table of Contents 1.0 Company Profile 1 1.1 Introduction of Company 1 1.2 Vision 2 1.3 Mission 2 1.4 Value 2 1.5 Logo 3 1.6 Motto 3 1.7 Corporate Information 4 1.8 Organizational Structure 5 2.0 General Environment Analysis 9 2.1 Politic Factors 9 2.2 Economic Factors 10 2.3 Social Factors 10 2.4 Technology Factors 11 2.5 Legal Factors 11 2.6 Environmental Factors 12 3.0 Task Environment Factor 13 3.1 Porter Five Forces Analysis 13 3.1.1 The Threat of the Entry of New Competitors 13 3.1.2 The Threat of Substitute Products or Services 13 3.1.3 The Bargaining Power of Customers 14 3.1.4 The Bargaining Power of Suppliers 14 3.1.5 The Intensity of Competitive Rivalry 15 3.2 Level of Threats 15 4.0 S.W.O.T Analysis 16 5.0 TOWS Matrix 18 6.0 Ratio Analysis 20 6.1 Profitability Ratios 21 6.2 Margin Analysis 21 6.3 Asset Turnover 22 6.4 Credit Ratios 23 6.5 Long-Term Solvency 24 6.6 Growth over Prior Year 24 6.7 Conclusion from Ratio Analysis 25 7.0 Strategic Directions 26 7.1 Market Development 26 8.0 Additional Information 29 9.0 References 31 1.0 Company Profile 2.1 Introduction of Company 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 efficiencies are derived from maintaining a simple aircraft fleet and a route...

Words: 6477 - Pages: 26