2. HQs : Kualalumpur, Malaysia
Existence: Asian Countries
Thailand, Malaysia, Singapore, India
.
Formation:
Formed in Malaysia.
Taken over from Malaysian govt.
Got success within two yrs.
Indian :
Started in Trichy.
They have extensive plan for India.
148 flights/week from 9 destinations.
Low fares in comparison to
competitors.
3. SERVICES-
low cost carrier(LCC). ADD-ON SERVICES
Courier service. Baggage supersize
Cargo service. Pick a seat.
Inter based megastore. Pre book meals.
Holiday products. Air Asia merchandise.
Booking services for Duty free sky shop.
hotels. Entertainment.
Rental cars.
Medical care.
6. Whats the Funda behind ?
Cost • Rs. 1.57/- Per seat per km as compare to
Rs. 2.40/- for other airlines.
Flying • 17 to 18 hrs compare to Indian airlines’
hours 11 to 12 hrs .
Employees • 68 employees per flight
Fuel • Air Asia has hedged its jet fuel
Capacity requirements for three years.
7. BUSINESS PLANNING
Mission: Sustaining cost advantages while
maintaining low-cost, high-quality airline status in the
time of unstable oil price and heavy market
competition.
Goal Formulation: Decrease fuel and oil cost per
ASK (Available seat per kilometer), more
diversification in air transportation business and more
price promotion for customers.
Distinctive Competency: Superior
workforce, Purchasing unit and Distribution channel.
8. MARKETING ANALYSIS
CUSTOMER- AirAsia targeted the budget segment of
south eastern Asia’s air passengers
Channel:
Multilingual website
Telephone booking centre
Sales office
Travel agent
Partnership with local bank and post office
By sms for the first time in Asia
9. SWOT ANALYSIS
STRENGTH:
o Low operational cost
o Effective distribution channel
o Malaysian government support
o Good alliances
WEAKNESS:
o Extra charges for baggage
o Poor ticketing service
OPPORTUNITY:
o Asia’s middle class growth
o Increasing importance of ASEAN route
THREATS:
o Volatile fuel price
o Increase in cost of airplanes and its components for
maintenance
o Increasing competition
10. PEST ANALYSIS
Political : ‘Everyday low fare’ campaign of MAS was
subsidized by Malaysia Government
Economical: Availing opportunity from recessive
market and growth of middle class in ASEAN
countries
Social: Tony Fernandez wore official red cap and T-
shirt to official functions and gave mobile phone no.
to all media representatives
Technolgical: Having more fuel efficient airplanes and
more tyre longevity.
11. OVERALL COST LEADERSHIP
Operation & Maintenance:
o Fuel cost reduction due to usage of Airbus 320-200 instead of
Boeing 737-300
o Doubled no. of landing from same tyre
o Less depreciation due to better maintenance by GE Engine
Services and Volvo Aero
o Less aviation and user station charge
Service:
o Thailand’s Shin Corp. helped in e-booking system in the alliance
o Virgin group provided ticketing system in AirAsiaX
HR Department:
o Minimum no. of employee and most usage of workforce
o To and fro journey on same day
12. OVERALL COST LEADERSHIP
Purchasing :
o Purchasing of new air planes on attractive terms
Marketing:
o Effective distribution channel
o ‘On time guarantee’ campaign for customer
satisfaction
Redefining Value Chain
o Started offering travel insurance,.
o Launched co-branded Citibank- Air Asia credit card
13. STRATEGIC PLANNING
To be the Asia’s first low cost carrier AirAsia choose underused
Kuala Lumpur International Airport in very low cost
Took the leadership in implementing the strategy of no flight
entertainment and no free meal in flight. It also started no frill
concept in Asia which is considered legendary in it's field.
For short-haul flights (less than 4 hours flight) it started returning
on the same day to reduce crew accommodation cost and other
allowances at the arriving cities.
To save high slotting fees in large airport it focused on
secondary airports.
Allowed customers to prebook some hotseats for a certain fees
by Pick A Seat Service from February,’09
Started Checked Baggage Handling Fees for insisting
passengers for light weight journey which can cause low fuel
consumption
14. RECOMMENDATION
On which route AirAsia has multiple flights in a day,
narrow body flights of higher capacity may be used. e.g. :
using of Airbus 380 (of seating cap 650) instead of two
Airbus 330-300
To reduce no. of vacant seat use less capacity air planes
More fuel economic air plane usage e.g.: using of Air340-
600
Must pay more attention for service channel as there is a
huge customer complaints against very slow server for e-
ticketing.
It can diversify its business more in cargo sector and can
use Airbus Bulega flights for economic model.
Can be diversified more in the island countries like Japan,
NewZealand etc.
Can charge higher at peak time.
