Air Asia Strategic Analysis

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STRATEGIC ANALYSIS OF

AIRASIA
THE BEST LOW-COST CARRIER AIRLINES IN THE WORLD

ASSIGNMENT FOR MICROECONOMICS FACULTY OF ECONOMICS AND BUSINESS NATIONAL UNIVERSITY OF MALAYSIA

BY: IWAN BUDHIARTA P-46048

MALAYSIA – 2009

I.

INTRODUCTION
1

A low-cost carrier (also known as a no-frills or discount carrier) is an airline that offers low fares but eliminates all “non-essential” services. The typical low-cost carrier business model is based on: – –


a single passenger class a single type of airplane (reducing training and servicing costs) a simple fare scheme (typically fares increase as the plane fills up, which rewards early reservations) free seating (which encourages passengers to board early) direct, point to point
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Optimise routes and development of new secondary hubs • Further enhance route network, venture destinations previously uncovered • Yield enhancement due to benefits of maturity • Ancillary expansion Stage 3 (we are here) Pursue regional expansion & expanding business on existing platform (ancillary) • Expand network to new countries • Develop strategic partnership for mutual benefits • Use strong brand to drive new business Stage 2 IPO Capital Raising and become publicly traded company • Strengthen financial sheets • Improve company credibility & rating • Ability to negotiate favourable terms with our suppliers Stage 1 Entry to market. Aggressive brand building & recognition • Introduction to the
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