Air Asia Structure

Air Asia is the founder of low cost airlines in the Asia region since the advent of deregulation by Malaysian Government in late 90’s which in itself is a very important economic factor, without deregulation a low cost Airline cannot enter the market. For the reason that of Air Asia’s lower price, the factors affected are the

Airline industry is a unique and complex industry, thus without a good and right management, it is impossible for AirAsia to compete with the complex business environment. The management team of AirAsia consist of different background of executive management members team from different kinds of industry professionals and ex-top government officials. This ascendancy brings AirAsia to have a very strong connection with the government and the airline industry leaders. However, it is more concern in the management internally rather than creating competitiveness. The team is very famous in strategy formulation and execution. AirAsia formulated a brilliant blend of several proven strategies by other low cost airlines. Those strategies included Ryanair's Operational Strategy which emphasis on "no frill" and landing in secondary airport is a good starting point for the organisation. Second strategy like Southwest's People Strategy focus mainly on employee comes first strategy, while third strategy, EasyJet’s Branding Strategy is an excellent idea by linking the organization with other service providers like hotels, car rental and so

Certain rates and charges are beyond the control of airline operators. For example, the airport departure, landing charges and security charges. These rates and charges is a big serious threat to all airlines especially budget airlines which intend to maintain their low cost strategy. Besides that, changes of certain aviation regulations and government policies can negatively affect AirAsia. The rules and regulations will increase the operation costs in producing value-added services and lead to a decrease in profits.

Airasia want try to be the largest low cost airline in Asia and serving the 3 billion people who currently underserved with poor connectivity and high fares.

In 2010, views on whether low-fare airlines would continue to flourish in Asia varied. Three factors regulation, population demographics, and socioeconomic trends -drove this calculus. Although the target consumer base for AirAsia was enormous -more than 500 million

In 2001, AirAsia was founded by Tony Fernandes. After six years, Fernandes realized the company should create a airline separated from AirAsia to focus on the low cost long-haul market which he called AirAsia X. Azran Osman-Rani was appointed to the become the CEO of the newly established company. The company had an initial success by being the first mover. However, there were some problems that they had to face along the way as they were in a completely new market using an untried business model. One of the main challenges for the company is the protectionist measures taken by the Malaysian government to protect the national airline, Malaysia Airlines (MAS). The other major problem is the limitations on the general

The organization’s environment describes the atmosphere inside and outside of the organization and how the entity responds to the conditions. The company should understand how these forces drive the organization and in which direction. With this knowledge, the organization will be able to plan and make adjustments as necessary.

Centralization refers to the degree in which the decision-making is centralized. Departmentalization can be classified as functional structures where groups are classed together based on their functional similarity. They also define functional structures to be very efficient with minimal redundancy, and appropriate in stable and predictable environments.

Air Asia 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. 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, Air Asia X, Thai Air Asia, Indonesia Air Asia, Philippines Air Asia and Japan Air Asia.

Air asia provides air travel at substantially lower prices is also known as no-frills or discount carrier. The company offers low fares according to cut out the "non-essential" service. The low cost of airline ticket is extremely basic because it attains high passenger loads and cut out all the extra. It means that the company does not provide meals, drinks, or snacks served free on board. The low cost airlines offer the economy flight which is narrow seat compare with wider business class seats. It also does not allocate seats for passengers as like "free seating" to make passengers board the flight early to get their seat. The additional of schemes or sale promotion activities do not offer by the company as the pricing structures are low. Low cost airline is related to the operating cost are kept to the bare minimum with low wages, low airport fees, low long term maintenance contracts rates, and low fares. So that, Air Asia is able to reduce the overhead and investment in equipments substantially absence of fringe services. Therefore, Air Asia has the operating cost compared to other competitor

An organizational structure is the outline of a company’s framework and guidelines for managing business operations. An organization 's structure and its degree of centralization or decentralization depend on a number of factors, including the size of the organization and its geographic dispersion. In a very large and diversified organization, it is unlikely that a handful of people will possess all the resources to achieve all goals and objectives of the enterprise. As a result, it becomes impractical to concentrate power and decision-making authority at the top. Similarly in a geographically-dispersed organization, a centralized approach will not be the most efficient, as the people with the most authority will be unable to directly supervise operations on a day-to-day basis.

In this term of our discussion we’re talking about business environment. It’s like an overview of the whole business environment. Simply environment of a business means the external forces including the business decisions. They can be forces of economic, social, political and technological factors.

AirAsia focused on ensuring a competitive cost structure as its main business strategy. It has been able to achieve a cost per average seat kilometer (ASK) of 2.5 cents, half that of Malaysia Airlines and Ryanair and a third that of EasyJet. AirAsia can lease the B737-300s aircraft at a very competitive market rates due to the harsh global market conditions for the second-hand aircrafts because of the September 11th event in 2001.

AirAsia believes in the hassle free, no frills, low fare business concept and feels that keeping costs low needs high efficiency in every part of the business. Efficiency creates savings which are then passed to the customers so that they will able to purchase on the affordable price but still with a high quality of air travel. AirAsia targets people who want to travel around Asia for leisure or business purposes. The fares of Air Asia are relatively known as a lower fares than the other airlines. Selected strategy used by Air Asia targeting to passengers who are willing to travel without frills of meals, airport lounges or frequent flyer miles in exchange for fares which is

Daft (1997) states that failure to do so may result in unsatisfied stakeholders withdrawing their support, leading to serious implications for the organization.