AirAsia: “Now Everyone Can Fly” I. Introduction
AirAsia is a Low-fare airline company owned by Anthony Fernandes. The company had its beginnings since 2001 and has been growing rapidly ever since. Within two years, AirAsia has proven that low-fare airline models such as Southwest’s, Ryanair’s, and easyJet’s model would fare well in the Asian marketplace. Its success has even spawned numerous imitators and competitors. But the question still remains, can the low-fare model continue to succeed and grow in Asia?
With the corporate philosophy of “Now Everyone Can Fly,” AirAsia has paved the way for low-cost aviation through “innovative solutions, efficient processes and a passionate approach to business.” More people around the region are
…show more content…
Ryanair and AirAsia had negative comments about rude staff and bad customer relations.
For global expansion, AirAsia scored highest; they have expanded globally, adding long haul flights to their (as well as their subsidiaries) products. Ryanair only serves locally while Southwest serves in USA and Mexico.
AirAsia had the most extensive list of features including pre-order meals, online entertainment for long-haul flights, and a 15kg free check-in baggage weight. Ryanair charges for each check-in baggage but provides television screens for each passenger seat. Southwest Airline also has free check-in baggage; they have no entertainment systems; they serve nuts instead of meals. b. Opportunities
Long haul flight is a trial to get undeveloped market share. Offering low-fare long haul flights will tap into an entirely different market. This will cater to people with low budget but wants to travel outside the country.
Companies can differentiate themselves from traditional LCC model by adding customer services or operation as full service airline with low fare. The airline could add features (with extra charge) to be able to differentiate themselves from other low-cost airlines. This could include full meal offerings, entertainment devices, or on-air duty free shopping. “ASEAN Open Skies” allows unlimited flights among ASEAN’s regional air carriers (should have taken effect since December 2008). This is a good opportunity to offer new
On the downside, Spirit airlines do not have a lot of leg room for their customer comfort. Yes, Spirit airlines are relatively cheap; however, for each amenity they offer which include bag carry on, beverages, and food there is a price added to the airfare price. Spirit also does not have any entertainment aboard their flights for their customers’ enjoyment. This has made customers opt with flying with Spirit.
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
AirAsia is a low cost leader in Asia. However, the competitors for AirAsia are numerous and it is hard for AirAsia to combat with those competitors. Thus, AirAsia will spare no effort to compete with them by keep the costs low. This lead to the bad perception of the customers that budget airlines like AirAsia may compromise safety to keep the costs low and those accident cases, terrorist attack, and disaster happened before will affect the customer confidence and AirAsia may face the losses of customers.
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
Southwest just recently made an effort to become more of an international company. In 2011, they bought out AirTran Airways, and have been working the past few years to fully integrate AirTran and Southwest into a company that is one and the same. Beginning on July 1, 2014, Southwest began offering international service to Cancun, Mexico City, Cabo, Aruba, Montego Bay, Nassau, and Punta Cana (Southwest Corporate Fact Sheet - Corporate Fact Sheet - Southwest Airlines Newsroom."). These international flights are the first by the company but likely won’t be the last. In addition to adding international flights to their flight schedule, Southwest has also been trying to shift away from the low fare reputation that customers and competitors associate with the
Ask people who the major United States airlines are and Delta and US Airways immediately come to mind. What might surprise you to know is that Southwest Airlines a comparatively smaller airline is able to compete with these big two and in my opinion it is the best. In order to compete at a national level Southwest Airlines reimagined the airline business model by focusing on a personalized approach toward both its employees and customers. A key component of Southwest Airlines quality management philosophy is employees first. This approach has led to the lowest employee turnover amongst US air carriers and as a result some of the best customer service in the industry.
Most time of cost carries try to offer additional successful low benefit such as on time performance more legroom. better Airways has been very successful with low-fare Business Class, while Frontier and JetBlue offer live in-flight television. US Airways offers a first class product, and a very extensive route network including international destination. The first successful low-cost carrier was Pacific Southwest
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.
With relation with Southwest airline consciously and unconsciously Southwest airline earned the top spot for 2012.” Not only do bag fly free Southwest airline was the first airline to offer senior discounts, ticketless traveling, and services for air freight delivery to the common traveler. Southwest airline offers credit based on the number of trips with the airline instead of the total miles traveled also understanding the not how far you fly it’s how many times you fly with Southwest airline.
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
8. Competing airlines offer satellite radio in their passenger jets, newer and more technologically advanced jets with luxury items and some of competitors offer inflight meals adding luxury
Air Asia is serving three billion people who are currently poor understanding and connectivity, high fares. To work, whereby employees deal is part of a large family of best companies. In order to achieve the lowest cost, so that everyone can fly with Air Asia. Maintaining the highest quality of products. Embrace technology to reduce costs and improve service levels also aimed at implementing the 70 million passengers a year, from 2014 begin within six years. Moreover, set up the low-cost airline terminal at Kuala Lumpur International Airport into a regional hub for low-cost air travel. Last is planning to introduce more routes, increased frequency and development of existing one. A
The first successful low-cost carrier was Pacific Southwest Airlines in the United States, which pioneered the concept when their first flight took place on May 6, 1949. However, Southwest Airlines that began service in 1971 and has been profitable every year since 1973. With the advent of aviation deregulation, the model spread to Europe as well, the most notable successes being Ireland 's Ryanair, which began low-fares operations in 1991, and easyJet, formed in 1995. Low cost carriers developed in Asia and Oceania from 2000 led by operators such as Malaysia 's AirAsia, and Australia 's Virgin Blue. The low-cost carrier model is applicable worldwide, although deregulated markets are most suited for its rapid spread. In 2006, new low-cost carriers were announced in Saudi Arabia and Mexico.
To be able to adjust with stiff competition that keep increasing in the airlines market, airlines industries tend to come up with different approaches and strategies to be more competitive. Air Asia, like any other airlines adopt strategic approach to marketing and expand their market reach and give better and satisfying service delivery to their target market. Being an industry that considers differentiation strategy, Air Asia continue to focus on their low cost approach, frequently flights approach, guest convenience, ticketless services, easy payment channels, internet booking, reservations and sales offices, and authorized travel