Airasia - Flying High with Low Cost Hopes

In the local region, Qantas managed to outweigh its competitor by gaining a toll of 65% compared to its competitor. Evidently this shows Qantas is the number one preferred airlines compared to other competitor airlines like Virgin, Tiger Airways and Emirates airlines. However the situation is not the same in South East Asian region as Qantas only managed to obtain about 15% of market share compared to likes of Air Asia who leads the market share with 60% in this region. Conversely, this is not a concern for the airlines as the airlines managed to generate revenue of 5 billion dollars, with a predicted passenger growth of 4.9% which is equivalent to 2.9 billion passengers by 2034.

pilots, and new next generation aircraft acquisitions to carry the airline proudly into the next 75

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

AirAsia X’s main strength is the low price that it offers for customers. For most airlines in the industry, it is extremely difficult to keep the price low for long-haul flights as the full services offered in most airlines increase the operating costs. In addition, X also benefited from the expansive network, infrastructure and customers that AirAsia already has that enabled them to grow fast with good financial outcomes. On the other hand, X’s main weakness is the technology. The website always crashes and the company doesn’t have its own database of customers. X also doesn’t enjoy from a strong relationship with the Malaysian Transport Ministry. This can be detrimental to the company as it finds competing with Malaysia Airlines in some profitable routes to be difficult. However, X has some opportunities. For example, in order to keep the low price ticket, cooperating with fuel companies which will offer low fuel price and increasing demand in low cost airlines will bring profits. The major threat for AirAsia X is the protectionist measures taken by the Malaysian government that prevented X from flying planes to some destinations with high demand. This would have been a very

The same applies for any “carriage contract” that comes along with any airline ticket when you fly commercial. Apparently, these contracts underscore that having a ticket doesn’t necessarily entitle you to a seat. In the national case of Dr. David Dao, who was callously dragged off a United Airlines flight in Chicago, his purchased ticket subjected him to United’s rules and regulations. United’s treatment of Dao revealed how the fine print can skewer the most basic human judgment and common sense. Once upon a time, flying was a fun mode of travel replete with elbow room and complementary elbow macaroni. Today, flying has been downgraded to strap-hanging in a subway car during an August evening rush hour. To date, no airlines charge for bathroom use – a potential additional money stream – but give them

Flying is usually understood to be a great, entertaining experience. It doesn't matter where you are traveling to, how many people are traveling, you still need to be aware of how to find cheap airline tickets to ensure that you can make your money stretch further. Some people come to a decision to take time off between school and college to journey the world. Knowing how to find cheap airline tickets will assist you have the trip of a lifetime.

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.

Next, one of the strengths for AirAsia company would be it has a very strong management team and also significant links with government and airline industry leaders. This can be said so is because the executive management teams are mostly built up by relevant industry experts and ex-top government officials. In addition, without the protection of national airlines brought about by deregulation, building alliances as strategy became necessary for many airlines to stay competitive and gain access to a global market too huge for any existing airline to dominate. There was a case where Shin Corp which is formerly owned by the family of former Thai Prime Minister which named Thaksin Shinawatra holds a 50% stake in Thai AirAsia. This has successfully helped AirAsia to open up and capture a sizeable

“If you’re providing service at no cost to the taxpayer, then you’re doing quite well” (Changing the Culture of British Airways, 1990, p. 3).

Airlines battle for competitive advantage by giving customers unbelievably low fares at an irresistible price.

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

The air service is used to be a luxury choice however, the air service had become a necessity now. Thus, the demand for air travel service have become relatively inelastic. In Southeast Asia, the aviation players carry on to post several of the highest growth rates in global aviation industry which is mainly driven by expansion in the Southeast Asia low-cost sector (CAPA, 2013). This shows that the market have high demand in air service. Hence, this forms an oligopoly market as a few of major airlines compete to have bigger share of market.

ANSWER 1: Low fare price is one of the main thing passengers/ fliers consider when looking to fly, therefore for most, low budget airlines are their first option. Passengers are willing to give up their comfort and other in-flight services such as entertainment and during their journey for low ticket prices. However, over the past few decades, operating long haul flights was not to the advantage of these budget airlines. The cost of fuel made it for the most part, took up a huge proportion of the costs needed to manage/operate these flights.

To understand and analyze an industry’s structure Michael Porter developed a model portraying every industry to be influenced by five different forces (Jobber 2004). According to Porter, these five forces are the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and the competitive rivalry.