Business Strategy of Airasia

The “ Battle Of The Air” has been used to describe current situation in the airline industry. The emergence of “ No Frills “ discount carriers such as Air Asia, Mahlindo, Firefly have threatened the survival of the traditional giants such as MAS, SIA, Thai Airways in the APAC regions and even the Big Boys across the continents such as United, Delta, Continental, Luftansa, Emirates and US Airway ( Myron J.Smith, 2012 ) face competition

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

AirAsia is a strong company with several unique strengths that offer itself could not be defeated by others competitor companies.

Strategic Planning: They try to do a lot of promotion and low-cost air ticket because Airasia company want to help everyone can afford the price to buy their air ticket to travel all around the world.

Power rests with the suppliers in the form of price and quality of supplies. Suppliers can increase the price or lower the quality of their goods and services. The power of supplier in the Indian airline industry is immense because of the three major inputs from the supplier are all affected by the external environment. These 3 factors and the power of supplier for each component is explained below.

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

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

Air travelling is obviously considered as a very large industry: socially, economically, and politically. It is continuing to expand and has been

The power of suppliers is also analyzed and the relationship between the buyers and suppliers is determined. Managers can create strategies to reduce the cost of suppliers and create an efficient supply chain by this analysis.

The implications of this analysis are that the focus on the Chinese market is justified. The Chinese air travel industry is booming, and indeed this is fueled by that country's rapid growth and the increased demand for

The growth of airline industry in any country is directly proportional to its GDP growth; the greater the business activity, the more air travel and the higher the GDP of the country. The demand

Supplier Power: the fewer suppliers’ choices you have and the more help from suppliers you require will help to determine how powerful your suppliers are. Suppliers of key parts and supplier with unique products and services can drive up the price of your materials or services. Also the cost of switching from one supplier to another will all contribute to the supplier power.

Strong management team – Air Asia Bhd has a very strong management team with strong link and connections with the government and airline industry leader. This is because Air Asia consist of diverse background of the executive management teams which include of different kind of industry expert and professional and ex-top government officials. For an example, Shin Corporation (formerly owned by the family of former Thai Prime Minister which name – Thaksin Shinawatra) has hold a 50% of share in Thailand’s Air Asia. This also help Air Asia to grab a huge market in the Thailand. Beside that Air Asia has strong working relationship with Air bus, which help them to purchase aircraft with big discount. The aircraft which the Air bus purchase

Having recognized and established numerous suppliers, manufactures are now able to substitute suppliers and provide consumer with several options. Therefore, supplier power is considered to be relatively lower in the automobile industry.

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