Case Study Air Asia

The Airline industry is a large and constantly growing industry. It facilitates economic growth, international investment and world trade and is therefore central to other industries as well for globalisation. There are various forces which lead to globalisation in airline industry. Key drivers of change are forces likely to affect the structure of an industry; sector or market. (1).

This assignment will also show how the macro environment has a major influence on Mango airlines as well as how does Mango airlines position themselves compare to the competitors.

The airline industry has been a major factor in the globalization of the world economy. It connects the sellers and the buyers as well as transports goods across countries. It also breaks the time and distance barriers. In the past, air travel was considered a luxury but it is now a common necessity.

In today’s business industry, the globalization process has become an important aspect and fundamental force. The elements that contribute to globalization is the environment, culture, regulation and technology and production. While the advancements globalization has increased greatly, so has the advancements in airline industry with their aircraft (Shevell, 1999). Globalization also provides a great amount of potential profits to nations and their corporations (Button, 2008). Air transportation has evolved into a major industry (Kroo, 1999). The airline industry’s continuously grows and is facilitated through its international investment, tourism, world trade and economic growth (Kroo, 1999).

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 micro environment affects the organization straight. Its most closely connected to the business .micro environment mainly reflects by Strengths, Weakness Opportunities and Threats (SWOT).

3) Domination on international routes: The Government of India has restricted the usage of traffic rights when flying international routes to Air India. This prevents other private carries from attaining competitive advantage in global market (Bhatia et. al 2003).

Another factor is the economic factor, airlines are affected with anything happening in the economy since it is a huge network. “The prolonged

The defendant of this case was AirAsia Berhad. The plaintiff was Rafizah Shima binti Mohamed Aris who was an employee of AirAsia Berhad.

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

Airline industry is the major engine powering the globalization of businesses and services. Prior to 1970’s, the airline industry was mainly owned and controlled by the governments in different countries. There was no free market competition as travelers have to make do with the services and prices available to them from the few airlines. But with the deregulation of the airline industry that swept across the world after 1970, entry barriers were lowered allowing new start-up of many airline companies, thus engendering competition in the airlines industry. This has led to competitions in various fronts, especially in prices and services provided onboard the flight. This competition has led to formulation of various business modules and the re-strategizing of the already existing and new start-up companies, in order for them to survive the new business environment. The operating environment of the airline industry continues to evolve, thereby presenting a significant challenge for the survival of the industry. Different models and frameworks have been formulated for analyzing the operating environment of various industries. In analyzing the operating environment, it is vital to indentify the different factors that might affect the organization cost, supply and demand. PEST (Political, Economical, Social and Technological) is one of the framework used for analyzing the macro-environment affecting organizations in a

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

Try to make a virtue out of product features that lead to low cost. Air Asia is a low cost airline but their services is good and better.

However, meals, pre-book baggage, seat assignment and extra services are not included in ticket of Air Asia, it is reasonable , at all. Furthermore, Air Asia offers a simple “no frills” service at fares that are on average notably lower than those offered by traditional full-service airlines. Modeled on winning low fare airlines such as the U.S.-based Southwest Airlines and Dublin-based Ryan air, Air Asia was established to produce a new aviation product in Malaysia, one that would develop air travel, and improve the local aviation market by providing very low fares so more people can fly. The company banks on the cost of running ‘bricks and mortar’ outlets and could reach national markets without having to extend a physical distribution network. Most essential was the company could save on customer service costs by enabling customers to serve themselves. Furthermore, Air Asia effectively adopted focus strategies by having developed a very well-organized and fully computerized system for its customers to book the air tickets through its website. Air Asia also have a high frequency of flights to most short haul and regional destinations in order to serve a wider market segment as well as to reduce the turnaround time in the ground between flights, which is 25 minutes compared to an hour for full service airlines. (Air Asia 2011) To

Air Asia operates in South East Asia in many countries with different languages. Each country has diverse cultures and religions. Co-operation in business is given more importance than individualism. Acceptance of laws and rules can vary. Corruption is rampant and the rules and regulations are not followed by passengers