E-Commerce Strategies for Airasia

1576 Words Dec 25th, 2011 7 Pages

Low cost per average seat kilometer

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.

Low distribution cost

AirAsia focus on Internet bookings and ticketless travel allowed it to lower the distribution cost.

Attractive ticket price

With the average fare being 40-60% lower than its full-service competitor, AirAsia has been
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E-Commerce-Allowing Malaysia Airlines to reduce distribution costs by providing a convenient, easy to use Internet Booking Engine.

E-Ticketing and DCS-Moving from traditional paper toe-tickets by May 2008, in line with IA TA's requirements. This included an upgraded Departure Control System so that Malaysia Airlines could offer new self-service options to passengers, including kiosk and web check-in.

Revenue Integrity-To authenticate every booking ensuring it produces an actual passenger upon departure, avoiding the revenue leakage which occurred in the past.

Fares Management-To enable Malaysia Airlines to distribute fares more efficiently around the world and to improve pr icing decisions.

A critical success factor was the ability to integrate all five work streams with other existing systems in place throughout Malaysia Airlines. SITA’s solution in a first for the region, and with a contract worth more than US$80million over a ten-year period, SITA has been undertaking a comprehensive overhaul of Malaysia
Airlines' existing passenger applications and services, covering the five work streams -reservations, e-commerce, ticketing and departure control, revenue integrity and fares management. To date, SITA has met the needs of Malaysia Airlines by implementing several Horizon solution components including:

Implementing SITA Ticketing and DCS around existing passenger applications, saving Malaysia
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