How Do You Think the Asian Passenger Air Transport Marketplace Will Shake Out? What Lessons Can Be Drawn from the North American and European Experience?

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.

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).

The Airline industry today offers services to nearly every place of the globe. The following economic factors that include consumer behaviour, currency rate, purchasing power of consumers, oil price plus the inflation plays key role in deriving the country’s economy. According to (Macmillan & Tampoe 2000), Airline industry itself is a leading economic force in terms of both its effects on associated industries for example aircraft manufacturing, operations and tourism. In this regard, this paper discusses the economic factors that affect the decision, the board of Air Asia needs to consider before acquiring 10 units of Air Bus model A350-1000 to increase its fleet of long haul airplanes.

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

From the figure 2 It conclude that is competitive advantage of Air Asia Airline that have over than other competitors in the airline industry. Air Asia is not full services airline which using the low cost carrier business model. Air Asia have limited of passenger service (e.g. No meals) because almost of Air Asia flight is short-haul , point to point and have more frequency flight that can reliable. They can earn more money from passenger when passenger want special services (e.g. Baggage , Select seat). Air Asia have more standard fleet of aircraft and they can used high aircraft utilisation. Finally, Air Asia have many employees that have skilled full and they always focused on management

In the past 10 years, the demand of travelling between Australia and China keep increasing at a high rate, especially after 2009 (fig 1) [International Airline Activity—Time Series. 2015]. Due to the rise in demand, major airlines such as Qantas China Eastern and China Southern have a massive expansion in terms of no. of flights and route network. With annual passengers of around 850k, China has become a key source market for Australia. Airports are also trying to attract Chinese travelers. For example, in Sydney airport every Chinese New Year, Terminal 1 would celebrate with Chinese-Themed declaration, launching simplified Chinese site and deployed Chinese-speaking Ambassadors to assist Chinese customers in Terminal 1. China aviation industry is absolutely one of the largest and fastest growing economies.

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

With the advancement of technology, traveling around the world is no longer a privilege to wealthy people. Tony Fernandes, the owner of AirAisa, pointed out that the raising middle class in Asian countries starts to be able to afford air travel for the first time (Grant, 2013). To the people who often have budget constraint while traveling such as students and social freshmen, it is more likely for them to go for short-haul or medium-haul trip rather than the countries with longer flight length and higher prices. The low-cost carriers (LCC) capacity share boosts significantly in Southeast Asian countries such as Indonesia, Thailand, Malaysia, Singapore and the Philippines from 3% in 2001 to over 50% in 2012 (CAPA, 2013).

On 27 December 2006, AirAsia's CEO Tony Fernandes unveiled a five-year plan to further enhance its presence in Asia.[7] In the plan, AirAsia will strengthen and enhance its route network by connecting all the existing cities in the region and expanding further into Indochina, Indonesia, Southern China (Kun Ming, Xiamen, Shenzen) and India. The airline will focus on developing its hubs in Bangkok and Jakarta through its sister companies, Thai AirAsia and Indonesia AirAsia. Hence, with increase frequency and addition of new routes, AirAsia expects passenger volume to hit 18 million by end-2007.

The concept of Air Asia being the lowest cost airline carrier has been embedded into most of consumers mind through consistent media advertising and branding. They believe in low fare business model and emphasises that keeping their cost low requires high efficiency in all areas, therefore creating savings which passed on to their passengers in order for reasonable air travel.

• Urbanization: 7 out of the top 10 most populated cities in the world (>14 million) are predicted to be in Asia by 2015, according to the UN.(xv) • Over 80% of AirAsia’s tickets are sold on-line; thus, eliminating travel agent fees.

AirAsia should stick to its vision to run long-hauls because the company has the capacity to offer these flights at lower costs than competitors. An amalgamation of the AirAsia and AirAsia X brands will reduce brand confusion. However, it is important to expand strategically to keep their LCC strategy strong. We suggest that AirAsia limits its long-hauls to countries with favourable weather conditions and also to countries with a similar culture and

If we can look at advertising side, AirAsia used information technology to make customers easy find the flight they wants. AirAsia has also used Online-Booking System to buy or just booking for flights. It has good way promotion and offers with the low-price surely, some information we can accessed as soon. All the things we

Air Asia is a Malaysian economic airline acquired by Tune Group in 2001. Before acquisition it was underperforming, but Shuk-Ching Poon and Waring (2010) state that in 2006 the airline company had a fleet of 35 Boeing and Airbus aircraft. The major success of the company is due to the low-cost carrier (LCC) business model. Major features of this business model include low service, point to point mode of travel, heavy utilisation of aircraft, ticketless reservation and flexibility in staff services. The airline company has carried 45.6 million passengers across 199 routes to 98 destinations across 17 countries (AirAsia Berhad, 2014). Furthermore, the various other services offered include flight bookings, low fair finder, customised travel, travel insurance and premium membership options (AirAsia.com, 2016a). The main market of Air Asia is in Malaysia, the market share in Malaysia is 46%, 19% in Thailand, 11% in Indonesia and 1% India (AirAsia Berhad, 2014). According to CAPA (2016a) the major competitors of Air Asia include Malindo Air, Cebu Pacific, Thai Lion Air and Thai VietJet. Furthermore, AirAsia Berhad (2014) show that the company has operations in countries such as Mauritius, Malaysia, Phillipines and India. This essay will briefly describe the profit and revenue situation of AirAsia, and then it will analyse the effect of the external environment factors. Finally a recommendation is provided to reduce the effect of such

A young Asian brand gone global, Air Asia is the World’s Best Low-Cost Carrier and the Airline of the Year for 2009 & 2010. Being the best in the industry and the top digital brand in Asia, Air Asia now flies to over 70 destinations in 19 countries. In general, the findings show that most of the respondents agree that the price of their Asia’s ticket is reasonable and it is making flying possible for everyone. The main finding is to find out that why do so many people fly with Air Asia. Based on the data collection from the questionnaire and the bar chart show in appendices 2, there are 86% of people who know about Air Asia airlines. Toward this analysis we obviously know that the popularity of Air Asia in Malaysia. Besides that, there is 76% of people had fly with Air Asia before and the major passengers were among teenagers. This shows that the air ticket of Air Asia can be