The Ascendance of Airasia Essay

Decent Essays
Case: The ascendance of AirAsia

1. What is the macro and industry environment for new budget airlines in the Asia- Pacific region? What opportunities and challenges are associated with that environment?
People in the Southeast Asian have low average incomes. The low average incomes should boost the cheap fares demands. In recent years, because of the government decreased the entry barrier of airline industry, more and more carriers entered the airline market. The Southeast Asian has very large populations; these carriers are attracted by the large number of potential travelers. This caused the Southeast Asian budget traveler increase very quickly. Otherwise, the fuel prices increased very quickly, and
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AirAsia’s focus on Internet bookings and ticketless travel allowed it to emphasize simplicity for the customer while securing low distribution costs. The revenue formula of AirAsia mostly followed the traditional low-fare approach.
Southwest Airlines:
Business-level strategy consists of their cost leadership and differentiation. Southwest Airlines was the leading pioneer in adopting a budget airline model. They are cost leaders by keeping company expenses down and providing low prices to the consumers. Their efforts are focused on a limited market segment such as cost-conscious business travelers. Southwest Airlines focus on the customer, having more of a “people strategy.”
Ryanair Airlines:
Ryanair Business strategy fits the Operational Excellent Model of high reliability and dependability with fewer flight cancellations, great punctuality and fewer lost bags than most airlines. It operates on a highly efficient basis too with high aircraft utilization, minimum staffing, and maximize their use of the Internet to keep booking costs down. Ryanair airlines focus on their operation.
But, these airlines companies also have similar strategies. They all focus on low-fare strategy, customers and services.

4. Did Fernandes weigh the range of political, economic and operational uncertainties and risks when he took over AirAsia? What risks might he have overlooked?

Yes, Fernandes weigh the range of political, economic and operational
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