The Development of AirAsia Airlines: How They Apply Blue Ocean Strategy

This report will be discussing strategic management to a company in the airline industry. This report will examine a chosen company’s strategic management and outline the stages. Strategic management is analyzing the situation facing the firm, also on the foundation of analysis formulating a strategy and lastly implementing strategy. Strategic management is the identification and the description of strategies that can be used by managers so as to attain better

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’s brand name is well-established in Asia Pacific. It expanded its route network aggressively in local and international destinations. At the end of 2002, it has covered all the major destinations in Malaysia and operated in over 25 countries and over 400 international and national destinations. Due to those aggressive expansion, AirAsia is able to penetrate and stimulate the potential market, and successfully gained the customers loyalty among the local and international market. Based on the research, most of the customers are loyal to AirAsia and willing to choose AirAsia again when they

The marketing plan for Oman air analyses the airlines market and situational analysis. The competitors, market strength, switching costs, the threat of new entrants, product differentiation, substitute strength and the purchasing power of buyers and suppliers are analyzed using porters five forces. The airline's strength and weakness (internal environment) and opportunities and strengths (external environment) are also looked into based on SWOT analysis.

Certain rates and charges are beyond the control of airline operators. For example, the airport departure, landing charges and security charges. These rates and charges is a big serious threat to all airlines especially budget airlines which intend to maintain their low cost strategy. Besides that, changes of certain aviation regulations and government policies can negatively affect AirAsia. The rules and regulations will increase the operation costs in producing value-added services and lead to a decrease in profits.

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.

Surcharges and baggage fees covered some of this but the airline was conscious that if it loaded on the full charge, it might find no demand on some flights due to a high base price (e.g. minimum or zero fare plus taxes, fees and surcharges). To offset this eventuality, AirAsia did a lot to improve operations and efficiency and also saw the benefits of the fuel efficient Airbus 320 help to maintain its low-fares brand position.

1.1 Product: At the point when Delta carrier changing their value, offering low airfares it pulls in clients toward them and afterward individuals initially favored that airline. Also, when aircraft give markdown on distinctive seasons it likewise draws in individuals. As indicated by the contextual investigation, aircraft known the moderateness of individuals and organization has numerous techniques; organization give most reduced conceivable charges to business explorers or relaxation voyagers in a basic straightforward manner. From the beginning, organization has altered expense on airfares regardless of the possibility that the traveler in plane is few or the high cost of flying a void plane

AirAsia was originally launched to compete with Malaysian Airline by offering low-priced air travels. It was, however, unable to liberalize the market to beat its rival and win and maintain its own niche. In 2001, Fernades bought AirAsia and hired experts in low-cost airline business to restructure the business model in use at AirAsia airline. This was the turning point for AirAsia. AirAsia is currently the second largest Airline in Malaysia and offers low-cost airfares. This is in consistence with their mission of providing affordable airfares and their vision that claims that everyone can now fly.

Focusing on the low-cost, long-haul segment - AirAsia X was established in 2007 to provide high-frequency and point-to-point networks to the long-haul business. AirAsia X’s cost

Air asia provides air travel at substantially lower prices is also known as no-frills or discount carrier. The company offers low fares according to cut out the "non-essential" service. The low cost of airline ticket is extremely basic because it attains high passenger loads and cut out all the extra. It means that the company does not provide meals, drinks, or snacks served free on board. The low cost airlines offer the economy flight which is narrow seat compare with wider business class seats. It also does not allocate seats for passengers as like "free seating" to make passengers board the flight early to get their seat. The additional of schemes or sale promotion activities do not offer by the company as the pricing structures are low. Low cost airline is related to the operating cost are kept to the bare minimum with low wages, low airport fees, low long term maintenance contracts rates, and low fares. So that, Air Asia is able to reduce the overhead and investment in equipments substantially absence of fringe services. Therefore, Air Asia has the operating cost compared to other competitor

The objective of this report is to study the external and internal environment of Indigo airlines. Planning, business and marketing strategies are also analyzed. This analysis has helped in putting forth recommendations that could help improve and sustain Indigo in the aviation industry.

After we have gone through the weakness of AirAsia, now we will discuss about the opportunities that AirAsia Company and their customer will get for being a low cost airlines in our country. The first opportunity is global exposition. The society in our country gets to explore the outside of the country at low cost despite of their financial status. Businesses can consider expanding their business by opening a new branch in foreign country while they are in vacation. They can use many ways to market their product for example by licensing, exporting, joint ventures and other method as long as it will bring profit for them. It is like a new step for our local businesses to enter international business. International businesses are “all business activities that involve exchanges across national boundaries” (Hughes, Kapoor, & Pride, 2012). It can increase our nation’s economic status when their product gains a lot of profit. They also can use these airlines if they have a meeting at farther place either in country or outside the country to save cost.

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.

AirAsia believes in the hassle free, no frills, low fare business concept and feels that keeping costs low needs high efficiency in every part of the business. Efficiency creates savings which are then passed to the customers so that they will able to purchase on the affordable price but still with a high quality of air travel. AirAsia targets people who want to travel around Asia for leisure or business purposes. The fares of Air Asia are relatively known as a lower fares than the other airlines. Selected strategy used by Air Asia targeting to passengers who are willing to travel without frills of meals, airport lounges or frequent flyer miles in exchange for fares which is