MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. It allows its customers to choose the services they want without compromising on quality. Points to consider while selecting a topic for dissertation help. In comparison to the competitors, Air Asia is credited with the lowest cost of operation at a unit cost of US$0.023 per available seat kilometer (ASK) and a passenger breakeven load factor of 52%. No plagiarism, guaranteed! The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. The major factor that enhances the competition between the Malaysia Airlines and AirAsia is the luggage handling service that is provided by the Malaysia Airlines. Rise of Other LCCs in Market. The brand names and other brand information used in the SWOT Analysis section are properties of their respective companies. It was started in 1993, and the operations began in 1996. Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. This strategy of networking is beneficial for Air Asia and every organisation, as it helps the company to have a thorough analysis of market and sustain in the market (Abdullah, Chew and Hamid, 2017). The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. Disclaimer: The reference paper provided by Student Life Saviour should be used as a model paper, and are not intended to be submitted to the universities. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. Use Slintel to connect with top decision-makers at AirAsia. For example, they had a #responsibletraveller campaign on Instagram. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). Some of the key weaknesses of Air Asia are: Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Some factors like increased competitor activity, changing government policies, alternate products or services etc. Below are the Strengths in the SWOT Analysis of Air Asia : 1. The dynamic oil prices and service costs result into criticality for maintaining the low-cost flights as the organisation focuses on facilitating the most affordable costs to its customers (Daft, Murphy and Willmott, 2010). Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia India are its affiliate airlines, while AirAsia X, its sister carrier, focuses on long-haul routes. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). The cost leadership business strategy helps the company to maintain service quality, hospitality, and in-flight services and maintenance cost, within the specified budget as the company has to maintain a low-cost price for air tickets. Thailand s market currently has just two local LCCs, Thai AirAsia and Nok Air. AirAsia is a Malaysian low cost and no-frills airline company, which has a unique slogan stated as Now Everyone Can Fly. AirAsia adopted the Computer Reservation System (CRS), which enabled it to introduce the first-ever ticket-less travel facility and also provides features such as advanced boarding passes and online ticket booking. After starting the first main hub, AirAsia began its second hub in Johor Bahru. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. The increase in oil prices has critically impacted the operations of the organisation. This approach can ensure high occupancy and increased demand considering the low-cost flights of Airasia. AirAsia X has amplified its profit-making routes to multiple countries such as Australia, France, Iran, South Korea and New Zealand. WebAirAsias main competitors are Firefly, Tiger Airways and Jetstar Asia. Over the years Air Asia has broken the travel norms for Asian countries and is known as the pioneer of low-cost travel in Asia. Customers have access to market information. Air Asia has established itself as a strong competitor in the airline industry. Furthermore, landing charges can be identified as the negative aspect resulting into underdevelopment of the airline industry as the aviation sector is strictly obligated to abide by precise air rights regulations and norms. The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. High numbers of Competitor. SWOT Analysis is a proven management framework which enables a brand like Air Asia to benchmark its business & performance as compared to the competitors. Government regulations which target various aspects such as particular routes, landing permissions and share possession cause a drastic impact on the operations of the organisation. Let us now get into its marketing strategy. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. It is the largest airline company based on the concept of the Low-Cost Carrier (LCC) (Zhang et al., 2017). Luggage handling is the major factor that is considered by the customer as well as the airlines industries and in context to this fact, Malaysia Airlines provides average 15 kg of luggage, and it does not include any additional charges in case there is few more luggage than the normal capacity provided by the airlines. AirAsia has won many awards over the years. The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. The content on MBA Skool has been created for educational & academic purpose only. As increasing in the number of airline competitor such as Jet Star and Tiger Airways which are also promote low cost fare may decrease the shifting cost of the customer lead to decrease of Air Asias customer loyalty. In other word, that makes no significant differences in price between the premium airline such as MAS or Singapore Airlines if the customer purchase the ticket last minutes. Market segmentation is the concept where the potential target customers for any organisation are divided into groups or segments based on various characteristics. The new handles will reflect AirAsia's brand identity and values, and make it easier for customers to connect with the airline and the super app on social media. In order to stay ahead of the competition, the company needs to constantly invest in improving the additional facilities that make a difference to customers in todays times such as disposable in-flight meals, complimentary WiFi, entertainment facilities, and varied seat options. Tiger Airways. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. WebEducational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.) Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler) Rich Dad, Poor Dad (Robert T. Kiyosaki) Air Asia Strategic Analysis The paper is prepared to analyse the strategic management of AirAsia which is Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in Both these budget airlines are units primarily concerned with maintaining a low-cost position in the mature market.. History of Garuda Airlines. They may compete in term of their route offering that Airasia does not fly. February 2, 2019 By Hitesh Bhasin Filed Under: SWOT of Brands. The airline offers400destinations both local and international in25countries across the world. As reported in The Edge Markets in 2019, Khazanahs managing director Datuk Shahril Redza Ridzuan claimed that the airlines CASK was only 15 per cent to 20 per cent higher than AirAsia and was in fact lower than regional airlines such as Singapore Airlines, Thai Airways and Cathay Pacific. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. It must have a good relation with hotels and tourism companies around Asia. Marketing mix 7 Ps and SWOT analysis can improve the brand value of AirAsia and identify the strengths and weaknesses of AirAsia along with determining the future opportunities. Specific analysis has been conducted in order to analyse the market environment for AirAsia. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. But in 1993, Air Asia was established to finally connect Asia like no other airline company. The price offer by an airline company may not be fixed but it will depend on the time differences between the date of booking and flight. In the similar context, Air Arabia provides the facility of carrying extra baggage for passengers, and this makes Air Arabia a preferred choice over Air Asia. WebCompare AirAsia against competitors. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. Another reason for the threat of new entrants being low is government laws and regulations which pose restrictions on applying for permissions and license for operating an airline company. AirAsias mission is to be the best company, which ensures good relations between its management and employees, to make everyone fly with AirAsia by attaining the lowest cost, employ new technology to maintain highest quality products and enhance service levels. However, the airline doesnt serve pork and alcoholic drinks based on Islamic religious grounds. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. In anchor pricing strategy, the company prices its services along with the tickets at a low price. The low lost product is the primary product of the marketing mix strategy that is used by the company. In our previous article, we learned in detail about the marketing strategy of a leading global Digital Marketing Courses Across The World, Mumbai | Navi Mumbai | Andheri | Mulund | Vashi | Thane | Churchgate | Delhi | Noida | Hyderabad | Gurgaon | Udaipur | Surat | Pune | Patna | Nagpur | Lucknow | Kolkata | Jaipur | Indore | Chandigarh | Ahmedabad | Nigeria | Dubai | Abu Dhabi | Egypt | Nepal | Malaysia | Sri Lanka, Geographic segmentation- AirAsia caters to mainly the Asian market, hence the name Air Asia. The company cannot control a number of charges and costs which are regulated by government and airline authorities which may result in a significant loss in profits and consistency of the organisation. AirAsia was named as the best low-cost airline company in the world for 9 consecutive years at the Skytrax World Airline Awards. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. This reduces the chances of small or medium enterprises to enter this industry, and hence, the threat of new entrants for Air Asia is very low. The organisation can be witnessed to confront critical competition from the competitors who are facilitating similar costs and additional services and privileges which act as a drawback for the organisation (Man and Justine, 2005). Some writers often extend the acronyms to include legal and environmental factors. This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. The brand colours of Air Asia are red and white, which represent determination along with passion, perfection, and positivity to serve customers high-quality services at low prices (Mele, Pels and Storbacka, 2015). The company was observed to initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for the organisation. Strong Promoter 2. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. Pacific (Cebu Air Inc, 2012), AirAsia (AirAsia, 2011), and JetStar Airways (Jetstar Airways, 2012) all reporting increase in revenues and recording profits over the previous year. Fixed cost incurred by an airline company may include the finance cost, hire purchase and staff cost while this fixed cost may be reduce through increase in market share. There are several companies associated with AirAsia including AirAsia X, Tun Hotel, Tune Monkey, AirAsia Berhad, Thai AirAsia Co. Ltd., AirAsia Japan Co., Ltd., PT Indonesia AirAsia (India) Limited. Focusing on providing air travel without frills at substantially lower prices, AirAsia has managed to achieve lower prices to attain high passenger loads, market share, and profitability by eliminating provision of gained a smart rating of 54 whereas Malaysia Airlines has gained the rating of 85 which, signifies the contrast of both the airlines in terms of acceptance of the services and feedback by the customers (Holiday.My, 2018). AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. It constantly delivers on this promise of affordability, It is extremely difficult to keep costs as low as possible due to fluctuations in fuel prices and increases in service costs, AirAsia does not have its own MRO facility, Cut-throat competition in its sector. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. All work is written to order. It is essential to choose the right set of employees for the organisation in order to maintain their position. Furthermore, competitive analysis has also been conducted for AirAsia in this report along with marketing mix 7 Ps and SWOT analysis. The price will be cheaper if you book earlier. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. Air Asia is smartly using its social media in building a direct relationship with its customers. Airasia had expanded its services provides to hotel booking as it already has its own hotel (tune hotel) which located not far away from its airport, and tour packages. AirAsia has been a successful part of the airline industry for over a decade. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. Hence, customer may access to the current airlines information which are available at all time, this has reduced the power of negotiation for airlines and producing a strong customers bargaining power. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Do essay writing needs professional writers? Porters five force analysis for Air Asia is as under: Bargaining power of Supplier Analysis of the bargaining power of suppliers is crucial for any organisation, as with the help of this, an organisation manages the capital and makes decisions regarding financial management (Thomas and Housden, 2017). As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. In the increasing demand of the airline services, there is a tough competition in the airline industry because of the varied numbers of the competitors that are providing the airline services. Furthermore. AirAsias mainproducts and servicesare KL Syariah Index of Bursa Malaysia, low price Santan meal, and duty-free merchandise, drinks, food, and other menus if you buy on board. The major issue with maintaining low ticket price is the increasing competition in the airline industry. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. There are several brands in the market which are competing for the same set of customers. The branding of the logo of Air Asia is essential for them. Low Cost Model: Low cost operations and fixed costs . Lets take a look at AirAsias marketing mix. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. The airline brand should exploit these circumstances. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. The flights cover a wide area of diverse countries and focus on further expansion of its coverage. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. Knowing the increase of competition in the market, AirAsia applied the adaptation process (Hanan & Freeman, 1984) by expanding its operation to long haul services to various destinations. In contrast to this, Jet Star Airways has more types of planes that are provided to its customers that includes A320, Bombardier Q300, A321 and Boeing 787 Dream Liner; whereas AirAsia offers only two types of planes to its customers, which are A330 and A320. They may compete in term of their route offering that Airasia does not fly. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Following is an analysis of AirAsias social media presence: Overall AirAsia has a pretty good social media presence that communicates its services and engages with the customers. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. This model is widely implemented by various organisations for the development of their strategies in the industry. As per the results of the survey, AirAsia has. Performance of rivalry. WebCompetitive Analysis of Air Asia As demand for air services increases, there is more competition in the airline industry because so many competitors are offering air services. The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. With the increasing number of services by different competitors, AirAsia has also expanded its facilities including the tour packages and hotel booking services that help the company to sustain in the market. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. AirAsia is one of Asias most successful low-cost carriers. They have achieved effective targeting to this segment by making their brand synonymous with low-cost services. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }). However, the company has employed more than20,000employees to manage its worldwide operations. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Along with these improvements, if AirAsia continues to deliver to its target market effectively, it will surely maintain its differentiated position in the industry. Student Life Saviour 2022 - All rights reserved. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. Airlines allowed to increase ight operations, with strict Maximising revenue in a reduced capacity/ competition 2020 environment 14 74,642 mil 45-60% of 2019 85% of 2019 Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. Tony Fernandes was recognised as for his outstanding work in AirAsia, and he was awarded by the International Herald Tribute Award and he also became the Malaysian CEO of the year in 2003 (Roy, 2014). Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. 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