Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Back in the 1900s Thai National Airlines was the only airline that could fly in the main routes of Bangkok Chiang Mai with non-stop flights. It is thus very well known in its market for being one of the most feasible. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. The price will be cheaper if you book earlier. It was started in 1993, and the operations began in 1996. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. Furthermore. Before we get started, lets get to know the company a little more. The increasing cost has made it impossible for the company to offer low prices and remain profitable. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. The company was observed to initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for the organisation. 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. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. 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 Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. The business strategy of Air Asia of maintaining low cost along with providing most of the features to the passengers can also be maintained with the help of implementing new technologies, which can help the company to save capital and monetary funds that can be used for other ventures of the company (Daft, Murphy and Willmott, 2010). Your email address will not be published. The content on MBA Skool has been created for educational & academic purpose only. Relative Price. Low Cost Model: Low cost operations and fixed costs . The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. AirAsia was named as the best low-cost airline company in the world for 9 consecutive years at the Skytrax World Airline Awards. Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. 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). The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. Air Asia is known for treating its employees and customers well. They may force to continue their operation even they are facing losses in order to cope with fixed costs. Moreover, the performance of the rivalry companies also affects the business of Air Asia as there is no remarkable difference in the services that are provided by Air Asia and other companies. As the rivalry is strong, Airasia may constant in price reduction to compete with them. This results in significant reduction in the cost as the commission fee paid to travel agents are saved and can be used to maintain the facilities and services of the company (Pinto et al., 2015). Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest The bargaining power of buyers is strong when the switching cost of airlines is low. But the company is only operating its business only in 25 countries. 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. 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). They may compete in term of their route offering that Airasia does not fly. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. This increases the probability of people to avail of airline services frequently. Find useful insights on AirAsias company details, tech stack, news alerts, competitors and more. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. Similarity in product offering. They truly contribute their lifelong learning in allowing students to succeed in their academics. 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. Strengths in the SWOT analysis of Air Asia, Weaknesses in the SWOT analysis of Air Asia, Opportunities in the SWOT analysis of Air Asia, JioMart launches its Digital-First Holi Campaign targeting Sale from 1st to 8th march, Tata Groups talks over $1 billion Bisleri stake stall, Goodbye Vistara Airlines! Below are the top 3 competitors of Air Asia: 1. Many airline companies have entered the airline industry and they have made the market very competitive. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. As there are adequate options available for passengers to choose from, at the similar price as Air Asia, the company needs to focus on the amenities and hospitality services it provides to the customers. Currently, the priority for the company is to maintain the fundamental principle of keeping travel fair as low as possible so that people with weak financial status can also afford to travel in flights. Relative insignificant influence of buyer to supplier. Given the current situation, in-flight experience, especially hygiene matters a lot to customers so AirAsia should heavily market its hospitality and put customers at ease in availing their services. Just over 790 million shares were sold, including 592.6 million new shares, at MYR1.25 per share (USD39 cents), making it the largest IPO in Malaysia 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. The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. There are a lot of operations that are conducted by the company as it is spread across 25 countries in more than 160 destinations. 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. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. 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. Supplier concentration in a few hands. WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. 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). 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 opportunities for any brand can include areas of improvement to increase its business. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. AirAsia uses various media platforms for the marketing and promotion of its products and services. *You can also browse our support articles here >. Porters Five-Forces Model of competitive analysis is widely implemented by most of the company to progress their strategies in many industries. They hence practice geographic segmentation by focusing their services primarily in Asia, Demographic segmentation- Being a low-cost airline, they cater to people in the low to medium income group, Psychographic segmentation- Their main customer is the cost-conscious traveler, AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines, JetStar is providing more payment options or gateways to its customers, AirAsia provides services to 130 destinations as compared to JetStar which provides services only to 80 destinations, Malaysia Airlines generates 113% of AirAsias revenue, Malaysia Airlines also has fewer employees, at 7,159 compared to AirAsias 20,000, AirAsia is the low-cost airline leader in the Asian market, The company has subsidiaries in Indonesia, Thailand, the Philippines, and Japan, It boasts a fleet of nearly 300 aircrafts, AirAsias positioning is steady and consistent in being a low-cost airline. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. Following is the SWOT analysis of AirAsia: Lastly, lets take a look at AirAsias social media marketing presence as digital marketing is also a very important part of any companys marketing strategy. Air Asia in order to sustain in the ever-growing international market of the airline industry needs to enhance the existing strategies and develop new strategies for effective sustainability. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. Air Asia also engages itself in the promotion of the company through social media, print advertisements, and effective billboard advertising (Mele, Pels and Storbacka, 2015). Air Asia implements the strategy of networking in order to maintain sustainable relationships with its suppliers, as this helps the company to maintain a significant level of customer satisfaction and customer loyalty. Although the two major suppliers of aeroplane structures are Airbus and Boeing, the suppliers of other facilities required in an aeroplane, for hospitality services including food and merchandise, are available in adequate amount in the market. In addition, rates are determined by the class of flight, airline load factors, travel dates and days, and competitor pricing in the airline industry. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. Lets see how they compare amongst a few key indicators. It mainly constitutes of two major subsidiary airlines that includes MASwings and Firefly. Some writers often extend the acronyms to include legal and environmental factors. Do check. Malaysia Airlinesis a member of the oneworld airline alliance and it is also considered as the flag carrier of Malaysia which is head-quartered in Kuala Lumpur International Airport. In anchor pricing strategy, the company prices its services along with the tickets at a low price. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. Diversified in product offered. In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. Student Life Saviour 2022 - All rights reserved. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. 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. They should be used as a reference paper for further research. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. 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. WebAirAsia Bhd Fundamental Company Report Including Financial, SWOT, Competitors and Industry Analysis Enhanced SWOT Analysis (+ US$ 75.00) PESTEL Analysis (+ US$ 150.00) IFE, EFE, IE Matrices (+ US$ 125.00) Porter Five Forces Analysis (+ US$ 75.00) VRIO Analysis (+ US$ 175.00) Special Bundle, including all types of analyses (+ US$ Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Hi, I am an MBA and the CEO of Marketing91. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. The other supplier such as fuel supplier, merchandise supplier, or food supplier may be depend on market condition. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. Lets understand AirAsias competitors better with analysis. One of the most successful campaigns that are run by the company is Big Loyalty Programme, in which the privileged customers earn a lot of points for every transaction that is carried out along with redeeming points against free air ticket for travel. 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. Air Asia is known for its low pricing, as well as a no frill policy. The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. 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