Air Asia
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AirAsia is a low-cost airline based in Malaysia that primarily serves destinations in Asia. It was formed in 2001 when the Malaysian government took over and restructured the airline. AirAsia has since expanded to many countries in Asia and operates over 150 flights per week from 9 destinations in India. The airline focuses on keeping costs low through efficient operations, purchasing practices, and unbundled services to offer low base fares. It aims to be Asia's first low-cost carrier and has pursued a strategy of operating from secondary airports to reduce fees and encouraging light baggage to reduce fuel costs.
Air Asia
- 2. HQs : Kualalumpur, Malaysia Existence: Asian Countries Thailand, Malaysia, Singapore, India . Formation: Formed in Malaysia. Taken over from Malaysian govt. Got success within two yrs. Indian : Started in Trichy. They have extensive plan for India. 148 flights/week from 9 destinations. Low fares in comparison to competitors.
- 3. SERVICES- low cost carrier(LCC). ADD-ON SERVICES Courier service. Baggage supersize Cargo service. Pick a seat. Inter based megastore. Pre book meals. Holiday products. Air Asia merchandise. Booking services for Duty free sky shop. hotels. Entertainment. Rental cars. Medical care.
- 4. CUSTOMER SERVICE DELIVERY- TICKET BOOKING- MOBILE ONLINE INFLIGHT SERVICES- FOOD & BEVERAGES AIRASIA MERCHANDISE DUTY FREE SKY SHOP ENTERTAINMENT FLIGHT INFO. TRAVEL INFO.
- 5. SALES OFFICES Tiruchirapalli Chennai Bangalore Hyderabad Trichy Kolkata Cochin Trivandrum
- 6. Whats the Funda behind ? Cost Rs. 1.57/- Per seat per km as compare to Rs. 2.40/- for other airlines. Flying 17 to 18 hrs compare to Indian airlines hours 11 to 12 hrs . Employees 68 employees per flight Fuel Air Asia has hedged its jet fuel Capacity requirements for three years.
- 7. BUSINESS PLANNING Mission: Sustaining cost advantages while maintaining low-cost, high-quality airline status in the time of unstable oil price and heavy market competition. Goal Formulation: Decrease fuel and oil cost per ASK (Available seat per kilometer), more diversification in air transportation business and more price promotion for customers. Distinctive Competency: Superior workforce, Purchasing unit and Distribution channel.
- 8. MARKETING ANALYSIS CUSTOMER- AirAsia targeted the budget segment of south eastern Asias air passengers Channel: Multilingual website Telephone booking centre Sales office Travel agent Partnership with local bank and post office By sms for the first time in Asia
- 9. SWOT ANALYSIS STRENGTH: o Low operational cost o Effective distribution channel o Malaysian government support o Good alliances WEAKNESS: o Extra charges for baggage o Poor ticketing service OPPORTUNITY: o Asias middle class growth o Increasing importance of ASEAN route THREATS: o Volatile fuel price o Increase in cost of airplanes and its components for maintenance o Increasing competition
- 10. PEST ANALYSIS Political : Everyday low fare campaign of MAS was subsidized by Malaysia Government Economical: Availing opportunity from recessive market and growth of middle class in ASEAN countries Social: Tony Fernandez wore official red cap and T- shirt to official functions and gave mobile phone no. to all media representatives Technolgical: Having more fuel efficient airplanes and more tyre longevity.
- 11. OVERALL COST LEADERSHIP Operation & Maintenance: o Fuel cost reduction due to usage of Airbus 320-200 instead of Boeing 737-300 o Doubled no. of landing from same tyre o Less depreciation due to better maintenance by GE Engine Services and Volvo Aero o Less aviation and user station charge Service: o Thailands Shin Corp. helped in e-booking system in the alliance o Virgin group provided ticketing system in AirAsiaX HR Department: o Minimum no. of employee and most usage of workforce o To and fro journey on same day
- 12. OVERALL COST LEADERSHIP Purchasing : o Purchasing of new air planes on attractive terms Marketing: o Effective distribution channel o On time guarantee campaign for customer satisfaction Redefining Value Chain o Started offering travel insurance,. o Launched co-branded Citibank- Air Asia credit card
- 13. STRATEGIC PLANNING To be the Asias first low cost carrier AirAsia choose underused Kuala Lumpur International Airport in very low cost Took the leadership in implementing the strategy of no flight entertainment and no free meal in flight. It also started no frill concept in Asia which is considered legendary in it's field. For short-haul flights (less than 4 hours flight) it started returning on the same day to reduce crew accommodation cost and other allowances at the arriving cities. To save high slotting fees in large airport it focused on secondary airports. Allowed customers to prebook some hotseats for a certain fees by Pick A Seat Service from February,09 Started Checked Baggage Handling Fees for insisting passengers for light weight journey which can cause low fuel consumption
- 14. RECOMMENDATION On which route AirAsia has multiple flights in a day, narrow body flights of higher capacity may be used. e.g. : using of Airbus 380 (of seating cap 650) instead of two Airbus 330-300 To reduce no. of vacant seat use less capacity air planes More fuel economic air plane usage e.g.: using of Air340- 600 Must pay more attention for service channel as there is a huge customer complaints against very slow server for e- ticketing. It can diversify its business more in cargo sector and can use Airbus Bulega flights for economic model. Can be diversified more in the island countries like Japan, NewZealand etc. Can charge higher at peak time.
- 15. THANK YOU
Editor's Notes
- #10: .: Tiger Airways, Valu Air, Jetstar Asia, Nok Air, One-Two-Go, Firefly