AirAsia Airline As the best low-cost passenger. 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. High Switching Cost. 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. 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. AirAsia is known for its low fares and no-frills policy. They have achieved effective targeting to this segment by making their brand synonymous with low-cost services. The acronym refers to political, economic, social and technological factors. This has been possible through excellent brand positioning. They truly contribute their lifelong learning in allowing students to succeed in their academics. Rise of Other LCCs in Market. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. Government regulations are strict. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. Below are the top 3 competitors of Air Asia: 1.Jetstar Airways 2.SilkAir 3.Tiger Airways. A recipient of numerous awards Air Asia has been consecutively designated as the leading low-cost carrier in the Asian region. 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. The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. Interested in learning more? 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). The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. Hi, I am an MBA and the CEO of Marketing91. Your email address will not be published. Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. It allows its customers to choose the services they want without compromising on quality. 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. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. 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). 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). 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). 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. Strengths. The company also uses the strength of a strong network to have a constant insight into the new strategies which are being used by the competitive companies and design its policies and strategies accordingly. 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. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. 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. 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. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. And thus Indians meet their target requirements perfectly, Government charges and costs that are not in the control of the company may lead to severe losses in the future, With dynamic management and other operational costs, it becomes difficult to manage low-cost flights, AirAsia has 62.K followers on Instagram, 93.5K followers on Twitter, and 12M likes on Facebook, They post regularly on their pages, at least a couple of times a week, and maintain this consistency, They post a variety of content that aims at staying relevant in the minds of the customers, Their main strategy seems to be posting about exotic travel destinations with Call-to-Action, encouraging customers to avail their services in exploring these locations, The company also posts environmentally friendly content to echo the ethos of its brand. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). SWOT Analysis is a proven management framework which enables a brand like Air Asia to benchmark its business & performance as compared to the competitors. Air Asia is known as one of the most low-cost airlines in the airline industry. There is no product differentiation while the only different is the airlines packages offered. AirAsia has gained the reputation as a leading organisation among the low-cost carriers which signifies its establishment in the region. 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. High numbers of Competitor. Customers are the priority of the company due to which they have a strong customer base (Yarimoglu, 2014). A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. This has been possible due to the companys relentless communication through various marketing channels. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. AirAsia is a global airline with operations in more than 160 destinations in 25 countries. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. Do essay writing needs professional writers? As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. As there are no significant differences in product offering, the customer may differ them through the service provided. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. Has Positioned itself as the major LCC in SE Asia. The major reason is that the number and type of competitors remain the same for a long time,and this reduces the chance of an airline company at a lower level coming higher in the market.Different airline brands are known for various services, for instance, JetBlue is known for the quality of services and amenities and Air Asia is known for its low cost. 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 marketing mixs 7 Ps model is a marketing strategy tool that is used in a business in order to gain the feedback from the market in relation to marketing objectives. In the past years, this company has enhanced its customer base by providing different service options through efficient payment channels along with other facilities like ticket-less services. Concentration of Buyers power in many hands. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. Air Asia is a low-cost airline headquartered in Malaysia. 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. AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. Lets get into discussing their marketing efforts, starting with their marketing mix. Ease to switching. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. As there are approximately 59 low cost airline operating in the industry,it is always easily for the customer to look for alternative. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. The complaints received by the organisation are identified to be the consequences of low prices as the organisation may face critical problems in ensuring service and assistance with the low-cost flights. This strategy encourages the customers to choose Air Asia over any other airline company. Besides @flyairasia and Another activity considered under this strategy is marketing and sales. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. 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 build buzz, cheap flight tickets are given out based on demand in the form of promotional schemes. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. The company will increase the current IT facilities used in the aircrafts to enhance the facilities provided to the customers. Basic things to know before seeking help in assignment. AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines Find useful insights on AirAsias company details, tech stack, news alerts, competitors and more. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. It would be a strong competitive edge to AirAsia after the pandemic ofcovid-19because the purchasing power of the people has dropped significantly. 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. Best regards from Kazakhstan.My name is Ainash. Due to few suppliers in market, this has increasing the bargaining power of supplier. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. The company was established in 1993, and the official operation of the company was started on 18 November 1996. 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. Following are the opportunities in Air Asia SWOT Analysis: 1. 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. 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. WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. Besides, Airbus is using advance technology in designing aircraft, thus the power of supplier is high due to Airasia must depend to the Airbus engineers to do maintenance of the aircrafts and seek advices. Your email address will not be published. Due to competitive in airline industry and protects on national airline, MAS which facing losses in these year, it is quite difficult to apply for licensing and permit for operating airline company. Air Asia PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. The bargaining power of buyers is strong when the switching cost of airlines is low. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. February 2, 2019 By Hitesh Bhasin Filed Under: SWOT of Brands. AirAsia has been facing the competition with the varied existing low fare airlines that include Jet Star Airways, Tiger Airways, JAL Express and Air Arabia. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Continue reading more about the brand/company. The opportunities for any brand can include areas of improvement to increase its business. Switching Cost is low. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. 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). Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. 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 According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. Hence this concludes the Air Asia SWOT analysis. This model is widely implemented by various organisations for the development of their strategies in the industry. 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 fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. This involves a detailed analysis of their actions and how these would affect the future strategies of AirAsia Flying Low Cost with High Hopes. This article has been researched & authored by the Content & Research Team. AirAsia is a low-cost multinational Malaysian airline. 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