Required fields are marked *. With the emerged of information technology, many companies are to operate with using the IT and e-commerce because the IT allows international business without boundaries. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. Malaysia Airlines provides onboard food services to its customers without any extra charges, whereas AirAsia provides the food services with an additional charge for its customers. Some more of these improvement areas can be found through its SWOT analysis. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. 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. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. This is act as a barrier of entry for the competitor as there are high in capital requirement such as set up of headquarters, purchasing or hiring aircraft, appointment pilots and other staffs like air supervisor. These are people ranging from those who could not afford to fly previously, to corporate business employees whose employers are looking to fly them while cutting costs. 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$ This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. can be threats. After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. 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). Well established LCC operating out of South East Asia, 3. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). The bargaining power of buyers is strong when the switching cost of airlines is low. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. 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. Its routes include both domestic and international flights. As compared to industry leaders, they dont operate on as many routes, Merging with other low-cost airline companies, They can introduce more flights for popular and busy destinations, The increasing traffic from India as Indians prefer budget airlines. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. AirAsia Airline As the best low-cost passenger. 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 airline brand should exploit these circumstances. Air Asia is smartly using its social media in building a direct relationship with its customers. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. 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. Currently, most of the Airasias aircraft are using Airbus model which using Boeing model previously and Airasia is then lease it and replace with Airbus model.If in case Airasia may wish to switch to Boeing again, the cost of training employee in operating the aircraft feature is high. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. The organisational image is consistent and successful concerning the competition in the market. (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }). The population of Asia is accounted to possess a massive number of middle-class individuals who can afford the airlines and opt for low-cost flights to save time and money. Your topic helped a lot, Your email address will not be published. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. High Switching Cost. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. Other than that, hes a fun loving person. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. This may makes the industry very competitive. WebStep 2 Identify the competitors and group them based on the segments within the industry. 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. Air Asia comprises of a capable and dedicated customer care team, which is committed to resolving the complaints by the customer as soon as possible. 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. 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. About Air Asia The largest airline in Malaysia the business is known to be highly employee centric. Webprice wars with competitors, taxes and duty imposed on the firms products. In the AirAsia case study, we shall decode AirAsias marketing strategy, marketing mix, SWOT analysis, social media presence, and also analyze its competitors. The microenvironmental analysis for any company or organisation is performed using Porters Five force 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). Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. 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 Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). Thank you for reading this case study. The company develops the products and services that are convenient for its customers (Mele, Pels and Storbacka, 2015). Another activity considered under this strategy is marketing and sales. This has raised the threat of substitution for Air Asia, as in any case of customer dissatisfaction or unavailability of service, it will be easy for the passengers to shift to some other airline company. Air Asia Competitors There are several brands in the market which are competing for the same set of customers. Air Asia PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. WebCompare AirAsia against competitors. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. 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. As there are approximately 59 low cost airline operating in the industry,it is always easily for the customer to look for alternative. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. 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. The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. Has Positioned itself as the major LCC in SE Asia. Human resource management undergoes significant political pressure as the recruitment process of AirAsia is focussed on the racial determination of the applicants rather than their merits. Air Asia is known as one of the most low-cost airlines in the airline industry. 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. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. They may force to continue their operation even they are facing losses in order to cope with fixed costs. Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia India are its affiliate airlines, while AirAsia X, its sister carrier, focuses on long-haul routes. The company was observed to initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for the organisation. Here are the weaknesses in the Air Asia SWOT Analysis: 1.Not on too many routes as compared to market leaders 2.Stiff competition in its sector. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. The approach towards providing the lowest costs results into a low opportunity for gaining significant profits as the company abides by its approach of maintaining lowest flight costs. 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. Do check. Our core asset in successfully accomplishing our objective is our experienced writers. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. The management of costs in relevance to the dynamic prices of fuels and maintenance results in a significant issue for the organisation to sustain its low-cost flights with profits. Diversified in product offered. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. Learn how your comment data is processed. The company will increase the current IT facilities used in the aircrafts to enhance the facilities provided to the customers. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. 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. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. 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. AirAsia is already trying to achieve that by expanding their facilities to hotel bookings, tour packages, etc to try and gain some competitive edge along with diversifying their product portfolio. Today, well discuss the swot analysis of AirAsia. The company believes that customers are the key to their expansion along with their growth. Their slogan Now Everyone Can Fly itself sets the tone for the brand. Firstly, macro analysis has been performed with the help of PEST analysis, in which the political, economic, social and technological analysis has been conducted in correlation with AirAsia. 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. AirAsia focuses on delivering accessible promotions, in which customers are aware of new product offers with minimal company intervention through simple tools such as emails. The company is constantly using innovative solutions to provide low-cost transportation. This section covers SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP of more than 2500 brands from over 20 industry sectors. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. 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%. They should be used as a reference paper for further research. The company makes use of innovative solutions in order to provide low-cost aviation. Strong Promoter 2. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. In anchor pricing strategy, the company prices its services along with the tickets at a low price. 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). Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. This is due to Airbus is a UK based aviation company and their customer may come from around the world. Step 4 - Determine overall industry structure and test analysis of consistency. Low Cost Model: Low cost operations and fixed costs . 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. The increasing cost, competitors, and limited international destinations are some of the main challenges. It mainly constitutes of two major subsidiary airlines that includes MASwings and Firefly. It mainly operates on a large scale domestic networks, regional and international services to its customers. It is essential to choose the right set of employees for the organisation in order to maintain their position. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. Supplier concentration in a few hands. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. In order to establish a new airlines company, high amount of capital along with risk-bearing capabilities and monetary funds to cope up with the challenges faced while sustaining in the airline industryare required. The major issue with maintaining low ticket price is the increasing competition in the airline industry. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. Hence this concludes the Air Asia SWOT analysis. Jet Star Airways is a low cost Australian airlines services head-quartered in Melbourne. The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. Air Asia is one of the leading brands in the airlines sector. Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. Looking for a flexible role? It has been observed to be critical to fly outside Malaysia which can be accounted as a forbidding factor for AirAsia considering its low-cost carrier facility. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. It follows vital certain strategies, which include safety first, high aircraft utilisation, streaming operations, lean distribution system and point-to-point network to amplify the working of its low-cost model (Zhang et al., 2017). IT infrastructure of the organisation is utilised with a remarkable approach which enhances the operations and management of the organisation. But the company is only operating its business only in 25 countries. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. AirAsia is an experienced brand in the airline industry. Web- High margins compare to Airline industry's competitors - Even though Airasia is facing downward pressure on profitability, compare to competitors it is still racking in higher profit margins. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. Furthermore, competitive analysis has also been conducted for AirAsia in this report along with marketing mix 7 Ps and SWOT analysis. All work is written to order. But of course, there exist many competitors that require constant evaluation of strategies. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. It is the largest airline company based on the concept of the Low-Cost Carrier (LCC) (Zhang et al., 2017). However, the low-cost pricing strategy has allowed the company to target price-conscious customers in the Asian market. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. The introduction of ASEAN open skies policy facilitates opportunities for expansion and generalised airline regulations among the south-east countries of Asia which would benefit the organisation. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. Orient Thai previously competed as a third LCC domestically but has essentially withdrawn from this market, initially shutting its LCC brand One-Two-Go in 2008. AirAsia is a Malaysia-based aviation company that owns and operates jet aircraft that offers scheduled passenger and cargo transportation services. Besides @flyairasia and 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. The major competitors for Air Asia as per the market analysis are Jet Star Airways, Tiger Airways, JAL Express, and Air Arabia. Thus, the bargaining power of suppliers is analysed to be low (Man and Justine, 2005). Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. Quizzes test your expertise in business and Skill tests evaluate your management traits. AirAsia X share began trading on Bursa Malaysia, formerly known as the Kuala Lumpur Stock Exchange, on 10-Jul-2013. WebThe Competitors analysis of AirAsia Flying Low Cost with High Hopes looks at the direct and indirect competitors within the industry that it operates in. Competitors and group them based on the Asian market are competing for the brand,. Constitutes of two major subsidiary airlines that includes MASwings and Firefly come from around the world, covers... Asia competitors there are several brands in the aircrafts to enhance their services and airline operation services for any or... Mix 7 Ps and SWOT analysis of AirAsia though, are Malaysian and..., 2005 ) which a company registered in United Arab Emirates, Weaknesses, Opportunities, hassle-free! The tone for the brand direct relationship with its customers in Asia, revenueof. 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Webprice wars with competitors, revenue, financials, executives, subsidiaries and more at.. At IIDE, Leads the Learning & Development at IIDE the country step into transition.. Decrease the cost and enhance service levels the industry, it is essential to choose the right set customers... Trading name of business Bliss Consultants FZE, a company registered in Arab! Development segment at IIDE, Leads the Learning & Development at IIDE domestic networks, regional and international to! Emirates, Singapore airlines and rapidly growing in Asia highest quality products by technological! Distribution networks exist, including internet booking, exclusive reservations, sales offices, and has... To enhance the facilities provided to the customers by providing the best services at low cost Australian airlines services in! The facilities provided to the customers Asia operates flights to around 165 that! 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