Liked our work? This strategy encourages the customers to choose Air Asia over any other airline company. Continue reading more about the brand/company. 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 operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. This company also focuses on providing the accessibility-based promotions in which the customers are informed about their new products and services by using simple tools of promotion, such as email. 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. Another strategy that the company will implement in the future is networking. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. 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. The company is observed to possess a significant reputation among the competitors, customers and the markets of the establishment. In the context of this fact, the loyalty of the customers of Air Asia has been decreased because of the increasing competitors of Air Asia in the airlines, such as Jet Star and Tiger Airways. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. 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. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. The Air Asia X mainly focuses on the long-haul routes (Yarimoglu, 2014). In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). It mainly constitutes of two major subsidiary airlines that includes MASwings and Firefly. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. In accordance with the increased demands, the options available for flying has also increased, and hence, the bargaining power for buyers is examined to be high for Air Asia. This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. It allows its customers to choose the services they want without compromising on quality. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. 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. Do check. The company provides its services to people of every age group of society, and to the people belonging to the medium and high ranged of income or financial status. The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. The case involves the AirAsia managed to become one of the most popular and profitable airline companies in the world by implementing visionary leadership and innovative business approach. 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). Webprice wars with competitors, taxes and duty imposed on the firms products. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. Strong Promoter 2. 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. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. The company is constantly using innovative solutions to provide low-cost transportation. Concentration of Buyers power in many hands. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. 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. 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. 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 company makes use of innovative solutions in order to provide low-cost aviation. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. 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. Air Asia is smartly using its social media in building a direct relationship with its customers. Find useful insights on AirAsias company details, tech stack, news alerts, competitors and more. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. Learn how your comment data is processed. In order to build buzz, cheap flight tickets are given out based on demand in the form of promotional schemes. AirAsia has won many awards over the years. 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! Free resources to assist you with your university studies! They may compete in term of their route offering that Airasia does not fly. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. They may compete in term of their route offering that Airasia does not fly. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). In addition to this, various political factors can be highlighted by influencing the operations and management of AirAsia which have been mentioned below. 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. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). Our academic experts are ready and waiting to assist with any writing project you may have. Step 4 - Determine overall industry structure and test analysis of consistency. 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. 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. Air Asia Revenue : RM 10,638 million (FY 2018) (9.6% increase YoY) RM 9,710 million (FY 2017) Competitive Analysis of Air Asia SWOT PESTLE The SWOT analysis of Air Asia is presented below: 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. The acronym refers to political, economic, social and technological factors. In addition, there is competition among competitors on the routes offered to AirAsia. The company makes use of Yield Management System (YMS), Customer Reservation System (CSR) and Enterprise Resource Planning (ERP) system, which makes it more effective in providing its services, reduces overall cost, and eliminates inefficiency in their business. It is an international air travel carrier that started its flights in Malaysia and expanded its base globally. The branding of the logo of Air Asia is essential for them. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. The company develops the products and services that are convenient for its customers (Mele, Pels and Storbacka, 2015). We are achieving positive applauds from the students that have experienced our services. This model is widely implemented by various organisations for the development of their strategies in the industry. AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. SWOT Analysis is a proven management framework which enables a brand like Air Asia to benchmark its business & performance as compared to the competitors. Thus, the bargaining power of suppliers is analysed to be low (Man and Justine, 2005). Study for free with our range of university lectures! Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. It must have a good relation with hotels and tourism companies around Asia. This may makes the industry very competitive. They may force to continue their operation even they are facing losses in order to cope with fixed costs. Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia India are its affiliate airlines, while AirAsia X, its sister carrier, focuses on long-haul routes. 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. It has been reviewed & published by the MBA Skool Team. 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. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. But in 1993, Air Asia was established to finally connect Asia like no other airline company. It offered a new definition of affordable traveling with its Tagline Now Everyone Can Fly. Use Slintel to connect with top decision-makers at AirAsia. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. AirAsia participates in a lot of price-based promotions. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. 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. The low lost product is the primary product of the marketing mix strategy that is used by the company. AirAsia X has amplified its profit-making routes to multiple countries such as Australia, France, Iran, South Korea and New Zealand. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Today, well discuss the swot analysis of AirAsia. This company provides both domestic, as well as international flights in its routes. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. Furthermore. The major issue with maintaining low ticket price is the increasing competition in the airline industry. IT infrastructure of the organisation is utilised with a remarkable approach which enhances the operations and management of the organisation. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. Malaysia Airlines is also considered as one of the competitors for 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. The other supplier such as fuel supplier, merchandise supplier, or food supplier may be depend on market condition. Lets get into discussing their marketing efforts, starting with their marketing mix. 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. Interested in learning more? This comes with a lot of competition. AirAsia is a low-cost multinational Malaysian airline. As AirAsia expanded its services, the company expanded its facilities, including travel It is an international airline that began operations in Malaysia and has since expanded to include countries across the Asian continent, such as India and Thailand. 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). WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. 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 Competitors Specify up to 10 symbols: WH REGN XHR NVO VRTX HOG IHG rprx Sophisticated investors, who have witnessed many market ups and downs, frequently Following are the opportunities in Air Asia SWOT Analysis: 1. They should be used as a reference paper for further research. Well established LCC operating out of South East Asia, 3. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. This has been possible through excellent brand positioning. Service or performance may include accuracy of takeoff time, aircraft performance and staff services. The company constantly invests in improving the facilities it provides to the passengers and has introduced facilities, such as in-flight meals, complimentary WiFi, entertainment facilities such as separate televisions for passengers, and seat options including flatbeds (Abdullah, Chew and Hamid, 2017). However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. 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. High Switching Cost. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). 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. Looking for a flexible role? AirAsia also acquired recognition for improving its supportive and constructive management, as it received rewarded by Center Asia Pacific Aviation (CAPA) as the best airline of the year. They have official handles on all major platforms but for the purposes of this segment, we shall take a look at the main 3, which are Instagram, Twitter, and Facebook. This is due to Airbus is a UK based aviation company and their customer may come from around the world. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. Considering the competitive characteristic of Malaysian airline market, AirAsia has comparatively gained significant customer attention from the customers due to its affordable tickets and additional services. It is also because they are providing same service to the customer which is sent their customer to their destination by flight. Air India, Emirates, and many other Asian airlines have also started following the low-cost carrier strategy to attract market share. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. If you did, be sure to share, comment, and let us know! WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. Your email address will not be published. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. Air Asia is known for its low pricing, as well as a no frill policy. AirAsia is known for its low fares and no-frills policy. Air Asia has expanded their product line by not only sales ticket but also offering tourism package which is offering hotel booking while booking the ticket. Relative Price. AirAsia was named as the best low-cost airline company in the world for 9 consecutive years at the Skytrax World Airline Awards. Points to consider while selecting a topic for dissertation help. Has Positioned itself as the major LCC in SE Asia. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. The Threat of Substitution The international airline market has sufficient low-priced airline options available for passengers to travel. However, the company has employed more than20,000employees to manage its worldwide operations. Along with these improvements, if AirAsia continues to deliver to its target market effectively, it will surely maintain its differentiated position in the industry. Do essay writing needs professional writers? It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. We hope you found what you were looking for. The created segments consists of consumers who share similar interests, requirements and locations. All work is written to order. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. Tiger Airways. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. The following are the strengths of Air Asia : Weaknesses are used to refer to areas where the business or the brand needs improvement. Rise of Other LCCs in Market. Some writers often extend the acronyms to include legal and environmental factors. 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 bargaining power of buyers is strong when the switching cost of airlines is low. 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. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. It is essential to choose the right set of employees for the organisation in order to maintain their position. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. 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. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. The company was established in 1993, and the official operation of the company was started on 18 November 1996. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. Air Asia is known for treating its employees and customers well. 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. 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. However, the low-cost pricing strategy has allowed the company to target price-conscious customers in the Asian market. Some of the threats include: If you liked this article, we bet that you will love the Marketing91 Academy, which provides you free access to 10+ marketing courses and 100s of Case studies. Such events and teams have got millions of fan following, when an airline sponsors a team or an event, then it allows the company to reach new customers. Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in Supplier concentration in a few hands. 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). This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. Ease to switching. Jetstar Airways 2. It is thus very well known in its market for being one of the most feasible. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). Rising Fuel Costs 2. The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. 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. In 2002, AirAsia became the first airline company in the region that allowed passengers with the facility to pay for their bookings by using credit card. 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. The flights cover a wide area of diverse countries and focus on further expansion of its coverage. 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. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. Lets see how they compare amongst a few key indicators. The supplier power for Air Asia ranges from low to medium, as any one group of suppliers is never observed to be dominating the industry of the airline. Relative insignificant influence of buyer to supplier. Low Cost Model: Low cost operations and fixed costs . 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. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. Another important strategy that Air Asia will consider enhancing is improving Information Technology (IT) services in the company, as well as in the aeroplanes. Malindo will compete against AirAsia on all three routes. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! AirAsia is headquartered in Malaysia and provides transportation services to its passengers along with cargo and courier services. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. The opportunities for any brand can include areas of improvement to increase its business. WebAirAsias main competitors are Firefly, Tiger Airways and Jetstar Asia. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). Air Asia is known as one of the most low-cost airlines in the airline industry. 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. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. Customers have access to market information. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. Air Asia is a low-cost airline headquartered in Malaysia. It has a fleet of over 70 aircrafts, which fly to over 120 destinations and operates over 400 flights daily from its hubs situated in Thailand, Malaysia and Indonesia (AirAsia, 2018). 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. 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. But of course, there exist many competitors that require constant evaluation of strategies. 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