Air Asia

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STRATEGIC MANAGEMENT
(PMS 3393)
‘AIR ASIA’
Prepared by: Ahmad Izzuddin Bin Ahmad Zamri (4102005781) HaslindaBinti Ismail (4092008911)
MohdAzuan Bin MohdAbdKadir (4102008091)
Muhammad Khairil Anwar Bin Othman (4102004441) Nur An-NisaBintiRahmat (4071032881)
SitiAisyahBintiMohdYusoff( 4102001031)
SitiKhajirahBinti Abdul Aziz (4092008931)
Prepared for: Dr. HafsahBinti Ahmad

Submission Date: 22nd November 2012

Table of Content

Acknowledgement1
Introduction2
History3
The Vision, Mission Statement and Objective5
Value Strategy6
Business Model8
Competitive Advantages10
AirAsia Assumption12
SWOT Analysis13
The Air Asia 5 Forces Porter Model16
Air Asia Market Segments19
Five Years Financial Highlights22
Appendix24
References25

Acknowledgement

Alhamdulillah. Thanks to Allah SWT, whom with His willingness has giving us the opportunity to successfully complete this Strategic Management assignment. First of all, we would like to express our special thank to Dr. HafsahBinti Ahmad, a lecturer of Strategic Management who had guided us and also provide a lot of information regarding our assignment from beginning to the end of the semester and also the valuable advices that he gave to us during our lectures. We are really appreciating it. Deepest thanks and appreciation to our parents, family and all fellow friends for their cooperation, encouragement, constructive suggestion and full of support for the assignment completion, from the beginning till the end. Without the help and guidance from all of you, it will be difficult for us to complete this assignment. Thank you.

1.0 Introduction
Air Asia is a Malaysian-based low-cost airline. Air Asia is Asia's largest low-fare, no-frills airline and a pioneer of low-cost travel in Asia. Air Asia group operates scheduled domestic and international flights to over 400 destinations spanning 25 countries. Its main hub is the Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Its affiliate airlines Thai Air Asia, Indonesia Air Asia, Air Asia Philippines and Air Asia Japan have hubs in Suvarnabhumi Airport, Soekarno-Hatta International Airport, Clark International Airport and Narita International Airport respectively. Air Asia's registered office is in Petaling Jaya, Selangor while its head office is at Kuala Lumpur International Airport.

1.1 History
AirAsia was established in 1993 and began operations on 18 November 1996. It was originally founded by a government-owned conglomerate, DRB-Hicom. On 2 December 2001 the heavily-indebted airline was bought by former Time Warner executive Tony Fernandes's company Tune Air Sdn Bhd for the token sum of one ringgit (about USD 0.26 at the time) with USD 11 million (MYR 40 million) worth of debts. Fernandes turned the company around, producing a profit in 2002 and launching new routes from its hub in Kuala Lumpur, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as MYR 1 (USD 0.27). In 2003, AirAsia opened a second hub at Senai International Airport in Johor Bahru near Singapore and launched its first international flight to Bangkok. AirAsia has since started a Thai subsidiary, added Singapore itself to the destination list, and started flights to Indonesia. Flights to Macau began in June 2004, and flights to mainland China (Xiamen) and the Philippines (Manila) in April 2005. Flights to Vietnam and Cambodia followed later in 2005 and to Brunei and Myanmar in 2006, the latter by Thai AirAsia. On August 2006, AirAsia took over Malaysia Airlines’ Rural Air Service routes in Sabah and Sarawak, operating under the Fly Asian Xpress brand. The routes were subsequently returned to MAS wings a year later, citing commercial reasons. Air Asia's CEO Tony Fernandes subsequently unveiled a...
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