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In its dynamic and competitive environment, Air Asia has reaped great benefit by applying low cost advantage in its business model. By the combination of technology advancement in its selling and marketing strategy and also strong recognition of various languages used by its world customers, AirAsia has successfully developed its business into a widely known best performance company in Southeast Asia airlines industry.

Keyword:AirAsia, low cost carrier, web design, business model, strategy Analyzing Air Asia in Business Competition Era
2 FCU e-Paper (2009-2010)
Table of Content
A. Introduction 3
B. AirAsia Company 3
C. AirAsia Financial Analysis 5
D. AirAsia Web Design 6
E. Customer Segmentation 8
F. Value Chain Analysis 9
G. AirAsia SWOT Analysis 10
H. Porter’s five-forces analysis on AirAsia 10
I. Capabilities Analysis 13
J. Summary 14
References 15
List of Figures
Figure 1: The Unaudited Condensed Consolidated Income Statement of AirAsia 5
Figure 2: Homepage 6
Figure 3: Customer Segmentation 8
Figure 4: Value Chain Analysis of Airline Industry 9
Figure 5: Porter’s Five Forces 11
List of Tables
Table 1: AirAsia SWOT Analysis 10
Analyzing Air Asia in Business Competition Era
3 FCU e-Paper (2009-2010)
Analyzing Air Asia in Business Competition Era
A. Introduction
Doing businesses has become harder in today’s competitive era. Businesses are not just facing higher pressure from increasing number of competitors, but they also have to compete in more dynamic and complex environment. The competition wave, that is mostly induced by the digitalization and finding of more advanced technology, has forced every single business to adapt the best business strategy. The heavy competition is also happening in airlines industry. There are increasing number of new carriers with new business model which has changed the competition pattern in the airlines industry. O’Connel and Williams (2005) said that direct competition between full service airlines and no-frills carriers is intensifying across the world. The old business model of most airlines business focused on the full service, while the new business model focuses on using digital technology to make the business becomes more and more efficient, and thus, leading to cost advantage. Facing the digitalization era, Air Asia has emerged as one of the best performance company in airlines industry. In a 2007 article, Thomas discussed how, during the external and internal crises, Air Asia owns 51% market share of Malaysian airlines industry. This paper tries to analyze Air Asia as the rising star of today’s airlines industry. The analysis included the how Air Asia designs its web, and how it applies E-commerce issues on its business model.

B. Air Asia Company
AirAsia Berhard which is also known as AirAsia, is an airline company which provides air transportation service. AirAsia was established in 1993 and started operations on 18 November 1996. AirAsia has a very long ownership history. At the very first, AirAsia was founded by a government-owned conglomerate, DRB-Hicom. Later on, it was purchased by Tony Fernandez, former Time Warner executive on 2 December 2001. The company’s headquarter is in Sepang, Selangor, Malaysia. Its main base is the Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport. Their operations are carried out in Malaysia, with 3,474 employees. AirAsia is the leading low fare airline in the Asia and AirAsia is the pioneer of low cost fliying in Asia.

Analyzing Air Asia in Business Competition Era
4 FCU e-Paper (2009-2010)
AirAsia has been experiencing tremendeous expansion since 2001 as the largest low cost carrier in Asia. It flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily and their subsidiary companies located in Thailand and Indonesia. In Thailand, AirAsia has hub in Suvarnabhumi Airport and in Indonesia at Soekarno-Hatta...
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