synergy in ingormationtechnology and telecommunications, which support AirAsia Internet and mobile phone bookings. ShinCorp. allows subscribers of the Shin mobile phone flagship, Advanced Information Service, being able toreserve tickets through its short-messaging service (SMS). AirAsia with its politically powerful backermay well grow up to bite. This helps it open the Thailand market he IPO strengthens AirAsia balance sheet, further cuts its existing lowcosts at 2.5 US cents per ASK and accelerates our growth plans throughout Asia. The IPO also allowsAirAsia to expand its fleet of 18 Boeing 737-300s. Low cost airlines are anticipated to have greater potential in Asia as there are many Asian cities with apopulation above one million people each as well as a rising middle class population. This growth of middle class in Asia provides a huge market potential for AirAsia to grow. However, as the market isbecoming larger, more airlines or new comers would like to get a piece of the action. For example,Budget airlines, it is estimated, will capture
Air Asia was re-launched in the aftermath of the September 11 events - Aircraft costs were declining at that time
An attractive market:
- Geographical conditions = Pacific Asia is made up numerous islands and poor road network
- more than 558 million inhabitants (ASEAN countries) and over 3 billions with China and India - urbanization (many cities have more than 1 million inhabitants) and growth of the middle class population
- Differentiation strategy by simplification
–Attractive and competitive ticket price, even compared to bus and road fare –
Bargaining power of customersBargaining power of supplierThreats of potential entrantsThreats of substitute productsRivalry within industry Medium
Many customers but high sensibility to prices.
Develop-ment of substitute productLow
Hard competition between Airbus, Boeing, ATR and othersSizeable Full...