Air Asia Structure
Introduction
AirAsia is the airline industry started based on the low cost carrier (LCC) concept in Malaysia. The low cost concept is introduced in the year of 2001 with the belief that “Now Everyone Can Fly” by Tony Fernandes. AirAsia was first established in 1993 and began its operation on 18 November 1996. In the year 2001, Anthony Fernandes (or known as Tony Fernandes) bought the airline which is suffering a loss. It was re-established as the low cost carrier after the bought over. AirAsia’s vision is to be the largest low cost airline in Asia and serve the 3 billion people who are currently underserved with poor connectivity and high fares. Their low fare model is made possible through the implementation of the key strategies including Safety First, High Aircraft Utilisation, Low Fare, No Frills, Streamline Operations, Lean Distribution System and Point to Point Network. Since its re-establishment, AirAsia had won several rewards and one of the most significant awards is being the World’s Best Low Cost Airline for 4 consecutive years (AirAsia 2012).
The Low budget fares are structured in the way that all fares are quoted one way to allow customers the flexibility to choose where and when they would like to fly. It also adopts a simplistic fare structure based on the time value relationship for seats. The earlier a person book the ticket, the cheaper the fare will be. The first few tiers are targeted to value conscious passengers so that they can get extremely cheap tickets if they book earlier. Once the revenue collected is sufficient to cover all the operational cost of the flight in the mid tier bucket, the system will then move on to the top tier fare bucket where the prices began to bring profits to the organization (AirAsia 2012).
Diagram 1: Low Cost Structure
Tony Fernandes was able to transform an airline which is in debt until it success and able to generate profits for the company after the re-establishment in the year 2001. Besides, it also allows
AirAsia is the airline industry started based on the low cost carrier (LCC) concept in Malaysia. The low cost concept is introduced in the year of 2001 with the belief that “Now Everyone Can Fly” by Tony Fernandes. AirAsia was first established in 1993 and began its operation on 18 November 1996. In the year 2001, Anthony Fernandes (or known as Tony Fernandes) bought the airline which is suffering a loss. It was re-established as the low cost carrier after the bought over. AirAsia’s vision is to be the largest low cost airline in Asia and serve the 3 billion people who are currently underserved with poor connectivity and high fares. Their low fare model is made possible through the implementation of the key strategies including Safety First, High Aircraft Utilisation, Low Fare, No Frills, Streamline Operations, Lean Distribution System and Point to Point Network. Since its re-establishment, AirAsia had won several rewards and one of the most significant awards is being the World’s Best Low Cost Airline for 4 consecutive years (AirAsia 2012).
The Low budget fares are structured in the way that all fares are quoted one way to allow customers the flexibility to choose where and when they would like to fly. It also adopts a simplistic fare structure based on the time value relationship for seats. The earlier a person book the ticket, the cheaper the fare will be. The first few tiers are targeted to value conscious passengers so that they can get extremely cheap tickets if they book earlier. Once the revenue collected is sufficient to cover all the operational cost of the flight in the mid tier bucket, the system will then move on to the top tier fare bucket where the prices began to bring profits to the organization (AirAsia 2012).
Diagram 1: Low Cost Structure
Tony Fernandes was able to transform an airline which is in debt until it success and able to generate profits for the company after the re-establishment in the year 2001. Besides, it also allows