Airasia Corporate Strategy

Topics: Airline, Low-cost carrier, Southwest Airlines Pages: 8 (2750 words) Published: April 28, 2013
Part 2
1.0 Introduction
AirAsia, a famous low cost airline in Asia, as Malaysia second National Airline, provides a different type of service to benefit all citizens and worldwide travelers. Low cost airlines generally have several differentiate to the traditional carriers. For example, low cost airline implement ticketless travel, online ticket, no free food and beverages and etc. AirAsia provides low airfares flight to the travelers, offering 40%-60% lower than other airline. This low airfares flight meet AirAsia philosophy of "Now Everyone Can Fly" and their mission is to provide 'Affordable Airfares' without any compromise to Flight Safety Standards. AirAsia expanding rapidly since 2001, currently owned 72 aircrafts and flies to over 61 domestic and international destinations with 108 routes and operates over 400 flight daily. Today, AirAsia has flown over 55million guests across the region and continues to create more extensive route network through its associate companies. AirAsia become a worldwide famous low cost airline and not confine in just Asia region, AirAsia has been awarded “World's Best Low Cost Airline” by Skytrax in year 2012. Beside that they also received “2012 ATW Value Airline of the Year” at the same year. This proved AirAsia was a most success low cost airline in the world.

AirAsia become so successful airline in the world as they create values through the following vision and mission: Vision | * To be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares.| Mission | * To be the best company to work for whereby employees are treated as part of a big family * Create a globally recognized ASEAN brand * Maintain the highest quality product, embracing technology to reduce cost and enhance service levels * To attain the lowest cost so that everyone can fly with AirAsia|

AirAsia makes the low fare model possible and create values through the implementation of the following key strategies: 1. Safety First – Providing the service by partnering with the other well-known maintenance providers and complying with the world airline operations. 2. High Aircraft Utilization – Assuring lower costs and higher productivity by implementing the regions fastest turnaround time at only 25 minutes. 3. Low Fare, No Frills - Providing the quality services to the passengers. 4. Streamline Operations - Making sure that processes are as simple as possible. 5. Lean Distribution System - Offering a wide and innovative range of distribution channels to make booking and traveling easier. 6. Point to Point Network - Applying the point-to-point network keeps operation simple and lower costs.

2.0 Strengths, Weakness, Opportunities, Threats Analysis
2.1 Strengths
2.1.1 Low Cost Operation
AirAsia focusing on providing the flight service without frills at substantially lower prices, the company managed to provide lower prices to attract high passenger loads, seize the market share, and to gain profit by eliminating provision of costly in-flight services, selling tickets to passengers directly through online ticketing, and reducing the overhead costs, such as free seating and no free meal provided but passenger able to buy meal during the trip. Besides that, low aircraft lease rate, long-term maintenance contracts rates and low airport fees, allow AirAsia to provide the low airfares to the travelers. This helps AirAsia reduce the overheads cost and investments in equipment substantially in the absence of fringe services. A long-term maintenance contract with the lower rate compare to other airline help AirAsia increase their competitive advantage in the industry. One of the AirAsia’s philosophies was no compromise to Flight Safety Standards allowed the company to obtain reasonable rates on its insurance policies. Due to the high requirement of safety standards, increasing the passengers...
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