Preview

Airasia Marketing Analysis

Powerful Essays
Open Document
Open Document
4783 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Airasia Marketing Analysis
Chapter I: Introduction

1.1 Company Background

AirAsia Berhad, which is also known as AirAsia, is an airline company that provides air transportation service. The airline was established in 1993 and started operation 18 November 1996. A government-owned conglomerate DRB-Hicom originally founded it. They were having heavily indebted on December 2,2001. An executive from company Tune Air Sdn, Tonny Fernandes, purchased it. The company’s headquarters is in Sepang, Selangor, Malaysia. After Tonny Fernandes changes all the operation management in the company, AirAsia its now can expands and becomes the largest low fare airlines even since then. With a fleet of 72 aircraft, AirAsia flies to over 61 domestic and international destination. They have 108 routes and operate over 400 flights daily from hubs located in Malaysia, Thailand, and Indonesia. Today, AirAsia has flown over 55 million guests across the region and continues to create more extensive route network through its associate companies.

AirAsia believes in the no-frills, hassle-free, low fare business concept and feels that keeping costs low requires high efficiency in every part of business. Through the corporate philosophy of ‘Now Everyone Can Fly’, AirAsia has sparked a revolution in air travel with more and more people around the region choosing AirAsia as their preferred choice of transport. In the competitive airline industry, AirAsia keep improving their supportive and constructive management by being supportive and responsive in listening to its employee for any ideas for reducing cost. AirAsia is leading way for developing low cost airlines and its promises to revolutionize the international market place.

1.2 Industry Background

There is new concept of aviation industry that gives a new opportunity for everyone to fly. It called Low-Cost-Carrier concept. LCCs open a totally new product such as no frills, no food, no drinks, no spacious seat, no travel agent bookings, but a very low

You May Also Find These Documents Helpful

  • Satisfactory Essays

    History of Airasia

    • 582 Words
    • 3 Pages

    AirAsia was established in 1993 and began operations on 18 November 1996. It was originally founded by a government - owned conglomerate, DRB-Hicom (Diversified Resources Berhad- The Heavy Industries Corporation of Malaysia Berhad). On 2 December 2001 the heavily-indebted airline was bought by former Time Warner executive Tony Fernandes' 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 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. In August 2006, AirAsia took over Malaysia Airlines’ Rural Air Service routes in Sabah and Sarawak, operating under the FlyAsianXpress brand. The routes were subsequently returned to MASwings a year later, citing commercial reasons. AirAsia's CEO Tony Fernandes subsequently unveiled a five-year plan to further enhance its presence in Asia. Under the plan, AirAsia proposes to strengthen and enhance its route network by connecting all the existing cities in the region and expanding further into Vietnam, Indonesia, Southern China (Kunming, Xiamen, Shenzhen) and India. The airline will focus on developing its hubs in Bangkok and Jakarta through its sister companies, Thai AirAsia and Indonesia AirAsia. With increase frequency and the addition of…

    • 582 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    Airasia Company Analysis

    • 1210 Words
    • 5 Pages

    AirAsia is the leading low-cost airline company in Asia. The company provides transportation for passengers and cargo services across domestic and international markets from 97 destinations in 21 countries. It consists of over 8,000 staff and makes up a market capital approximately RM7.06 billion (AirAsia, 2012). AirAsia’s competitors are Malaysia Airlines and other national airlines. AirAsia has five Air operation’s certificates (AOCs) – Malaysia, Thailand, Indonesia Philippines and Japan (AirAsia, 2012). The company has market share for domestic and international, 60 per cent 40 per cent respectively (the star online, 2012). AirAsia has the highest profit margins in the global industry 20 % EBIT (Earnings before interest and tax) margins in 3Q 2012 (Centre for aviation, 2012). According to AirAsia‘s company annual report 2012, Company Net profit and company sale revenues ended 31 December 2011 were RM 553 million and RM 4.5 billion respectively. Thus AirAsia is the leader of low cost airlines in Asia. This essay will focus on Air Asia’s overview business from the past to the current period including origins and key developments. In addition, it will discuss strength, weakness, opportunities and threats analysis of AirAsia. In addition, it will discuss AirAsia’s likely future performance and give recommendations to its future business.…

    • 1210 Words
    • 5 Pages
    Good Essays
  • Good Essays

    Airasia Strategy

    • 7394 Words
    • 30 Pages

    AirAsia was established in 1993. It was originally founded by a government-owned company Hicom Berhad with a 75% interest and Mofaz Air with a 25% interest. Other than the initial capitalization, Mofaz Air did not participate in a number of subsequent cash calls by the Company. In 1996, the Company became Malaysia’s second national carrier, and officially commenced operations as full-service domestic airline with two aircraft. In December 2001, Tune Air acquired a 99.25% shareholding in the Company…

    • 7394 Words
    • 30 Pages
    Good Essays
  • Good Essays

    AirAsia wants to be the lowest short-haul airline in every market it goes in. To achieve the goal, it has some strategies such as lean cost structure, different ways of promotion, keeping safety, satisfying customers and developing human resources. AirAsia always tries to keep the operations simple and efficient to keep costs low. According to Fu Sen, an ex employee of Awair- the airline company bought by AirAsia , the tickets that have been booked online can printed by the customers or the customers can just remember the booking code and show their identity card for checking-in, so Air Asia can also save some amount of money that it should spend on thick ticket material. AirAsia also providing food, snacks and beverages on the plane, so customer can just buy what they want. By implementing this strategy, AirAsia can gain more profit from the sales of the food and beverages because it sells the products higher prices than supermarket or restaurant. Also according from Fu Sen, AirAsia also tries to keep the costs low by recruiting only members of workers needed and selecting only capable and hardworking workers, so each worker will have works to do and the company does not have to pay those workers who are not efficiently.…

    • 634 Words
    • 3 Pages
    Good Essays
  • Powerful Essays

    Airasia

    • 4769 Words
    • 20 Pages

    Prior to its take-over by Tune Air Sdn. Bhd. in 2001, AirAsia was owned by DRB-Hicom, a government-linked company (AirAsia, 2008). Its airline had not been able to take off and was eventually sold to Tune Air, literally for a song, for a token sum of RM1.00 or US$0.26 together with an accumulated debt of RM40 million (AirAsia, 2008). Tune Air was formed by Tony Fernandez and four entrepreneurs, some of whom had worked with the music industry which perhaps inspired the name of the company.…

    • 4769 Words
    • 20 Pages
    Powerful Essays
  • Good Essays

    In line with its growth and expansion plans, AirAsia has secured a 175 aircraft commitment with Airbus for its A320s. The 175 aircraft order will place AirAsia as the single largest customer for the aircraft in Asia-Pacific, and potentially one of the largest airline fleets in the region. On 23 of March 2006, AirAsia successfully moved its operations to the new Low Cost Carrier Terminal (LCCT). This is a major milestone as it is the first dedicated terminal for low cost carrier operations in the world. Besides that, they have achieved many more heights even in the past 2 year.…

    • 357 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Introduction to AirAsia

    • 10721 Words
    • 43 Pages

    Established in 1993 and officially started its operation on 18 November 1996, AirAsia is a low cost carrier (LCC) airline in the aviation industry. On 2 December 2001, the heavily-indebted government-linked commercial airline was bought over by the current Chief Executive Officer (CEO) of AirAsia, Tony Fernandes. From then, AirAsia cleared its former debts which worthed USD 11 million and became a profit-making low cost carrier.…

    • 10721 Words
    • 43 Pages
    Powerful Essays
  • Powerful Essays

    Airasia Marketing Case

    • 3154 Words
    • 13 Pages

    Contents ...................................................................................................................................................... 2 1 Introduction.......................................................................................................................................... 3 1.1 1.2 Case Overview ........................................................................................................................... 3 Low Cost Carrier Strategy Overview ....................................................................................... 3 Simple Product: .................................................................................................................. 3 Positioning ........................................................................................................................... 4 Low Operating Costs ......................................................................................................... 4…

    • 3154 Words
    • 13 Pages
    Powerful Essays
  • Powerful Essays

    Air Asia Advertising Types

    • 4327 Words
    • 18 Pages

    Starting with only two planes till now AirAsia owns more than 72 aircrafts. AirAsia become an award winning and the largest low cost carrier in Asia with leading low fare airline in the Asia. In 2003, AirAsia opened a second hub at Senai Airport in Johor Bahru near Singapore and launched its first international flights to Thailand. AirAsia has since started a Thai AirAsia subsidiary, added Singapore itself to the destination list, and started flights to Indonesia. Flights to Macau started in June 2004, while flights to mainland China (Xiamen) and the Philippines (Manila) were started in April 2005. Flights to Vietnam and Cambodia followed later in 2005. AirAsia flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs located in Malaysia, Thailand and Indonesia. To date, AirAsia has flown over 55 million guests across the region and continues to spread its wings to create more extensive route network through its associate companies, Thai AirAsia and Indonesia AirAsia. AirAsia is also spreading the amazing experience to exciting destinations…

    • 4327 Words
    • 18 Pages
    Powerful Essays
  • Good Essays

    Air Asia Current Issues

    • 554 Words
    • 3 Pages

    Established on 12 December 2001, AirAsia has been such a big phenomenon in airline industry especially in Asia. AirAsia with the ordinary symbol but with strong brand, “now everyone can fly” nowadays has been phenomena in Airlines industry. AirAsia is one of the airline companies who more focused with the strategy how to reduce inefficiency and make it low possible fare in the world. With the cost-efficiency, low complexity and profitability are always the cornerstones of building a strong business.…

    • 554 Words
    • 3 Pages
    Good Essays
  • Better Essays

    The development of Low-cost airline is growing fast in recent decades and this is a big challenge to the traditional full-service airlines. Lau (2005) states that the characteristics of Low-cost airline including point-to-point short haul network, quick turnaround and high aircrafts utilization and seat density. Also, they do not have frills cabin, direct channel of distribution, streamlined organizational structure and operation. For example, Airasia. Different from the traditional full-service airline, low-cost airline emphasize on their low fare policy, which is very attractive to the price oriented customers. Therefore, the low-cost airlines enlarge their industrial market by their low-cost operating model and thus the market shares of the traditional full-service airlines are decrease. According to Gross & Lück (2013), customers are divided into two groups including people need to travel to certain destination and are looking for suitable means of transport. And the other group comprises those whose destination choice is primarily influenced by availability and provision of affordable transportation opinions to a set of destinations. The low-cost airline is very successful in attracting travellers from the…

    • 1106 Words
    • 4 Pages
    Better Essays
  • Good Essays

    As we all know, AirAsia Berhad (AirAsia) is famous of its low-cost airfare. AirAsia is controlling excellently for parts of operation and distribution which both helping with keeping costs. Low cost principle that applied by AirAsia by eliminating provision of in-flight services that will definitely reduce the burden of high facility and overhead costs (Zhu, 2015). For instance, no frill or no luxury products will be installed inside the aircraft which means no free food and beverage and entertainment will be provided for the passengers. AirAsia has also practices simple boarding process with online reservation or online buying ticket to cut down the cost (Berhad, 2015). Thus, it won the “World’s Best Low Cost Carrier” award from Skytrax for 7 years in 2007, 2009, 2010, 2011, 2012, 2013, 2014 and 2015 (AirAsia, 2015). Obviously, its reputation even reverberates worldwide with its slogan “Now Everyone Can Fly” that attains the dreaming of everyone to travel around any corner of the word. By this strategy, AirAsia should able to set up business in Taiwan as its low cost budget airlines could benefit Taiwan passengers to save money for travelling.…

    • 971 Words
    • 4 Pages
    Good Essays
  • Satisfactory Essays

    Air Asia was established on 12 December 2001 by Mr. Tony Fernandes, the CEO of Air Asia and expanding rapidly since that. Air Asia is the leading low fare airline in Asia and Air Asia succeed to become the award winning, ‘Asia Pacific Airlines of the year 2003’ by Centre for Air Pacific Aviation (CAPA) in 2003. The vision of Air Asia is to serve the 3 billion people who are currently underserved with poor connectivity and high fare and to be the largest low cost airlines in Asia. Their mission is to create a globally recognized ASEAN brand, to attain the lowest cost so that everyone can fly with Air Asia, to be the best company to work for as employees are treated as part of a big family, and to maintain the highest quality product, embracing technology to reduce cost and enhance service levels.…

    • 611 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Air Asia essay summary

    • 3279 Words
    • 14 Pages

    The low cost structure of Air Asia is entrenched in the organization in their mission statement, which is to “To continue to be the lowest cost short-haul airline in every market we serve, delivering strong organic growth through offering the lowest airfares at a profit” (AirAsia 2011), and their vision statement “To be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with Air Asia creates values through vision and mission.…

    • 3279 Words
    • 14 Pages
    Good Essays
  • Good Essays

    Air Asia essay

    • 356 Words
    • 2 Pages

    In this study case of Air Asia, low price was the smartest marketing strategy Air Asia used. The company has done its research and found that there were a huge mass middle-class people that love to travel by plain. They targeted these people and offered them convenient and affordable air travel experience. By this approach, the company has satisfied its slogan “Now everyone can fly”.…

    • 356 Words
    • 2 Pages
    Good Essays