Airasia Strategic Management Report

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AirAsia Strategic Management Report

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SWOT analysis of AirAsia

Firstly, Air Asia has indeed a strong management team. This is clearly known as it has very strong links with the governements and airline industry leaders.This is partly contributed by the diverse background of the executive management teams which consists of industry experts and ex-top government officials. For example, Shin Corp (formerly owned by the family of former Thai Prime Minister - Thaksin Shinawatra) holds a 50% stake in Thai AirAsia. This has helped AirAsia to open up and capture a sizeable market in Thailand. With their strong working relationship with Airbus, they managed to get big discount for aircraft purchase which is also more fuel efficient compared to Boeing 737 planes which is being used by many other airline. Secondly, the management team is also very good in their strategic formulation and execution. The strategy that they have formulated at the beginnings was a clever blend of proven strategies by other low cost airlines is US and Europe. They are Ryanair’s operational strategy (no frills, landing in secondary airport), Southwest’s people strategy (employee comes first) and Easyjet’s branding strategy (linking with other service providers like hotels, car rental). Thirdly, AirAsia is a brand name which is very well established in Asia Pacific. Besides the normal print media advertising & promotions, AirAsia’s top management also capitalised on promotions through news by being very “media friendly” and freely sharing the latest information on Air Asia as well as the airline industry. For example, their partnership with other service providers such as hotels and hostels, car rental firms, hospitals (medical tourism), Citibank (AirAsia Citibank card) has created a very unique image among travellers. Alliance with Galileo GDS (Global Distribution System) that enables travel agents from around the world to check flight details and make bookings have also contributed to their string brand name. Air Asia’s local presence in few countries such as Indonesia (Indonesia AirAsia) and Thailand (Thai AirAsia) have successfully “elevated” the brand to become a regional brand beyond just Malaysia. The links with Manchaster United (one of the world’s most famous football teams) and AT&T Williams Formula One team have further boosted their image to a greater extend beyond just the this region. Fourthly, AirAsia is also known to be a low cost leader in Asia. With the help of AirAsia Academy, AirAsia has successfully created a workforce which is veryflexible and high committed and very critical in making AirAsia the lowest cost airline in Asia. Lastly, their excellent utilization of IT have successfully contributed to their promotional activites; such as email alerts and desktop widgets which was jointly developed with Microsoft, as well as being able to keep costs low by enabling direct purchase of tickets by customers therefore saving on airline agent fees.

Air Asia does not have its own maintenance, repair and overhaul facility. Although it may have been a brilliant strategy when they first started with Malaysia as their only hub and few planes to maintain, they now have hubs even in Malaysia, Thailand and Indonesia with over 100 planes currently owned and many more to be received in the coming years. Therefore, AirAsia have to ensure proper and continuous maintenance of the planes which will also help to keep the overall costs low. Thus is is a copetitive disadvantage nt to have its own mainteance facility. Also, AirAsia have gradually received alot of complaints from customers on their services. For example, the typical complaints...
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