Purpose and Topic
The purpose of this report is to conduct a SWOT Analysis of Asia’s largest low-cost airline, Malaysian carrier AirAsia. An extensive SWOT analysis is conducted to comprehend the Strengths and Weaknesses in the airline’s internal environment and respective Opportunities and Threats in the external environment. Methodology
The report has been compiled with the usage of various online sources, books and other industry-related documentations. Limitations
Major obstacles faced during the analysis were the lack of readily available statistics and data relating to the industry. Acknowledgement
I am highly indebted to anyone who assisted in the analysis and compilation of this report.
TABLE OF CONTENTSPAGE
LUCT COVER PAGE 1
TITLE COVER PAGE 2 FOREWORD 3
TABLE OF CONTENTS 4 LIST OF FIGURES 5 ABSTRACT 6
1.1INDUSTRY OUTLOOK 7 1.2COMPANY HISTORY AND BACKGROUND 8 1.3COMPANY OPERATIONS 10
2.0SWOT ANALYSIS – AIRASIA 12
2.4THREATS 15 3.0CONCLUSION 16 4.0RECOMMENDATION 17
LIST OF FIGURESPAGE
Figure 1 10
The report focuses on an elaborative study of AirAsia’s business environment to gauge the various challenges and prospects it is exposed to in the current highly competitive milieu. An internal study of the company has enabled to identify its core strengths and underlying weaknesses. Concurrently, various opportunities and potential threats have been recognized which may have a significant influence on AirAsia’s business operations. AirAsia’s most prominent strength lies in its highly profitable Low-cost Business Model. This is attributed to their relentless drive of dragging costs down through operating on a no-frills concept. AirAsia, however, has experienced difficulties in operating their flights on time leading to various directives from the government to improve their on-time performance. On the other hand, AirAsia has great potential in enhancing its passenger traffic spurred by the favorable growth of major Asian economies leading to a sizeable middle-class. On the contrary, rising oil prices will magnify its fuel costs which currently account for about 60 per cent of its annual operating costs. The paper further necessitates on the importance of expanding AirAsia’s revenue channels to create a more sustainable and comprehensive revenue model. A major overhaul of its service delivery process is required to overcome the troubles of on-time performance. Also, subsequent in-depth analysis of the emerging economies should be carefully carried out to capture the first mover advantage. Moreover, in minimizing the risk of rising fuel costs, AirAsia should consider maximizing its hedging policy.
The purpose of the report is to provide a medium of information sharing among various stakeholders of AirAsia. The report will also be useful for further research purposes by academicians. Various online sources, books and other aviation industry documentations were used in conceiving the report. 1.1INDUSTRY OUTLOOK
The cold reality is that the airline industry is difficult to gauge and complex in structure. Most markets eventually mature into intensely competitive arenas where very few players are able to earn consistent profits. Asian airlines have enjoyed a few years of healthy returns, reflecting relatively light competition and...