Operating and Information System: Case Study on Airasia

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WEEK 7 :Operating and Information System: Case Study on AirAsia

AirAsia creates values through the following vision is 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. Beside that, the AirAsia also creates the mission is to be the best company to work for whereby employees are treated as part of a big family, create a globally recognized ASEAN brand, to attain the lowest cost so that everyone can fly with AirAsia and the last is maintain the highest quality product, embracing technology to reduce cost and enhance service levels.

AirAsia makes the low fare model possible and create values through the implementation of the 6 key strategies. The first of the key strategies is Safety First, AirAsia wan to be partnering with the world’s most renowned maintenance providers and complying with the world airline operations. Beside that, the second key strategies is High Aircraft Utilization is mean implementing the regions fastest turnaround time at only 25 minutes, assuring lower costs and higher productivity. Low Fare and No Frills are also is AirAsia’s key strategies, Low Fare and No Frills is mean providing guests with the choice of customizing services without compromising on quality and services. Another key strategies is Streamline Operation, this key strategies is make sure that processes are as simple as possible. Beside that, Lean Distribution System is offering a wide and innovative range of distribution channels to make booking and traveling easier. The last of the AirAsia’s key strategies is Point to Point Network is to applying the point-to-point network keeps operation simple and lower costs.

Business process and operation in the AirAsia is has fostered a dependency on Internet technology for its operational and strategic management, and provides an online ticket booking services to traveler online. In todays globalize economy, information technology has driven fundamental changes in the nature and application of technology in business. The implementation of information technology in its value chain provides powerful strategic and tactical tools for AirAsia, which if properly applied and used, could bring great advantages in promoting and strengthening the competitive advantages. Moreover, AirAsia has currently adopted information technologies strategically to integrate the operations and coordinate all the business and management functions. The followings are few system implementations that AirAsia has done in its marketing and sales activities as well as operation activity in the value chain.

The lowest airlines like Air Asia attending low cost require high efficiency in every part of the business and maintaining simplicity. Therefore every system process must incorporate the best industry practices. The key components of the LCC business model are High aircraft utilization, No frills, Streamline Operations, Basic Amenities,Point to point network, Lean Distribution System. Aircraft is kept flying as much as possible, the first flight starts as early in the morning commercially possible and the final flight typically ends at midnight.

A fast turnaround is critical to ensure time spent of the ground is minimal – an airline makes money when the aircraft is flying, not when the aircraft is parked. AirAsia’s turnaround time is 25 minutes; compare that against 1 hour for a FSC. On average, AirAsia’s utilization per aircraft is 12 block hours per day, a FSC might do about 8 block hours per day. No frills such as no free food and beverages, free seating, no refund and no loyalty programme. Making the process as simple as possible is the key of a successful LCC. Single type of aircraft, single class seating, Standard Operating Procedures.

Secondary airports. Low cost carriers mostly fly to and from airports that are not necessarily the busiest, for example, London - Stanstead rather than London - Heathrow....
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