Value Chain Analysis - Airasia

Page 1 of 9

Value Chain Analysis - Airasia

By | April 2011
Page 1 of 9
Value Chain Analysis of AirAsia
The value chain analysis is used to evaluate the value of each particular functional activity that is added to the organisation’s products or services as seen in Diagram 1 [pic]

a)
Logistics
This involves all areas of receiving, storing of inputs when producing outputs. So far, AirAsia only operates on a single type of aircraft, the Boeing 737-300. Based on a report published by Aero Connections in 2004, that particular model was the best selling commercial jet of all times due to its efficiency and cost effectiveness. AirAsia also has 1382 employees and they received proper on-the-job training workshops so that they can perform multiple roles effectively within a simple and flat organisation structure. b)

Operations
It processes inputs to provide valuable products/services. AirAsia has always been stringent about standards and procedures. AirAsia is aware that maintaining its passenger safety is of paramount importance – as indicated in the surveys in the United States and Japan. Based on the company’s 2003 annual report, AirAsia had joined ventures with GE Engine Services for a business alliance that allows the latter to be in charge of maintaining all AirAsia’s aircraft engines in the next five years. AirAsia had also managed to achieve good operating benchmarks in terms of flights on time and baggage handling where in 2004, the company registered 88% and 99.9% respectively. c)

Outbound Logistics
This involves delivering products/services into a distribution channel or to the final destination. As of late 2005, AirAsia operated 32 Boeing 737 aircraft that run over 60 routes across Southeast Asian regional network. Not only that, its aircraft interiors are also outfitted with signature red carpeting and plush leather seats to enable its guests to travel comfortably. In addition, it was also reported in prominent journals and magazines such as ABJ and AWM that many customers felt that AirAsia’s cabin crew demonstrated...