AIR ASIA ANALYSIS REPORT

Topics: Low-cost carrier, Airline, AirAsia Pages: 11 (1670 words) Published: August 24, 2015
PART 1: CURRENT SITUATION

A. Current Performance
Air Asia continued to expand in terms of networks and capacity. Revenue for the year of 2013 is RM5.11 billion, which marked an impressive 3.4% increase from RM4.95 billion achieved in 2012. Unfortunately the impact of a stronger US Dollar against Asean currencies impacted their profit margins, leading to a dip in operating profit, which stood at RM1.01 billion

B. Strategic Posture
Mission
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 Maintain the highest quality product, embracing technology to reduce cost and enhance service levels

Objectives
Aims to carry 70 million passengers a year, within six years starting from 2014. Turn the low-cost carrier terminal at the KL International Airport into the regional hub for budget travel. • Plans to introduce more routes add frequencies and develop the existing ones.

Strategies
Playing the cost reduction game in order to maximize the lowest operation cost. Relocating the operations of AirAsia from the Low-Cost Carrier Terminal in Sepang to the new KLIA2, this has more space and infrastructure to offer better and more exciting service. Open a new bird nest in different countries.

PART 2: STRATEGIC MANAGERS
A. Board of Director
The board of director consists of eight people which are 2 Non-independent non-executive directors, 4 independent non-executive directors, 1 executive director CEO and 1 non-independent executive Director GCEO.

B. Top Management
Top management are promoted from outside AirAsia by their respective skill and experienced in the industries. The teams are very experienced in the industry.
PART 3: EXTERNAL ENVIRONMENT

EFAS table
External Factor
Weight
Rating
Weighted Score
Comments
Opportunities
A first Choice flight alternative during economic turmoil

.15

4.0

0.60
First choice in the alternative of travelling since this company offers low-cost airfares. Promote Malaysian tourism
.10
3.0
0.31
In return will increase the company’s revenue.
AirAsia can tap on a lot of opportunities within the South-East region. .05
2.0
0.10
Huge potential for customers that consist of foreign workers from neighboring countries such as Indonesia, Myanmar and Vietnam. Relocating AirAsia from LCCT to the new KLIA2.
.15
4.0
0.60
More space and infrastructure to offer better operations and more exciting service. Online Market
.05
2.5
0.13
AirAsia can market to a much wider audience for relatively little expense Threats
Economic recession

.10

3.5

0.35

Reduces the urge for people to travel by air as it is the most costly alternative for travelling. Emergence of new- entrance in the low-cost carrier sector
.05
1.5
0.08
Firefly and Jetstar making the market share smaller
Inconsistent oil prices
.15
4.0
0.60
adversely affect the fuel surcharge
Rivalry among the competing firms- High
.15
3.0
0.45
Compete with other senior airlines such as MAS
Threats of substitute products or services- High
.05
1.0
0.05
Car or any private vehicle as an alternative for inside travel Total Score
1.00

3.27

PART 4: INTERNAL ENVIRONMENT

IFAS Table
Internal Factor
Weight
Rating
Weighted Score
Comments
Strenght
A low cost airlines which offers five-star service where everybody can fly.

.15

5.0

0.75

All categories of customer able to enjoy an affordable ride. In-flight services that promote Malaysian hospitality 
.05
2.0
0.10
Promote faster travel inside the country.
Utilization of Information Technology (IT)
.05
3.0
0.15
Saved on the cost of issuing physical ticket and make check-in and booking easier. Strong branding and marketing
.15
4.5
0.68
Well established brand
Well established LCC operating out of South East Asia
.10
3.0
0.30
Important for company operation
Weaknesses...
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