Air Asia assignment

Topics: Low-cost carrier, Airline, Southwest Airlines Pages: 3 (796 words) Published: September 3, 2014
3) Ryanair was introduced as a low-cost airline in 1991, CEO Michael O’Leary used the low-cost American, SouthWest airline model to plan their tactical direction.  Ryanair has set values, which they want to succeed in such as: product leader, operationally excellent and being intimate with their customers. ( Dbuccellato2011, 2012) As for Southwest airlines, it is a people-oriented company and uses that orientation to leverage its advantages. It cuts costs by having employees who work for a company they love, instead of for a simple paycheck at the end of the week. (Teamspark,2012) Southwest and Ryanair emphasize those strategies in order to differentiate themselves from a large number of low-cost providers in their highly competitive and relatively saturated American and European markets, respectively. On the other hand, AirAsia is an imitator in a market with limited competition and growing demand from a previously nonexistent market segment. AirAsia chose to be centered on cost leadership. According to Porter’s generic strategies (1985), one of the generic strategies is the cost leadership. AirAsia wanted to be a leader in the lowest cost to run their business. Therefore, building and sustaining it’s competitive advantage by providing services at a price that is simply lower than competitors price. Operation effectiveness and outstanding efficiency are the two main characteristics of low cost business including in AirAsia. (catatanraufmendunia, 2009)

Moreover, AirAsia believes in the no-frills, hassle-free, low fare business concept and feels that keeping costs low requires high efficiency in every part of the business. Efficiency creates savings that are then passed on to guests so that affordable air travel can become a reality. Through AirAsia’s philosophy of ‘Now Everyone Can Fly’, Air Asia has sparked a revolution in air travel with more and more people around the region choosing AirAsia as their preferred choice of transport. As Air Asia continuously...
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