Air Asia Introduction

Topics: Low-cost carrier, Airline, AirAsia Pages: 8 (2556 words) Published: March 11, 2013



AirAsia 1 : The AirAsia Logo

AirAsia was established in 1993 by DRB-Hicom, a Government-owned conglomerate. It started operations in 1996. Tune Air Sdn Bhd, Tony Fernandes’s company purchased this heavily indebted airline business from DRB-Hicom in 2001. AirAsia managed to become profitable and world renowned low-cost airline through visionary leadership and innovative business approach. Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International is AirAsia’s first and main base. AirAsia is renowned as Malaysian low cost airline and Asia’s largest low fare, no frills airline. The airlines claims ‘No Admin Fee’, but has some fees for services which are free on other airlines. AirAsia slogan is ‘Now Everyone Can Fly’. Being the home of AirAsia, the LCCT is the budget terminal in KLIA, opened on 23 March 2006. The AirAsia subsidiaries are the likes of Thai AirAsia, Indonesia AirAsia, VietJet AirAsia and AirAsia RedTix. Meanwhile, AirAsia associate companies are AirAsia X, Tune Hotel and Tune Money. AirAsia is one of the award winning and largest low fare airlines in the Asia expanding rapidly since 2001. With a fleet of 72 aircrafts, AirAsia flies to over 61

OUMM2103 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs located in Malaysia, Thailand, and Indonesia. AirAsia believes in the nofrills, hassle-free, low fare business concept and feels that keeping costs low requires high efficiency in every part of the business. AirAsia’s 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. Their missions are 

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

They managed to make the low fare model possible through the implementation of the following key strategies, 

Safety First: Partnering with the world’s most renowned maintenance providers and complying with the with world airline operations.

High Aircraft Utilisation: Implementing the regions fastest turnaround time at only 25 minutes, assuring lower costs and higher productivity.

Low Fare, No Frills: Providing guests with the choice of customizing services without compromising on quality and services.

Streamline Operations: Making sure that processes are as simple as possible.

Lean Distribution System: Offering a wide and innovative range of distribution channels to make booking and travelling easier.


Point to Point Network: Applying the point-to-point network keeps operations simple and costs low.


TYPES OF INNOVATION According to Kinicki and Williams, innovation is finding ways to deliver new or better

goods or services. It means that every organization will not allow itself become complacent. According to Chell, innovation is also deemed as the creation of something new in the marketplace that alters the supply-demand equation. An entrepreneur creates a new demand in the market by recombining the factors of production to create something new. According to Kuratko and Hodgetts, there are four basic types of innovation. i. Invention – the act of creating a new product, service or process that is totally novel or untried. For example the creation of telephone by Bell. ii. Extension – the expansion or addition to existing product lines, services or processes. For example Samsung which is well-known for electric and electronic products, extending its business to automobiles. iii. Duplication – process of replication of existing product, service or process. Duplication does not mean simply copying, but adding new features or improving competitiveness...
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