Air Asia Logistic

Topics: Low-cost carrier, Airline, AirAsia Pages: 8 (2550 words) Published: July 21, 2013
Question 1
Discuss the growing demand for logistics. (10m)
The reason for the rapid growth of the logistics industry can be attributed to the fact that a majority of the companies dealing in logistics operations target clients of medium size instead of targeting the stalwarts of the logistics industry. Nowadays, the advance IT technologies had make the internet retail or online shopping is growing rapidly and this will be an increasing source of demand for both large and smaller logistics units. For example, Groupon, Zalora, Taobao have enter the Malaysia market because online shopping are still not common in Malaysia. This type of retailer will increase the trend of online shopping in Malaysia. Meanwhile, the demand of logistic totally will increase at the same time. Beside that, demographics. Population has always been a key factor influencing logistics markets, particularly the location of distribution centres servicing retail stores. Long-term, differential rates of demographic growth and ageing, and associated changes in incomes and spending, will have a dramatic impact on global supply chains.  For many companies, this will drive significant change in their current logistics networks. As the United Nations report said, the world's population has reached the 7 billion mark in year 2013.That mean , the demand of product will increase due to the world population increase. Therefore, the demand of logistic will grow up follow with the increasing of world populations. When the demand of market increase due to increasing of world population, its definitely will effect the world trade and seaports. Long-term forecasts suggest that world trade growth will exceed world GDP growth, and about 90% of world trade is handled by sea ports. This will generate growth in container traffic, and with container ships getting bigger some ports will be better placed than others to win the competition for freight.

Q2. Select a company of your choice by using the company information on the company website magazine and newspaper AirAsia is a successful air line in Malaysia. It was established since 1993 and started operate in 1996. AirAsia is popular for its low costs carrier services, these attracts many people select AirAsia flight over other airlines. The success factors of the company make an impact the airline industry. As a pioneer in aviation of low-cost carrier, it successful existence must whit some particular reasons. AirAsia have a distinct advantage on pricing. This is the most important reason of success of AirAsia. AirAsia operates with the world's lowest unit cost and in 2008 AirAsia had abolished its fuel surcharges. Therefore in this assignment, our group would like to discuss in details of AirAsia outputs and inputs and 4 elements of logistics.

1) Describe inputs and outputs of logistics.
Outputs of logistics

●Competitive advantage
With the help of AirAsia Academy, AirAsia has successfully created a “low-cost airline mentality” among their workforce. The workforce is very flexible and high committed and very critical in making AirAsia the lowest cost airline in Asia. Although other Budget airlines attempted to do the same, AirAsia managed to be more effective at implementing these measures (difficult to imitate). AirAsia managed to achieve cost per average seat per kilometer of 2.13 U.S. cents, the lowest for any airline in the world, giving it a competitive (cost) advantage as it is able to maintain its low fares for passengers. This efficiency enabled AirAsia to utilize its capacity by increasing its load factor (passenger carrying capacity) from 0.62 in 2000, to 0.75 in 2005). Hence, this is a sustainable (cost) competitive advantage for AirAsia as it is rare (e.g. lowest cost per average seat per kilometer in the world), difficult to imitate (e.g. not many competitors were as successful as AirAsia), and without substitutes.

Its successful negotiations for its low aircraft lease rates, low long-term...
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