Topics: Low-cost carrier, Airline, AirAsia Pages: 14 (4769 words) Published: July 31, 2013
1.0 Table of Content

1.1 Brief History on AirAsia2 – 3
2.0 Macro-Environmental PESTEL Analysis4 - 12
2.1 Undertake a Macro-Environmental Analysis using the PESTEL Framework 2.2 AirAsia Inflation Rate in Malaysia
2.3 Brief Definition on Unemployment Rate
3.0 Porter’s Five Forces13 - 16
3.1 Analyze the competitive forces within the industry using the Porter’s Five Forces Framework 4.0 Carry out a Customer Analysis 17
5.0 Analyze the competitor’s by conducting competitor profiling 18 - 20 5.1 Recommendations with regards to competing with competitors 6.0 References 21
6.1 Internet References

1.1 Brief History on AirAsia

Prior to its take-over by Tune Air Sdn. Bhd. in 2001, AirAsia was owned by DRB-Hicom, a government-linked company (AirAsia, 2008). Its airline had not been able to take off and was eventually sold to Tune Air, literally for a song, for a token sum of RM1.00 or US$0.26 together with an accumulated debt of RM40 million (AirAsia, 2008). Tune Air was formed by Tony Fernandez and four entrepreneurs, some of whom had worked with the music industry which perhaps inspired the name of the company. According to Fernandez , it is not easy to sell the idea of operating an airline particularly to the government. In fact, his request for a license to operate from the government was rejected on two previous attempts. Finally, with Pahamin A Rejab, the former Secretary General of the Ministry of Transportation, they presented their case to the then Prime Minister, Dr. Mahathir Mohamad, who eventually gave the green light, not for a new company, but to take over the ailing AirAsia from DRB-Hicom. Many were skeptical that Fernandez could succeed in transforming the ailing, capital-intensive company especially during the travel slump soon after the destruction of the World Trade Center in New York in 2001. Within two years, Fernandez proved the critics wrong and was able to turn AirAsia into a profit-making company modeled after the successful operations of the United States-based Southwest Airlines, Dublin-based Ryanair and United Kingdom-based Virgin Air. AirAsia was listed in the Kuala Lumpur bourse within three years of operation, on 22 November 2004, with one of the largest IPO offer of RM717.4 million (AirAsia, 2008). In addition, AirAsia won many accolades including certification by Superbrands International. For his achievements, Fernandez was awarded the Best Entrepreneur of the Year by Ernst & Young Entrepreneur Award in 2006 (AirAsia, 2008), (Azeman Ariffin & Gerald Goh Guan, 2009).

In March 2006, AirAsia’s passenger load expanded to such a capacity that a new low-cost terminal (LCCT) was built for it. This LCCT can accommodate 10 million passengers annually and has 30 parking bays for the aircrafts (AirAsia, 2008). Asia’s leading airline was established with the dream of making flying possible for everyone. Since 2001, AirAsia has swiftly broken travel norms around the globe and has risen to become the world’s best. \With a route network that spans through to over 20 countries, AirAsia continues to pave the way for low-cost aviation through our innovative solutions, efficient processes and a passionate approach to business. Together with our associate companies, AirAsia X, Thai AirAsia, Indonesia AirAsia, Philippines’ AirAsia Inc and AirAsia Japan , AirAsia is set to take low-cost flying to an all new high with our belief, "Now Everyone Can Fly".

2.0 Macro-Environmental PESTEL Analysis.

According to the research of Gillespie Oxford University, 2011 says that there are many factors in the macro-environment that will affect the decisions of the managers of any organization. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. To help analyze these factors managers can categories them using the PESTEL model. This classification...

References: 1. Azeman Ariffin & Gerald Goh Guan, Background Studies, [online PDF]
Retrieved Date: September 01st, 2012
Retrieved Date: September 01st, 2012
3. Affin Bank Berhad, AirAsia Airlines Inflation Rate [online HTML]
Retrieved Date: September 04th, 2012
4. Bureau of Labor Statistics, AirAsia Unemployment Rate [online HTML]
Retrieved Date: September 04th, 2012
5. James Manktelow & Amy Carlson, Porters 5 Forces, [onlineHTML]
Retrieved Date: September 05th, 2012
Retrieved Date: September 06th, 2012
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