Airasia Swot Analysis

Topics: Airline, AirAsia, Low-cost carrier Pages: 8 (2740 words) Published: October 5, 2012
Article taken from WSJ dated Wednesday May 02, 2012
“AirAsia Flies Better Without Flag Carrier” largest budget carrier (Economy of scale) •Very strong management team
Very good in strategy formulation and execution (Economy of scale) •Strong brand equity - AirAsia’s brand name is well established in Asia Pacific (Learning Curve) •Cost advantage (Economy of scale)

Market share leadership- AirAsia is the low cost leader in Asia (Economy of scale) •International alliances (Linkages)
Very flexible and high committed workforce (Learning Curve) •Excellent utilization of IT (Capacity Utilization, Learning Curve) •Single type fleet minimize maintenance fee and easy for pilot dispatch (Capacity Utilization)Air Asia does not have its own maintenance, repair and overhaul (MRO) facility ((Capacity Utilization, Company Policy) •AirAsia receives a lot complaints from customers on their service (Economy of scale, Learning Curve) •Low load factors

Service resource is limited by lower costs
Aircraft financing costs surging(Economy of scale)
Government interference and regulation on airport deals and passenger compensation •Heavy reliance on outsourcing
OPPORTUNITIESHigh demand for low cost and differentiated service •International expansion (Economies of Scale)
High demand for low cost and differentiated serviceEXPLOIT •AirAsia has a established reputation
Online Market (Economy of Scale)
Customer Loyalty
Cost management - Financial markets (raise money through Fuel Hedging) •Ongoing industry consolidation has opened up prospects for new routes and airport deals •Product and services expansion (Capacity Utilization)

ASEAN “Open Skies” allows unlimited flights among ASEAN’s regional air carriers (Linkages) •Long haul flight is a trial to get undeveloped market shareUNDECIDED •Cost saving initiatives (Economy of scale)

New services (Economy of scale)
Additional Merger and Acquisitions provide new business strategy opportunities (Policy) •Partner with other low cost airlines like Virgin (Linkages) •Growing Asian middle-class population (over 700 million) •High fuel prices will squeeze out unprofitable competitors •Emerging markets and expansion abroad (Capacity Utilization) THREATSLow Cost Carriers

Low demand and increase costs after 911
Bad economy
Government Regulations
New technology (Learning Curve)
Lower cost competitors
Full service airlines start cut costs to compete
Price wars
High fuel price decreases yield
Shifting consumer preferences
Certain rates like airport departure, security charges and landing charges are beyond the control of airline operators (Economy of Scale) •System disruption due to heavily reliance on online sales (Economy of Scale)AVOID •Industry’s extra capacity

Outbreak of disease (eg Swine Flu)
Accident, terrorist attack, and disaster can affect customer confidence •Increasing competition for routes, services and fares (Economy of Scale) •Aviation regulation and government policy
Increase in operation cost in producing value-added services (Policy) AirAsia Berhad is a Malaysian-based low-cost airline. AirAsia is Asia's largest low-fare, no-frills airline and a pioneer of low-cost travel in Asia. AirAsia group operates scheduled domestic and international flights to over 400 destinations spanning 25 countries. Its main hub is the Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Its affiliate airlines Thai AirAsia and Indonesia AirAsia have hubs in Suvarnabhumi Airport and Soekarno-Hatta International Airport respectively. AirAsia won the Skytrax World's best low-cost airline award in 2007, 2009, 2010 and 2011. It has the world's lowest operating costs at USD 0.035/seat-kilometre in 2010. It is also the first airline in the region to implement fully ticketless air travel. In August 2011, AirAsia agreed to forge an alliance...
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