Blue Ocean Of Airasia

Topics: AirAsia, Airline, Blue Ocean Strategy, Tony Fernandes, Malaysia Airlines / Pages: 2 (444 words) / Published: Mar 28th, 2015
Blue Ocean of Airasia: introduction

Blue oceans might provide profitable high-growth for companies with new competitive advantages. Many companies over the worldhi have created blue oceans but these blue oceans only remain in a short periods and quickly become red oceans.

Kim and Maugne claimed in their book that in order to have sustainable competition advantages, blue oceans should be different attached by low cost. However, the fact shows that innovations are expensive so it is difficult to maintain both creates and low cost, especially in the first period. (1)

As a surprising success, Airasia achieved this and kept the sustainable development from launched to now, though aviation industry depends on a lot of objective factors such as the weather, airport conditions or petrol cost. Even though when the world has underwent a global economic crisis in recent years, the revenue of Air asia has increased continuously. (9)

In order to achieve current successes of Airasia, it is undenied the big contributions of Tony Fernandes who purchased bleeding low cost subsidiary of air Malaysia from Malaysian government in 2001. He implemented Blue ocean strategy of Air Asia first in Malaysia and then in Indonesia, Japan, the Philippines and Thailand via joint venture companies.(9)

The blue ocean of Airasia is LCC (low cost carrier) that provide customers who want to use air travel with less money than conventional airline. This strategy was quickly successful. Within first two years, Air Asia paid a huge debt and be profitable. Then, it has become the largest low cost airline in Asia.(9)

In Asia, the company had some difficulties in the implementation of its blue ocean. For example, it tried to establish joint venture companies with Vinashin in 2007 and VietJet Air in 2010(10),(11). Unfortunately, with both two situations, It had to divest their stake in these companies.

However, Asia still has the potential markets with Air asia when the number of Asian urban

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