What Are the Strategic Dilemmas Facing Air Asia?

SWOT ANALYSIS

Strengths
Low cost operations
Aggressive, focused and effective management
Simple business model that provides low prices
Penetrate and stimulate to potential markets
Multi-skilled staff means efficient and incentive workforce and reduced staff
More seats per aircraft
Single type fleet minimize maintenance fee
Brand name

Weakness
Service resource is limited by lower costs
Non-central location of secondary airports
Brand is vital for market position and developing it is always a challenge
Heavy reliance on outsourcing
New entrants to provide the price-sensitive services
Limited human resources
Government interference
Regulation on airport

Opportunities
Long haul flight
Differentiation from traditional LCC model by adding customer services or operation as full service airline with low fare
Ongoing industry consolidation has opened up prospects for new routes and airport deals
High fuel prices will squeeze out unprofitable competitors
Large potential market
Product differentiation
Regional international flight
New routes

Threats
Entrance of other LCCs
Accident, terrorist attack, and disaster and affect customer confidence
Aviation regulation and government policy
Increase in operation cost in producing value-added services
System disruption due to heavily reliance on online sales
Other airlines start cut costs to compete
High fuel price
Government policy
Security charges, landing charges, airport departure

Key challenges
Increasing competition because of increasing number of low cost airline competitors, and aggressive competition against the large or traditional airline companies
Customer decrease because of poor economy
Rising of the fuel prices
Higher labor cost
Inadequate infrastructure
Route and flight utilization
Safety and security issues of aircraft crash or being attacked
AIR ASIA VMOST ANALYSIS

VMOST is an acronym for Vision, Mission, Objectives, Strategy, Tactics. It is an internal