What Are the Strategic Dilemmas Facing Air Asia?

Topics: Low-cost carrier, Airline, Cost Pages: 4 (703 words) Published: December 13, 2010

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

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

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

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 analysis...
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