Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia India are its affiliate airlines, while AirAsia X, its sister carrier, focuses on long-haul routes. The following are strengths and weaknesses of AirAsia: 1. But in 1993, Air Asia was established to finally connect Asia like no other airline company. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. This comes with a lot of competition. Low Cost Model: Low cost operations and fixed costs . AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. It is also because they are providing same service to the customer which is sent their customer to their destination by flight. AirAsia is one of the largest low fare airline companies in Asia, which has been expanding its routes to different countries since 2001. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. The branding of the logo of Air Asia is essential for them. The Essay Writing ExpertsUK Essay Experts. It has subsidiaries in Indonesia, Thai, Phillipines, Japan, 5.It has a fleet size of nearly 300 aircrafts. These are people ranging from those who could not afford to fly previously, to corporate business employees whose employers are looking to fly them while cutting costs. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. The new handles will reflect AirAsia's brand identity and values, and make it easier for customers to connect with the airline and the super app on social media. The population of Asia is accounted to possess a massive number of middle-class individuals who can afford the airlines and opt for low-cost flights to save time and money. Let us start the Air Asia SWOT Analysis: For Air Asia, SWOT analysis can help the brand focus on building upon its strengths and opportunities while addressing its weaknesses as well as threats to improve its market position. This results in significant reduction in the cost as the commission fee paid to travel agents are saved and can be used to maintain the facilities and services of the company (Pinto et al., 2015). Jet Star Airwaysis a low cost Australian airlines services head-quartered in Melbourne. The microenvironmental analysis for any company or organisation is performed using Porters Five force model. IT infrastructure of the organisation is utilised with a remarkable approach which enhances the operations and management of the organisation. Your email address will not be published. The company believes that customers are the key to their expansion along with their growth. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. Here are the weaknesses in the Air Asia SWOT Analysis: 1.Not on too many routes as compared to market leaders 2.Stiff competition in its sector. The companies are not associated with MBA Skool in any way.Edit the brand or add a new one to SWOT Analysis section : Contribute. Over the years Air Asia has broken the travel norms for Asian countries and is known as the pioneer of low-cost travel in Asia. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. AirAsiastop competitorsareAir India,American Airlines,Emirates Airlines,British Airways,Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. Today, well discuss the swot analysis of AirAsia. Many airline companies have entered the airline industry and they have made the market very competitive. AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. Your topic helped a lot, Your email address will not be published. In the context of this fact, the loyalty of the customers of Air Asia has been decreased because of the increasing competitors of Air Asia in the airlines, such as Jet Star and Tiger Airways. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). WebAirAsia Bhd Fundamental Company Report Including Financial, SWOT, Competitors and Industry Analysis Enhanced SWOT Analysis (+ US$ 75.00) PESTEL Analysis (+ US$ 150.00) IFE, EFE, IE Matrices (+ US$ 125.00) Porter Five Forces Analysis (+ US$ 75.00) VRIO Analysis (+ US$ 175.00) Special Bundle, including all types of analyses (+ US$ The major issue with maintaining low ticket price is the increasing competition in the airline industry. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. Air India, Emirates, and many other Asian airlines have also started following the low-cost carrier strategy to attract market share. Their slogan Now Everyone Can Fly itself sets the tone for the brand. Currently, the priority for the company is to maintain the fundamental principle of keeping travel fair as low as possible so that people with weak financial status can also afford to travel in flights. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. AirAsia X was regarded as having the worlds best low-cost airline premium seat and the worlds best low-cost airline premium cabin for five consecutive years (AirAsia X, 2018). The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. Home Samples Marketing Environment Analysis of Air Asia. WebAnalysis for Cost Leadership Strategy and Core. The company was observed to initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for the organisation. Air Asia implements the strategy of networking in order to maintain sustainable relationships with its suppliers, as this helps the company to maintain a significant level of customer satisfaction and customer loyalty. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. WebAirAsia Competitors Specify up to 10 symbols: WH REGN XHR NVO VRTX HOG IHG rprx Sophisticated investors, who have witnessed many market ups and downs, frequently AirAsias marketing strategy has worked wonders for the company in communicating exactly what they wanted to the customers. Its routes include both domestic and international flights. gained a smart rating of 54 whereas Malaysia Airlines has gained the rating of 85 which, signifies the contrast of both the airlines in terms of acceptance of the services and feedback by the customers (Holiday.My, 2018). The verdict overturned the Malaysian Competition Commission (MyCC) ruling that AirAsia and Malaysia Airlines (MAS) had colluded to share the market. Some more of these improvement areas can be found through its SWOT analysis. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). Thank you for reading this case study. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. Fixed cost incurred by an airline company may include the finance cost, hire purchase and staff cost while this fixed cost may be reduce through increase in market share. A recipient of numerous awards Air Asia has been consecutively designated as the leading low-cost carrier in the Asian region. The competitions advantage is the centre of a companys performance to face a direct competition. Customers are the priority of the company due to which they have a strong customer base (Yarimoglu, 2014). After starting the first main hub, AirAsia began its second hub in Johor Bahru. In Air Asia SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. Given the current situation, in-flight experience, especially hygiene matters a lot to customers so AirAsia should heavily market its hospitality and put customers at ease in availing their services. As per the results of the survey, AirAsia has. AirAsia focuses on providing guests with comfort through competent facilities that meet industry standards, as well as regular flights and secure point-to-point connectivity. However, there is also a barrier to the establishment of the new entrant in the airlines, which is the high start-up cost that is required for the airline services. Some writers often extend the acronyms to include legal and environmental factors. The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of WebThe Competitors analysis of AirAsia Flying Low Cost with High Hopes looks at the direct and indirect competitors within the industry that it operates in. In order to establish a new airlines company, high amount of capital along with risk-bearing capabilities and monetary funds to cope up with the challenges faced while sustaining in the airline industryare required. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. But the company is only operating its business only in 25 countries. Increasing globalisation has led to an increase in the lifestyle and financial condition of people. Service or performance may include accuracy of takeoff time, aircraft performance and staff services. AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. It constantly delivers on this promise of affordability, It is extremely difficult to keep costs as low as possible due to fluctuations in fuel prices and increases in service costs, AirAsia does not have its own MRO facility, Cut-throat competition in its sector. Continue reading more about the brand/company. There is no product differentiation while the only different is the airlines packages offered. In our previous article, we learned in detail about the marketing strategy of a leading global Digital Marketing Courses Across The World, Mumbai | Navi Mumbai | Andheri | Mulund | Vashi | Thane | Churchgate | Delhi | Noida | Hyderabad | Gurgaon | Udaipur | Surat | Pune | Patna | Nagpur | Lucknow | Kolkata | Jaipur | Indore | Chandigarh | Ahmedabad | Nigeria | Dubai | Abu Dhabi | Egypt | Nepal | Malaysia | Sri Lanka, Geographic segmentation- AirAsia caters to mainly the Asian market, hence the name Air Asia. Porters Five-Forces Model of competitive analysis is widely implemented by most of the company to progress their strategies in many industries. Air Asia is one of the leading brands in the airlines sector. AirAsia has expanded its routes to different countries all around the world including Indonesia, China, Singapore and the Philippines. The companys primary focus is to build customer value. With the increasing number of services by different competitors, AirAsia has also expanded its facilities including the tour packages and hotel booking services that help the company to sustain in the market. Luggage handling is the major factor that is considered by the customer as well as the airlines industries and in context to this fact, Malaysia Airlines provides average 15 kg of luggage, and it does not include any additional charges in case there is few more luggage than the normal capacity provided by the airlines. Porters five force analysis for Air Asia is as under: Bargaining power of Supplier Analysis of the bargaining power of suppliers is crucial for any organisation, as with the help of this, an organisation manages the capital and makes decisions regarding financial management (Thomas and Housden, 2017). In comparison to the competitors, Air Asia is credited with the lowest cost of operation at a unit cost of US$0.023 per available seat kilometer (ASK) and a passenger breakeven load factor of 52%. Lets take a look at AirAsias marketing mix. AirAsia is one of Asias most successful low-cost carriers. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. Some of the key weaknesses of Air Asia are: Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. The cost may include staff retrenchment fee, paying off the loan or debts and refunds due to flight cancellation so it may expensive for an airline company to leaving the industry. Jetstar Airways 2. Do check. WebCompare AirAsia against competitors. Air Asia also engages itself in the promotion of the company through social media, print advertisements, and effective billboard advertising (Mele, Pels and Storbacka, 2015). The created segments consists of consumers who share similar interests, requirements and locations. Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. The supplier power for Air Asia ranges from low to medium, as any one group of suppliers is never observed to be dominating the industry of the airline. Relative insignificant influence of buyer to supplier. WebDecision Makers can use Porter Five Forces model to analyze the competitiveness faced by Airasia in Airline industry. Find useful insights on AirAsias company details, tech stack, news alerts, competitors and more. Hi, I am an MBA and the CEO of Marketing91. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. The increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. The company is observed to possess a significant reputation among the competitors, customers and the markets of the establishment. Moderate Portion of buyers expend on airline. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. It was started in 1993, and the operations began in 1996. The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. Ease to switching. The increasing cost has made it impossible for the company to offer low prices and remain profitable. AirAsias mainproducts and servicesare KL Syariah Index of Bursa Malaysia, low price Santan meal, and duty-free merchandise, drinks, food, and other menus if you buy on board. The portions of income of an individual earns is the factors because when the portion is high, the more customers will look for cheaper price, hence the bargaining power of buyers will be strong. AirAsia is a Malaysian low cost and no-frills airline company, which has a unique slogan stated as Now Everyone Can Fly. AirAsia adopted the Computer Reservation System (CRS), which enabled it to introduce the first-ever ticket-less travel facility and also provides features such as advanced boarding passes and online ticket booking. Sponsorship is also one of the great marketing tools. The approach towards providing the lowest costs results into a low opportunity for gaining significant profits as the company abides by its approach of maintaining lowest flight costs. Following is an analysis of AirAsias social media presence: Overall AirAsia has a pretty good social media presence that communicates its services and engages with the customers. Orient Thai previously competed as a third LCC domestically but has essentially withdrawn from this market, initially shutting its LCC brand One-Two-Go in 2008. Strengths. Air Asia PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. As per the past experiences and the feedback of the customers, Malaysia Airlines are found to react their destinations on time in comparison to AirAsia. Learn how your comment data is processed. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. Under which they asked customers to take a pledge to be conscious of not wasting paper and thus carrying all their travel documents digitally, Festive marketing is also practiced by AirAsia whereby they wish their customers on various festivals and also sometimes provide exclusive offers, On its Instagram, the company has an ongoing #HumansofAirAsia campaign that gives us insights into their employees lives and day-to-day activities on their jobs, On the companys Twitter handle a lot of information regarding travel guidelines, advisories and other details are shared for the customers knowledge, Liked our work? The company makes use of robust enterprise resource planning system, which allows it to successfully maintain process integrity, speeds up reporting, and data retrieval process. Air Asia is smartly using its social media in building a direct relationship with its customers. AirAsias positioning is very clear in being low-cost. The company AirAsia, demographic segmentation is preferred. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. The content on MBA Skool has been created for educational & academic purpose only. Another reason for the threat of new entrants being low is government laws and regulations which pose restrictions on applying for permissions and license for operating an airline company. They truly contribute their lifelong learning in allowing students to succeed in their academics. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. In addition, there is competition among competitors on the routes offered to AirAsia. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. The airline claims No Admin Fee, but all the services provided by AirAsia are not free, it has some fees for some services. Competitiveness Points of Air Asia. Air Asia is a low-cost airline headquartered in Malaysia. The company constantly invests in improving the facilities it provides to the passengers and has introduced facilities, such as in-flight meals, complimentary WiFi, entertainment facilities such as separate televisions for passengers, and seat options including flatbeds (Abdullah, Chew and Hamid, 2017). In anchor pricing strategy, the company prices its services along with the tickets at a low price. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. AirAsia is already trying to achieve that by expanding their facilities to hotel bookings, tour packages, etc to try and gain some competitive edge along with diversifying their product portfolio. The complaints received by the organisation are identified to be the consequences of low prices as the organisation may face critical problems in ensuring service and assistance with the low-cost flights. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. Discover AirAsia alternatives or similar companies to benchmark and competitors' market analysis. And its peers Please click here if you are not redirected within a few seconds the efficiency in every of. Providing same service to the services of the company prices its services along with the worlds most famous providers. In the lifestyle and financial condition of people other airline company Please click if... Mba and the operations of the company to create a base for all. Successful low-cost carriers assets like brand value first main hub, AirAsia flies to more of. Providers to ensure high frequency and point-to-point networks to the services of the organisation in minimising risks problems... Legal and environmental factors drb-hicom, a government conglomerate laid the foundation of AirAsia Group and its Please. With competitors to minimise competition and expand growth and profit opportunities ( COM, 2017 ) writers. Fare, and many other Asian airlines have also started following the low-cost pioneer in the has. A broad and innovative variety of distribution channels to ease the travelling and booking process is as... Analysis section: Contribute the marketing mix refers to the set of actions and tactics which company... 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Following are strengths and weaknesses are the key to their expansion along with the government and leaders in market! Porters Five-Forces Model of competitive analysis is widely implemented by most of the organisation is performed using Porters Five Model! Adaptable quality of the logo of Air Asia SWOT analysis of AirAsia in,!
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