The increase in oil prices has critically impacted the operations of the organisation. This has been possible through excellent brand positioning. AirAsia participates in a lot of price-based promotions. One of the most successful campaigns that are run by the company is Big Loyalty Programme, in which the privileged customers earn a lot of points for every transaction that is carried out along with redeeming points against free air ticket for travel. Find useful insights on AirAsias company details, tech stack, news alerts, competitors and more. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). In Kuala Lumpur. Strong Promoter 2. AirAsia has expanded its routes to different countries all around the world including Indonesia, China, Singapore and the Philippines. Air Asia is known as one of the most low-cost airlines in the airline industry. Although the two major suppliers of aeroplane structures are Airbus and Boeing, the suppliers of other facilities required in an aeroplane, for hospitality services including food and merchandise, are available in adequate amount in the market. 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 started with only 2 Boeing 737 300 series and started their first point-to-point flights. AirAsia has gained the reputation as a leading organisation among the low-cost carriers which signifies its establishment in the region. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. The company also uses the strength of a strong network to have a constant insight into the new strategies which are being used by the competitive companies and design its policies and strategies accordingly. Ease to switching. The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. Relative Price. The threats for any business can be factors which can negatively impact its business. AirAsia has been facing the competition with the varied existing low fare airlines that include Jet Star Airways, Tiger Airways, JAL Express and Air Arabia. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. 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 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. - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. Below are the top 3 competitors of Air Asia: 1. This comes with a lot of competition. As reported in The Edge Markets in 2019, Khazanahs managing director Datuk Shahril Redza Ridzuan claimed that the airlines CASK was only 15 per cent to 20 per cent higher than AirAsia and was in fact lower than regional airlines such as Singapore Airlines, Thai Airways and Cathay Pacific. WebCompetitive Analysis of Air Asia As demand for air services increases, there is more competition in the airline industry because so many competitors are offering air services. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. 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. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. AirAsia uses various media platforms for the marketing and promotion of its products and services. This article has been researched & authored by the Content & Research Team. The major factor that enhances the competition between the Malaysia Airlines and AirAsia is the luggage handling service that is provided by the Malaysia Airlines. 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. It was named as the Best Low-Cost Airline Company in the world for 9 consecutive years at the Skytrax World Airline Awards. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. Below are the Strengths in the SWOT Analysis of Air Asia : 1. Thank you for reading this case study. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. Market segmentation is the concept where the potential target customers for any organisation are divided into groups or segments based on various characteristics. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Looking for a flexible role? It has a fleet of over 70 aircrafts, which fly to over 120 destinations and operates over 400 flights daily from its hubs situated in Thailand, Malaysia and Indonesia (AirAsia, 2018). AirAsiastop competitorsareAir India,American Airlines,Emirates Airlines,British Airways,Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. They have achieved effective targeting to this segment by making their brand synonymous with low-cost services. But in 1993, Air Asia was established to finally connect Asia like no other airline company. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. The increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. AirAsia has been a successful part of the airline industry for over a decade. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. 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. Well established LCC operating out of South East Asia, 3. Malaysia Airlines is also considered as one of the competitors for AirAsia. As compared to industry leaders, they dont operate on as many routes, Merging with other low-cost airline companies, They can introduce more flights for popular and busy destinations, The increasing traffic from India as Indians prefer budget airlines. AirAsia X has amplified its profit-making routes to multiple countries such as Australia, France, Iran, South Korea and New Zealand. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. Extensive Marketing Strategy Of Ahluwalia Contracts In-Depth Analysis, Extensive Marketing Strategy Of KEC International In-Depth Analysis, Extensive Marketing Strategy Of Manappuram Finance In-Depth Analysis, Online Digital Marketing Course (4 months). However, the airline doesnt serve pork and alcoholic drinks based on Islamic religious grounds. Air Asia maintains its image in the market by choosing the right set of employees depending on their capabilities (Shaw, 2016). Specific analysis has been conducted in order to analyse the market environment for AirAsia. If you did, be sure to share, comment, and let us know! AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest But of course, there exist many competitors that require constant evaluation of strategies. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. 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. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. The following are the strengths of Air Asia : Weaknesses are used to refer to areas where the business or the brand needs improvement. Required fields are marked *. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). Air India to discontinue Vistara after merger, DS Group Partners with Lderach (Swiss Chocolate Maker), Castrols unveils a New Logo and a Refreshed Brand Identity. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. 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. Air Asia is known for its low pricing, as well as a no frill policy. There are several brands in the market which are competing for the same set of customers. Low switching costs. Diversified in product offered. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. 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). AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. The company was established in 1993, and the official operation of the company was started on 18 November 1996. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). AirAsia has won many awards over the years. The strengths of Air Asia looks at the key aspects of its business which gives it competitive advantage in the market. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. This is act as a barrier of entry for the competitor as there are high in capital requirement such as set up of headquarters, purchasing or hiring aircraft, appointment pilots and other staffs like air supervisor. The business strategy of Air Asia of maintaining low cost along with providing most of the features to the passengers can also be maintained with the help of implementing new technologies, which can help the company to save capital and monetary funds that can be used for other ventures of the company (Daft, Murphy and Willmott, 2010). This has raised the threat of substitution for Air Asia, as in any case of customer dissatisfaction or unavailability of service, it will be easy for the passengers to shift to some other airline company. Quizzes test your expertise in business and Skill tests evaluate your management traits. 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 price offer by an airline company may not be fixed but it will depend on the time differences between the date of booking and flight. Such events and teams have got millions of fan following, when an airline sponsors a team or an event, then it allows the company to reach new customers. Technology is a major component of organisational structure which is completely analysed on the basis of IT framework of Airasia in particular region. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. It has operations in over 25 countries and over 400 international and national destinations, 4. AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. WebFive steps to successful analysis of. Similarity of product. 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. Rising Fuel Costs 2. Performance of rivalry. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. 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. 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. 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). SWOT analysis of Air Asia analyses the brand by its strengths, weaknesses, opportunities & threats. Do check out our Free Digital Marketing Masterclass by Karan Shah. 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$ Besides @flyairasia and 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. Do check. 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). Malaysia Airlines provides onboard food services to its customers without any extra charges, whereas AirAsia provides the food services with an additional charge for its customers. The importance of pricing strategy is to know the strategies that are used in the market and to analyse the rivals that are present for Air Asia n the airline industry (Shaw, 2016). The basic product strategy in its marketing mix is its low-cost air services. Tiger Airways. Step 4 - Determine overall industry structure and test analysis of consistency. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. The flights cover a wide area of diverse countries and focus on further expansion of its coverage. In addition to this, various political factors can be highlighted by influencing the operations and management of AirAsia which have been mentioned below. AirAsia is a global airline with operations in more than 160 destinations in 25 countries. Fixed Cost is high. The microenvironmental analysis for any company or organisation is performed using Porters Five force model. 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. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. Today, well discuss the swot analysis of AirAsia. AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. In the similar context, Air Arabia provides the facility of carrying extra baggage for passengers, and this makes Air Arabia a preferred choice over Air Asia. The bargaining power of buyers is strong when the switching cost of airlines is low. The price will be cheaper if you book earlier. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Your topic helped a lot, Your email address will not be published. That was AirAsias 4Ps mix, detailing each strategy and its purpose. 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). The airline offers400destinations both local and international in25countries across the world. The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. The company makes use of Yield Management System (YMS), Customer Reservation System (CSR) and Enterprise Resource Planning (ERP) system, which makes it more effective in providing its services, reduces overall cost, and eliminates inefficiency in their business. WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. Back in the 1900s Thai National Airlines was the only airline that could fly in the main routes of Bangkok Chiang Mai with non-stop flights. Lets take a look at AirAsias marketing mix. Air Asia Revenue : RM 10,638 million (FY 2018) (9.6% increase YoY) RM 9,710 million (FY 2017) Competitive Analysis of Air Asia SWOT PESTLE The SWOT analysis of Air Asia is presented below: Air Asia has established itself as a strong competitor in the airline industry. Knowing the increase of competition in the market, AirAsia applied the adaptation process (Hanan & Freeman, 1984) by expanding its operation to long haul services to various destinations. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. Due to competitive in airline industry and protects on national airline, MAS which facing losses in these year, it is quite difficult to apply for licensing and permit for operating airline company. In contrast to this, Jet Star Airways has more types of planes that are provided to its customers that includes A320, Bombardier Q300, A321 and Boeing 787 Dream Liner; whereas AirAsia offers only two types of planes to its customers, which are A330 and A320. Continue reading more about the brand/company. AirAsia Airline As the best low-cost passenger. The management of costs in relevance to the dynamic prices of fuels and maintenance results in a significant issue for the organisation to sustain its low-cost flights with profits. The diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. Rise of Other LCCs in Market. *You can also browse our support articles here >. 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 first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. The introduction of ASEAN open skies policy facilitates opportunities for expansion and generalised airline regulations among the south-east countries of Asia which would benefit the organisation. The company engages in anchor pricing strategy in its marketing mix. High Switching Cost. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. The Threat of Substitution The international airline market has sufficient low-priced airline options available for passengers to travel. Lets see how they compare amongst a few key indicators. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. The company was observed to initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for the organisation. After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. He has been a guest speaker at prominent colleges in India including IIMs[Read full bio], Your email address will not be published. The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. 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. 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. Jet Star Airways is a low cost Australian airlines services head-quartered in Melbourne. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). WebDecision Makers can use Porter Five Forces model to analyze the competitiveness faced by Airasia in Airline industry. Just over 790 million shares were sold, including 592.6 million new shares, at MYR1.25 per share (USD39 cents), making it the largest IPO in Malaysia The threats in the SWOT Analysis of Air Asia are as mentioned: 1. Concentration of Buyers power in many hands. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). Lets see how they compare amongst a few key indicators. 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. The primary product of this company is the low-cost services that are provided to the customers. AirAsia is a low-cost multinational Malaysian airline. Bargaining power of Buyers The buyer power for Air Asia is analysed to be high as with increasing options in the international market and decreasing prices of air tickets, people of every category of society can afford flying, and hence, the bargaining power of buyers is also high. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. Airasia X ( Yashodha, 2012 ) within the transportation industry multiple countries such as Australia, France,,. And Tony Fernandes bought the airline industry the most low-cost Airlines in the airline industry for over a.... The various tourism locations in Asia since 2001 by the Content & Team. 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