The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. Strengths. 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. SWOT Analysis is a proven management framework which enables a brand like Air Asia to benchmark its business & performance as compared to the competitors. Free resources to assist you with your university studies! Air India, Emirates, and many other Asian airlines have also started following the low-cost carrier strategy to attract market share. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. Features, such as improved WIFI and other entertainment facilities, can be improved with the help of latest trends and technologies in the IT industry. 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. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. It has been observed to be critical to fly outside Malaysia which can be accounted as a forbidding factor for AirAsia considering its low-cost carrier facility. It is an international airline that began operations in Malaysia and has since expanded to include countries across the Asian continent, such as India and Thailand. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. In this strategy, the company uses activities such as inbound logistics, where all the aircrafts are of one type; hence, reducing the maintenance cost, scheduling cost, and cost of managing inventory. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. Like Manchester United, Queens Park Ranger, Jamshedpur FC, Singapore national football team, Malaysia national football team, and others. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. Air Asia has expanded their product line by not only sales ticket but also offering tourism package which is offering hotel booking while booking the ticket. WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. It would be a strong competitive edge to AirAsia after the pandemic ofcovid-19because the purchasing power of the people has dropped significantly. This involves a detailed analysis of their actions and how these would affect the future strategies of AirAsia Flying Low Cost with High Hopes. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. In addition, rates are determined by the class of flight, airline load factors, travel dates and days, and competitor pricing in the airline industry. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. Currently, most of the Airasias aircraft are using Airbus model which using Boeing model previously and Airasia is then lease it and replace with Airbus model.If in case Airasia may wish to switch to Boeing again, the cost of training employee in operating the aircraft feature is high. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. 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. 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 airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. Relative insignificant influence of buyer to supplier. 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). The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. Below are the top 3 competitors of Air Asia: 1. Along with these improvements, if AirAsia continues to deliver to its target market effectively, it will surely maintain its differentiated position in the industry. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. Thank you for reading this case study. It is also because they are providing same service to the customer which is sent their customer to their destination by flight. Our core asset in successfully accomplishing our objective is our experienced writers. It was started in 1993, and the operations began in 1996. The company develops the products and services that are convenient for its customers (Mele, Pels and Storbacka, 2015). Concentration of Buyers power in many hands. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). Following are the opportunities in Air Asia SWOT Analysis: 1. Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. Home Samples Marketing Environment Analysis of Air Asia. Discover AirAsia alternatives or similar companies to benchmark and competitors' market analysis. Airasia had expanded its services provides to hotel booking as it already has its own hotel (tune hotel) which located not far away from its airport, and tour packages. AirAsia is known for its low fares and no-frills policy. Rising Labour Costs 3. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. 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. Do check out our Free Digital Marketing Masterclass by Karan Shah. The major competitors for Air Asia as per the market analysis are Jet Star Airways, Tiger Airways, JAL Express, and Air Arabia. Technology is a major component of organisational structure which is completely analysed on the basis of IT framework of Airasia in particular region. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. 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). Air Asia is known for treating its employees and customers well. Thailand s market currently has just two local LCCs, Thai AirAsia and Nok Air. Airlines allowed to increase ight operations, with strict Maximising revenue in a reduced capacity/ competition 2020 environment 14 74,642 mil 45-60% of 2019 85% of 2019 Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. But of course, there exist many competitors that require constant evaluation of strategies. Do you have a 2:1 degree or higher? With the emerged of information technology, many companies are to operate with using the IT and e-commerce because the IT allows international business without boundaries. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. As there are approximately 59 low cost airline operating in the industry,it is always easily for the customer to look for alternative. 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. Competitiveness Points of Air Asia. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Malaysia Airlinesis a member of the oneworld airline alliance and it is also considered as the flag carrier of Malaysia which is head-quartered in Kuala Lumpur International Airport. They have achieved effective targeting to this segment by making their brand synonymous with low-cost services. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. 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. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. 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. There are a lot of operations that are conducted by the company as it is spread across 25 countries in more than 160 destinations. Basic things to know before seeking help in assignment. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. The company is observed to possess a significant reputation among the competitors, customers and the markets of the establishment. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. Government regulations are strict. The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. 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). WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. 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). The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. The increase in oil prices has critically impacted the operations of the organisation. Their target audience is- travelers looking for inexpensive flights. AirAsias positioning is very clear in being low-cost. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. Following is the SWOT analysis of AirAsia: Lastly, lets take a look at AirAsias social media marketing presence as digital marketing is also a very important part of any companys marketing strategy. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. About Air Asia Quizzes test your expertise in business and Skill tests evaluate your management traits. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. The profits of the organisation have been observed to be remarkable which introduce an opportunity to new competitors causing a severe threat to AirAsia for sustainable profits. AirAsia managed to become one of the most popular and profitable airline companies in the world by implementing visionary leadership and innovative business approach. The created segments consists of consumers who share similar interests, requirements and locations. Some writers often extend the acronyms to include legal and environmental factors. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. Do check. Continue reading more about the brand/company. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. As increasing in the number of airline competitor such as Jet Star and Tiger Airways which are also promote low cost fare may decrease the shifting cost of the customer lead to decrease of Air Asias customer loyalty. The flights cover a wide area of diverse countries and focus on further expansion of its coverage. Air Asia is known for its low pricing, as well as a no frill policy. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. As per the results of the survey, AirAsia has. The company is constantly using innovative solutions to provide low-cost transportation. It offered a new definition of affordable traveling with its Tagline Now Everyone Can Fly. 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. The following are the strengths of Air Asia : Weaknesses are used to refer to areas where the business or the brand needs improvement. 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). Air Asia has established itself as a strong competitor in the airline industry. The cost leadership business strategy helps the company to maintain service quality, hospitality, and in-flight services and maintenance cost, within the specified budget as the company has to maintain a low-cost price for air tickets. Low switching costs. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. *You can also browse our support articles here >. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. Very interesting and informative. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. 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. The company provides its services to people of every age group of society, and to the people belonging to the medium and high ranged of income or financial status. Air Asia is smartly using its social media in building a direct relationship with its customers. Below are the top 3 competitors of Air Asia: 1.Jetstar Airways 2.SilkAir 3.Tiger Airways. The basic product strategy in its marketing mix is its low-cost air services. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. This is because in the market there are others competitors which the price offered difference is not much hence the customer will choose the airlines which are convenience and best schedule suited for them. The other supplier such as fuel supplier, merchandise supplier, or food supplier may be depend on market condition. 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 marketing mixs 7 Ps model is a marketing strategy tool that is used in a business in order to gain the feedback from the market in relation to marketing objectives. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. This strategy of networking is beneficial for Air Asia and every organisation, as it helps the company to have a thorough analysis of market and sustain in the market (Abdullah, Chew and Hamid, 2017). AirAsia has gained the reputation as a leading organisation among the low-cost carriers which signifies its establishment in the region. It has been reviewed & published by the MBA Skool Team. Rising Fuel Costs 2. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. Required fields are marked *. Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. High numbers of Competitor. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. 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. AirAsia has been a successful part of the airline industry for over a decade. AirAsiastop competitorsareAir India,American Airlines,Emirates Airlines,British Airways,Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. 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 Points to consider while selecting a topic for dissertation help. Air Asia is one of the leading brands in the airlines sector. High Switching Cost. Fixed Cost is high. The bargaining power of buyers is strong when the switching cost of airlines is low. Sponsorship is also one of the great marketing tools. The diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. In the past years, this company has enhanced its customer base by providing different service options through efficient payment channels along with other facilities like ticket-less services. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. This comes with a lot of competition. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. In 2002, AirAsia became the first airline company in the region that allowed passengers with the facility to pay for their bookings by using credit card. 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. Focusing on providing air travel without frills at substantially lower prices, AirAsia has managed to achieve lower prices to attain high passenger loads, market share, and profitability by eliminating provision of In the increasing demand of the airline services, there is a tough competition in the airline industry because of the varied numbers of the competitors that are providing the airline services. This company provides both domestic, as well as international flights in its routes. According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. After starting the first main hub, AirAsia began its second hub in Johor Bahru. As AirAsia expanded its services, the company expanded its facilities, including travel The competitions are depending on the services provided and the suitability of the flight time for the customer. The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. The companys primary focus is to build customer value. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Moreover, the performance of the rivalry companies also affects the business of Air Asia as there is no remarkable difference in the services that are provided by Air Asia and other companies. Lets take a look at AirAsias marketing mix. Low Cost Model: Low cost operations and fixed costs . 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. Webprice wars with competitors, taxes and duty imposed on the firms products. AirAsia also acquired recognition for improving its supportive and constructive management, as it received rewarded by Center Asia Pacific Aviation (CAPA) as the best airline of the year. It is essential to choose the right set of employees for the organisation in order to maintain their position. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. They have official handles on all major platforms but for the purposes of this segment, we shall take a look at the main 3, which are Instagram, Twitter, and Facebook. Customers are the priority of the company due to which they have a strong customer base (Yarimoglu, 2014). WebFive steps to successful analysis of. He has been a guest speaker at prominent colleges in India including IIMs[Read full bio], Your email address will not be published. Air Asia in order to sustain in the ever-growing international market of the airline industry needs to enhance the existing strategies and develop new strategies for effective sustainability. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. The branding of the logo of Air Asia is essential for them. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. The AirAsia Big Loyalty Program is one of the companys most popular campaigns, in which affluent customers win BIG points for any purchase they make and redeem those points for free airline tickets. 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. The case involves the The company makes use of innovative solutions in order to provide low-cost aviation. Diversified in product offered. It follows vital certain strategies, which include safety first, high aircraft utilisation, streaming operations, lean distribution system and point-to-point network to amplify the working of its low-cost model (Zhang et al., 2017). As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. And thus Indians meet their target requirements perfectly, Government charges and costs that are not in the control of the company may lead to severe losses in the future, With dynamic management and other operational costs, it becomes difficult to manage low-cost flights, AirAsia has 62.K followers on Instagram, 93.5K followers on Twitter, and 12M likes on Facebook, They post regularly on their pages, at least a couple of times a week, and maintain this consistency, They post a variety of content that aims at staying relevant in the minds of the customers, Their main strategy seems to be posting about exotic travel destinations with Call-to-Action, encouraging customers to avail their services in exploring these locations, The company also posts environmentally friendly content to echo the ethos of its brand. Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. In order to stay ahead of the competition, the company needs to constantly invest in improving the additional facilities that make a difference to customers in todays times such as disposable in-flight meals, complimentary WiFi, entertainment facilities, and varied seat options. Hence, customer may access to the current airlines information which are available at all time, this has reduced the power of negotiation for airlines and producing a strong customers bargaining power. Ease to switching. As there are adequate options available for passengers to choose from, at the similar price as Air Asia, the company needs to focus on the amenities and hospitality services it provides to the customers. Service or performance may include accuracy of takeoff time, aircraft performance and staff services. 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. AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. Moderate Portion of buyers expend on airline. The largest airline in Malaysia the business is known to be highly employee centric. The company was observed to initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for the organisation. The increasing cost, competitors, and limited international destinations are some of the main challenges. 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). It has subsidiaries in Indonesia, Thai, Phillipines, Japan, 5.It has a fleet size of nearly 300 aircrafts. AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. Air Asia is known as one of the most low-cost airlines in the airline industry. 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. Do essay writing needs professional writers? Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. The increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. 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. Today it is one of the most reputed Asia-based airline companies. It allows its customers to choose the services they want without compromising on quality. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). Other than that, hes a fun loving person. There are several companies associated with AirAsia including AirAsia X, Tun Hotel, Tune Monkey, AirAsia Berhad, Thai AirAsia Co. Ltd., AirAsia Japan Co., Ltd., PT Indonesia AirAsia (India) Limited. 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. Continue reading more about the brand/company. Government regulations which target various aspects such as particular routes, landing permissions and share possession cause a drastic impact on the operations of the organisation. 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