Government regulations are strict. Liked our work? 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. 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. AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. AirAsia X share began trading on Bursa Malaysia, formerly known as the Kuala Lumpur Stock Exchange, on 10-Jul-2013. Continue reading more about the brand/company. The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. This company also focuses on providing the accessibility-based promotions in which the customers are informed about their new products and services by using simple tools of promotion, such as email. 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. In other word, that makes no significant differences in price between the premium airline such as MAS or Singapore Airlines if the customer purchase the ticket last minutes. WebThe two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). The major issue with maintaining low ticket price is the increasing competition in the airline industry. Performance of rivalry. It has been reviewed & published by the MBA Skool Team. Rising Fuel Costs 2. 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. Swot Analysis of AirAsia Berhad. Your topic helped a lot, Your email address will not be published. Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. 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. Jetstar Airways 2. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. AirAsias positioning is very clear in being low-cost. (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }). Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. However, the airline doesnt serve pork and alcoholic drinks based on Islamic religious grounds. Some factors like increased competitor activity, changing government policies, alternate products or services etc. Relative Price. Diversified in product offered. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. 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. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. Basic things to know before seeking help in assignment. This may makes the industry very competitive. Air Asia is one of the leading brands in the airlines sector. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. 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 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. They truly contribute their lifelong learning in allowing students to succeed in their academics. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. Do essay writing needs professional writers? There are many services that are provided to the employees of the organisation, such as training and motivational lectures. 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. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. 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. AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. Human resource management undergoes significant political pressure as the recruitment process of AirAsia is focussed on the racial determination of the applicants rather than their merits. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. Today it is one of the most reputed Asia-based airline companies. The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. 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. AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. Air Asia is known for treating its employees and customers well. The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. Tiger Airways. This comes with a lot of competition. WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. 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. The other supplier such as fuel supplier, merchandise supplier, or food supplier may be depend on market condition. 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. Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. 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. Air Asia Competitors There are several brands in the market which are competing for the same set of customers. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. 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 microenvironmental analysis for any company or organisation is performed using Porters Five force model. Jet Star Airwaysis a low cost Australian airlines services head-quartered in Melbourne. The following are the strengths of Air Asia : Weaknesses are used to refer to areas where the business or the brand needs improvement. Below are the top 3 competitors of Air Asia: 1. The primary product of this company is the low-cost services that are provided to the customers. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. It must have a good relation with hotels and tourism companies around Asia. Like Manchester United, Queens Park Ranger, Jamshedpur FC, Singapore national football team, Malaysia national football team, and others. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. Free resources to assist you with your university studies! 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. In the AirAsia case study, we shall decode AirAsias marketing strategy, marketing mix, SWOT analysis, social media presence, and also analyze its competitors. Another activity considered under this strategy is marketing and sales. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). The customers are able to book their tickets and gain promotional discounts through internet booking which eliminates the issue of queues for booking and additional assistance in choosing seats. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. Air Asia is a low-cost airline headquartered in Malaysia. The dynamic oil prices and service costs result into criticality for maintaining the low-cost flights as the organisation focuses on facilitating the most affordable costs to its customers (Daft, Murphy and Willmott, 2010). No plagiarism, guaranteed! They have a vast network of operations around the world, flying domestically and internationally. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. AirAsia uses various media platforms for the marketing and promotion of its products and services. It seems as the destination and customer market share of AirAsia is only limited to the Asian countries. If you did, be sure to share, comment, and let us know! Webprice wars with competitors, taxes and duty imposed on the firms products. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. Use Slintel to connect with top decision-makers at AirAsia. Air Asia is known for its low pricing, as well as a no frill policy. 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. Disclaimer: The reference paper provided by Student Life Saviour should be used as a model paper, and are not intended to be submitted to the universities. This involves a detailed analysis of their actions and how these would affect the future strategies of AirAsia Flying Low Cost with High Hopes. AirAsia managed to become one of the most popular and profitable airline companies in the world by implementing visionary leadership and innovative business approach. This approach can ensure high occupancy and increased demand considering the low-cost flights of Airasia. The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. Malindo will compete against AirAsia on all three routes. There are several brands in the market which are competing for the same set of customers. All work is written to order. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. The low lost product is the primary product of the marketing mix strategy that is used by the company. AirAsia has 5 employees at their 1 location and RM1.84 b in annual revenue in FY 2021. The largest airline in Malaysia the business is known to be highly employee centric. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. This section covers SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP of more than 2500 brands from over 20 industry sectors. Quizzes test your expertise in business and Skill tests evaluate your management traits. AirAsia focuses on delivering accessible promotions, in which customers are aware of new product offers with minimal company intervention through simple tools such as emails. Features, such as improved WIFI and other entertainment facilities, can be improved with the help of latest trends and technologies in the IT industry. It has operations in over 25 countries and over 400 international and national destinations, 4. In anchor pricing strategy, the company prices its services along with the tickets at a low price. Best regards from Kazakhstan.My name is Ainash. 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. There is no product differentiation while the only different is the airlines packages offered. Furthermore, competitive analysis has also been conducted for AirAsia in this report along with marketing mix 7 Ps and SWOT analysis. 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. As the rivalry is strong, Airasia may constant in price reduction to compete with them. 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 airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. It is essential to choose the right set of employees for the organisation in order to maintain their position. 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. Do check. Lets see how they compare amongst a few key indicators. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. 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. This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. Our core asset in successfully accomplishing our objective is our experienced writers. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. Lets take a look at AirAsias marketing mix. 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. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. 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). According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. We hope you found what you were looking for. Other than that, hes a fun loving person. Low Cost Model: Low cost operations and fixed costs . 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. 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. 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. Specific analysis has been conducted in order to analyse the market environment for AirAsia. This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. These include a 36% increase in passengers carried by AirAsia Malaysia, 79% increase in passengers carried by AirAsia India and an increase of 65% of passengers carried by AirAsia Thailand. Do check out our Free Digital Marketing Masterclass by Karan Shah. In addition, there is competition among competitors on the routes offered to AirAsia. Moderate Portion of buyers expend on airline. But the company is only operating its business only in 25 countries. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. 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. The bargaining power of buyers is strong when the switching cost of airlines is low. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. The increasing cost has made it impossible for the company to offer low prices and remain profitable. Besides @flyairasia and The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. 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. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and Thailand s market currently has just two local LCCs, Thai AirAsia and Nok Air. Competitiveness Points of Air Asia. Points to consider while selecting a topic for dissertation help. Due to few suppliers in market, this has increasing the bargaining power of supplier. WebEducational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.) Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler) Rich Dad, Poor Dad (Robert T. Kiyosaki) Air Asia Strategic Analysis The paper is prepared to analyse the strategic management of AirAsia which is The largest airline in Malaysia Bandung in late 2011 the internal and external factors impacting the worlds low-cost... Jamshedpur FC, Singapore airlines, Virgin airlines etc Boeing 737 300 series and started first! Has also been conducted in order to analyse the market which are competing for the organisation has outsourced maintenance... Competition: the company prices its services along with marketing mix 7 Ps and swot analysis their! 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