c


   

  
      

 
    

  

Ø Air Asia has a very  


 

with strong links with governments and airline
industry leaders. This is partly contributed by the diverse background of the executive
management teams which consists of industry experts and ex-top government officials. For
example, Shin Corp (formerly owned by the family of former Thai Prime Minister - Thaksin
Shinawatra) holds a 50% stake in Thai AirAsia. This has helped AirAsia to open up and
capture a sizeable market in Thailand. With their strong working relationship with Airbus,
they managed to get big discount for aircraft purchase which is also more fuel efficient
compared to Boeing 737 planes which is being used by many other airlines

Ø The management team is also very good in 

 

 
 The strategy
thatthey have formulated at the beginnings was a clever blend of proven strategies by other
low cost airlines is US and Europe. They are Ryanair¶s operational strategy (m

m m


m
 m 
 , Southwest¶s people strategy ( 
 
) and Easyjet¶s
branding strategy (mm




  

 

m).

Ø AirAsia¶s b


 is well established in Asia Pacific. Besides the normal print media
advertising & promotions, AirAsia¶s top management also capitalised on promotions through
news by being very ³media friendly´ and freely sharing the latest information on Air Asia as
well as the airline industry. Their partnership with other service providers such as hotels and
hostels, car rental firms, hospitals (medical tourism), Citibank (AirAsia Citibank card) has
created a very unique image among travellers. Alliance with Galileo GDS (Global
Distribution System) that enables travel agents from around the world to check flight details
and make bookings have also contributed to their string brand name. Air Asia¶s local presence
in few countries such as Indonesia (Indonesia AirAsia) and Thailand (Thai AirAsia) have
successfully ³elevated´ the brand to become a regional brand beyond just Malaysia. The links
with Manchaster United (one of the world¶s most famous football teams) and AT&T
Williams Formula One team have further boosted their image to a greater extend beyond just
the this region

Ø AirAsia is the  

  
. With the help of AirAsia Academy, AirAsia has
successfully created a ³   
 
 
´ among their workforce. The workforce is
very flexible and high committed and very critical in making AirAsia the lowest cost airline
in Asia.

Ø The  !

  " have directly contributed to their promotional activities (email
alerts and desktop widget which was jointly developed with Microsoft for new
promotions), brand building exercise (with over 3 million hits per month and on the most
widely surfed booking engines in the world) as well keep the cost low by enabling direct
purchase of tickets by consumer thus saving on airline agent fees

# 
  
 Ø Air Asia does not have its  

 


 
 (MRO) facility. It may be a
good strategy when they first started with only Malaysia as the hub and few planes to
maintain. But now, with few hubs (Malaysia, Thailand and Indonesia) and over 100 planes
currently owned and about another 100 planes to be received in the next few years, AirAsia
have to ensure proper and continuous maintenance of the planes which will also help to keep
the overall costs low. It is a competitive disadvantage not to have its own MRO facility

Ø AirAsia receives a  


  
 
 on their service. Examples of complaints
are around flight delays, being charged for a lot of things and not able to change flight or get a
refund if customers could not make it. Good customer service and management is critical
especially when competition is getting intense.

$   

Ø There are 2 major events that are taking place now or going to take place in less than 6 months
from now. First, is the ever  
  . Second, is the ³%&  '


  that has been reached.

Ø The increasing oil price at the first glance may appear like a threat for AirAsia. But being a low
cost leader, AirAsia an upper hand because its cost will be still the lowest among all the
regional airlines. Thus, AirAsia has a great opportunity to capture some of the existing
customers of full service and other low cost airline¶s customers. However, there will be also
some reduction in overall travel especially by casual or budget travellers.

Ø The ³ASEAN Open Skies´ allows unlimited flights among ASEAN¶s regional air carriers
beginning December 2008. This will definitely increase the competition among the regional
airlines. However, with the ³first mover´ advantage as well as its strengths in management,
strategy formulation, strategy execution, strong brand and ³low-cost´ culture among its
workforce, this agreement can be seen as more of an opportunity.

Ø There is also some opportunity to 

    
  
( to tap into
their existing strengths or competitive advantages such as brand name, landing rights and
landing slots (time to land).

Ø The  
   


b
 

)
 b# . This
creates a larger market and a huge opportunity for all low cost airlines in this region including
AirAsia.

* 


Ø c
 
 
 
 
 

 
 
b 
   
  
  and this is a threat to all airlines especially low cost airlines
which tries to keep their cost as low as possible. For example, Changi airport in Singapore
charges SGD21 for every person who departs from Singapore.

Ø AirAsia¶s profit margin is about 30% and this has already attracted many competitors. Most of
the  
  
 
  

   b 
 to compete
directly with AirAsia. For example, Singapore Airlines has created a low cost carrier Tiger
Airways.