AirAsia originally was founded by government and on 2 December 2001 was bought by Tony Fernandes. AirAsia was established in year 1993. AirAsia has travel around the earth and ascend to become the world’s best in year 2001. AirAsia continues to spread out the way for low-cost aviation through the innovation, efficient and passionate approach to business with a route a network that extent through over 20 countries. There are some companies which link with AirAsia such as AirAsia X, Thai AirAsia, Philippines’ AirAsia Inc., AirAsia Japan and Indonesia.
In addition, for the vision part in AirAsia, AirAsia aims to be the largest low cost airline in Asia and serving the 3 ...view middle of the document...
3.1 PEST analysis
PEST will be the type of situation analysis in political, economic, socio-cultural and technological factors are investigate to chart of an organization’s long-term plans. (BusinessDictionary, 2013)
In the political part, AirAsia found that it is difficult to fly outside the Malaysia. Double-sided agreement will be the main barriers in the way of low cost carriers. The landing charges will also be another big factor which influence on costing of low fare airlines. Besides, the low cost airline industry which situated in South East Asia has been underdeveloped just because the aviation market is tightly adjusted by bilateral air rights contract.
While in the economic part, AirAsia airline offers the low-cost carriers by providing inexpensive ticket and few in flight services. These may help in obtaining the attraction in the district despite having the strong competition from MAS (Malaysia Airline). For the current depression will hit on the aviation business. With the slow down economy, more people will want to buy the cheap tickets and enjoy the flight. Besides, the prices of the oil may be another factor for the airlines. It is difficult to control the operation’s cost once the price of the oil increasing.
For the social part, passengers are not willing to take the expensive airline for a long-haul flight. To help for the world’s population increasing, the numbers of tourist and educated person are needed as help for increasing the growth of aviation industry. SARS had scare people to fly over. “Safety First” was committed by the AirAsia, implement with all regulatory institutions, set and maintain constantly high standards and the last will be guarantee the security of staff and guests.
While in the technology part, AirAsia provides the online service which can combines the air ticketing with hotel bookings, car hire and travel insurance. AirAsia had pushed the internet booking services in order to keep costs in check. Besides, AirAsia also introducing the GO holiday, the online programmed where consumers can book the holiday package online in real time. With the airbus A320, there will be better performance and reliability as help in proving the fuel efficiency and extra capacity. (UK Essay, 2013)
3.2 Porter 5 forces
Porter 5 forces are a model which used by the company for industry analysis and corporate strategy development. This 5 forces include supplier strength, competition, customer power, the potential for new companies join the industry and threat of substitute products (BusinessDictionary, 2013)
Figure 1: Porter 5 Forces diagram
3.3.1 Bargaining power of customers
Bargaining of buyers will be the ability of customers to put the firm under pressure. (Wikipedia, 2013) There are 2 types of buyer power which are customer’s price sensitivity and negotiating power. The Revenue Management System was the only system which used by AirAsia. This system had...