AirAsia Case Study
Abstract—This paper focuses on the company AirAsia. We will be talking about their strategy through out this paper and will also discuss their position in the global market. AirAsia’s strategy is to become the largest low cost airline in Asia; however, their coverage stays within south east Asia, which with our consultation and data presented in this paper we can analyze and seek a path towards a much larger coverage and becoming the leading largest low cost airline in the world. For the sake of this paper, we will be focusing on AiAsia’s partnership with Emirates in the middle east region.
Keywords—AirAsia; Strategy; Sustainable Growth; Low-cost Airline; ...view middle of the document...
Once the analysis section is completed we will discuss our suggestions for best possible strategy for AirAsia to go world wide and become the leading largest low-cost airline in the world. We will conclude with a brief discussion on some of the takeaways and a summarizing on what was discussed throughout this paper.
History and Background
Low Cost Carriers development in Asia started around 1990s. It all began in Japan and Philippines, these two nations were liberalized by huge domestic markets; SkyMark Airlines and Air Do; also in 1996, Cebu Pacific Air established the low fare strategy in the Philippines. These early-start LCCs (Low Cost Carriers) served mainly point- to-point services targeting price-sensitive leisure travelers. (S.St AirAsia Case Study)
Since 2000 LCCs in North Asia, South Asia, and South East Asia have been developing rapidly due to the early start of only a few operators in these regions. Some of the factors which can explain the rapid growth of LCCs in the year of 2000 can be: First, the eruption of the financial crisis in Asia in 1997 enable a high demand of low-cost air transportation for business travelers; This also made the governments in some Asian countries under pressured to choose national airlines over international. Second, elimination of bilateral air transport contacts to encourage rapid growth of trade and travel in the region. Third, opening new low cost terminals in Malaysia’s Kuala Lumpur Low Cost Carrier Terminal in 2005 and Singapore’s Changi Airport in 2006. (S.St AirAsia Case Study)
AirAsia is well known in Asia. It is the leading low-cost carrier, connecting people and place around countries. In 2010 the AirAsia group includes AirAsia Thai and AirAsia Indonesia break the record of its leadership position with two extraordinary occasions flew 100 million passengers and gain profit of RM 1 billion. (S.St AirAsia Case Study)
AirAsia is currently the leading and largest low-cost carrier in Asia. It services an extensive network of over 85 destinations with over 106 aircrafts. Within less than 15 years of operations, it has carried over 300 million guests (the end of 2014). AirAsia today is proud to be a truly ASEAN (Association of Southeast Asian Nations) airline with established operations based in Malaysia, Indonesia, Thailand, Philippines and Japan. This is complemented by AirAsia X, its low-cost long-haul affiliate carrier that currently flies to destinations in China, Australia, Taiwan, Nepal, Korea and Japan. AirAsia was named the World’s Best Low Cost Airline for over five years in a row (including 2015). (Ismail, Case Study: AirAsia).
In 2004, AirAsia made a huge and revolutionary decision to change all its existing old aircraft Boeing B737 with Airbus A320; the reason behind this decision was to gain more capacity, more efficient fuel-consumtion and cost-efficient. As a result, nowadays, the Group has the largest and newest A320 fleet in the region. By utilizing homogeneous...
