AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). Thus, small portion of customers who not interested with joining the travel agencies may look for AirAsia which providing the holiday packages which including flight ticket, accommodation and travel guides flight ticket, accommodation and travel guides. The approach towards providing the lowest costs results into a low opportunity for gaining significant profits as the company abides by its approach of maintaining lowest flight costs. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. The portions of income of an individual earns is the factors because when the portion is high, the more customers will look for cheaper price, hence the bargaining power of buyers will be strong. 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. Customers have access to market information. Such events and teams have got millions of fan following, when an airline sponsors a team or an event, then it allows the company to reach new customers. The market has confronted critical competition in the form of new competitors who have also introduced low-cost flights. In anchor pricing strategy, the company prices its services along with the tickets at a low price. 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. AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. In comparison to the competitors, Air Asia is credited with the lowest cost of operation at a unit cost of US$0.023 per available seat kilometer (ASK) and a passenger breakeven load factor of 52%. Your email address will not be published. Rising Fuel Costs 2. AirAsia uses various media platforms for the marketing and promotion of its products and services. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. Let us now get into its marketing strategy. High Switching Cost. Let us start the Air Asia SWOT Analysis: For Air Asia, SWOT analysis can help the brand focus on building upon its strengths and opportunities while addressing its weaknesses as well as threats to improve its market position. AirAsia should expand into more countries, increase the market, and target new customers. AirAsia is one of Asias most successful low-cost carriers. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. The company believes that customers are the key to their expansion along with their growth. The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. February 2, 2019 By Hitesh Bhasin Filed Under: SWOT of Brands. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. Start-up Cost is high. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. The largest airline in Malaysia the business is known to be highly employee centric. 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. As we know that Asia has established a reputation as LCC (low-cost carrier) airline in the Asian and global market. The company engages in anchor pricing strategy in its marketing mix. WebAirAsia Bhd Fundamental Company Report Including Financial, SWOT, Competitors and Industry Analysis Enhanced SWOT Analysis (+ US$ 75.00) PESTEL Analysis (+ US$ 150.00) IFE, EFE, IE Matrices (+ US$ 125.00) Porter Five Forces Analysis (+ US$ 75.00) VRIO Analysis (+ US$ 175.00) Special Bundle, including all types of analyses (+ US$ Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. AirAsia has won many awards over the years. Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. The airline brand should exploit these circumstances. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. Student Life Saviour 2022 - All rights reserved. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. Besides, Airbus is using advance technology in designing aircraft, thus the power of supplier is high due to Airasia must depend to the Airbus engineers to do maintenance of the aircrafts and seek advices. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in This company provides both domestic, as well as international flights in its routes. 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. Swot Analysis of AirAsia Berhad. 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. The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. Strong Promoter 2. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). 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. Knowing the increase of competition in the market, AirAsia applied the adaptation process (Hanan & Freeman, 1984) by expanding its operation to long haul services to various destinations. Continue reading more about the brand/company. The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. AirAsia Airline As the best low-cost passenger. This has been possible due to the companys relentless communication through various marketing channels. Webprice wars with competitors, taxes and duty imposed on the firms products. Liked our work? We're here to answer any questions you have about our services. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. This article has been researched & authored by the Content & Research Team. 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 Essay Writing ExpertsUK Essay Experts. 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). It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. Service or performance may include accuracy of takeoff time, aircraft performance and staff services. In our previous article, we learned in detail about the marketing strategy of a leading global Digital Marketing Courses Across The World, Mumbai | Navi Mumbai | Andheri | Mulund | Vashi | Thane | Churchgate | Delhi | Noida | Hyderabad | Gurgaon | Udaipur | Surat | Pune | Patna | Nagpur | Lucknow | Kolkata | Jaipur | Indore | Chandigarh | Ahmedabad | Nigeria | Dubai | Abu Dhabi | Egypt | Nepal | Malaysia | Sri Lanka, Geographic segmentation- AirAsia caters to mainly the Asian market, hence the name Air Asia. Some more of these improvement areas can be found through its SWOT analysis. The airline company has already got a subsidiary AirAsia India for the local market. It constantly delivers on this promise of affordability, It is extremely difficult to keep costs as low as possible due to fluctuations in fuel prices and increases in service costs, AirAsia does not have its own MRO facility, Cut-throat competition in its sector. Similarity in product offering. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. 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. Thai AirAsia faces new competitive threats in Thai Lion and Thai VietJet. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. They have achieved effective targeting to this segment by making their brand synonymous with low-cost services. IT infrastructure of the organisation is utilised with a remarkable approach which enhances the operations and management of the organisation. 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. 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. Air India, Emirates, and many other Asian airlines have also started following the low-cost carrier strategy to attract market share. Learn how your comment data is processed. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. WebCompare AirAsia against competitors. Jetstar Airways 2. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. The company cannot control a number of charges and costs which are regulated by government and airline authorities which may result in a significant loss in profits and consistency of the organisation. Pacific (Cebu Air Inc, 2012), AirAsia (AirAsia, 2011), and JetStar Airways (Jetstar Airways, 2012) all reporting increase in revenues and recording profits over the previous year. The Air Asia X mainly focuses on the long-haul routes (Yarimoglu, 2014). Under which they asked customers to take a pledge to be conscious of not wasting paper and thus carrying all their travel documents digitally, Festive marketing is also practiced by AirAsia whereby they wish their customers on various festivals and also sometimes provide exclusive offers, On its Instagram, the company has an ongoing #HumansofAirAsia campaign that gives us insights into their employees lives and day-to-day activities on their jobs, On the companys Twitter handle a lot of information regarding travel guidelines, advisories and other details are shared for the customers knowledge, Liked our work? The brand colours of Air Asia are red and white, which represent determination along with passion, perfection, and positivity to serve customers high-quality services at low prices (Mele, Pels and Storbacka, 2015). 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). Brands, such as Jet Star Airways and Tiger Airways, are sustaining in the competition as they also provide air transportation at cheap costs to people along with enhanced in-flight services and varied options for passengers.This directly affects the customer strength of Air Asia, andthese companiespose a threat to the company. The cost-cutting strategies of AirAsia are effective and beneficial in terms of financial growth and maintenance (Ahmad and Neal, 2006). 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. If you did, be sure to share, comment, and let us know! Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. Do you have a 2:1 degree or higher? Step 4 - Determine overall industry structure and test analysis of consistency. As the rivalry is strong, Airasia may constant in price reduction to compete with them. The case involves the Due to few suppliers in market, this has increasing the bargaining power of supplier. 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. In addition, rates are determined by the class of flight, airline load factors, travel dates and days, and competitor pricing in the airline industry. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. Reputation as LCC ( low-cost carrier ) airline in the Asian and global market Asia Pacific, Australia Honolulu. Quite self-explanatory a service perfectly matched to your needs is in Kuala Lumpur International Airport, Sepang,,! 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