AZAMUDDIN BIN MOHAMAD

Summary

AirAsia is a low-cost Malaysian airline company located in Kuala Lumpur, Malaysia. AirAsia was led by CEO Tony Fernandes who the founder of this company. Sir Tony Fernandes restructed AirAsia into the first no-frills, low-cost carrier "LCC" in Asia and give a huge success in result. Sir Tony Fernandes saw great potential for a no-frills LCC in Asia after witnessing the success of LCCs in the West. AirAsia have accomplished to be the first airline operator in Asia to adopt the low-fare, no-frills concept. AirAsia also became the first airline to introduce fully ticketless travel and offer a free seating policy in Asia. By using their tagline "Now Everyone Can Fly", many travelers were attracted to purchase air tickets through its multilingual website which offer fare promotion and encourage early booking. AirAsia use several new tagline to approach customer to buy their tickets. Under tagline "Easy to Book, Easy to Pay & Easy to Fly", the seats were sold through telephone booking centre, sales offices, travel agents and partnerships with local banks and post offices. In a short period, AirAsia announced their first profit nearly to US$6 million. In addition, AirAsia had set up three hubs wihtin Malaysia to give a better service to domestic market and expand their name to neighbouring countries by provide regional flights. Value-added service offer passengers to pre-book their checked baggage for a lower rate, and checked-baggage handling fees was introduced later to encourage customers to travel lighter so that less fuel burnt and reduce pollution. AirAsia had evolved from a classic LCC into an integrated service provider, offering financial services such as travel insurance and other holiday products. AirAsia had launched the co-branded Citibank-AirAsia credit card, which allowed eligible cardholders to earn free flights. AirAsia had a price war with Malaysia Airlines MAS although both of the company compete in different markets. Airasia became a real threat to the former monopoly operator who more receptive to the low cost and no-frills concept. 

Observation and Data Analysis

Based on Exhibit 1, the business model of AirAsia stated that AirAsia have set their vision to continue to be the lowest cost airline in every market they serve. AirAsia also have plan several strategy in order to achieve their goals. Based on the comparison on Exhibit 3, AirAsia is the earliest company that introduce both low-cost carrier and no-frill. Compare to Malaysia Airlines, AirAsia had a sister airline which called AirAsia X that operates for long haul services while Malaysia Airlines stated zero sister airline. AirAsia have many advantages compared to other airline operators such as aircraft (seats), cabin, seat option, refund and changes option and checked baggage fees. Based on Exhibit 4, there are a few differences between AirAsia and AirAsia X in term of concept, flying range, aircraft, seat type, seat option and in-flight dining where each of them have their own benefits to customer. Based on the comparison of share price of low-cost carrier on Exhibit 5, AirAsia was recorded as one of the low share price change compared to other airline operators. Based on Exhibit 9, there were many awards and recognition received by AirAsia based on their performance and services.

Conclusion

In conclusion, what i have learnt from this case study is we need to grab any opportunity that giving high chance of profit such as airlines industry. We need to believe in ourselves to take risk in order to achieve our dreams like Tony Fernandes who can build AirAsia as they are today.