Airline

1. Airline • 2 Malaysian-based airlines are Malaysian Airlines and Air Asia • Malaysian Airlines , a full service airline, was born in 1947, owned by the govt of Malaysia. It has been operating on average performance based on profits earned over the years, however it is also considerably successful, based on several service awards won over the years. • Air Asia was born in 1993, began as a budget airline. It has since grew fast to become world leading budget airline.

2. Partha Pratim Mahanta Dibakar Sinha Dipankar Nath Pranjal Pratim Neog Samiron Moran Abhijit Ramchiary 25-5, Block H, Jalan PJU 1/37 Dataran Prima, 47301 Petaling Jaya Selangor Darul Ehsan, Malaysia CASE STUDY

4. OBJECTIVES • To show the profile of our company i.e. Air Asia. • To know the business strategies and operations of Air Asia by using different strategy models. • To show you the future of Air Asia by SWOT analysis. • To show you some of the future planning with reference to future growth.

5. CORPORATE PROFILE AirAsia • Our Vision : To be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares. • Asia's leading airline. • It was established in 1993 with the dream of making flying possible for everyone • Headquarters : Sepang, Selangor and Malaysia • No. of planes (including Joint ventures) : 78 planes • No. of employees : 3,000 employees • No. of customers : 16,000,000 per year • Turnover per annum : $60,000,000 • Our Mission : • To be the best company to work. • Create a globally recognized ASEAN brand. • To attain the lowest cost so that everyone can fly with AirAsia. • Maintain the highest quality product, embracing technology to reduce cost and enhance service levels.

6. CORPORATE PROFILE • Our Corporate objectives : • Leanest cost structure • Maximize shareholders value • Safety • Passion for Guests’ satisfaction • Transparency • Human Capital Development • Our Values : • Safety First, Low Fare and No Frills • High Aircraft Utilisation • Streamline Operations • Lean Distribution System and Point to Point Network

7. WHERE WE FLY

8. Air Asia Airlines over the years

9. Business Strategy and Operations FREQUENT FLIGHTS SAFETY FIRST LOW FARE NO FRILLS • Faster turnaround time • Improving aircraft utilization • Crew efficiency • Using one type of aircraft for saving training cost • Ticketless service • Internet booking • Reservations and sales office • Easy payment channels and authorized travel agents • Nationwide call centers The airline ensures fast turnaround of about half-an-hour which is the fastest in the region The airlines complies with the conditions of the International Aviation Safety and is regulated by the Malaysian Dept. of Civil Aviation It’s fares are significantly lower than those of other operators GUEST’s CONVENIENCE COST OPTIMIZATION OPERATION

10. Analysis

11. SWOT Analysis of AirAsia Internal Comp- -etence Factor • Growth in revenue • Low distribution cost • Low operational costs • Attractive ticket price • Strong Brand presence in Asia • Malaysian government support • Diversification strategy + Joint ventures OPPORTUNITY • Increasing competition • Increasing oil price • Substitute products • Increasing of maintenance cost External Environmental Factor STRENGTH WEAKNESS • Liberalization of ASEAN capital routes • Asia’s middle class growth • The “ASEAN Open Skies” allows unlimited flights among ASEAN’s regional air carriers beginning December 2008. • Does not have its own maintenance, repair and overhaul (MRO) facility. • Receives a lot of complaints from customers on their service. THREATS

12. Porter Analysis of AirAsia Potential Entrants • Many customers but high sensibility to prices. • Development of substitute products. Medium Threat of New Entrants • Train, bus and car travel are developing. Industry Competitors Rivalry Among Existing Firms Medium Bargaining Power of Buyers Suppliers Buyers Bargaining Power of Suppliers • Hard competition between Airbus, Boeing, ATR and others. Medium • Full services Air Line might consider going low cost. • Development of new low-cost companies. Low Threat of Substitute Products or Services Substitutes

13. BCG Matrix analysis of AirAsiaaccording to the country that their fleets are operating • Malaysia •  Indonesia • Brunei • Macau and • Thailand • Singapore

14. Future Analysis

15. SWOT Analysis15 years Down the Line

16. Brand Name • Long-term future • Strong management team • Strategy formulation and execution • Low cost leader in Asia • Excellent utilization of IT • Relatively high price • High operation cost • Investment cost in high technology • Strong competition • Demographic advantages • Growing of Middle Class • Partner with other low cost airlines • High fuel prices will squeeze out unprofitable competitors • Air Asia will get inherent advantage in long distance travel • Developed innovation technology • Entrance of other LCCs • High fuel price decreases yield • Accident, terrorist attack and disaster and affect customer confidence • Aviation regulation and government policy • Increase in operation cost in producing value-added services • System disruption due to heavily reliance on online sales

17. Future Strategy • Layered Adaptive Security • “Equivalent Visual” Operation • “Super Density” Airport Operations • Airborne Information Net • Travelling planning • Reservations and ticketing • Frequently flyer program • Campaign management • Customer care • Business intelligence • Yield Management System (YMS) • Computer Reservation System (CRS) • Enterprise Resource Planning System (ERP)

18. FUTURE PLANNING • To maintain the high level of profitability. • Act on the prices : • Expensive tickets to be distributed when the demand is high (week-end). • Prices increasing according to the demand. • Cheap tickets available during the middle of the week. • Act on the cost : • Offer more on board services/ products to the passengers. • Taxi booking service • Internet WIFI access on board Newspapers • Place advertisings on the plane’s cabin

19. FUTURE PLANNING • Fund-raising • Fresh money could be used to finance strategic projects. • Invest in joint ventures. • Maintain international development across Asia in association with local budget airlines. • It would increase the airline’s offer. • Diversification • Acquire new know-how in a view to offer more service to the consumer. • E.g. To take over an online travel agency.

20. Conclusion • The strategies of Air Asia focus more on the management and access of information rather the creation of irrelevant airline services. • For this reason, Air Asia has developed a unique set of guiding principles - simplicity, cost-efficiency and effectiveness. • Total commitment to these principles makes the airline services of Air Asia very user-friendly to its customers. • SWOT analysis of AirAsia with reference to sustainability and future growth shows more opportunities than threats. • AirAsia is fully determined to exploit these opportunities and convert more threats into opportunities for success.