AirAsia is a Malaysian low-cost airline. Headquartered in Kuala Lumpur, Malaysia.

. AirAsia group operates scheduled domestic and international flights to 78 destinations spanning 25 countries. Its main hub is the Low-Cost Carrier Terminal(LCCT) at Kuala Lumpur International Airport (KLIA).

Founded Commenced Operations Took Over Hubs Secondary hubs

1994
18 Nov 1996 by a government-owned conglomerate, DRB-Hicom. 2 Dec 2001 by private entrepreneur Tony Fernandes Kuala Lumpur International Airport Kota Kinabalu International Airport Kuching International Airport Senai International Airport

Fleet size Destinations Parent Company Headquarters

Key People

132 78 Tune Group, AirAsia Berhad Kuala Lumpur

Tony Fernandes (Director)

AirAsia
Low-cost airline Operates schedule domestic and International flights Asias leading low fare airline No frills Implement fully ticketless travel and unassigned seats Main base is the Low Cost Carrier Terminal (LCCT), Kuala Lumpur International Airport

Subsidiaries
Air Asia Zest

Indonesia AirAsia
AirAsia Japan Thai AirAsia Air Asia X AirAsia Philippines

Air Asia India

Destination Map
142 routes to 78 destinations (Over 400 daily flights covering Indonesia, Malaysia and Thailand). International routes: Australia Brunei, Cambodia People's Republic of China India, Nepal Japan Laos, Philippines South Korea, Singapore Sri Lanka, Taiwan, Vietnam.

Over 400 daily flights covering: Indonesia Malaysia and Thailand

Competitors
EasyJet plc Malaysian Airline System Ryanair Holdings Singapore Airlines Limited Tiger Airways. Southwest Airlines Thai Airways International

STRATEGY

Vision
To be the largest low cost airline in Asia and serving 3 billion people who are currently underserved with poor connectivity and high fares.

Mission
To be the best company to work for whereby employees are treated as part of a big family 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

VALUES
Safety first High aircraft utilization Low fare, no frills Streamline operations

Lean distribution system

Point to point network

Employees before customers

SWOT Analysis
INTERNAL

STRENGTHS

WEAKNESSES

Strong management Team Strong Strategy and Execution plan on fuel hedging, buying low cost airbuses. Low cost Model Single type fleet Efficient Operations First to market with ICT collaboration Strong Brand Name Multi-skilled Staff seamless transition within workforce

Outsourcing Limited human resources Heavy reliance on IT Non-central location of secondary airports

SWOT Analysis
OPPORTUNITIES THREATS

Long haul flights new routes High fuel prices survival of the strongest airlines Industry consolidation means new routes and airport deals Recycling routes abandoned by struggling rivals

Entrance of new LCCs High fuel price decreases yield Regulations and Policies Customer confidence affected by Terrorist Attacks, Accidents Increase in operation cost in producing value-added services System disruption on IT

EXTERNAL

MARKETING MIX:

PRODUCT/SERVICES: 1.Guest convenience: -Convenient services for easy booking through combination of ways:-SMS Booking in August 2003 -GO Holiday programme , the airlines online programme where guests can Book their holiday packages online in real time. 2.Frequent flights: Airasias high frequency services ensures guest convenience is met. 3.Nationwide call centre 4.Ticketless service 5.Easy payment channels

PRICE:
Low fare ,No frills: -Airfares 40-60% lower than rivals -No complimentary drinks or meals are added -Choice of purchasing food and beverages ready for sale on board.

PLACE/DISTRIBUTION: 1.Internet booking -Multilingual website -Launched in 2002 available in 7 languages -www.airasia.com

2.Reservations and sales office

3.Authorized travel agents

PROMOTION:
Unconventional marketing strategies: Unique marketing campaigns such as sports sponsorship, media publicity stunt and making use of cabin crew as marketing icons allowed Airasia to Outperform competitors.

Official airline sponsor of Manchester United

Official airline sponsor of AT&T Williams Formula One team:

Airline business model:

Hub and spoke model

Point to point model

LCA are built upon point to point model that work effective in turbulent model

In hub and spoke system moved passengers from 2nd tier spoke to hub where all passengers all pass through to reach final destination

-basic premise to fly shorter distance between secondary airports in under service locations

Operating cost structure

operating expenses jan/mar 2008 jan-mar2007 %revenue Column1 Column2

2008

2007 justification

Revenue

146731

111346.3

staff cost

12420

10582

-8.5

-9.5 High due to training and handling new fleet of planes

fuel and oil

74164.02

44488.62

-50.5

-40 Fuel expenses increased by 66.6

user and station charges

9084.5

7689.6

-6.2

-6.9

Maintaince and overhaul

6314

9374.5

-4.3

-8.4 Maintaince cost decreased because of new fleet of planes

EBITAR

35837.2

34811.8

24.4

31.3

EBITA

38930.97

32673.54

26.5

29.3

EBIT

20120.04

19963.8

13.7

17.9

Pretax profit

27731.79

11806.04

20.6

10.6

Net income

44206.03

23811.89

30.1

21.4 Increase because of layered hedge strategy

SIF for AIRASIA in Southeast Asia:

1.Market demand for air travel. 2.Availabilty of secondary airport and infrastructure development. 3.Removal of regulatory constraints. 4.Alternative distribution and marketing strategies.

Low Cost Model

Foresight

Fast turnaround

First LCA entrant

Yield management

Local adaptation C Sponsorship Media frenzy Other critical factors No free meal

Single class

Female cabin crew marketing

Low fare campaign

Sustainable Growth and Competitive Advantage

Aggressive in its branding and marketing campaigns Single aircraft type in use, which results in fixed costs and low cost operations. Its flat organizational structure Employees have multiple roles so as to save on costs. Employees are given opportunities to grow in the organisation. Available Seat per Kilometre (ASK) - Having the lowest cost on available seat/kilometre ensures efficiency and cost savings.

Conclusion
Innovative mindset and keeping faith in its employees to maintain a competitive advantage. Financially shrewd and have dynamic layered-hedge strategy so as to save on fuel costs due to volatile oil prices. Partnerships with various corporate organization and diversify its services such as partnerships with Financial institutions. Not only will this provide extra revenue streams but increase its brand power and image, via indirect marketing. Diversification would also spread risks among partners. It should continue to be aggressive in advertising, innovative and first to market new ideas and seek to enter other countries/regions.