THE ANALYSIS OF THE FINANCIAL

MARKET OR INSTITUTION FOR

AIR ASIA AIRLINES.

STUDENTS:
ANDI NUR ELISYA SYAHIRA BINTI BAHRI (AIU18092007) (Leader)
PUSPA AZWIEYANIE BINTI JAWI (AIU18092005)
SITI NORALINNAH BINTI JUSNEH (AIU18092008)
NADZIRAH RADIN (AIU18092003)
MAIDAH BINTI SALI (AIU18092001)
 Introduction
• Air Asia Berhad, Malaysia is the first low-cost and frill-free
airline in Asia. Air Asia introduced many incentives to
encourage more consumers to use its aviation services. Air Asia
Company was initially established on 20 December 1993 and
began operations on 18 November 1996 which was founded by
a Malaysian government conglomerate, DRB-Hicom. Air Asia
Sdn Bhd is a limited company by shares and sole
proprietorship incorporated under the Companies Act 1965.

Objective
To analyze the financial
market or institution of
Air Asia Airlines.
 Company Background
• The Head Quarters of Air Asia called RedQ (Red
Quarters) located at Sepang, Selangor.
• Air Asia was re-established on 12 December 2001 when
the company bore a very high debt burden of RM40
million. Therefore, it was sold to Tony Fernandez, the
founder of Tune Air at a price per ringgit. Tony
Fernandez is an entrepreneur from Malaysia and the
founder of "Tune Air Sdn Bhd" who has introduced low
cost flights.
• In 2002, Air Asia launched a new route from its hub at
KLIA at low speeds that beat former Malaysia Airlines
monopoly airline with a promotional price as low as one
ringgit.
• In 2003, Air Asia opened a second hub at Senai
International Airport in Johor Bahru near Singapore.

• Armed with the simple slogan "Now Everyone Can Fly",

AirAsia effectively puts the brand in the minds of
customers when choosing a flight.

• Air Asia also has a route network spanning more than 20

countries; therefore it continues to pave the way for low
cost flights through innovative solutions, more efficient
processes and thoughtful approaches to the business
market

• Air Asia X was established in 2007 to provide high

frequency and point-to-point networks for long-distance
businesses.
 Content

A. Function Of The Market And

Institution In Air Asia Airline

To promote service of Air Asia Airline for customers

To control financial system in the company
Reduction in transaction costs and provision of the
information.
Reasonable price for customers
Target on Potential Customer’s requirement
B. Financial Platform
C. Revenue Grew
C. SWOT Analysis
 D. Fin
a ncial
State
m ent

BALANCE SHEET
 INCOME
STATEMENT
 RATIO
Liquidity ratios
a. Current ratio
2019 = 0.74  Turnover ratio
2020 = 0.58 a. Fixed asset turnover
b. Quick ratio  Profitability ratios 2019 = 0.20
2019 = 0.07 a. Gross profit ratio 2020 = 0.14
2020 = 0.24 2019 = 35.46
2020 = 0.24
b. Operating profit ratio
2019 = -6.58
2020 = -44.75
E. Air
A
si a D i
Analy vidend
si s
 F. Issu
es for the
2 years past

Air Asia X recorded

MYR550 million net loss
compared with a net
profit MYR43.3 million in
the first quarter of 2019.

Source :
https://www.flightglobal.com/strategy/m
alaysian-brokerage-issues-dire-warning-
about-airasia-x/139592.article
 Air Asia expected to raise an
additional RM1 billion in debt
funding this year, followed by
RM600 million in the next two
years to tide through bruising
losses and cash burn arising from
the Covid-19 pandemic.

Source :
https://www.nst.com.my/business/2020/04/582382
/airasia-may-last-less-five-months-current-
conditions-may-raise-rm1bil-debt
 Recommendation to the issues

1. Air Asia has implemented include resuming operations on a

staggered basis in June 2020, said the airline.
• Positive developments on its business operations as passenger
seat booking trends, flight frequencies and improving their
cater.
• The company expects the business operations to gradually
return to normal operations level by early 2021
2. Negotiating with suppliers to reduce aircraft lease rates and to
pay on a per-use basis, to early-return leased aircraft that is in
excess of future requirements, to reduce airport charges, to revisit
terms with business partners, and to restructure its fuel hedges .
 Conclusion
• The financial market and institution are exists in every company or
any organization. The system could enhance the performance of
the company. The Air Asia’s is one of the most known companies
in the world that practice the financial system.

• All department of the organization and employees have to work

together to ensure that the strategy reaches its objectives.

• The financial system really influences the financial statement of the

Air Asia’s Airlines in the end of 2019.
• However, the Air Asia’s company faces a very tough
challenges in 2020 due to this pandemic.

• The Air Asia’s company take an action to reduce the

impact.

• The Air Asia believe they will recover as soon as possible

and come out stronger to manage the problem.