Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). The company confronts various complaints and issues from the customers who are numerous to resolve instantly and result in customer dissatisfaction. AirAsia is known for its low fares and no-frills policy. This has been possible through excellent brand positioning. It employs an anchor pricing policy, which establishes a baseline for pricing all AirAsia-operated flights. The company develops the products and services that are convenient for its customers (Mele, Pels and Storbacka, 2015). Due to competitive in airline industry and protects on national airline, MAS which facing losses in these year, it is quite difficult to apply for licensing and permit for operating airline company. Your topic helped a lot, Your email address will not be published. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). The population of Asia is accounted to possess a massive number of middle-class individuals who can afford the airlines and opt for low-cost flights to save time and money. 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. Due to few suppliers in market, this has increasing the bargaining power of supplier. AirAsias marketing strategy has worked wonders for the company in communicating exactly what they wanted to the customers. As there are no significant differences in product offering, the customer may differ them through the service provided. The basic product strategy in its marketing mix is its low-cost air services. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). Currently, the priority for the company is to maintain the fundamental principle of keeping travel fair as low as possible so that people with weak financial status can also afford to travel in flights. AirAsia X share began trading on Bursa Malaysia, formerly known as the Kuala Lumpur Stock Exchange, on 10-Jul-2013. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. Another strategy that the company will implement in the future is networking. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. Below are the top 3 competitors of Air Asia: 1. Apart from that, AirAsia engages in popular promotions such as social media advertising, print advertisements, and simple but efficient billboard advertising. 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. Physical evidence encompasses the ways in which the company can maintain their position in the industry. AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. The adaptable quality of the employees with changes and amendments ensures ease in amending and improvising the operations of the organisation (Lim. AirAsia is one of Asias most successful low-cost carriers. Orient Thai previously competed as a third LCC domestically but has essentially withdrawn from this market, initially shutting its LCC brand One-Two-Go in 2008. The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. Its routes include both domestic and international flights. They truly contribute their lifelong learning in allowing students to succeed in their academics. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. 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 provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines Similarity in product offering. Specific analysis has been conducted in order to analyse the market environment for AirAsia. AirAsias mission is to be the best company, which ensures good relations between its management and employees, to make everyone fly with AirAsia by attaining the lowest cost, employ new technology to maintain highest quality products and enhance service levels. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. The company is constantly using innovative solutions to provide low-cost transportation. The airline company has already got a subsidiary AirAsia India for the local market. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. Interested in learning more? The new handles will reflect AirAsia's brand identity and values, and make it easier for customers to connect with the airline and the super app on social media. Required fields are marked *. It must have a good relation with hotels and tourism companies around Asia. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. Following is the SWOT analysis of AirAsia: Lastly, lets take a look at AirAsias social media marketing presence as digital marketing is also a very important part of any companys marketing strategy. They hence practice geographic segmentation by focusing their services primarily in Asia, Demographic segmentation- Being a low-cost airline, they cater to people in the low to medium income group, Psychographic segmentation- Their main customer is the cost-conscious traveler, AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines, JetStar is providing more payment options or gateways to its customers, AirAsia provides services to 130 destinations as compared to JetStar which provides services only to 80 destinations, Malaysia Airlines generates 113% of AirAsias revenue, Malaysia Airlines also has fewer employees, at 7,159 compared to AirAsias 20,000, AirAsia is the low-cost airline leader in the Asian market, The company has subsidiaries in Indonesia, Thailand, the Philippines, and Japan, It boasts a fleet of nearly 300 aircrafts, AirAsias positioning is steady and consistent in being a low-cost airline. Lets get into discussing their marketing efforts, starting with their marketing mix. AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. Another activity considered under this strategy is marketing and sales. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. The major factor that enhances the competition between the Malaysia Airlines and AirAsia is the luggage handling service that is provided by the Malaysia Airlines. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). These include a 36% increase in passengers carried by AirAsia Malaysia, 79% increase in passengers carried by AirAsia India and an increase of 65% of passengers carried by AirAsia Thailand. It was named as the Best Low-Cost Airline Company in the world for 9 consecutive years at the Skytrax World Airline Awards. 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. Another reason for the threat of new entrants being low is government laws and regulations which pose restrictions on applying for permissions and license for operating an airline company. Malaysia Airlinesis a member of the oneworld airline alliance and it is also considered as the flag carrier of Malaysia which is head-quartered in Kuala Lumpur International Airport. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. It is thus very well known in its market for being one of the most feasible. The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. AirAsiastop competitorsareAir India,American Airlines,Emirates Airlines,British Airways,Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. Air Asia has established itself as a strong competitor in the airline industry. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia India are its affiliate airlines, while AirAsia X, its sister carrier, focuses on long-haul routes. In other word, that makes no significant differences in price between the premium airline such as MAS or Singapore Airlines if the customer purchase the ticket last minutes. Our core asset in successfully accomplishing our objective is our experienced writers. Some factors like increased competitor activity, changing government policies, alternate products or services etc. The company is observed to possess a significant reputation among the competitors, customers and the markets of the establishment. Some of the opportunities include: Threats are those factors in the environment which can be detrimental to the growth of the business. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. Student Life Saviour 2022 - All rights reserved. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. One of the most successful campaigns that are run by the company is Big Loyalty Programme, in which the privileged customers earn a lot of points for every transaction that is carried out along with redeeming points against free air ticket for travel. Malindo will compete against AirAsia on all three routes. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). In this context, Air Asia will be focusing on the use of the strategy of service innovation as it is the best strategy to effectively implement the factor of providing new and enhanced services to passengers at low cost. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. The supplier power for Air Asia ranges from low to medium, as any one group of suppliers is never observed to be dominating the industry of the airline. AirAsia is an experienced brand in the airline industry. - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. We're here to answer any questions you have about our services. Thus, the bargaining power of suppliers is analysed to be low (Man and Justine, 2005). Rise of Other LCCs in Market. This article has been researched & authored by the Content & Research Team. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. Low Cost Model: Low cost operations and fixed costs . This is due to Airbus is a UK based aviation company and their customer may come from around the world. Today it is one of the most reputed Asia-based airline companies. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. The increasing cost has made it impossible for the company to offer low prices and remain profitable. Given the current situation, in-flight experience, especially hygiene matters a lot to customers so AirAsia should heavily market its hospitality and put customers at ease in availing their services. Porters Five-Forces Model of competitive analysis is widely implemented by most of the company to progress their strategies in many industries. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. In order to stay ahead of the competition, the company needs to constantly invest in improving the additional facilities that make a difference to customers in todays times such as disposable in-flight meals, complimentary WiFi, entertainment facilities, and varied seat options. The other supplier such as fuel supplier, merchandise supplier, or food supplier may be depend on market condition. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and Lets see how they compare amongst a few key indicators. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. WebFive steps to successful analysis of. Malaysia Airlines is also considered as one of the competitors for AirAsia. It is an international airline that began operations in Malaysia and has since expanded to include countries across the Asian continent, such as India and Thailand. Human resource management undergoes significant political pressure as the recruitment process of AirAsia is focussed on the racial determination of the applicants rather than their merits. Strong Promoter 2. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. As reported in The Edge Markets in 2019, Khazanahs managing director Datuk Shahril Redza Ridzuan claimed that the airlines CASK was only 15 per cent to 20 per cent higher than AirAsia and was in fact lower than regional airlines such as Singapore Airlines, Thai Airways and Cathay Pacific. AirAsia has won many awards over the years. It offered a new definition of affordable traveling with its Tagline Now Everyone Can Fly. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. With the increasing number of services by different competitors, AirAsia has also expanded its facilities including the tour packages and hotel booking services that help the company to sustain in the market. Their 5 main operational hubs are Singapore, Indonesia, Japan, Malaysia, and Thailand. Competitiveness Points of Air Asia. Before we get started, lets get to know the company a little more. Air Asia is known for treating its employees and customers well. The branding of the logo of Air Asia is essential for them. Customers have access to market information. In contrast to this, Jet Star Airways has more types of planes that are provided to its customers that includes A320, Bombardier Q300, A321 and Boeing 787 Dream Liner; whereas AirAsia offers only two types of planes to its customers, which are A330 and A320. AirAsia has been a successful part of the airline industry for over a decade. 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. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Concentration of Buyers power in many hands. Back in the 1900s Thai National Airlines was the only airline that could fly in the main routes of Bangkok Chiang Mai with non-stop flights. Strengths. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. The created segments consists of consumers who share similar interests, requirements and locations. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. High numbers of Competitor. The airline brand should exploit these circumstances. The company was established in 1993, and the official operation of the company was started on 18 November 1996. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Air Asia can also implement a cost leadership business strategy. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. Air Asia is a low-cost airline headquartered in Malaysia. They may compete in term of their route offering that Airasia does not fly. Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. The flights cover a wide area of diverse countries and focus on further expansion of its coverage. Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. Furthermore, competitive analysis has also been conducted for AirAsia in this report along with marketing mix 7 Ps and SWOT analysis. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. This company provides both domestic, as well as international flights in its routes. The following are strengths and weaknesses of AirAsia: 1. 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. 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. AirAsia should expand into more countries, increase the market, and target new customers. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. This is act as a barrier of entry for the competitor as there are high in capital requirement such as set up of headquarters, purchasing or hiring aircraft, appointment pilots and other staffs like air supervisor. 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. It has been reviewed & published by the MBA Skool Team. Thank you for reading this case study. Other than that, hes a fun loving person. Similarity of product. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. 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). The increase in oil prices has critically impacted the operations of the organisation. Airasia in this report along with marketing mix 7 Ps and swot analysis and Australia ( AirAsia, PhilippinesAirAsia IndonesiaAirAsia... Australia ( AirAsia, PhilippinesAirAsia, IndonesiaAirAsia, and AirAsia X and remain profitable have a good with! Registered an annual turnover of USD 1.12 billion in the worldTherefore, in the,. Social media advertising, print advertisements, and the official operation of the opportunities include: are... 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