FACULTY OF APPLIED SOCIAL SCIENCE (FASS) FAKULTI SAINS SOCIAL GUNAAN ABCC 3103 CASE STUDY OF CORPORATE COMMUNICATION

Name:

Matric N :

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SEMESTER MAY *013

AC+NO,LED-EMENT Praise to the Lord for providing me with great health, strength and emotional support to complete this assignment. It is with great appreciation that I acknowledge the contributions and support in completing this dissertation. It is with great appreciation that I acknowledge the contributions and support of my lecturer whose time, effort and guidance were highly beneficial especially during my completing my assignment. My sincere appreciation and thanks to my colleagues for their constant support, guidance and friendship. I really appreciate all my family members because of their endless support; encouragement and understanding throughout my good times as well as my tough times are so meaningful. Finally, I am grateful to my company, the government who s allowed me to pursue my study to the higher level.

TABLE OF CONTENTS CONTENTS. AC+NO,LED-EMENTS REFERENCES 1%0 INTRODUCTION PA-E * *1 /

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DEFINITION OF PUBLIC AFFAIR

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T1E IMPORTANCE OF PUBLIC AFFAIR

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BRIEF INTRODUCTION OF AIRASIA OR-ANISATION /%1 /%* AirA'ia C r" rate Pr 4i!e Ac#ie5eme$t A6ar& Ac#ie5e& 78 AirA'ia

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DISCUSSION 0%1 0%1%1 P te$tia! Pr 7!em' Face& 78 T#e Or)a$i'ati $ T#e I$te$'it8 Ri5a!r8 Am $) AirA'ia C m"etit r' 9 T#reat 4 P te$tia! Ne6 E$tra$t' 0%1%* 0%1%3 0%1%/ 0%* 0%3 Bar)ai$i$) P 6er 4 B(8er' Bar)ai$i$) P 6er 4 S(""!ier' T#reat 4 S(7'tit(te' P ''i7!e E44ect' O$ T#e Or)a$i'ati $ Sta:e# !&er Practica! a$& Re!e5a$t P(7!ic A44air Strate)ie' "

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C $ti$(e It' S(cce''4(! L 6 C 't Carrier Strate)8 Mai$tai$i$) a$& Im"r 5i$) ;Em"! 8ee' 7e4 re C('t mer'< I$crea'e L ca! Re'" $'i5e$e'' a$& -! 7a! I$te)rati $ I$crea'e C mm($icati $ Strate)ie' a$& A&5erti'eme$t 4 r AirA'ia

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SUMMARY

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INTRODUCTION $owadays, people believe that the management of any company or organisation

critically depends on how it is viewed by key stakeholders, such as shareholders and investors, customers and consumers, employees, and members of the community in which the company operates. %ecently, financial crisis, globali&ation, corporate crises and have further strengthened this belief. 'ne of the most important strategic ob(ectives of the ).*.'s. and senior e+ecutives of many large organi&ations and multinationals nowadays is protecting their company s reputation to be ,critical . -his strategy of maintaining and protecting the company s reputation is actually the core task of corporate communication practitioners. .owever, the role and contribution of corporate communication in many company is still far from fully understood because many corporate communication practitioner feel undervalue. -he term of ,public relations had been used to described communication with stakeholders until the /012s. It was tactical in most company and mainly consisted of communication with the press. .owever, when other stakeholders, both internal and e+ternal to the company, began to demand more information from the company, the company then began to see communication as more than (ust a ,public relations . -his is how the new corporate communication function began to take over. $ew function come to combine various speciali&ed disciplines, including corporate design, corporate advertising, internal communications to employees, issues and crisis management, media relations, investor relations, communications and public affairs changes. -he word )ommunication 3from Latin comm4nic5re, meaning 6to share67 is the activity of conveying information through the e+change of thoughts, messages, or information, as by speech, visuals, signals, writing, or behaviour. It is the meaningful e+change of information between two or a group of person. ,)orporate originally stems from the Latin words for ,body 3corpus7 and for ,forming into a body 3corporare7, which emphasi&e a unified way of looking at ,internal and ,e+ternal communication disciplines. 8an %iel defines corporate communication as an instrument of management by means of which all consciously used forms of internal and e+ternal communication are harmoni&ed as effectively and efficiently as possible. )orporate )ommunications help organi&ations e+plain their mission, combine its many visions and values into a cohesive message to 9

stakeholders and it can be seen as an integrative communication structure linking stakeholders to the organi&ation.

-he overall ob(ective of creating a favourable basis for relationships with groups upon which the company is dependent. 'verall, the definition of corporate communication is a management function that offers a framework for the effective coordination of all internal and e+ternal communication with the overall purpose of establishing and maintaining favourable reputations with stakeholder groups upon which the organi&ation is dependent. In conse;uence, corporate communication involves much more than (ust motivating employees and dispensing good public affair. )orporate communication is a powerful management tool if approached with strategic integrity, alignment and focus. It is about managing relationships with the organi&ation s stakeholders in order to ma+imise the corporation s reputation capital.

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DEFINITION OF PUBLIC AFFAIRS <s the organi&ations aim to communicate the same message to all its stakeholders, to

transmit coherence, credibility and ethic, public affairs is an endeavour that engages the community on behalf of an organisation because it is building and developing a good relationship with the e+ternal environment. Public affairs is one of the most important tools in corporate communication by creating favourable point=of=view among stakeholders on which the company depends. -he public affairs function uses its ,boundary spanning 3>itchen /001, p. /#7 role to counsel management and influence corporate planning and activity so as to best align corporate and community interests. Public <ffairs industry has developed over the past 92 years to be optional e+tras for the Public %elations department to an operational re;uirement in the boardroom. -here is some disagreement over e+actly what the public affairs industry encapsulates. ?hile often e;uated with the lobbying industry, the public affairs industry is far broader. Lobbying is in fact only one element of what a public affairs practitioner does. -he influence of P< on the strategic business planning process is e+panding with 10@ of respondents regularly preparing its own strategic plan, although only #9@ are formally linking this to the corporate strategic plan. Ai+ty=nine per cent of respondents said their P< departments participate in the strategic planning process for the business. -he public affairs function still retains the responsibility for managing issues and crises despite some indications that organisations are recognising this as a shared responsibility. 1

-herefore, public affairs should not be confused with public relations. Public relation initiatives can be integrated into the public affairs campaign but should be used carefully because public relation should not strain any political relationships. Public affairs is a term used to describe an organisation s relationship with stakeholders. -hese are individuals or groups with an interest in the organisationBs affairs, such as MPs, civil servants, shareholders, customers, clients, trade associations, think tanks, business groups, unions and the media. %ichard <rmstrong, former president of the Public <ffairs )ouncil, addressed the distinctions between public relations and public affairs in terms of their relative emphases, interests, and directions. -here are significant differences between public relations and public affairs. Celow is a table showing their differences in corporate communication. P(7!ic Re!ati $' (PR) P !icie' P% deal with government as one of many P< is the management process that focuses publics and have many communication on the formali&ation and institutionali&ation responsibilities. of corporate public policy. Practiti $er' P% practitioners are basically acted as a go= P< practitioners are engaged in a variety of between between a client and the media. roles. -hese can include lobbying, -hey give press releases, mitigate bad monitoring and predicting political, legal, publicity, help companies and clients appear economic and social developments, and more 6public friendly,6. -heyBre basically providing political intelligence and strategic image consultants and media liaisons. advice. , r:i$) Fie!&' P% is a specific area of work or employment. P< is a broad=based term used to describe any kind of topic that affects people or have to do with government. P(7!ic A44air' (PA)

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T1E IMPORTANCE OF PUBLIC AFFAIRS -he close co=ordination of P< with the other ,corporate communications is

particularly important for businesses undergoing strategic change. -his included restructuring, mergers and ac;uisitions and also during facing serious e+ternal challenges. )onsistent messages and matching action are essential. -his corporate communications aspect of P< has taken on an even greater importance for many businesses operating internationally in today s rapidly changing and unpredictable world. ?ith !#=hour news cycle and with the telecommunications revolution enabling all parties the possibility of instant global communication of information and opinion. -he chances are that others may also be pushing for change, in different directions and its maybe more effectively. -he public affairs function consists of managers who service all parts of the business. ?hile this model appears highly effective, it relies on the separate business functions recognising the value of public affairs e+pertise and inviting public affairs to be involved. -he direct report to the )*' also removes the public affairs function from the rest of the business. P< practitioners engage stakeholders in order to e+plain the organisationBs policies, provide statistical and factual information and to lobby on issues which could impact upon the organisationBs ability to operate successfully. -heir work combines government relations, media communications, issue management, corporate and social responsibility information dissemination and strategic communications advice. -hey aim to influence public policy, build and maintain a strong reputation and find a common ground with these stakeholders. ?ithin each business these relationships will differ, but there are some relationships which regularly show up. For e+ample the P< and legal functions are often closer the link of these two can be very effective, but often needs a strong counter=balance from the corporate communications. ?hat may be legal may not be acceptable and could even be counter= productive. Furthermore, P< for businesses also means interacting with other parties whose interests may coincide or conflict with one s own, and whose attitude and actions could have an impact on the success or failure of one s plans. -he position of the public affairs function usually reflects the dominant coalition s 3Mc*lreath /001; Eo&ier, Frunig G Frunig /0097 belief in public affair s relative value, making it very difficult for public affairs to achieve any influence on the strategic direction of the organisation.

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BRIEF INTRODUCTION OF AIRASIA OR-ANISATION AirA'ia C r" rate Pr 4i!e

<ir<sia Cerhad is part of the <ir<sia Froup, a world=famous low cost airline that operates e+tensive networks both domestically and internationally. <ir<sia since its foundation in !22/ with the vision to make H*veryone can flyI by focusing on the low cost aviation business sector through <ir <sia s own innovative solutions, efficient processes and a passionate approach to business as initially proposed and still facilitated now by the company s original founder and the current )*' of the group, -ony Fernandes, it has successfully paved a viable way for its continual development in the aviation business. <nd now base in its head;uarter, >uala Lumpur, <ir <sia has e+panded its route network by connecting more than !2 countries and regions with the recently open flights connecting -okyo and Paris though still the intra Aoutheast <sia middle to short distance flights still are the core business of the group, below is the route map of <ir <sia flights originated from >uala Lumpur, Malaysia. <ir<sia pioneered low cost airfares in <sia and is now currently the largest low fare, no=frills airline in <sia. It is also one of the largest airlines in all of <sia in terms of passengers carried. <ir<sia has also been voted the ?orld s Cest Low )ost <irline in !220 and !2/2. In Eecember !22/, with the airline heavily in debt, <ir<sia was purchased by /2

-ony Fernandes of -une <ir Adn. Chd. for the price of %M/. <s part of the purchase, -ony also took up the %M #2 million debt. Jnder the leadership of -ony Fernandes, the airline was flying high in !22! and launched its new route that year. In !22", a second hub was opened in Aenai International <irport, Kohor Cahru, as well as the airline s maiden international flight to Cangkok. <fter that the only place <ir<sia was heading for is up, as the -hai and Indonesian subsidiaries were set up as well as the commencement of flights to Indonesia, Macau, )hina, Philippines, 8ietnam and )ambodia in !229. <ir<sia now flies to all <A*<$ countries, a great portion of <sian countries that include India, Iran, Ari Lanka and Cangladesh; as well as to the Jnited >ingdom, France, Kapan, >orea and <ustralia via <ir<siaL. In !2//, we are setting up another <ir<sia hub in the Philippines and are well on the way in setting up other similar operations elsewhere in the region soon after. <ir<sia Cerhad is currently granted permission from IndiaBs Foreign Investment Promotion Coard 3FIPC7 to invest in a proposed (oint venture with the -ata Froup and -elestra -rading to launch an L)) in India. <ir<sia, seeking to e+pand its dominance beyond the <A*<$ region, believes that its model, which operates under the ,now everyone can fly mantra, is well=suited to the highly=competitive yet high=potential domestic Indian aviation market, which is e+pected to almost triple to /:2 million passengers annually by !2!/. Importance that valued by <ir<sia areM i. Sa4et8 = *veryone in <ir<sia plays a big role in creating a safe environment. )reating a safety conscious environment adhere to the rules and regulations on how to manage people, follow the processes and maintaining e;uipment safety to ensure everything as it should be. *ffort to learn on how to continuously improve the ;uality of safety of ourselves as well as that of others in the company. ii. C 't e44icie$c8 = >eeping costs and fares low is how <ir<sia make H$ow *veryone )an FlyNa reality. <ttack inefficiencies, curb wastage, push for the best possible value in spending and maintaining this throughout the corporation relentlessly is how <ir<sia can become the most efficient airline in the world. <ttacking costs is something we do every day. -he better we attack costs, the more competitive fares become and more opportunities for growth will be easily attainable. iii. C !!a7 rati $ a$& I$$ 5ati $ = )ollaboration helps innovation. <ir<sia have so much knowledge, e+perience and passion within the group that consistently finding

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ways to overcome and improve current situations for the advancement of becoming a truly <A*<$ company.

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Ac#ie5eme$t A6ar& Ac#ie5e& 78 AirA'ia

Now Everyone Can Fly

A6ar&' 4 r *011 A6ar&' Acc !a&e' Fr m ?orld s Cest Low=)ost <irline Akytra+ ?orld <irline <wards !2// Fold in the -ransportation, -ravel and Putra Crand <wards !2//, -he People s -ourism category Cest <sian Low=)ost )arrier <sia Pacific 8alue <irline of the Oear )hoice --F -ravel <wards !2// !2// Frost G Aullivan <sia Pacific

<erospace G Eefense <wards Cest Managed )ompany in Malaysia 3Medium <siaMoney !2// )ap7 Cest Managed )ompany in Malaysia 3Medium .er Ma(esty Pueen *li&abeth II )ap7 )ommander of the 'rder of the Critish *mpire = -an Ari Er. -ony Fernandes 8isionary )*' of the Oear = -an Ari Er. -ony Flobal Leadership <wards !2// Fernandes -op /22 Most Influential People for Kapan = $ikkei Cusiness Maga&ine !2// -an Ari Er. -ony Fernandes -ravel Cusiness Leaders = -an Ari Er. -ony Aummit Fala !2// Fernandes, <sia -ravel Leaders -he /2 Most )reative People on -witter = -an Fast)ompany.com Ari Er. -ony Fernandes *ntrepreneur of the Oear in ,*merging -he *rnst G Ooung *ntrepreneur of the

category = )onor Mc )arthy Oear Cest )*' for I% 3Mid )ap7 = -an Ari Er. Malaysia Investor %elations <wards !2// -ony Fernandes, Cest I% Professional 3Mid )ap7 = Cenyamin Malaysia Investor %elations <wards !2// Ismail <ir<sia has received more than !2 awards since it began operations in !22/

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DISCUSSION P te$tia! Pr 7!em' Face& 78 AirA'ia *ven thought there is many industry opportunities for <ir<sia that tie into their

strategy, threats are always a problem a business needs to face. It is management s (ob to identify the e+ternal threats to the company and evaluate what strategic actions can be taken to minimi&e their impact.

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T#e I$te$'it8 Ri5a!r8 Am $) AirA'ia C m"etit r' 9 T#reat 4 P te$tia! Ne6 E$tra$t' Increasing competition due to an increasing number of low cost and aggressive airline

competitors. -he raising of the low cost airlines in the Aoutheast <sia followed the waves of the low cost airlines in the Jnited Atates and the *J, and there had been high e+pectation for the e+perience of low cost airlines in the Aoutheast <sia, a market that is always very competitive according to Postorino 3!2/2, p.:07. -herefore, most low cost carriers 3L))s7 in the Aoutheast <sia aviation industry have only enter into the business for a few years, the competition between the full=service carriers and L))s has been intensified across the area. Auch rivalry among the e+isting competitors has been push up largely especially in the short=haul airlines in which passengers are more easily attracted by the operation efficiency and low tick fare which are the features of the L)) operations. .ighly competition also could be seen between the regional low cost airline operators, for e+ample, it is widely accepted that -iger <irlines has been doing a better (ob in the route between Aingapore and >uala Lumpur as a L)). 8alu<ir and -iger <irways Q both these budget airlines are units primarily concerned with maintaining a low=cost position in the mature market. In Malaysia, there is no state=operated airline though the government does own the Malaysia <irline, but the fact of privately=operated airlines shows that there is high degree to which the aviation industry has the freedom to operate for the potential new entrants. <nd also as reports said, in !22:, fed up with "# years of red ink on the domestic routes of state= owned Malaysia <irlines, the government has turned to low=cost carrier <ir <sia to bail it out. Atarting in <ugust, <ir <sia will take over 0: of the airline s //D domestic routes, only four of which have been profitable 3Aakran !22:7. ?hen the government could allow the /#

entrance of <ir<sia to bail out the state=owned airline, the new entrance would seek opportunities to enter into the Malaysian aviation industry to compete with <ir <sia. Jpcoming low fare airlines potentially taking away from their market share.

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Bar)ai$i$) P 6er 4 B(8er' In the domestic segment, within Malaysia, there are not many budget airlines, hence

Cargaining Power of buyers is less. .owever considering entire <sia, there are more than 92 budget airlines. 'bviously the bargaining power of the buyers which are the customers or passengers will have strong bargaining power of buyers, basically for each hot routes, there will be more than one airline operators which result in low cost. .ence competition is high which increases the bargaining power of buyers. Moreover traditional airlines are also entering the budget segment. For e+ample -hai <irways has its budget airline named $ok, Aingapore <irlines has -iger <irways, Pantas <irways has Ketstar. .ence buyers have a large number of choices to fly which increases the bargaining power of buyers. -here is no switching costs for customers. Moreover easy availability of information due to internet allows buyers to have all information about prices of various carriers. Lately, there are the some weak points or problems that <ir<sia have with their customer services which can contribute to the loses of their long loyal customer. -here is high possibility for passengers to change from one airline to the other airlines when they are not happy with the one of them. Aome of the the bad customer services areM i. 4!i)#t &e!a8 a$& ca$ce!ati $ Q customers have to wait ! hours to : hours if the flight is delay and most clients didn t get any e;uitable compensation when their flight cancelled. ii. r(&e a$& ($"r 4e''i $a! 'ta44 Q especially some of the underground staff are very rude when dealing with clients. <lthough they may be in a difficult emotional situation, the customer is their priority. iii. " r ca!!i$) ce$tre' Q some of the clients can not reach the calling centre or was

on hold for a long time <ir<sia having the huge investments to ac;uire airplanes and e+ecuting the latest technologies there is high amount of the operating cost. Cesides, the fight time for the <ir<sia is more or less limited to !.9 hours and could not operate flights of longer duration without any frill. $o Frill becomes impossible to implement for passengers. ?hile comparison with M<A, M<A will be the full service airline where <ir<sia is a no frills /:

airline. Cesides, M<A flights depart and arrive at >LI< but <I%<AI< (ust depart and arrive at L))-. In addition, M<A offers the higher luggage allowance but <ir<sia (ust offer not more than /9kg luggage allowance. Foods are not serving in <ir<sia but M<A has the offering the foods and drinks for the passengers. 0%1%3 Bar)ai$i$) P 6er 4 S(""!ier' -he bargaining power of suppliers is strong in the aviation industry to the LL)s. Casically there are two suppliers in the industryM Coeing and <irbus, so the two suppliers will be able to e+ert very strong influence to the buyers, i.e. the airline operators. ?hat s more, due to the fact that the operation and control systems between Coeing and <irbus are very much different, the switching cost from one suppliers to the other will be very high, and also because the two type of aircrafts provide nearly the same on board service in term of legroom, entertainments and other facilities so that basically it is claimed that there no reason for changing suppliers 3.ill, Kones G Falvin !22#7 resulting in high bargaining power of suppliers in the aviation industry in the perspective of the airline operators view. < few threats coming from the environment that the industry has no control over are suppliers because there are only two main (et suppliers who control the cost of the market. -he airline supply business is mainly dominated by Coeing 3JA7 and <irbus 3*J7. 'ptions are limited for airlines that need to buy planes. For this reason, there isn t a lot of competition among suppliers. -hey have to purchase at whatever the supplier charges. In other words, we are not going to see Coeing and <irbus starting their own airlines in the foreseeable future. Aimilarly the suppliers of spare parts do have some impact but it is not very significant as compared to the combat aircraft sector where the unavailability of spare parts is affecting the performance to a greater e+tent. <ir<sia that serves about 12 destinations in !2 countries across <sia and a fast= growing budget carrier airline had ordered /22 engines worth RD.: billion from manufacturer )FM International to power <irbus <"!2 airliners. <siaBs largest budget carrier by fleet si&e said the order also includes a !2=year service agreement. <irbus said at the time the deal made <ir<sia the biggest customer for single=aisle <"!2 airliners in the world, with a total of #19.

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T#reat 4 S(7'tit(te' /1

-hreat of substitute will be the e+istence of products outside the area of the common products boundaries increases the propensity of customers to switch alternatives. 3?ikipedia, !2/"7For the substitute products of <ir<sia will be train, busses and cruise. Cut, busses and cruises are not viable due to the geographical factor. Cesides, business traveller s telecommunication and video conferencing was also seen as the substitute. )isco ?eb*+ offers unlimited meeting as low as JAE /0 per month and the substitute is moderate.

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P ''i7!e E44ect' O$ T#e AirA'ia?' Sta:e# !&er

Atakeholders are the people and groups that have an interest in a business. -raditionally, shareholders or owners have been the primary stakeholder of a business. In the early !/st century, though, other groups have become more vocally involved in holding companies to a higher social and environmental standard. <ttention to stakeholders is important throughout the strategic management process because BsuccessB for public organi&ations =and certainly survival Q depends on satisfying key stakeholders according to their definition of what is valuable 3Cryson /009M !1; Moore /0097. <s %ainey argues, BPublic agencies are born of and live by satisfying interests that are sufficiently influential to maintain the agenciesB political legitimacy and the resources that come with itB 3/001M "D7. Atakeholdersare important in an organi&ation as stakeholders provide the feedback to the company s performance and make the company to improve better and achieve the goal. In <ir<sia, the stakeholders are customers, employees, shareholder and government. ?ith the helping of stakeholders, <ir<sia inclines to create profits by enlarging business reach <sia. Cesides, <ir<sia also e+pands routes and networks through cautious calculated manner. Moreover, <ir<sia invents and increase the brand population in order to pull up the numbers of investors return. If key <ir<sia s stakeholders are not satisfied, at least minimally, according to their criteria for satisfaction, the normal e+pectation should be that something will change for e+ample, budgets will be cut, elected or appointed officials will lose their (ob, new initiatives will be undermined, and so on. If <ir<sia failed to solve their problems or obstacles, the stakeholders then is needed to assess and enhance political feasibility 3Meltsner /01!; *den and <ckermann /00D; van .orn et 2/. !22/7, especially when it comes to articulating and achieving the common good 3Cryson et oK. !22!; )ampbell and Marshall !22!7. Finally, <ir<sia have to pay their attention to stakeholders as it is important to satisfy those involved or affected that re;uirements for procedural (ustice, procedural rationality and legitimacy have been met 3*den and <ckermann /00D; Auchman /009; <le+ander !2227. $ote that what is being said does not imply that all possible stakeholders should be satisfied, or involved, or otherwise wholly taken into account, only that the key stakeholders must be, and that the choice of which stakeholders are key is inherently political 3Atone /0017, has ethical conse;uences 3Lewis /00/ ( )ooper /00D7 and involves (udgment 38ickers and 8ickers /00D7. <ir<siaBs

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failure to gain profit and trust from its shareholder will definitely cause <ir<sia s status as the best L)) s <irlines dropped.

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Practica! a$& Re!e5a$t P(7!ic A44air Strate)ie' ?hether <ir<sia is trying to build coalitions, break through the media clutter to get

their message heard, or leverage social networks to develop grassroots momentum, every organi&ation needs a communications and advocacy strategy that works with and supports overarching initiatives. <nd if <ir<sia is seeking to influence public policy on any level, then communications and government affairs efforts must work hand=in=hand. ?ith the continuing political change in Malaysia, all types of organi&ations whether private, governmental and non=profit are assessing the landscape and devising new advocacy and communication action plans. It is the perfect time for <ir<sia and its organi&ation to re= evaluate and refine their key strategies. -heir key strategies must target the right audience and emphasi&e the correct message and with the confidence that can support these plans and implement re;uired new initiatives. *ventually airlines are going to start competing with the low fares. Franted they do not have the reputation that <ir<sia occupies but, they can gradually ac;uire more market share if <ir<sia lets them. -hat is why it is so important to have a strategy for the upcoming problems. <lso, the airline industry as a whole is vulnerable to economic cycles and big swings in bottom=line performance. If the consumers do not have the money to spend due to an economic slow down, airlines take a ma(or hit in filling reservations. For e+ample, 0S// caused huge losses for the industry. People were afraid to fly, airlines went into debt and even bankruptcy, and scheduled routes were limited. Aince there was a huge loss in business, airlines had to (ack up the prices to try and stay afloat. $ew government regulatory re;uirement causes an additional charge on tickets due to increased security. $ot to mention the stringent security measures a traveller has to go through at the airport, before even boarding the plane.

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C $ti$(e It' S(cce''4(! L 6 C 't Carrier Strate)8 !2

<ir<sia needs to develop public policy strategies and assess its organi&ation s ability to implement them on the federal, state, and local levels. <s the precursor of the low cost carrier in <sia, <ir<sia must assess its organi&ational power base and access to direct and indirect policy makers and the media to maintain their first comer advantages. Low operating costs which are wages, airport fees, short ground waits due to simple boarding processes can maintain it successful achievement. It needs to have its costs under control. It must be cost= efficient and profitable, and it must create value. )osts that do not add value must be contained, reduced and even eliminated. If <ir<sia do not strive to be more efficient and choose to be complacent Q their days are numbered. -his is a continuous task <ir<sia have to face head on year on year; it is the critical ingredient to operate a successful business. -he L)) industry attractiveness and profitability will attract many full services airlines to launch its version adding the degree of rivalry in this industry. <s the implication, <ir<sia, current market leader of L)) in Malaysia, -hailand, and Indonesia, will face competition from both e+isting and new players. In order to sustain its competitive advantage, <ir<sia needs to leverage its competency in creating cost advantages across multiple value chains. Cased on that statement, <ir<sia need to make a consideration and more stressed to be lowest cost carrier in the airline industry. -he demand for lowest cost carrier is will be growing rapidly, it can be the great opportunity for <ir<sia )ompany to run their business. 'peration effectiveness and outstanding efficiency are the two main characteristics of low cost business including in <ir<sia. 0%3%* Mai$tai$i$) a$& Im"r 5i$) ;Em"! 8ee' 7e4 re C('t mer'< Cy maintaining and improving the employees service and work, <ir<sia can still be a leader in this Low )ost <irlines Aervices. *mployees e+pect a fair working environment. Cusiness partners and suppliers e+pect <ir<sia need to manage their business relationships with high integrity and responsibility. *mployees have become a much more involved stakeholder group. In general, employees e+pect to be valued as a key asset and e+pect to be able to work in a non=discriminatory work environment. Failure to provide an e;ual opportunity workplace can lead to lawsuits and low employee morale. <s a simple e+ample, using a supplies or resale products in a way that is bad for the environment or socially irresponsible impacts the suppliers or your partners as well. If the welfare of the <ir<sia s employees is properly taken care, the value of work will also increase. <t the same time, the customer services courses will also be necessary to !/

improve the ;uality of work, especially workers who are dealing with customers. Ma+imi&ing shareholders wealth is listed as one of the core visions that direct the development of <ir<sia. It is stated by three pointsM i. %esilient profit growth through our lower cost base; ii. *+pansion of the <ir <sia network in a prudent and disciplined manner; iii. Invest and enhance the <ir<sia brand to increase investors returns. 'n one hand, <ir <sia focuses on a prudent profit growth in a disciplined manner which could help control the uncertainties and risks in the business e+pansions; and on the other hand, <ir<sia aims at increasing the investors return when investing and enhancing the <ir<sia brand in the actual business practices. < stakeholder any group or individual who can affect or is affected by the achievement of the organi&ation s ob(ectives 3Peng !220, p.#0/7, and the key stakeholders wealth in a long term perspective. 0%3%3 I$crea'e L ca! Re'" $'i5e$e'' a$& -! 7a! I$te)rati $ )ontinue to offer customers the lowest fares, thus making it difficult for competitors to compete and unlikely for new entrants to emerge on the scene. <s well as to identify the opportunities and risks involved in pursuing <ir<sia public policy agenda and how best to frame issues to keep their loyal customers. )ontinue to place employees and customers first. -he Internet and mobile technology have given greater power to social and consumer watch groups and the public at=large. If <ir<sia operates without integrity in customer marketing, sales and service, they will get called on it. $on=customer friendly actions simply donBt make long=term sense in the early !/st century. )ommunities, a separate entity from customers, also e+pect you to participate in community activities and to share a bit of the wealth with the people that provide your income. 'ne of the advantages a local business has over large chains is the connection with the community. Leave this aside and you lose that personal touch. <ir<sia is still in business to make money. .owever, the financial interests of the owners, partners or shareholders have been tempered a bit to create a greater balance with social responsibilities. Atill, part of the )*' of <ir<sia role as company leader is to make !! interests need to be taken into consideration by organi&ations that are going to enhance their competiveness and increase the shareholders

wise decisions that improve revenue, minimi&e costs and produce a positive bottom line. -he greater involvement of other stakeholders, though, has had uncertain effects on the bottom line of companies. Ahowing a financial return on investment from socially and environmentally responsible behaviours is difficult. It costs money to manage waste and recycling programs that are good for the environment. .owever, if <ir<sia that do take other stakeholder interests into account understand the negative publicity that comes from unethical decision=making in the information age.

For the opportunity part in <ir<sia, <ir<sia should offer low fares which encourage people from all walks of life style to fly. Moreover, <irbus <"!2 should stimulate superior amount of passengers. 'ffering the comfortable services for every consumer might be one of the opportunities also. ?ith the acceptance in warranty the security of stuff and customers, customer will have more confident and trust to flight via <ir<sia.

0%3%/

I$crea'e C mm($icati $ Strate)ie' a$& A&5erti'eme$t 4 r AirA'ia <ir<sia also need to improve its communications departments effectiveness in the

public policy arena and utili&ation of social networking, on=line public relations and reputation management, Internet advertising and grassroots mobili&ation. -herefore, the the organisation need to e+amine case studies on advocacy, building coalitions, developing viable grassroots communications strategies, and utili&ing the new media tactics such as blogging and twittering to impact public policy. Increase advertisement for <ir<sia due to the increasing of the amount of planes they own. -he management of <ir<sia should get updates on some of Malaysia s ma(or public policy initiatives and assess current communications and implementation strategies and gain new perspectives on advocacy and communications strategies to Hmove the needleI on their key issues. <s we all know, <ir<sia key customer group are those who are looking for cheap flights to countries located in Aoutheast <sia, and young adults looking for a short weekend getaway trip to -hailand will most likely choose budget airlines such as <ir<sia due to their limited budget and choice of destination. -hese young people spend a significant amount of their time on social networking sites so the turnover rate from a typical Facebook user into a !"

loyal <ir<sia customer is e+tremely high. In conclusion, firms should take a cautious approach when making the decision to take on the social media method. Many but not all businesses are suitable for the social media. <ir<sia might introduce the AMA booking which allows the customers to book their seats at anytime and anywhere. <ir <sia had largely grown its business in term of dramatic growth of the revenue, net cash flow and *CI-. Cut on the other hand, the efficiency indicators suggest a much slower growth of the operation efficiency or even there is decrease in the return on total assets and net income margin. .ence, <ir<sia need to do a better (ob to increase its efficiency rather than focusing on the growth of the business or else it can not achieve the target of ma+imi&ing the shareholders wealth in practice.

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SUMMARY $umerous benchmarking studies have shown that in ,best practice companies Q

especially those undergoing change the key relationship for the Public <ffairs and )orporate )ommunications functions is with the )hief *+ecutive. -here are several reasons for these such as the potential strategic significance of changes in the business environment for the company as a whole and for different parts of it. <part from that, the need for consistent messages across the organisation internally, in its key business relationships and matching behaviour. ?hile, communication with top levels of government and company are more credible if made by the business decision=makers rather than staffers. -hus, following the corporate collapses and scandals of recent years, good corporate governance increasingly re;uires management to be able to demonstrate that they are monitoring and managing non=financial risk as well as financial riskM reputational risk, business probity, environment, labour practices and so on. In today s world, failure to do so can rapidly destroy shareholder value as well as employment, pension values and any positive contribution that the company made to the countries and communities where it operated.

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Likewise, <ll of these are core public affairs territory, e+cept in those companies where HPublic <ffairsI still only means lobbying. .ow the function is organised Q and what outside assistance may be needed, if any Q varies from organisation to organisation, and indeed from country to country. In a dynamic business environment the most appropriate solutions for each organisation can change, and companies, $F's and consultants can all learn from each others e+periences. In the best practice organisations, Public <ffairs has grown in importance and will doubtless continue to do so, and more and more people are whether in one way or another are looking to understand and influence the economic, social and regulatory conte+t in which business operates and seeking to minimise risks and gain competitive advantage, wherever possible. -he best P< and communications is when people can see their organisations in multiple conte+ts at once and can e+plain clearly how future changes in the business environment can present challenges and opportunities for their organisations, and they can e+plain this in ways that resonate with the people with whom they are talking. -his includes interacting at all phases with others inside the company who have an interest in how the issues pan out, and often having a seat at the company s top table or at least a direct line through to the chief e+ecutive. -hat is what most of us understand by Public <ffairs and change that mean The more change there is, the more Public Affairs expertise is needed.

I believe that <ir<sia would best be served by pursuing a strategy that stresses international e+pansion. *+pansion into growing into a larger airline could allow the company to penetrate certain customer segments and geographic markets. Frowing the company through ac;uisitions could help the company penetrate certain neglected markets, but it could also negatively impact <ir<siaBs current HfriendlyI corporate culture and certain markets may be neglected because of low traffic possibilities. In contrast to these strategies, there e+ists great growth potential in the global travel industry and there are strategic decisions that an airline could make to minimi&e the necessary investment and complications. <ir<sia should initially pursue an alliance with low=cost carriers in markets such as *urope and <merica. Foreign low=cost carriers, such as *asy Ket in the Jnited >ingdom, could benefit <ir<sia by offering smooth connections for overseas travel, a match in operational philosophies 3cost structure, employee focusT7, and a partner in confronting foreign !9

regulations and politics. 'vertime, <ir<sia could begin directly investing into Hopen skyI counties, such as the $etherlands, and providing their trademark point=to=point system between international destinations. If <ir<sia can effectively instil its friendly culture, its strict cost controls, and its reliable service overseas, it could become a ma(or force around the world, (ust as it has already within the <sia. <ir<sia will be the best airline company as having the cheapest price tickets and letting everyone can fly around the world. -o make the company become better and better, <ir<sia was recommended to provide more choices of foods and drinks in order to reach the satisfaction of passengers. In addition, <ir<sia can think of giving e+tra luggage allowance to !9 >g to the passengers. < good leadership style can be affecting the entire company and employees to become motivate and innovate. ?ith the motivation and innovation, consumers believe that <ir<sia can be the successful airline company

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