JEANY Y.

ROSAREAL

AIR ASIA CASE STUDY

AirAsia- Introduction
 AirAsia is a Malaysian low-cost airline.
 Initially it was a Malaysian Govt. controlled company.
 It was relaunched in Jan 2002 as an LCC (Low cost Carrier after take over by Tony
Fernandes)
 It operates scheduled domestic and international flights.
 AirAsia is a pioneer of low-cost flights in Asia and is the largest Asia non-frills airline.
 In a very short time, after launching as an LCC, Air Asia converted from a debt ridden
company to a profit making company.

AirAsia- A Recap
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Global Trends in Aviation

 Change in ownership pattern from Government owned or Supported to Private.

 Deregulation in airline industry leading to greater competition and pricing freedom.
 In order to increase efficiency, carries are entering into new strategic alliances with each
other.
 Fierce competition, rising fuel prices leading to streamlining of operations to enhance
the value chain.
 Emergence of Low Cost Carrier (LCC) Market due to rising economics, increasing
business travel and growing disposable incomes especially in Asia.
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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 Air Asia
 Maintain the highest quality product, embracing technology to reduce cost and enhance
service levels.
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Goal Formulation
 To be the largest low cost airline in Asia and serve the people who are currently
underserved with poor connectivity and high fares.

Strategy Formulation

To provide basic airline experience to customers by curtailing costs. This was achieved by
providing only the requisite facilities and keeping the process as low as feasible. To provide
requisite safety and focus on simplicity.
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Overall Cost Leadership

Differentiation
 Lowest prices without compromising on customer service.
 VAS to flyers
o Ticketless check-in- saved time and hassle free
o Single class seating-no bias among flyers
o Standard operating procedures ensured uniform level of competence amongst
the staff.
o Multi-lingual website
o Customer delight services like lucky draw
 Shunned “hub and Spoke” for point to point system.
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Program Formulation and

Implementation
 Tony Fernandes invited Connor McCarthy to join Air Asia’s executive team.
 They plan to offer only one standard class cabin.
 It did not provide in-flight entertainment or free meals.
 Seats were sold through online site, telephone booking, sales offices, travel agents and
local banks and post offices
 Multiple hubs within Malaysia to serve better.
 Innovative marketing.

Growth- illustration
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Diversification and Expansion

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Porter’s 5 Forces Model

Recommendation
 Ancillary in come increase
o Offer more on board services/ products to the passengers
o Taxi booking service
o Internet WIFI access on board
o Merchandising (perfume, make up or toys)

 Ticket price differentiation

 Place advertising in the plane’s cabin
 Increasing Air Asia’s assets- Enlarging this existing fleet.
 Invest in joint ventures.
 Attention seeking advertisements.
JEANY Y. ROSAREAL
JEANY Y. ROSAREAL

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