CERTIFICATE

This to certify that KARTIK SETH student of BBA (TTM), MAHARAJA SURAJMAL
INSTITUTE, New Delhi has successfully completed his project report on AIR ASIA
it is a original study done by him under our guidance.

MRS. KAVERI BANSAL

Lecturer
Department of business administration
 ACKNOWLEDGMENT

This project has been made possible through direct and indirect support of various
people from whom I wish to express my appreciation and gratitude.

I would like to thank GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY for

giving me an opportunity to work on a valuable project.

I owe my sincere and whole hearted thanks to MRS. KAVERI BANSAL and other
faculty members for constantly guiding me and tackling variety of hurdles with
implicit patience throughout my project

THANKYOU

KARTIK SETH
 TABLE OF CONTENT
TOPIC PAGE NO
CHAPTER 1
INTRODUCTION 4-12

CHAPTER 2
RESEARCH METHODOLOGY 12-13

CHAPTER 3
ANALYSIS & ITERPRETATION 14-49

CHAPTER 4
CONCLUSION 50

CHAPTER 5
RECOMMENDATIONS 51

(BIBLOGRAPHY)
(QUESTIONAIRE)
 INTRODUCTION

Establishment

AirAsia was established in 1993 and commenced operations on 18 November 1996. It

was originally founded by a government-owned conglomerate DRB-Hicom. On 2
December 2001, the heavily-indebted airline was purchased by former Time Warner
executive Tony Fernandes's company Tune Air Sdn Bhd for the token sum of one
ringgit. This was after great deliberation as the initial offer was fifty sen. Fernandes
proceeded to engineer a remarkable turnaround, turning a profit in 2002 and launching
new routes from its hub in Kuala Lumpur International Airport at breakneck speed,
undercutting former monopoly operator Malaysia Airlines with promotional fares as low
as RM1 (US$0.27).

Second hub

In 2003, AirAsia opened a second hub at Senai International Airport in Johor Bahru near
Singapore and launched its first international flight to Bangkok. AirAsia has since started
a Thai subsidiary, added Singapore itself to the destination list, and commenced flights to
Indonesia. Flights to Macau started in June 2004, while flights to Mainland China
(Xiamen) and the Philippines (Manila) started in April 2005. Flights to Vietnam and
Cambodia followed later in 2005 and to Brunei and Myanmar in 2006, the latter by Thai
AirAsia.

Budget terminal

A new budget terminal, the first of its kind in Asia was opened in Kuala Lumpur
International Airport on 23 March 2006. Built at a cost of RM108 million (US $29.2
million) and spanning some 35,000 square metres (116,000 square feet), the Low Cost
Carrier Terminal (LCCT) is the new home for AirAsia Bhd. Initially, the LCCT handled
10 million passengers a year. AirAsia Group is expected to carry 18 million passengers in
2007. However, all airport taxes charged and collected by the airline have yet to be paid
to the terminal owner, due to unknown reasons.

Low-cost model

AirAsia operates with the world’s lowest unit cost of US$0.023/ASK and a passenger
break-even load factor of 52%. It has hedged 100% of its fuel requirements for the next
three years, achieves an aircraft turnaround time of 25 minutes, has a crew productivity
level that is triple that of Malaysia Airlines and achieves an average aircraft utilisation
rate of 13 hours a day.[5]
Airbus A320 fleet

AirAsia is currently the largest single customer of the Airbus A320.[6] The company has
placed an order of 175 units of the same plane to service its routes and at least 50 of these
A320 will be operational by 2013. The first unit of the plane arrived on 8 December
2005.

On August 2006, AirAsia took over Malaysia Airlines' Rural Air Service routes in Sabah
and Sarawak, operating under the FlyAsianXpress brand. The routes were transferred
back to new Malaysia Airlines subsidiary in East Malaysia, MASwings from August
2007 since they were pulling down profits.

Asian expansion

On 27 December 2006, AirAsia's CEO Tony Fernandes unveiled a five-year plan to

further enhance its presence in Asia.[7] In the plan, AirAsia will strengthen and enhance
its route network by connecting all the existing cities in the region and expanding further
into Indochina, Indonesia, Southern China (Kun Ming, Xiamen, Shenzen) and India. The
airline will focus on developing its hubs in Bangkok and Jakarta through its sister
companies, Thai AirAsia and Indonesia AirAsia. Hence, with increase frequency and
addition of new routes, AirAsia expects passenger volume to hit 18 million by end-2007.

From September 2007, AirAsia's Kuala Lumpur hub is fully operated with A320s while
Thai AirAsia received its first Airbus A320 in October 2007. Indonesia AirAsia received
its first Airbus by January 2008.

F1 partnership

On 5 April 2007, AirAsia announced a three-year partnership with the British Formula
One team AT&T Williams. The airline brand is displayed on the helmets of Nico
Rosberg and Alexander Wurz, and on the bargeboards and nose of the cars.

Route expansion

On 27 September 2008, has on its list 106 new routes to be added to its current list of 60
over the next few years. The number of old routes discontinued has not been publicly
disclosed.

Fuel surcharge discontinued

On 12 November 2008, AirAsia abolished fuel surcharges. In doing so, it claimed to be

the 'first airline in the world to abolish fuel surcharges

By May 2008, the airline had flown 55 million cumulative passengers.

In 2010, it has the world's lowest costs for an airline, at under 2 cents per seat per
kilometre.]

The airline and disabled passengers

Air Asia 737 with illustrations by Lat (Mohammad Nor Khalid)

Disabled passengers from BEAT 'The Barrier-Free Environment and Accessible

Transport Group' protested against the airline for its refusal to fly passengers who were
completely immobile.] The protesters, headed by the group's co-ordinator Christine Lee,
asserted that the disabled were discriminated against when booking AirAsia tickets
online, where an icon would appear on the website asking if the ticket purchaser would
require “special assistance”. According to Lee, the passenger clicked 'yes', then they
would not be able to proceed with the booking. Lee also said that AirAsia charged RM12
for renting out a wheelchair, which a passenger could use to go from the ticketing counter
to the departure hall. When interviewed by Malaysia's Daily Express, AirAsia Chief
Executive Officer Datuk Tony Fernandes denied that the low cost airline turned away
wheelchair using passengers.

He said, the airline's ground staff take the disabled to the aircraft and physically carry
them onboard, "We do not even charge for this service and there is certainly no
discrimination against them," he claimed.] AirAsia's 'Service Fees' post a charge of RM12
Malaysian Ringgit for wheelchair service fees. Several consumerist groups have rallied
behind the disabled and wheelchair-using travellers, lobbying to bring about changes in
Malaysia's anti-discrimination legislation; among them the 'Fly Air Asia? Not Me'
website ] utilizes viral advertising to pressure legislators. In 2007 the activist group used
AirAsia's sponsorship of the Williams Formula One Team and the fact that team owner
Sir Frank Williams uses a wheelchair to garner public attention and apply pressure upon
legislators and the carrier. It is unclear whether such groups have had any measure of
success. AirAsia has provided two ambulifts, however, one in its LCC Terminal hub at
Kuala Lumpur and another in its Kota Kinabalu hub. A year after the BEAT protest these
remain the two hubs that are equipped - while the airline's December 2007 Annual Report
affirms that AirAsia flies over 100 routes across 11 countries in Asia and states, 'AirAsia
has a firm commitment with a purchase order for 225 Airbus A320 aircraft.' It does not
stipulate whether it has any plans to expand access for disabled passengers beyond the
two domestic ambulifts.
Rights-based advocate for an inclusive and accessible Malaysia and former assistant
coordinator of BEAT, Peter Tan writes from The Digital Awakening, 'Despite assurances
by AirAsia CEO Datuk Tony Fernandes on 20 July and again on 4 August this year
[2007] that disabled passengers will be treated with dignity, the airlines is still subjecting
disabled passengers to discriminatory policies.' after he was required to sign an
indemnity releasing AirAsia from all liabilities before being allowed to board the aircraft
at Kota Kinabalu International Airport's Terminal 2, agreeing to surrender rights to hold
AirAsia liable for damages, injuries or other claims.

Fees

The airline claims 'No Admin Fee', but has introduced a number of fees for services that
are free on many airlines. Its fees and charges are: seating fee (charged for pre-selecting
seats, higher for 'hot seats' near the front or exits, with priority boarding), 'convenience
fee' (a per passenger, per flight charge imposed for all means of payment other than direct
debit (only available for customers of certain Malaysian banks)), marked-up airport tax
charges, a charge for in-flight entertainment including use of seat-back video, a checked
luggage fee (charged by weight, not by piece, with excess baggage charges payable for
carrying baggage exceeding 15 kg, if not pre-booked), charges for food, for use of a
wheelchair and for amenity kit (pillow, blanket and eyeshade).

Subsidiaries

Thai AirAsia
: Thai AirAsia

Thai AirAsia (Thai: ไทยแอร์เอเชีย) was established on 8 December 2003 as joint

venture with Shin Corporation. Flight operations commenced on 13 January 2004 from
its base in Don Mueang International Airport. Since 25 September 2006, the airline is
based at the new Suvarnabhumi Airport.

Indonesia AirAsia
Indonesia AirAsia

AirAsia acquired the then defunct Awair in 2004 with a 49% stake in the airline. Awair
commenced services on behalf of AirAsia in December 2004; full rebranding to
Indonesia AirAsia was completed on 1 December 2005. The airline is based at Soekarno-
Hatta International Airport with a secondary hub at Denpasar (Bali) Airport.] VietJet
AirAsia

Main article: VietJet AirAsia

On February 2010, AirAsia announced that it has purchased a 30% stake in VietJet and
changed the name to VietJet AirAsia. VietJet AirAsia is based in Hanoi, and plans to fly
to Ho Chi Minh City and Da Nang.

AirAsia RedTix

On March 20, 2010, AirAsia launched their new event ticketing system called AirAsia
RedTix, focusing on non-airline flight tickets such as events, sports, and music. Their
first event was Zee Avi's KL homecoming tour.

Khmer AirAsia

AirAsia will be opened in Cambodia in 2012.

Destinations
Main article: AirAsia Group destinations

2007 AirAsia domestic route map

AirAsia Group operates over daily 400 flights,] with both domestic and international
routes covering Indonesia, Malaysia and Thailand and with international routes, primarily
from Kuala Lumpur, to Australia, Bangladesh, Brunei, Cambodia, the People's Republic
of China, India, Laos, Myanmar, Philippines, Singapore, Sri Lanka, Taiwan (the Republic
of China), the United Kingdom, South Korea and Vietnam. Flights to Japan and Iran will
be mounted in December

Fleet

AirAsia Airbus A320 departing Kuala Lumpur International Airport

AirAsia plane sporting the "Airline of the Year" livery, taxying to its gate in Kuching.
Taken with a Fujifilm FinePix S5600 through the terminal window

The total AirAsia fleet (including Thai AirAsia, AirAsia X and Indonesia AirAsia)
consists of the following aircraft as of 10 October 2010:

AirAsia fleet (including Thai AirAsia, AirAsia X and Indonesia AirAsia)

Orders/ Passengers
Aircraft Total Notes
Options J Y Total
53 with AirAsia, 11 with
Airbus A320-
83 92/50 — 180 180 Indonesia AirAsia, 19 with Thai
200
AirAsia
3 with Indonesia AirAsia
Boeing 737-300 3 — 0 148 148 To be removed from fleet by
2010[24]
Airbus A330- Operated by AirAsia X
8 17/— 12 365 377
300 1 leased from AWAS
Airbus A340- Operated by AirAsia X
2 — 18 309 327
300 Leased from Orix Aviation
Airbus A350- Operated by AirAsia X
0 10/5 TBA 400
900 Entry into service 2016[25]
Total 96 121/55

The total AirAsia fleet (excluding Thai AirAsia, AirAsia X and Indonesia AirAsia)
consists of the following aircraft as of 10 October 2010:

AirAsia fleet (excluding Thai AirAsia, AirAsia X and Indonesia AirAsia)

Passengers
Aircraft In fleet Registration Notes
(XL/Economy)

Airbus A320-214 6 180 (0/180) 9M-AFA - 9M-AFF

 9M-AFG - 9M-AFZ
Airbus A320-216 47 180 (0/180)
9M-AHA - 9M-AQA
Total 53

Future A320 deliveries

2010 - 15
2011 - 8
2012 - 24
2013 - 24
2014 - 24
2015 - 9
By end of 2009, AirAsia will have 70 aircraft and by end of 2015 with a total of 175
aircraft.

Fleet renewal

AirAsia began a gradual conversion of its fleet from the Boeing 737-300 to the Airbus
A320-200, with the first order made for 40 Airbus A320 aircraft and 40 more on option
in a Memorandum of Understanding made in 17 December 2004. When the contract was
signed on 25 March 2005, the order was increased to 60 firm orders with 40 on option.
The first six Airbus A320s were delivered on 9 December 2005, with the remaining 54
aircraft from the 2005 order to be delivered by June 2009.]

On 19 July 2006, the airline exercised the options of 40 Airbus A320-200s to increase its
total firm orders to 100 aircraft, with another 30 on option] It made a third order of 50
firm A320-200s and increased the options to 50 on 8 January 2007, with delivery
expected to be completed by December 2013. The Airbus A320-200 was expected to
completely replace the Boeing 737-300 fleet at the Kuala Lumpur base by July 2007.]
The airline made its latest order of 25 firm orders on 25 November 2007, bringing its
total orders of Airbus aircraft to 175 with 50 on option.]
[]

In August 2009, AirAsia had signed an amendment agreement with Airbus to defer the
delivery dates for 8 of its A320s aircraft by four years to 2014 due to "infrastructural
constraints" at the existing low-cost carrier terminal (LCCT) in Sepang as it cannot
accommodate its fleet expansion. The rationale to scale down on the delivery of aircraft
in 2010 and possibly 2011 is to enable AirAsia to optimize its fleet and avoid the costs
associated with leaving idle or under- utilized aircraft due to infrastructural limitations,
avoiding having to incur depreciation, interest expense and other costs without earning
revenue. The infrastructural constraints will continue at the current airport until the new
low-cost carrier terminal is constructed. Earlier In February 2009 the Malaysia's
government vetoed an ambitious plan by AirAsia to build a 460-million-dollar airport
nearby as KLIA East @ Labu.[34][35]
 Inflight services

AirAsia offers "Snack Attack," a buy on board programme offering food and drinks for
purchase.] Air Asia is accredited by the KL Syariah Index, and as per Shariah law it does
not serve alcohol and pork. However, this is only applicable on the regional AirAsia
group flights, and not applicable to the AirAsia X flight as it does sell wine and beers on
board. AirAsia also offers advance bookings of Skybus tickets, which are for a bus
service to Kuala Lumpur from LCCT.

All meals purchased, as well as Sky bus tickets, are not refunded if you cancel your
flight. Passengers are not notified of this during the purchase of the products.

In addition it does not distribute materials that it considers to be pornographic.]

Incidents and accidents

• On 7 November 2004, AirAsia Flight 104 skidded off the runway in heavy rain
after it touched down at Kota Kinabalu International Airport. Two passengers
suffered minor injuries.]
 OBJECTIVES OF STUDY.

OBJECTIVE
 To identify the services offered by AIR ASIA.
 To study and analyze the customer perception and
preference about AIR ASIA.
 Finally to draw the various conclusion and recommendation
on the basis of study conducted.
 RESEARCH METHODOLOGY

Managers need information in order to introduce products and services that

create value in the mind of the customer. But the perception of value is a
subjective one, and what customer’s value this year may be quite different from
what they value next year. As such, the attributes that create value cannot simply
be deduced from common knowledge. Rather, data (information) must be
collected and analyzed. The goal of Marketing Research (analysis) is to provide
the facts and direction that managers need to make their more important
marketing decisions.
The analysis involves the following steps:

 Define the problem.

 Determine research design.

 Identify data types and sources.

 Determine sample plan and size.

 Collect the data.

 Analyze and interpret the data.

LIMITATIONS OF STUDY