The new lowcost strategy has led to an increase in frequencies and a 60% cut in headline fares on its five domestic services from kuala lumpur. They are ryanairs operational strategy, southwests people strategy and easyjets branding strategy. The strategy that they have formulated at the beginnings was a clever blend of proven strategies by other low cost airlines is us and europe. Airasia named asias top lowcost carrier at 2018 world. Fernandes started up airasia three days after 911 upon purchasing the airlines sorrowful predecessor for the cost of a half pint of milk in.
Strategy our irvision to continue to be the lowest cost shorthaul airline in every market we serve, delivering strong organic growth through offering the lowest airfares at a profit. Pdf low cost business model in airlines industry a. Since then airasia has flown more than 330 million passengers to over 120 destinations in 26 countries and territories. Strategic management has played a key role in the success of many business organisations in the world including airlines and airasia is no exception. Focus on the following zero down on the central problem and two to five related problems in the case study. The operation of airasia, the market leader of low cost carriers lccs in asia, is suitably selected, firstly, because the company.
The business model of airasia is well established and fairly ideal for other industries as well. The study demonstrates the diverse businesslevel, corporate level and competitive strategies of airasia berhad, played crucial roles in the lcc to successfully penetrate the underserved market. An exceptional intraregional traffic growth opportunity, september 2002, 9 ibid. In 2001, tune air sdn bhd tony fernandess company purchased this airline from drbhicom. Strength of airasia can be found in its strong management team and its operation is managed by the exryanair director who has the experience of reducing the expenses in the low. Airasia southeast asias most successful lowcost airline. Case study on growth, diversification and low cost strtegy 1. Sepang, 4 september 2018 airasia has been named asias leading lowcost airline for the sixth year in a row at the 2018 world travel award asia and australasia the airline was voted best in category by travel and tourism professionals worldwide for commitment to excellence in service, ahead of air india express, firefly, goair, jetkonnect, jetstar airways.
Hiring 36yearold azran osmanrani as the ceo for the new long haul venture, nicknamed x, was a critical step in this process. This move will also give the company an opportunity for the company to offer increased flight transfers. The purpose of this study is to focus on the cost leadership competitive strategy applied by low cost. To be the largest low cost airline in asia strategy. Strategic management airasia executive summary airasia. When we started airasia as a lowcost airline back in 2001, i never thought one day we would be selling our competitors. Partha pratim mahanta pranjal pratim neog dibakar sinha samiron moran dipankar nath abhijit ramchiary 255, block h, jalan pju 7 dataran prima, 47301 petaling jaya selangor darul ehsan, malaysiapartha pratim mahantadibakar sinha case study pranjal ramchiary abhijit. Thirdly, airasia is a brand name which is very well established in asia pacific. Despite persistent claims from industry insiders that low cost long haul flights would never be profitable, fernandes pushed forward with the expansion. It will provide an opportunity for the company to grow.
Finance, strategic management, fleet planning and general. Airasias lowcost highefficiency approach to sustainability tony fernandes, group chief executive officer, airasia when airasia was established 15 years ago, we made a pledge to give everyone the opportunity to fly. To be established as the leading lowcost carrier in the asian region. In this article we trace the rise of airasias success and the nuances of the lowcost aviation model it has pursued. Malaysia airasia 2001 thailand airasia 2003 indonesia airasia 2005.
However, in general consensus, low cost carrier industry is expected to have a bright future and sustainable growth in asia. Know what business strategy made air asia a successful low budget airline in asia. Commencing in 1996, within fifteen years, airasia managed to expand its operations into another ten countries. The study demonstrates the diverse businesslevel, corporate level and competitive strategies of.
If that remains the case about the importance of flexibility in. With the perfectly set goals, mission and listed strategy ensures the well functioning of the corporation. Airasia focuses on providing highfrequency services on shorthaul domestic and international routes. We draw upon established theory from the fields of strategy and strategic human resource management to explain airasia s minimalist approach to human resource management. Airasia berhad airasia is a leading lowcost carrier in the association of southeast asian nations asean region. Section one examines the southwest airlinesryanair cost reduction model and advances it as a prototype for low cost competition in europe. The product strategy and mix in airasia marketing strategy can be explained as follows. Airasia, low cost carrier, web design, business model, strategy.
This document is authorized for use only in the dynamics of strategy by michael cronin at open university from june 20 to december 20. Company background airasia information technology system. Airasia passengers carried million 2 acft in 2001 airasia india largest asiaslow cost carrier fastest passenger growth globally recognised brand 120 aircraft in 20 12 year achievement 2. How a budget airline is driving urbanization in asia. The competitive pricing behaviour of low cost airlines in the. In order to maintain its brand which is famous with low cost carrier and to be consumers preference to choose using its services offered, airasia must be able to complete with competitors and new entrance by doing some. Air asia established in 1993 with commenced operations in 1996. Airasia berhad airasia is one of the leading low cost airlines in south east asia which has expanded rapidly since 2001. Air asia has adopted a generic strategy of cost leadership by reducing the cost of operations and passing the savings through to customers with very low ticket prices. This case study discusses the factors that contributed to airasias success. Cvp analysis and business strategy analysis of air asia.
The main goal of this paper is to analyse the business strategy of airasia as a lowcost airline. After eight years development, airasia x becomes the largest budget airline in asia and its low cost model has also become the successful example to competitors. The airasia story icaocaac symposium on low cost carriers 5th november 20 1. According to frost sullian 2010, low cost carrier market is expected to a grow to a total number of 217 million passengers in 2012 compared to 116 million in 2008, with a compounded annual growth rate of 16. It also discusses the threats to the longterm success of the airline. Airasia business strategy low cost carrier airlines. Low cost carriers or lccs emphasize cost reduction and control to compete with legacy carriers. In this article we trace the rise of airasia s success and the nuances of the low cost aviation model it has pursued.
You will be redirected to the full text document in the repository in a few seconds, if not click here. In november, we took a step forward in the vision for to become the regions onestop travel shop by expanding our online offering to include flights on other airlines. Being innovative down to the corporate bone, airasia pioneered several new services for its operation, including an ambitious plan that many other low cost, shorthaul carriers viewed as riskyextending services to include long haul routes. Airasia group berhad third quarter 2019 financial results. The company is based in kuala lumpur, malaysia and has successfully positioned itself in customers mind through the simple slogan now everyone can fly airasia, 2009. This study examines the extensive strategic analysis of airasia berhad that has enabled it to sustain its competitive advantage as asias leading low cost carrier lcc. The company also aspires to move to klia2 which is the countrys new low cost carrier terminal. Applying the rigid flexibility model in a service setting. Airasia x is the only longhaul lcc currently flying the europeanasia pacific corridor. Business level strategy of airasia 2120 words bartleby. Foundation of the corporation is based upon low cost, efficiency, stimulation of new markets and strong cash flow. Airasias lowcost highefficiency approach to sustainability. Safety first high aircraft utilization low fare, no frills streamline operations lean distribution system point to point network business model. Mentions the strategic actions adopted by airasia in implementing its business level strategy and explains how these strategic actions support airasias cost leadership strategy.
Airasia marketing mix 4ps airasia marketing strategy. Airasia low cost carrier airlines free 30day trial. Low cost business model in airlines industry a study on airasia article pdf available in international journal of science and research ijsr 63 march 2017 with 4,246 reads. It studies the influence of culture and leadership at airasia, the factors contributing to its operational efficiency and the strategic orientation of the airline. With cost leadership, a set of actions are integrated to produce goodsservices with features that are acceptable to customers at the. Continue its successful low cost carrier strategy continue to place employees and customers first continue to maintain strict cost controls. With the full implementation of the liberalisation in europe in three steps between 1993 and 1997, low cost. Barely competition within shorthaul, lowcost segment. Airasia berhad, played crucial roles in the lcc to successfully. On 8 december 2001, tune air sdn bhd officially acquired 99.
Airasias first and main base is the low cost carrier terminal lcct at kuala lumpur international airport, while its secondary hubs are at kota kinabalu international airport, senai. This paper examines the cost reduction techniques of one of europes most successful low fare airlines, ryanair, and advances an operational model for other small and mediumsized carriers in europe. In august 2011 airasia and mas, malaysias national carrier, announced a partnership called the comprehensive collaboration framework, whereby a share swap deal was agreed between tune air, the owner of airasia, and khazanah nasional, the government backed investment arm. The airasia story international civil aviation organization. However, airasia x will still have a lot of uncertainties and challenges in the future. Strategic management of airasia pdf to realise our aseanwide strategy, 2009 saw airasia successfully integrate. Strategic analysis of a leading low cost carrier in the. Air asias highest fares are 20% below those offered by mas, and these fares account for only 10% of its total seat sales. The firstlow cost carrier in this region is air asia, and it works in 21 countries and over 75 destinations on. Airasia has adopted cost leadership as its business level strategy. Type essay pages 4 pages word count 659 words school na. Kathleen helped airasia grow from a young airline to a global and powerful brand in the aviation industry. Airasia was the first successful low cost airline in the southeast asian region.
Executive summary airasia is well known company for airlines industry especially in all over asia and being one of the market leaders in that industry. Airasia pan asia plan targeted to million of asians who wanted basic air transportation at cheap price airasia achieved low cost by following method. The low operational cost of the company is on account of use of online reservation systems, no frill, quick check that helps the company to reduce its operational cost. It was the first successful low cost, ticketless airline in the southeast asian region. Airasia is one of the most popular low cost airlines in asia. We draw upon established theory from the fields of strategy and strategic human resource management to explain airasias minimalist approach to human resource management. Airasia is an international air travel carrier, which started its operations in malaysia, and has moved onto expanding its services in other countries in the asian continent like india and thailand. Once you finished the case analysis, time line of the events and other critical details. Air asia is a low fare airline of malaysia, it had one of the largest number of airplanes and flying destinations. The firm was founded in 1996 as a low cost domestic airline, and was purchased by tony fernandes in 2001.
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