AirAsia

AirAsia

Asia’s leading airline was established with the dream of making flying possible for everyone. Since 2001, AirAsia has swiftly broken travel norms around the globe and has risen to become the world’s best. With a route network that spans through more than 20 countries, AirAsia continues to pave the way for low-cost aviation through our innovative solutions, efficient processes and a passionate approach to business. Together with our associate companies, AirAsia X, Thai AirAsia and Indonesia AirAsia, AirAsia is set to take low-cost flying to an all new high with our belief, "Now Everyone Can Fly".

AirAsia X

Focusing on the low-cost, long-haul segment - AirAsia X was established in 2007 to provide high-frequency and point-to-point networks to the long-haul business. AirAsia X’s cost efficiencies are derived from maintaining a simple aircraft fleet and a route network based on  low-cost airports, without complex code-sharing and other legacy overheads that weigh down traditional airlines without compromising on safety. Guests continue to enjoy low fares, through cost savings that we pass on to our guests.

AirAsia X’s efficient and reliable operations are fully licensed and monitored by Malaysian and  international regulators, and adhere to full international standards. AirAsia X is committed in offering X-citing low fares, X-emplary levels of safety and care, and an X-traordinary in-flight and service experience to all our guests - spreading the amazing AirAsia experience to X-citing destinations in Australia, New Zealand, China, Taiwan, Japan, Korea, India, Middle East and Europe.

Vision

To be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares.

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 AirAsia
• Maintain the highest quality product, embracing technology to reduce cost and enhance service levels

Values

We make the low fare model possible through the implementation of the following key strategies,

•   Safety First:      

Partnering with the world’s most renowned maintenance providers and complying with

the with world airline operations.

•       High Aircraft Utilisation:

Implementing the regions fastest turnaround time at only 25 minutes, assuring lower costs and higher productivity.

•          Low Fare, No Frills:

Providing guests with the choice of customizing services without compromising on quality and services.

•     Streamline Operations:

Making sure that processes are as simple as possible.

•      Lean Distribution System:

Offering a wide and innovative range of distribution channels to make booking and travelling easier.

•  Point to Point Network:

Applying the point-to-point network keeps operations simple and costs low.

Loyalty Programme, BIG

BIG is the 'first of its kind' global loyalty programme where you earn BIGGIES (points) with every transaction to redeem FREE* AirAsia Flights. Members also enjoy priority booking, special offers and discounts exclusively as an AirAsia BIG Loyalty Member.

Monday, 14 November 2011

Business Strategy

Aligned with its mission statement, AirAsia’s business strategy is centred on costleadership. However, its business strategy targets specific markets; price sensitive customers (including first-time fliers) needing short-haul flights. In Porter’s generic strategies, AirAsia’s business strategy can be categorised into focused cost leadership;quadrant 3A in figure 1.

AirAsia builds and sustains its competitive advantage by providing services at a price that is simply lower than competitors’ price. Operation effectiveness and outstanding efficiency are two main characteristics of low cost businesses including AirAsia. The central objective is to achieve bigger cost advantages than the rivals by continuously searching  areas for cost reduction along its value chain. By further analysing AirAsia’s value chain, one can actually determine how AirAsia creates cost advantages along  its value chain. Appendix 2 summarises the sources of cost advantages contributable to the low cost business model for each activity in AirAsia’s value chain. These cost advantages constitute AirAsia’s order winner in competing with its rivals as they enable AirAsia to provide the lowest possible price to the  price sensitive customers.  In LCC industry, cost is the competitive priority and it determines market position.

The Air Asia Establishment

Inspired by the LCC business model of Southwest Airlines inspired Tony. Southwest Airlines was established in 1971 and had been profitable every year since 1973. Then model adopted by Europe after liberalization of aviation industry. Ryanair (Ireland) and easyJet (London) are the largest LCC in Europe and follow the same business model.

Air Asia was established initially by DRB-Hicom Bhd in late 1996, asian financial crisis in 1997.

Government studied Tony’s proposal to start a LCC carrier and refused to issue a new licence and had requested Tony to buy over an existing airline.

Tune Air, set up by Tony and his investors bought Air Asia over from DRB-Hicom on 8th Dec 2001 for a token sum of RM1, with its 2 x Boeing 737-300s, a tiny route network and nearly RM 40 million in debts.

Tony Fernandez (VP, Times Warner Music, SEA), from music industry had RM 1 million in hand (mortaged house and sold off Times Warner Share Options) to pump into Air Asia.

Air Asia’s LCC runs short-haul (less than 3 hours) and is low-cost, no-frills carrier serving routes within Asia.

Air Asia was re-launched in January 2002, with fares lower than bus ticket for local destinations and even gave away free tickets. First day of operations started with RM 1 promotional price.

Air Asia started with routes from KL, and then from Senai Airport in Johor in 2003.

By Dec 2002, the revenue was stated to be RM 113 million and profits of RM 19.4 million, 1.1 million passengers and most debts settled.

Cost cutting measures such as : Fuel consumption being cut by half, and landings being doubled with the tyres. Safety and service were given same priority as cost cutting measures. Problems raised were resolved within 24 hours as a KPI.

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