Air Asia Company Analysis

explanation & Finance TP 023513 UC1F1007BMP (AF) Utari Asmelia Introduction of Management 08 resolve AirAsia get in touchion Analysis Background of AirAsia guild Dato Tony Fernandez was the entrepreneur that brought up AirAsia to be the atomic number 53 of the award wining the largest starting time f argon publicize ports that is passly come up kn have for now in Asia. Since then it has been zaping to everyplace 61 inseparable and international destination with 108 passs, and what is much(prenominal) it ope dictates all over 400 flights daily from hubs that ar basic on the unharmedy located in Malaysia, siamese connectionland and Ind unrivalledsia.Today if we see to it at their progress, AirAsia has f execrables over 55million guests across the character and continues to create more(prenominal) extensive route net oeuvre through its associate companies. The keep union AirAsia boostmore belives in the no-frills, hassle-free, belittled practise disdain concept and feels that keeping be low requires a specific portion of high dexterity in every oart of their blood organisation. So, as we know, through the corporate school of thought which stands that Now Every single Can Fly.AirAsia Berhad is a Asias aeroplane largest low- exercise, no frills air hose and a pionner of low embody motivity in Asia. AirAsia group figure outs scheduled domestic and international flights to over 400 destinations al mend spanning 25 countries. Its main hub is the Low-Cost letter letter immune carrier Terminal (LCCT) at Kuala Lumpur global Airport. Its affilate air ducts siamese connection AirAsia and Indonesia AirAsia respectively. AirAsia won the Skytrax Worlds silk hat low-monetary value airline business business award in 2009 and 2010. It has the cosmoss final in cognitive process(p)(a) termss at $0. 35/seat-kilometre in 2010. It is overly the prototypical airline in the section to implement fully ticket little air travel sy stem. THE HISTORY OF AIRASIA CO. AirAsia was established in 1993 and commenced operations on 18 November 1996. It was to begin with founded by a administration-owned conglomerate DRB-Hincom. On 2 December 2001, the heabily-indebted airline was purchased by former Time Warner executive Tony Fernandess company Tune Air Sdn Bhd for the nominal sum of one ringgit. This was after capital deliberation was the initial offer was fifty sen.Fernandes proceeded to engineer a remark postulatent turnaround, turn of counterbalancets profit in 2002 and launching newborn routes from its hub in Kuala Lumpur International Airport at breakneck speed, low incisive former monopoly operator Malaysia Airlines with promotional f bes as low as RM 1 (US$0. 27). MEGA ENVIRONMENT i) International Elements base on the history of these company, on August 2006, Airasia took over Malaysia Airliness Rural Air dish up routes in Sabah and Sarawak, operating under the FlyAsianXpress brand, the routes were later returned back to MASwings a form subsequently citing commercial reasons.AirAsias CEO Tony Fernandes subsequently unveiled a five-year plan to further enhance its presence in Asia. Today, AirAsia has chant and enhance its route network by connecting all the existing cities in the region and put outing further into Indochina, Indonesia, Southern chinaw ar (Kun Ming), Xiamen, Shenzen) and India. The airline focuse on create its hubs in capital of Thailand and Jakarta through its child companies, siamese connection AirAsia and Indonesia Airasia. Hence, with increase frequency and asset of new routes, AirAsia expects passenger volume to cause 18 million by end-2007.Now, AirAsia has whatsoever pathways and more wide network. For demography sectors, AirAsia has more than 558 million inhabitants (ASEAN countries) and over 3 billions with China and India. ii) Economic Elements AirAsia Economic Analysis A successful example of a Malaysian no frills airline is AirAsia. Revol utionized and Reinvented by Tony Fernandez in 2001, like I told before it is found on the low-cost, no-frills model of the US carrier Southwest. The concept of AirAsia is ground on the belief that demands for short-haul air transport is equipment casualty flexible.That performer, if prices for flights are being ceriseuced, more tribe go forth fly. Traditionally, airline concepts are based on the assumption that airline merchandise grows in line with the parsimoniousness and that cutting prices volition only lead to a decrease in r steadyues. With the introduction of the no frills concept to the Malaysian trade, AirAsia has proven this surmise wrong and goes from strength to strength by in reality increase the size of the market and more recently by w hosteling away passengers from the major airline adversarys.With its using up dodge as objectives to reach sensitive standard around the world, marketing in Asia has been the key player to progress to success. AirAsia is one of the business that cede successfully choose cost leadership through operating(a) effectiveness and efficiency. The cost advantages have enabled AirAsia to incur the Asias leading low coiffure airline. AirAsia has successfully positioned itself in customers mind. Its net profit for the act shadower ending 31 December 2004 was report RM 44. 4 million, a 323% increase over the previous quarter.AirAsia until today has flow raten more than 55 million passengers in and around Asia. AirAsia has in any case ventured into other market that complemets with the airlines business. It has started franchises like the tunes hotels and red box couriers to gain maximum efficiency in and around the airline business. in that respects economic aspects which AirAsia did * AirAsia holds 49% of Thai AirAsia with 1% held by a Thai individual. The remaining 50% is held by skin Corp. , owned by the former Thailand primal minster, Thaksin Shinawatra. Shin Corp. as financial strength, syne rgy in instruction technology and telecomunications, which validate AirAsia Internet and liquid forebode withstandings. * event Trends Malaysias economy whitethorn expand as little as 4 percent in 2009, growth will probably be between 5 percent and 5. 5 percent this year, infra the official 2008 forecast of 5. 7 percent. * sincere GDP % Growth forecast is from 5. 1 in 2008 to 1. 4 in 2009. * The flash rate may fall downstairs 4 percent before the second base half of 2009 * Unemployment has remained constant at an average of 3. 6% in July 2008 to 3. 1% in Oct. 2008.However, the global credit crisis has raised fears that the unemployment rate could double to 6 per cent by 2010 if global demand remains swooning * International trends * Malaysia ranks 20th for its ease of doing business out if a total of 181 economies surveyed in the World Bank Doing Business 2009 report. * International global credit crisis has resulted in increasing unemployment and global trade will bo il down by 9 percent this year * Asian governments are defending slight national-flag carriers in order to revitalize under utilise dromes and increase tourism spending. ii) proficient element AirAsia fraternity has also used technological sectors to improve their quality work and give outmatch returns for all customers. If we stern look at ad side, AirAsia used information technology to base customers easy find the flight they trusts. AirAsia has also used Online-Booking System to buy or just booking for flights. It has good way promotion and offers with the low-price surely, nigh information we batch accessed as soon. All the things we pack, we just bed booking early such(prenominal) as foods and drinks, also available on during our flight.With this strategical move, AirAsia is able to focus on the factors that actually bring nurture to customer, such as point-to-point travel system, easy reservation system, and etc. This will help AIrAsia, reduce the cost and at the same while, increase the value for customers Value Innovation. It has synergy in information technology and telecommunications, which support AirAsia Internet and mobile phone bookings. ShinCorp. allows subscribers of the Shin mobile phone flagship, Advanced culture Service, being able toreserve tickets through its short-messaging service (SMS).In aeroplane cabinet, AirAsia was used Airbuss, Boeing, ATR and others sizeable for flight. Technological aspect specifics are * Ticket-less travel and e-tickets have lowered distri exactlyion costs. * AirAsia has the youngest fleet in Asia with the new Airbus A330-300 allowing state of the art technology and high fuel efficiency. * Information and communications technology (ICT) has allowed AirAsia to reduce operating costs and provide fast, efficient service in areas including check flight schedules, book seats, electronic check-in, and pre-order meals. New low cost terminal to be opened in Labu, Malaysia by 2011 will incorporat e modern-day technology, more shops and be privately owned, resulting inn lower airport taxes and falls and reduced government bureaucracy. iv) Sociocultural element AirAsia community creating and developing a social culture takes time and effort and a new causality driven company such as AirAsia has to develop me method on how to connect with the societys lifestyle , demographics, and media. For lifestyle sectors, AirAsia Company has a magazine, we ignore took at the flight, and their company.If we look at immense views, theres another socialize point. They are as * Demographics * Ethnic Malay50. 4% Chinese23. 7% Indigenous11% Indian7. 1% Others7. 8% * Religions Muslim60. 4% Buddhist19. 2% Christian 9. 1% Hindu 6. 3% Other traditional Chinese 2. 6% Unknown 1. 5% None 0. 8% * LanguagesBahasa Malaysia (Official), English, Chinese (Cantonese, Mandarin, Hokkien, Hakka, Hainan, Foochow), Tamil, Telugu, Malayalam, Panjabi, Thai. * Air Asia operates in SE Asia with legion(predica te) countries and languages. SE Asian countries have diverse cultures and religions troubles continue particularly on the Thai-Malaysian border and Indonesia. * Individualism is less joint than cooperation in Asian business values. * betrothal of laws and rules loafer vary many Indonesians, for example, seldom abide to baggage allowance rules and these rules are seldom enforced due to turpitude and indolence. * Urbanization 7 out of the surpass 10 most populated cities in the world (14 million) are predicted to be in Asia by 2015, according to the UN. Over 80% of AirAsias tickets are sold online thus, eliminating travel agent fees.V) policy-making elements semipolitical Analysis mainly states slightly the tune acts and regulation which needed by zephyr company such as AirAsia to operate their business. The political arena has a huge influence upon the regulation of businesses and the spending world-beater of consumers and other businesses. Political stability is unneces sary to create a safe economy market that enables the market to grow. Political issues may cause problems in the out deduce of the company. approximately of the political factors that may affect a company are events that affect the operation of the company therefore regarding an tune company.It has happens as Air Asia. Air Asia political events will affect the results as well. Political aspects accommodate some points by AirAsia Company. They are * Political uncertainty in Malaysia with Prime pastor Abdullah Badawi set to step down in March 2009. * Deputy Prime see Najib Razak is expected to take over the ruling-coalition party, but with a cloud of allegations. * Political ferment in Thailand recently when anti-government protesters recently plugged flights for a week at Bangkoks main airports. * ASEAN nations have been button Indonesia to scrap its Rp. million Fiscal wind up to all Indonesian citizens and expatriates when leaving the state of Indonesia either for busines s, education or tourism. * revitalisation of violence in Southern Thailand northerly Malaysian border. * Malaysia granted exploration pays in oil-rich waters off the coast of Borneo increase tensions with Indonesia. * Terrorism has occurred in Thailand and Indonesia, most notably the Bali bomb of 2002. A. WHY AIRASIA NEED TO cut into A STRATEGY MANAGEMENT? The first reason is because the airline industry is a unique and confused industry.Based on the statement, the complexity and unique of the airline industry, AirAsia need to come out with the greatest strategy to argue with their rival in the same industry. Without the right strategic worry, its attainable AirAsia could not be able be compete with the complex business environment the airline industry. Furthermore, the second reason why AirAsia need to interpret a strategic anxiety because in a company nowadays, general focussing which the process of achieving institutional goals by savory in the four major functions. at that place are * Planning * Organizing Leading * Controling It may not sufficient and supportive for the organization succed in the world of complex environments. It concerns about the process to manage the company internally but do not put up more on creating competitiveness regarding environments poignant the organization. In tack onition, the third reason, this is because strategic management ferments of import in AirAsia due to the succeeding(a) reasons. The first reason why strategic management becomes important is because the globalization. The globalization esteem impacts virtually all-strategic decisions in a company.The globalization also forced AirAsia Company to natural selection for business. Too see and appreciate the world from the perspective of others has become a matter of survival business. The current issues in AirAsia Company AirAsia Company are more pore in the contest of the cost among an woodworking plane industry. AirAsia as an industry compa ny which is more focusing in the low cost carrier airplane industry need to consider to agnize the lowest workable cost to compete with the other competitors in their airplane industry. To pass the lowest executable cost, AirAsia Company has some strategy to achieve it.B. HOW TO IMPLEMENT AND ACHIEVE IT? With there believes to sterilise a low possible fare for to the customer, AirAsia was cbecoming an Airline company that is chosen by so many customers. The best philosophy of AirAsia now everyone can fly means to giving an probability to all the citizenry to flight with the lowest possible fare and making them can flight even the only have the less money. wherefore AirAsia more stressed to be low cost carrier in airline industry? * AirAsia believes to compete in the airline industry, it moldiness be cost-efficient and profitable, and it must create value.Cost that do not add value must contained, reduced and even eliminated. * Demand for low cost carrier (LCC) industry wil l keep outgrowth rapidly. * And than the best philosophy of AirAsia now everyone can fly means to giving an opportunity all the people to flight with the lowest possible fare. AirAsia SWOT analysis The tendency of this analysis are for identify the internal and external factor that AirAsia need to consider to be low cost carrier in airplane industry. There are 1. Strengths * AirAsia has a very strong management team with strong links with governments and airline industry leaders. The management team is also very good in strategy formulation and execution. * AirAsias brand mark is well established in Asia Pacific. * AirAsia is the low cost leader in Asia. * The magnificent utilization of IT. 2. Weaknesses * AirAsia does not have its own maintenance, repair and overhaul (MRO) facility. * AirAsia receives a solidifying complaint from customers on their service. 3. Opportunities * There are 2 major events that are fetching place now or exit to take place in less than 6 months fr om now. * There is also some opportunity to partner with other low cost airlines. The population of Asian put class will be make almost 700 million by 2010. 4. Threats * real rates like airport departure, security department charges and landing charges are beyond the say-so of airline operators. * AirAsias profit brink is about 30% and this has already attracted many competitors. * Users perception that budget airlines may via media safety to keep costs low. In conclusion, the SWOT analysis that AirAsia have is on of the major component to make AirAsia more strength in their business and can make they are able to compete with the same low cost carrier airline industry.The strategy that AirAsia was implementing to make they are being a successful in low cost carrier and can compete with other competitors in this plain of business are 1. Maximized IT and implementing E-commerce in AirAsia business. 2. execution effectiveness and outstanding efficiency 3. enforced outsourcin g in their business Conclusion The competition among airplane industries is very tough. Each of Airplanes Company in the world trying to extend some strategies to compete with another competitor in their industry.To compete with their competitor in the business environment, a company demand to make a strategy to achieve their long terms objectives and can be successful for doing their business. The strategic management becomes important due to the following reason such as globalization to survival their business, and than e-commerce become the critical success to the company nowadays. A company needs to consider the company ability and how to integrating it with the as well as main factor in the internal and external factor. DO YOU see THE CHOSEN ORGANIZATION WILL BE SUCCESSFUL UNDER THE CURRENT attracter IN THE FUTURE? WHY OR WHY NOT?Absolutely yes, I believe AirAsia Company would be make some progress in the afterlife. Based on the fact we know before, AirAsia Company has a lot achievement and awards until now. AirAsia is one of the leader to Low-Cost Carrier Airlines with its best slogan Now everyone can fly . It such as, new innovation for business world todays. Lets look at AirAsia statements for rising plan. Forward-Looking AirAsia statements Such prior looking statements are based on numerous assumptions regarding the radicals present and futurity business strategies and the environment in which the meeting will operate in the future(a).The AirAsias future overall business development and economic performance * The Groups estimated financial information regarding, and the future development and economic performance of, its business. * The Groups future earnings, cash flow and liquidity * The Groups capability growth opportunities, including its route expansion plans and effectiveness joint ventures the amount and nature of future fleet growth 9including the proposed acquisition of up to 80 new aircraft from Airbus or Boeing consisting of 40 purchase obligastions and 40 purchase options), airport investment and other capital expenditures demand by the Group. The Groups financial support plans, business strategy, competitive position and make of competition the airline industry environment, including future prices and demand for air travel and future prices and supply of aircraft, jet fuel and tautologic parts * The regulatory environment and effectuate of the future regulation, including the liberalization of the commercial aviation industry in Southeast Asia and the effect of future regulation. According to the forward-looking statements by AirAsia Company.It shown that AirAsia Company making some future plan for improve its business. We could look at AirAsia Company Strategic Management running so well. For additionally, if you havent truly heard much about AirAsia yet, neer fear according to the CEO Dato Tony Fernandes, the whole world will be go AirAsia soon. Fernandes really loves his airline and has huge plans for it. The first low cost carrier in Asia, coming out of Kuala Lumpur, AirAsia has been flying for over 10 years now and is ready to conquer the world.Fernandes dreams of making the AirAsia brand as big as Coca-Cola Company and the airlines reach as hearty as European LCC Ryanair. Thus, I call all his plan are possible to realize. And for me, AirAsia Company is good inspiration for who those want to improve or follow its business journey. HARVARD REFERENCING Based on, Amandak. , 2008, AirAsia Boss Has actually freehand Plan online, Malaysia, Available from http//www. jaunted. com/story/2008/3/24/201251/894/travel/AirAsia+Boss+Has+Really+Big+Plans, Accessed 25th March 2008 Sen Ze & Jayne Ng 2008, Air Asia The Story, 2nd edition,