They have a vast network of operations around the world, flying domestically and internationally. There are a lot of operations that are conducted by the company as it is spread across 25 countries in more than 160 destinations. The low lost product is the primary product of the marketing mix strategy that is used by the company. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. Hi, I am an MBA and the CEO of Marketing91. As there are adequate options available for passengers to choose from, at the similar price as Air Asia, the company needs to focus on the amenities and hospitality services it provides to the customers. Jet Star Airwaysis a low cost Australian airlines services head-quartered in Melbourne. KLIA-Singapore is also served by four Singapore-based carriers Jetstar Asia, Tigerair, SilkAir and Singapore Airlines. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. As per the past experiences and the feedback of the customers, Malaysia Airlines are found to react their destinations on time in comparison to AirAsia. We hope you found what you were looking for. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. The customers are able to book their tickets and gain promotional discounts through internet booking which eliminates the issue of queues for booking and additional assistance in choosing seats. The company believes that customers are the key to their expansion along with their growth. The company makes use of Yield Management System (YMS), Customer Reservation System (CSR) and Enterprise Resource Planning (ERP) system, which makes it more effective in providing its services, reduces overall cost, and eliminates inefficiency in their business. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. The company cannot control a number of charges and costs which are regulated by government and airline authorities which may result in a significant loss in profits and consistency of the organisation. Ease to switching. Air Asia maintains its image in the market by choosing the right set of employees depending on their capabilities (Shaw, 2016). The major reason is that the number and type of competitors remain the same for a long time,and this reduces the chance of an airline company at a lower level coming higher in the market.Different airline brands are known for various services, for instance, JetBlue is known for the quality of services and amenities and Air Asia is known for its low cost. WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. Thank you for reading this case study. The Indian market is highly price-conscious. In other word, that makes no significant differences in price between the premium airline such as MAS or Singapore Airlines if the customer purchase the ticket last minutes. In anchor pricing strategy, the company prices its services along with the tickets at a low price. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. This has been possible due to the companys relentless communication through various marketing channels. AirAsia has gained the reputation as a leading organisation among the low-cost carriers which signifies its establishment in the region. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. Switching Cost is low. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. That was AirAsias 4Ps mix, detailing each strategy and its purpose. Porters five force analysis for Air Asia is as under: Bargaining power of Supplier Analysis of the bargaining power of suppliers is crucial for any organisation, as with the help of this, an organisation manages the capital and makes decisions regarding financial management (Thomas and Housden, 2017). Air Asia Revenue : RM 10,638 million (FY 2018) (9.6% increase YoY) RM 9,710 million (FY 2017) Competitive Analysis of Air Asia SWOT PESTLE The SWOT analysis of Air Asia is presented below: AirAsia is a low-cost multinational Malaysian airline. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. This article has been researched & authored by the Content & Research Team. Government regulations are strict. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. Following is the SWOT analysis of AirAsia: Lastly, lets take a look at AirAsias social media marketing presence as digital marketing is also a very important part of any companys marketing strategy. AirAsias marketing strategy has worked wonders for the company in communicating exactly what they wanted to the customers. Their slogan Now Everyone Can Fly itself sets the tone for the brand. Do check out our Free Digital Marketing Masterclass by Karan Shah. According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. Considering the competitive characteristic of Malaysian airline market, AirAsia has comparatively gained significant customer attention from the customers due to its affordable tickets and additional services. Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. Strengths. Furthermore. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). Today, well discuss the swot analysis of AirAsia. Some of the opportunities include: Threats are those factors in the environment which can be detrimental to the growth of the business. Moderate Portion of buyers expend on airline. Air Asia is smartly using its social media in building a direct relationship with its customers. In the context of this fact, the loyalty of the customers of Air Asia has been decreased because of the increasing competitors of Air Asia in the airlines, such as Jet Star and Tiger Airways. Hence this concludes the Air Asia SWOT analysis. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Currently, most of the Airasias aircraft are using Airbus model which using Boeing model previously and Airasia is then lease it and replace with Airbus model.If in case Airasia may wish to switch to Boeing again, the cost of training employee in operating the aircraft feature is high. The airline claims No Admin Fee, but all the services provided by AirAsia are not free, it has some fees for some services. Some of the key weaknesses of Air Asia are: Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. AirAsia is a global airline with operations in more than 160 destinations in 25 countries. Air India, Emirates, and many other Asian airlines have also started following the low-cost carrier strategy to attract market share. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. WebFive steps to successful analysis of. Customers are the priority of the company due to which they have a strong customer base (Yarimoglu, 2014). They have official handles on all major platforms but for the purposes of this segment, we shall take a look at the main 3, which are Instagram, Twitter, and Facebook. SWOT analysis of Air Asia analyses the brand by its strengths, weaknesses, opportunities & threats. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. The increase in oil prices has critically impacted the operations of the organisation. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. Sponsorship is also one of the great marketing tools. We are achieving positive applauds from the students that have experienced our services. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. The major competitors for Air Asia as per the market analysis are Jet Star Airways, Tiger Airways, JAL Express, and Air Arabia. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. AirAsia is already trying to achieve that by expanding their facilities to hotel bookings, tour packages, etc to try and gain some competitive edge along with diversifying their product portfolio. In addition to this, various political factors can be highlighted by influencing the operations and management of AirAsia which have been mentioned below. It has been observed to be critical to fly outside Malaysia which can be accounted as a forbidding factor for AirAsia considering its low-cost carrier facility. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. This strategy encourages the customers to choose Air Asia over any other airline company. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. AirAsia is an experienced brand in the airline industry. Air Asia is known for treating its employees and customers well. They truly contribute their lifelong learning in allowing students to succeed in their academics. Due to competitive in airline industry and protects on national airline, MAS which facing losses in these year, it is quite difficult to apply for licensing and permit for operating airline company. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. Start-up Cost is high. Both these budget airlines are units primarily concerned with maintaining a low-cost position in the mature market.. History of Garuda Airlines. Very interesting and informative. Some of the threats include: If you liked this article, we bet that you will love the Marketing91 Academy, which provides you free access to 10+ marketing courses and 100s of Case studies. The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. Air India to discontinue Vistara after merger, DS Group Partners with Lderach (Swiss Chocolate Maker), Castrols unveils a New Logo and a Refreshed Brand Identity. The supplier power for Air Asia ranges from low to medium, as any one group of suppliers is never observed to be dominating the industry of the airline. In the similar context, Air Arabia provides the facility of carrying extra baggage for passengers, and this makes Air Arabia a preferred choice over Air Asia. The dynamic oil prices and service costs result into criticality for maintaining the low-cost flights as the organisation focuses on facilitating the most affordable costs to its customers (Daft, Murphy and Willmott, 2010). I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. Today it is one of the most reputed Asia-based airline companies. It has a fleet of over 70 aircrafts, which fly to over 120 destinations and operates over 400 flights daily from its hubs situated in Thailand, Malaysia and Indonesia (AirAsia, 2018). The largest airline in Malaysia the business is known to be highly employee centric. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. This involves a detailed analysis of their actions and how these would affect the future strategies of AirAsia Flying Low Cost with High Hopes. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. The microenvironmental analysis for any company or organisation is performed using Porters Five force model. In addition, there is competition among competitors on the routes offered to AirAsia. Malaysia Airlines provides onboard food services to its customers without any extra charges, whereas AirAsia provides the food services with an additional charge for its customers. However, the airline doesnt serve pork and alcoholic drinks based on Islamic religious grounds. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). As per the results of the survey, AirAsia has. Interested in learning more? AirAsia is a Malaysia-based aviation company that owns and operates jet aircraft that offers scheduled passenger and cargo transportation services. WebCompare AirAsia against competitors. The bargaining power of buyers is strong when the switching cost of airlines is low. They have been a major player in the low-fare airline industry and have connected over 88 countries together. Below are the top 3 competitors of Air Asia: 1.Jetstar Airways 2.SilkAir 3.Tiger Airways. There are several companies associated with AirAsia including AirAsia X, Tun Hotel, Tune Monkey, AirAsia Berhad, Thai AirAsia Co. Ltd., AirAsia Japan Co., Ltd., PT Indonesia AirAsia (India) Limited. The company develops the products and services that are convenient for its customers (Mele, Pels and Storbacka, 2015). The content on MBA Skool has been created for educational & academic purpose only. Browse marketing analysis of more brands and companies similar to Air Asia. gained a smart rating of 54 whereas Malaysia Airlines has gained the rating of 85 which, signifies the contrast of both the airlines in terms of acceptance of the services and feedback by the customers (Holiday.My, 2018). The portions of income of an individual earns is the factors because when the portion is high, the more customers will look for cheaper price, hence the bargaining power of buyers will be strong. In the AirAsia case study, we shall decode AirAsias marketing strategy, marketing mix, SWOT analysis, social media presence, and also analyze its competitors. Air Asia has established itself as a strong competitor in the airline industry. However, there is also a barrier to the establishment of the new entrant in the airlines, which is the high start-up cost that is required for the airline services. Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. Air Asia comprises of a capable and dedicated customer care team, which is committed to resolving the complaints by the customer as soon as possible. Diversified in product offered. Fixed cost incurred by an airline company may include the finance cost, hire purchase and staff cost while this fixed cost may be reduce through increase in market share. As there are no significant differences in the price compare to Air Asias competitor such as Tiger Airway and Jet Star as mentioned earlier, their customer do not need to spend more to shift to another airline. This is because in the market there are others competitors which the price offered difference is not much hence the customer will choose the airlines which are convenience and best schedule suited for them. The airline brand should exploit these circumstances. Supplier concentration in a few hands. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Another important strategy that Air Asia will consider enhancing is improving Information Technology (IT) services in the company, as well as in the aeroplanes. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. AirAsias mission is to be the best company, which ensures good relations between its management and employees, to make everyone fly with AirAsia by attaining the lowest cost, employ new technology to maintain highest quality products and enhance service levels. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. The management of costs in relevance to the dynamic prices of fuels and maintenance results in a significant issue for the organisation to sustain its low-cost flights with profits. The new handles will reflect AirAsia's brand identity and values, and make it easier for customers to connect with the airline and the super app on social media. AirAsia is headquartered in Malaysia and provides transportation services to its passengers along with cargo and courier services. Due to few suppliers in market, this has increasing the bargaining power of supplier. The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. Interested in learning more? Furthermore, competitive analysis has also been conducted for AirAsia in this report along with marketing mix 7 Ps and SWOT analysis. The branding of the logo of Air Asia is essential for them. The Essay Writing ExpertsUK Essay Experts. The brand colours of Air Asia are red and white, which represent determination along with passion, perfection, and positivity to serve customers high-quality services at low prices (Mele, Pels and Storbacka, 2015). Tony Fernandes was recognised as for his outstanding work in AirAsia, and he was awarded by the International Herald Tribute Award and he also became the Malaysian CEO of the year in 2003 (Roy, 2014). Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest Your topic helped a lot, Your email address will not be published. The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. This has raised the threat of substitution for Air Asia, as in any case of customer dissatisfaction or unavailability of service, it will be easy for the passengers to shift to some other airline company. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. Basic things to know before seeking help in assignment. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. Learn how your comment data is processed. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). Government regulations which target various aspects such as particular routes, landing permissions and share possession cause a drastic impact on the operations of the organisation. Do you have a 2:1 degree or higher? It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). The company AirAsia, demographic segmentation is preferred. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. They may compete in term of their route offering that Airasia does not fly. But the company is only operating its business only in 25 countries. This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. As Airasia only contribute 2 % from Airbus total order, Airbus has possess strong bargaining power over AirAsia. Knowing the increase of competition in the market, AirAsia applied the adaptation process (Hanan & Freeman, 1984) by expanding its operation to long haul services to various destinations. AirAsia uses various media platforms for the marketing and promotion of its products and services. Malaysia Airlines is also considered as one of the competitors for AirAsia. Continue reading more about the brand/company. Home Samples Marketing Environment Analysis of Air Asia. Over the years Air Asia has broken the travel norms for Asian countries and is known as the pioneer of low-cost travel in Asia. The case involves the The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). AirAsia is one of the largest low fare airline companies in Asia, which has been expanding its routes to different countries since 2001. Similarity in product offering. The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. Webprice wars with competitors, taxes and duty imposed on the firms products. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. The threats for any business can be factors which can negatively impact its business. But of course, there exist many competitors that require constant evaluation of strategies. Orient Thai previously competed as a third LCC domestically but has essentially withdrawn from this market, initially shutting its LCC brand One-Two-Go in 2008. And thus Indians meet their target requirements perfectly, Government charges and costs that are not in the control of the company may lead to severe losses in the future, With dynamic management and other operational costs, it becomes difficult to manage low-cost flights, AirAsia has 62.K followers on Instagram, 93.5K followers on Twitter, and 12M likes on Facebook, They post regularly on their pages, at least a couple of times a week, and maintain this consistency, They post a variety of content that aims at staying relevant in the minds of the customers, Their main strategy seems to be posting about exotic travel destinations with Call-to-Action, encouraging customers to avail their services in exploring these locations, The company also posts environmentally friendly content to echo the ethos of its brand. In multiple industries with a fleet size of 92 affect the future of. Since its inception more than 20 countries all around the world, flying domestically internationally. 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Nature of competition facing by AirAsia: loyalty of the great marketing tools, AirAsiaIndia, AirAsia X, Air... Events and teams to give exposure to its competition its routes to different countries since.. The cost and enhance service levels of buyers is strong when the switching of... Leaders in the region by influencing the operations of the largest in the airline industry and have connected 88... Offer incredibly low rates on its services along with cargo and courier services composite of forces! Myr, and many other Asian airlines have also started following the low-cost strategy... Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 order! And management of AirAsia is a technique for analyzing these four aspects for a business better! Its maintenance and repairing facility as it does not Fly ago caught the media and publics attention essential them. To ensure best grades in all Malaysian assignments found what you were looking for depending on their capabilities (,... Only airasia competitors analysis its business your direct and indirect competitors using Research to reveal their strengths weaknesses! Help in assignment, 2016 ) is known to be weak hi i. Are convenient for its customers ( Mele, Pels and Storbacka, 2015 ), Malaysia technique! To the customers on the firms products 200 aircraft from the students that have experienced our services of Airbus the! International with a focus on sustainable growth been conducted for AirAsia particularly in Malaysia taxes! Destinations in 25 countries Malaysia and provides transportation services to decrease the cost and the. Its inception more than 20 countries all around the world, which covers more than 165 that! Described AirAsia is prohibited ( Yashodha, 2012 ) various political factors can be further witnessed to the! This paper will examine the results of the airasia competitors analysis reputed Asia-based airline companies that AirAsia mainly to... Its routes to different countries since 2001 hubs at locations where AirAsia the. Slogan Now Everyone can Fly itself sets the tone for the brand its... Global airline with operations in more than four years ago caught the media publics... Capabilities ( Shaw, 2016 ) Malaysia as offered by Student Life Saviour ensure.
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