The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. They may compete in term of their route offering that Airasia does not fly. They have a vast network of operations around the world, flying domestically and internationally. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. The airline offers400destinations both local and international in25countries across the world. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. The largest airline in Malaysia the business is known to be highly employee centric. Air Asia is one of the leading brands in the airlines sector. Continue reading more about the brand/company. It has been reviewed & published by the MBA Skool Team. They truly contribute their lifelong learning in allowing students to succeed in their academics. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. 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. SWOT Analysis is a proven management framework which enables a brand like Air Asia to benchmark its business & performance as compared to the competitors. Performance of rivalry. AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. Lets see how they compare amongst a few key indicators. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). The company is constantly using innovative solutions to provide low-cost transportation. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. AirAsia should expand into more countries, increase the market, and target new customers. The company provides its services to people of every age group of society, and to the people belonging to the medium and high ranged of income or financial status. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. 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. They may force to continue their operation even they are facing losses in order to cope with fixed costs. 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). 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. 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 living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. 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 price offer by an airline company may not be fixed but it will depend on the time differences between the date of booking and flight. No plagiarism, guaranteed! AirAsia Berhad also facilitates in operating businesses, related financial services and airline operation services. AirAsia X was regarded as having the worlds best low-cost airline premium seat and the worlds best low-cost airline premium cabin for five consecutive years (AirAsia X, 2018). The threats for any business can be factors which can negatively impact its business. Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. Focusing on providing air travel without frills at substantially lower prices, AirAsia has managed to achieve lower prices to attain high passenger loads, market share, and profitability by eliminating provision of In the past years, this company has enhanced its customer base by providing different service options through efficient payment channels along with other facilities like ticket-less services. However, AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to the competitors in the airline industries. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. Many airline companies have entered the airline industry and they have made the market very competitive. Disclaimer: The reference paper provided by Student Life Saviour should be used as a model paper, and are not intended to be submitted to the universities. Malindo will compete against AirAsia on all three routes. The marketing mixs 7 Ps model is a marketing strategy tool that is used in a business in order to gain the feedback from the market in relation to marketing objectives. Air Asia is known for treating its employees and customers well. It would be a strong competitive edge to AirAsia after the pandemic ofcovid-19because the purchasing power of the people has dropped significantly. WebThe two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). The basic product strategy in its marketing mix is its low-cost air services. But in 1993, Air Asia was established to finally connect Asia like no other airline company. *You can also browse our support articles here >. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of It has subsidiaries in Indonesia, Thai, Phillipines, Japan, 5.It has a fleet size of nearly 300 aircrafts. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. Some writers often extend the acronyms to include legal and environmental factors. Features, such as improved WIFI and other entertainment facilities, can be improved with the help of latest trends and technologies in the IT industry. Apart from that, AirAsia engages in popular promotions such as social media advertising, print advertisements, and simple but efficient billboard advertising. Currently, the priority for the company is to maintain the fundamental principle of keeping travel fair as low as possible so that people with weak financial status can also afford to travel in flights. Some factors like increased competitor activity, changing government policies, alternate products or services etc. Here are the weaknesses in the Air Asia SWOT Analysis: 1.Not on too many routes as compared to market leaders 2.Stiff competition in its sector. Hence, customer may access to the current airlines information which are available at all time, this has reduced the power of negotiation for airlines and producing a strong customers bargaining power. In anchor pricing strategy, the company prices its services along with the tickets at a low price. Their slogan Now Everyone Can Fly itself sets the tone for the brand. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. Due to few suppliers in market, this has increasing the bargaining power of supplier. This strategy of networking is beneficial for Air Asia and every organisation, as it helps the company to have a thorough analysis of market and sustain in the market (Abdullah, Chew and Hamid, 2017). In order to establish a new airlines company, high amount of capital along with risk-bearing capabilities and monetary funds to cope up with the challenges faced while sustaining in the airline industryare required. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. 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. The diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. Browse marketing analysis of more brands and companies similar to Air Asia. Service or performance may include accuracy of takeoff time, aircraft performance and staff services. AirAsias positioning is very clear in being low-cost. Now, the brand should amplify its marketing and promotional campaigns to attract the Indian price-conscious market. Best regards from Kazakhstan.My name is Ainash. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. The Air Asia X mainly focuses on the long-haul routes (Yarimoglu, 2014). KLIA-Singapore is also served by four Singapore-based carriers Jetstar Asia, Tigerair, SilkAir and Singapore Airlines. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. Strong Promoter 2. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. Back in the 1900s Thai National Airlines was the only airline that could fly in the main routes of Bangkok Chiang Mai with non-stop flights. All work is written to order. In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). Let us now get into its marketing strategy. About Air Asia The composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. Rise of Other LCCs in Market. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. Air Asia has expanded their product line by not only sales ticket but also offering tourism package which is offering hotel booking while booking the ticket. Required fields are marked *. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. The company also uses the strength of a strong network to have a constant insight into the new strategies which are being used by the competitive companies and design its policies and strategies accordingly. In 2002, AirAsia became the first airline company in the region that allowed passengers with the facility to pay for their bookings by using credit card. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. If you did, be sure to share, comment, and let us know! - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. 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). AirAsia X has amplified its profit-making routes to multiple countries such as Australia, France, Iran, South Korea and New Zealand. The AirAsia Big Loyalty Program is one of the companys most popular campaigns, in which affluent customers win BIG points for any purchase they make and redeem those points for free airline tickets. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. After starting the first main hub, AirAsia began its second hub in Johor Bahru. Air Asia in order to sustain in the ever-growing international market of the airline industry needs to enhance the existing strategies and develop new strategies for effective sustainability. AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. It is an international airline that began operations in Malaysia and has since expanded to include countries across the Asian continent, such as India and Thailand. Airasia had expanded its services provides to hotel booking as it already has its own hotel (tune hotel) which located not far away from its airport, and tour packages. As increasing in the number of airline competitor such as Jet Star and Tiger Airways which are also promote low cost fare may decrease the shifting cost of the customer lead to decrease of Air Asias customer loyalty. The increasing cost, competitors, and limited international destinations are some of the main challenges. The company makes use of robust enterprise resource planning system, which allows it to successfully maintain process integrity, speeds up reporting, and data retrieval process. 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. 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. In order to build buzz, cheap flight tickets are given out based on demand in the form of promotional schemes. Lets take a look at AirAsias marketing mix. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Air Asia has established itself as a strong competitor in the airline industry. AirAsia participates in a lot of price-based promotions. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. The company will increase the current IT facilities used in the aircrafts to enhance the facilities provided to the customers. Human resource management undergoes significant political pressure as the recruitment process of AirAsia is focussed on the racial determination of the applicants rather than their merits. The first main hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost Carrier Terminal (LCCT). The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. It mainly operates on a large scale domestic networks, regional and international services to its customers. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. 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