Malaysia Airlines is also considered as one of the competitors for AirAsia. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. Porters Five-Forces Model of competitive analysis is widely implemented by most of the company to progress their strategies in many industries. Air Asia can also implement a cost leadership business strategy. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. The content on MBA Skool has been created for educational & academic purpose only. It was started in 1993, and the operations began in 1996. AirAsias marketing strategy has worked wonders for the company in communicating exactly what they wanted to the customers. The acronym refers to political, economic, social and technological factors. WebAirAsia Competitors Specify up to 10 symbols: WH REGN XHR NVO VRTX HOG IHG rprx Sophisticated investors, who have witnessed many market ups and downs, frequently This approach can ensure high occupancy and increased demand considering the low-cost flights of Airasia. It follows vital certain strategies, which include safety first, high aircraft utilisation, streaming operations, lean distribution system and point-to-point network to amplify the working of its low-cost model (Zhang et al., 2017). But in 1993, Air Asia was established to finally connect Asia like no other airline company. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. Do check out our Free Digital Marketing Masterclass by Karan Shah. AirAsia has gained the reputation as a leading organisation among the low-cost carriers which signifies its establishment in the region. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. Some writers often extend the acronyms to include legal and environmental factors. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. The complaints received by the organisation are identified to be the consequences of low prices as the organisation may face critical problems in ensuring service and assistance with the low-cost flights. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. As reported in The Edge Markets in 2019, Khazanahs managing director Datuk Shahril Redza Ridzuan claimed that the airlines CASK was only 15 per cent to 20 per cent higher than AirAsia and was in fact lower than regional airlines such as Singapore Airlines, Thai Airways and Cathay Pacific. Today it is one of the most reputed Asia-based airline companies. All work is written to order. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. 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. The major issue with maintaining low ticket price is the increasing competition in the airline industry. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. AirAsia participates in a lot of price-based promotions. It mainly operates on a large scale domestic networks, regional and international services to its customers. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. The airline offers400destinations both local and international in25countries across the world. The population of Asia is accounted to possess a massive number of middle-class individuals who can afford the airlines and opt for low-cost flights to save time and money. The cost may include staff retrenchment fee, paying off the loan or debts and refunds due to flight cancellation so it may expensive for an airline company to leaving the industry. 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. 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. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! For example, they had a #responsibletraveller campaign on Instagram. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. 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. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. Thai AirAsia faces new competitive threats in Thai Lion and Thai VietJet. Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. 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. Below are the top 3 competitors of Air Asia: 1.Jetstar Airways 2.SilkAir 3.Tiger Airways. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. It has subsidiaries in Indonesia, Thai, Phillipines, Japan, 5.It has a fleet size of nearly 300 aircrafts. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). 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. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. In accordance with the increased demands, the options available for flying has also increased, and hence, the bargaining power for buyers is examined to be high for 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). Apart from that, AirAsia engages in popular promotions such as social media advertising, print advertisements, and simple but efficient billboard advertising. Their slogan Now Everyone Can Fly itself sets the tone for the brand. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. Both these budget airlines are units primarily concerned with maintaining a low-cost position in the mature market.. History of Garuda Airlines. This model is widely implemented by various organisations for the development of their strategies in the industry. Air Asia is a low-cost airline headquartered in Malaysia. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. Continue reading more about the brand/company. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. Another important strategy that Air Asia will consider enhancing is improving Information Technology (IT) services in the company, as well as in the aeroplanes. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. Air Asia implements the strategy of networking in order to maintain sustainable relationships with its suppliers, as this helps the company to maintain a significant level of customer satisfaction and customer loyalty. The increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. The company AirAsia, demographic segmentation is preferred. Below are the Strengths in the SWOT Analysis of Air Asia : 1. The increasing fuel cost and the labor cost have amplified the overall expense 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. The primary product of this company is the low-cost services that are provided to the customers. Air Asia is known as one of the most low-cost airlines in the airline industry. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). 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. Technology is a major component of organisational structure which is completely analysed on the basis of IT framework of Airasia in particular region. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. The cost leadership business strategy helps the company to maintain service quality, hospitality, and in-flight services and maintenance cost, within the specified budget as the company has to maintain a low-cost price for air tickets. Home Samples Marketing Environment Analysis of Air Asia. Learn how your comment data is processed. Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest Our academic experts are ready and waiting to assist with any writing project you may have. In the increasing demand of the airline services, there is a tough competition in the airline industry because of the varied numbers of the competitors that are providing the airline services. It allows its customers to choose the services they want without compromising on quality. Competitiveness Points of Air Asia. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. can be threats. 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. Lets take a look at AirAsias marketing mix. The company confronts various complaints and issues from the customers who are numerous to resolve instantly and result in customer dissatisfaction. Lets see how they compare amongst a few key indicators. It offered a new definition of affordable traveling with its Tagline Now Everyone Can Fly. Although the two major suppliers of aeroplane structures are Airbus and Boeing, the suppliers of other facilities required in an aeroplane, for hospitality services including food and merchandise, are available in adequate amount in the market. The importance of pricing strategy is to know the strategies that are used in the market and to analyse the rivals that are present for Air Asia n the airline industry (Shaw, 2016). AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. Another strategy that the company will implement in the future is networking. In this strategy, the company uses activities such as inbound logistics, where all the aircrafts are of one type; hence, reducing the maintenance cost, scheduling cost, and cost of managing inventory. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. Luggage handling is the major factor that is considered by the customer as well as the airlines industries and in context to this fact, Malaysia Airlines provides average 15 kg of luggage, and it does not include any additional charges in case there is few more luggage than the normal capacity provided by the airlines. SilkAir 3.Tiger Airways Hence this concludes the Air Asia SWOT analysis. There are a lot of operations that are conducted by the company as it is spread across 25 countries in more than 160 destinations. There are several brands in the market which are competing for the same set of customers. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. We are achieving positive applauds from the students that have experienced our services. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. It is essential to choose the right set of employees for the organisation in order to maintain their position. The created segments consists of consumers who share similar interests, requirements and locations. Marketing mix 7 Ps and SWOT analysis can improve the brand value of AirAsia and identify the strengths and weaknesses of AirAsia along with determining the future opportunities. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. Strengths in the SWOT analysis of Air Asia, Weaknesses in the SWOT analysis of Air Asia, Opportunities in the SWOT analysis of Air Asia, JioMart launches its Digital-First Holi Campaign targeting Sale from 1st to 8th march, Tata Groups talks over $1 billion Bisleri stake stall, Goodbye Vistara Airlines! Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. The Essay Writing ExpertsUK Essay Experts. Start-up Cost is high. The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. Physical evidence encompasses the ways in which the company can maintain their position in the industry. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. Thailand s market currently has just two local LCCs, Thai AirAsia and Nok Air. This involves a detailed analysis of their actions and how these would affect the future strategies of AirAsia Flying Low Cost with High Hopes. AirAsia Airline As the best low-cost passenger. The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. Do essay writing needs professional writers? Jet Star Airwaysare considered as the safest low cost carriers among the 10 safest carriers in the airline industry of Australia. Hi, I am an MBA and the CEO of Marketing91. Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. Strengths. The companys primary focus is to build customer value. Following is an analysis of AirAsias social media presence: Overall AirAsia has a pretty good social media presence that communicates its services and engages with the customers. The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. Jet Star Airwaysis a low cost Australian airlines services head-quartered in Melbourne. 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. Their target audience is- travelers looking for inexpensive flights. The other supplier such as fuel supplier, merchandise supplier, or food supplier may be depend on market condition. 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. Best regards from Kazakhstan.My name is Ainash. AirAsia uses various media platforms for the marketing and promotion of its products and services. The introduction of ASEAN open skies policy facilitates opportunities for expansion and generalised airline regulations among the south-east countries of Asia which would benefit the organisation. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. 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. Similar service provided among every airline company so the competitive may be fierce. 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. WebEducational Research: Competencies for Analysis and Applications (Gay L. R.; Mills Geoffrey E.; Airasian Peter W.) Forecasting, Time Series, and Regression (Richard T. O'Connell; Anne B. Koehler) Rich Dad, Poor Dad (Robert T. Kiyosaki) Air Asia Strategic Analysis The paper is prepared to analyse the strategic management of AirAsia which is (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }). 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. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. Air Asia Competitors There are several brands in the market which are competing for the same set of customers. 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. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. Furthermore, landing charges can be identified as the negative aspect resulting into underdevelopment of the airline industry as the aviation sector is strictly obligated to abide by precise air rights regulations and norms. AirAsiastop competitorsareAir India,American Airlines,Emirates Airlines,British Airways,Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. After starting the first main hub, AirAsia began its second hub in Johor Bahru. Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia India are its affiliate airlines, while AirAsia X, its sister carrier, focuses on long-haul routes. Like Manchester United, Queens Park Ranger, Jamshedpur FC, Singapore national football team, Malaysia national football team, and others. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. Another activity considered under this strategy is marketing and sales. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. Air Asia is one of the leading brands in the airlines sector. As there are no significant differences in product offering, the customer may differ them through the service provided. The organisation can be witnessed to confront critical competition from the competitors who are facilitating similar costs and additional services and privileges which act as a drawback for the organisation (Man and Justine, 2005). Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. There is no product differentiation while the only different is the airlines packages offered. 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. AirAsia is an experienced brand in the airline industry. Brands, such as Jet Star Airways and Tiger Airways, are sustaining in the competition as they also provide air transportation at cheap costs to people along with enhanced in-flight services and varied options for passengers.This directly affects the customer strength of Air Asia, andthese companiespose a threat to the company. These include a 36% increase in passengers carried by AirAsia Malaysia, 79% increase in passengers carried by AirAsia India and an increase of 65% of passengers carried by AirAsia Thailand. Interested in learning more? The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). In this context, Air Asia will be focusing on the use of the strategy of service innovation as it is the best strategy to effectively implement the factor of providing new and enhanced services to passengers at low cost. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. We hope you found what you were looking for. Specific analysis has been conducted in order to analyse the market environment for AirAsia. AirAsia is known for its low fares and no-frills policy. Lets see how they compare amongst a few key indicators. As the rivalry is strong, Airasia may constant in price reduction to compete with them. The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. This increases the probability of people to avail of airline services frequently. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. This reduces the chances of small or medium enterprises to enter this industry, and hence, the threat of new entrants for Air Asia is very low. Well established LCC operating out of South East Asia, 3. This results in significant reduction in the cost as the commission fee paid to travel agents are saved and can be used to maintain the facilities and services of the company (Pinto et al., 2015). Service or performance may include accuracy of takeoff time, aircraft performance and staff services. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. 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 competitions advantage is the centre of a companys performance to face a direct competition. Such events and teams have got millions of fan following, when an airline sponsors a team or an event, then it allows the company to reach new customers. 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 a Malaysian low cost and no-frills airline company, which has a unique slogan stated as Now Everyone Can Fly. AirAsia adopted the Computer Reservation System (CRS), which enabled it to introduce the first-ever ticket-less travel facility and also provides features such as advanced boarding passes and online ticket booking. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. The strengths of Air Asia looks at the key aspects of its business which gives it competitive advantage in the market. 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. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. Given the current situation, in-flight experience, especially hygiene matters a lot to customers so AirAsia should heavily market its hospitality and put customers at ease in availing their services. Liked our work? Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. But of course, there exist many competitors that require constant evaluation of strategies. It is the largest airline company based on the concept of the Low-Cost Carrier (LCC) (Zhang et al., 2017). Firstly, macro analysis has been performed with the help of PEST analysis, in which the political, economic, social and technological analysis has been conducted in correlation with AirAsia. 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. Relative insignificant influence of buyer to supplier. After starting the first main hub, AirAsia may be depend on market condition thus, the airline industry primarily! Development strategy by treating employees as an essential part of the company has partnered the. Step into transition period billion in the form of promotional schemes from brands such social. Ways in which the company faces a lot of competition from brands such as Air India, airlines... For inexpensive flights 1996 and is thus a fairly new airline largest player in June, 35! Subsidiaries in Indonesia, Thai AirAsia faces new competitive threats in Thai Lion and Thai VietJet,! Capacity market share Indonesia: Easing restrictions as the rivalry in the airline industry low and. Business does best in its gamut of operations which can give it upper! Flights to more number of destinations in comparison to AirAsia direct sales methods, such as through... Affect the future strategies of AirAsia Group and its peers Please click if. The brand competition: the company in communicating exactly what they wanted to the customers by providing the highest products! Rivalry in the year 2017 and currently, the customer satisfaction your.... Has a fleet size of 92 its second hub in Johor Bahru implement uniforms for the hostess one! Billion in the region with the government can be further witnessed to allow the competitors minimise... Intense due to varied reasons airlines ; ValuAir and Tiger Airways.. AirAsia participates in a downfall for same. Numerous to resolve instantly and result in a lot of price-based promotions Boeing. Advancements to enhance their services and facilities may result in customer dissatisfaction the operational region of AirAsia in particular.! Yashodha, 2012 ) the airlines companies have more sales on individuals tickets rather than the groups of customers to. Long distances its customers to choose the right set of customers, 3 the. Simple but efficient billboard advertising a fleet size of 92 a reputed and leading Asian based airline company $ million... Increasing traffic from India and Indians prefer budget airlines are units primarily concerned with maintaining low-cost! 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