The flights cover a wide area of diverse countries and focus on further expansion of its coverage. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. The increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. Bargaining power of Buyers The buyer power for Air Asia is analysed to be high as with increasing options in the international market and decreasing prices of air tickets, people of every category of society can afford flying, and hence, the bargaining power of buyers is also high. 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. The major factor that enhances the competition between the Malaysia Airlines and AirAsia is the luggage handling service that is provided by the Malaysia Airlines. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. 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. There are many services that are provided to the employees of the organisation, such as training and motivational lectures. This comes with a lot of competition. The cost-cutting strategies of AirAsia are effective and beneficial in terms of financial growth and maintenance (Ahmad and Neal, 2006). This increases the probability of people to avail of airline services frequently. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. 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. 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. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. After starting the first main hub, AirAsia began its second hub in Johor Bahru. 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. They may compete in term of their route offering that Airasia does not fly. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Under which they asked customers to take a pledge to be conscious of not wasting paper and thus carrying all their travel documents digitally, Festive marketing is also practiced by AirAsia whereby they wish their customers on various festivals and also sometimes provide exclusive offers, On its Instagram, the company has an ongoing #HumansofAirAsia campaign that gives us insights into their employees lives and day-to-day activities on their jobs, On the companys Twitter handle a lot of information regarding travel guidelines, advisories and other details are shared for the customers knowledge, Liked our work? The opportunities for any brand can include areas of improvement to increase its business. Your email address will not be published. The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. 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. We hope you found what you were looking for. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. 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 companys primary focus is to build customer value. Rising Labour Costs 3. Below are the top 3 competitors of Air Asia: 1.Jetstar Airways 2.SilkAir 3.Tiger Airways. Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. The airline company has already got a subsidiary AirAsia India for the local market. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. The distribution channels for the tickets include different sources such as internet ticket booking, exclusive reservation, and sales offices along with the agents that are authorised by the company. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. 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). About Air Asia 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. 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. The company has partnered with the worlds most famous maintenance providers to ensure its passengers safety. The approach towards providing the lowest costs results into a low opportunity for gaining significant profits as the company abides by its approach of maintaining lowest flight costs. Sponsorship is also one of the great marketing tools. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. Very interesting and informative. They should be used as a reference paper for further research. But in 1993, Air Asia was established to finally connect Asia like no other airline company. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. This model is widely implemented by various organisations for the development of their strategies in the industry. In order to stay ahead of the competition, the company needs to constantly invest in improving the additional facilities that make a difference to customers in todays times such as disposable in-flight meals, complimentary WiFi, entertainment facilities, and varied seat options. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Your email address will not be published. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. WebThe Competitors analysis of AirAsia Flying Low Cost with High Hopes looks at the direct and indirect competitors within the industry that it operates in. Best regards from Kazakhstan.My name is Ainash. It is an international air travel carrier that started its flights in Malaysia and expanded its base globally. Lets see how they compare amongst a few key indicators. Specific analysis has been conducted in order to analyse the market environment for AirAsia. 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. IT infrastructure of the organisation is utilised with a remarkable approach which enhances the operations and management of the organisation. Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. This section covers SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP of more than 2500 brands from over 20 industry sectors. Air Asia is a low-cost airline headquartered in Malaysia. The following are strengths and weaknesses of AirAsia: 1. For example, they had a #responsibletraveller campaign on Instagram. Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. 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: 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. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. Jetstar Airways 2. 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. In Kuala Lumpur. AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. Our academic experts are ready and waiting to assist with any writing project you may have. As the rivalry is strong, Airasia may constant in price reduction to compete with them. 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. Thus, small portion of customers who not interested with joining the travel agencies may look for AirAsia which providing the holiday packages which including flight ticket, accommodation and travel guides flight ticket, accommodation and travel guides. Required fields are marked *. - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. We're here to answer any questions you have about our services. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. Similarity of product. 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. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. But the company is only operating its business only in 25 countries. Before we get started, lets get to know the company a little more. This is act as a barrier of entry for the competitor as there are high in capital requirement such as set up of headquarters, purchasing or hiring aircraft, appointment pilots and other staffs like air supervisor. Another strategy that the company will implement in the future is networking. Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. This approach can ensure high occupancy and increased demand considering the low-cost flights of Airasia. 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. The strengths of Air Asia looks at the key aspects of its business which gives it competitive advantage in the market. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. It has been reviewed & published by the MBA Skool Team. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Do you have a 2:1 degree or higher? The company AirAsia, demographic segmentation is preferred. The company also engages in direct service development strategy by treating employees as an essential part of the organisation. 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. A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. 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. Air Asia also engages itself in the promotion of the company through social media, print advertisements, and effective billboard advertising (Mele, Pels and Storbacka, 2015). The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. Interested in learning more? Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. Market segmentation is the concept where the potential target customers for any organisation are divided into groups or segments based on various characteristics. 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. Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. These are people ranging from those who could not afford to fly previously, to corporate business employees whose employers are looking to fly them while cutting costs. 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). However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. Hi, I am an MBA and the CEO of Marketing91. 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. Continue reading more about the brand/company. AirAsia focuses on providing guests with comfort through competent facilities that meet industry standards, as well as regular flights and secure point-to-point connectivity. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. Air Asia maintains its image in the market by choosing the right set of employees depending on their capabilities (Shaw, 2016). The company was observed to initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for the organisation. 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. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. It mainly operates on a large scale domestic networks, regional and international services to its customers. AirAsia is a low-cost multinational Malaysian airline. Has Positioned itself as the major LCC in SE Asia. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. This is due to Airbus is a UK based aviation company and their customer may come from around the world. AirAsias positioning is very clear in being low-cost. We are achieving positive applauds from the students that have experienced our services. AirAsia participates in a lot of price-based promotions. 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 company is constantly using innovative solutions to provide low-cost transportation. Today, well discuss the swot analysis of AirAsia. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. 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. Quizzes test your expertise in business and Skill tests evaluate your management traits. Increasing globalisation has led to an increase in the lifestyle and financial condition of people. 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. WebFive steps to successful analysis of. The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. 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 composite of five forces below explaining the nature of competition facing by Airasia: Loyalty of customer is weak. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. Porters Five-Forces Model of competitive analysis is widely implemented by most of the company to progress their strategies in many industries. In comparison to the competitors, Air Asia is credited with the lowest cost of operation at a unit cost of US$0.023 per available seat kilometer (ASK) and a passenger breakeven load factor of 52%. Jet Star Airwaysare considered as the safest low cost carriers among the 10 safest carriers in the airline industry of Australia. Air India, Emirates, and many other Asian airlines have also started following the low-cost carrier strategy to attract market share. Browse marketing analysis of more brands and companies similar to Air Asia. WebAirAsia Bhd Fundamental Company Report Including Financial, SWOT, Competitors and Industry Analysis Enhanced SWOT Analysis (+ US$ 75.00) PESTEL Analysis (+ US$ 150.00) IFE, EFE, IE Matrices (+ US$ 125.00) Porter Five Forces Analysis (+ US$ 75.00) VRIO Analysis (+ US$ 175.00) Special Bundle, including all types of analyses (+ US$ This company also focuses on providing the accessibility-based promotions in which the customers are informed about their new products and services by using simple tools of promotion, such as email. 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. 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. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. He has been a guest speaker at prominent colleges in India including IIMs[Read full bio], Your email address will not be published. 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. Government regulations are strict. WebDecision Makers can use Porter Five Forces model to analyze the competitiveness faced by Airasia in Airline industry. Student Life Saviour is a prominent name in providing assignment, essay and dissertation help services to students. 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. 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. 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. 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). Features, such as improved WIFI and other entertainment facilities, can be improved with the help of latest trends and technologies in the IT industry. AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Air Asia can also implement a cost leadership business strategy. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. 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. *You can also browse our support articles here >. Thus, the bargaining power of suppliers is analysed to be low (Man and Justine, 2005). Another reason for the threat of new entrants being low is government laws and regulations which pose restrictions on applying for permissions and license for operating an airline company. 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. 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. The cheap flight tickets are given to the customers on the basis of the demand in the form of promotional schemes. 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. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. High numbers of Competitor. 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. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). The diverse people are capable of affording the costs concerning their location and currency as the organisation operates widely among the diverse locations. 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. (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }). 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. WebCompare AirAsia against competitors. 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. 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 The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. They have been a major player in the low-fare airline industry and have connected over 88 countries together. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. 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. Air Asia is known as one of the most low-cost airlines in the airline industry. Many airline companies have entered the airline industry and they have made the market very competitive. 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. This has been possible through excellent brand positioning. They may force to continue their operation even they are facing losses in order to cope with fixed costs. Have made the market environment for AirAsia, 2018 ) to know company... To the businesses situated at long distances, they had a # responsibletraveller campaign on Instagram them based on segments! Tests evaluate your management traits used to determine the strengths of air Asia was established to finally Asia. Route offering that AirAsia does not fly you were looking for of travel group! 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Does best in its gamut of operations which can give it an upper hand over its competitors 2006! Which can give it an upper hand over its competitors implement a cost leadership business strategy competition: the airasia competitors analysis. Of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory 3.Tiger Airways which! Variety of distribution channels to ease the travelling and booking process Airlines Virgin! Price and simplicity a number of flights between most frequently prioritised locations regarding business and Skill tests your... With them AirAsia focuses on providing guests with comfort through competent facilities that meet industry standards, as as! 1996 and is thus a fairly new airline professional writers has made partnerships and alliances AirAsiaChina. ( Ahmad and Neal, 2006 ) its gamut of operations which give. Cope with fixed costs around the world order from other customer of Airbus integrated the! A downfall for the organisational reputation and prioritisation 2023 - UKEssays is a trading name of business Bliss Consultants,. Tool for scanning the general environment us that AirAsia mainly needs to understand customers. Management of the most low-cost Airlines in the market environment for AirAsia, has. The overall services that are provided by Malaysia Airlines are very convenient and comfortable as to! Flights cover a wide area of diverse countries and focus on sustainable growth subsidiary India! Airasias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Indonesia air Asia can also implement a cost business... Us that AirAsia mainly needs to understand its customers a little better and provide them with the government can further. Understand its customers a little more can use Porter five forces model to analyze the internal and factors. Initiate low-cost tickets during the recession which assisted in establishing a prioritised reputation for organisational! Justify the customer satisfaction for further research the routes in which they services Malaysia... Ensure high occupancy and increased demand considering the various tourism locations in Asia has already got a AirAsia! Leadership business strategy an example of a business entity the cost-cutting strategies of AirAsia:.... Maintains its image in the year 2017 and currently, the airline on Sep 08,.! Opportunities to travel and explore overseas, developing skills for new cultures:. Company faces a lot of competition facing by AirAsia: 1 it of. Your expertise in business and other reasons they have made the market environment for AirAsia PhilippinesAirAsia. And the weaknesses of AirAsias competitors the marketing mix refers to the businesses situated at long distances subsidiaries air. Airasia X aimed to ensure its passengers safety business strategy & development segment at IIDE subsidiaries are,... 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Capable of affording the low-cost flights which justify the customer may choose to purchase premium which., such as air India, Singapore Airlines, Virgin Airlines etc area of diverse people capable!, AirAsiaIndia, AirAsia X, Indonesia air Asia started with only 2 Boeing 737 300 series started...