Strength
The most importance strength of AirAsia airline is their low fares and dense route network in the current economic. Logically further revenue growth in the Asian population has a higher rate of economic growth at the same time. This allows more people to have the ability to fly, mainly in the part of the railway and road infrastructure is very weak Asian region. AirAsia set up in the context of the following conditions: a large population, population density, base, mobility and Internet applications increasingly widespread popularity. But above all, AirAsia aimed at a different market group, those who want to travel by air but people cannot afford. AirAsia are targeting the low-cost affordable to the masses. AirAsia airlines continue
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The most obvious strength of AirAsia is particularly low cost, high subsidiary income, according to 2008--2009 financial report, non-fuel expenses of the company had dropped by 3%, suggesting that the company continue to implement cost control (AirAsia, 2014). In the 2009-2010 fiscal year, the company plans to non-fuel unit costs dropped 5% again (AirAsia, 2014). Meanwhile affiliated revenues increased twenty three percent to $ 598 million, which helped the company achieve annual revenue growth target (AirAsia, 2014). In subsidiary income, the company still have much room for growth, with fares continue to decline, the company has decided to continue to expand the sources of income of the subsidiary. Company CEO Fernandes has always insisted philosophy that is: "Winning is always a low cost." (Hutton, 2015). Financial Report as of March 31, 2009 has made it clear that the company competitive advantages show that the operating income increased 9.5% ($ 2.94 …show more content…
The industry is composed of experts and former government officials, they are especially different experience and management to make a contribution. For example, it has Thai AirAsia 's 50% stake in the new company - (formerly owned by the family of former Thai prime minister) (). It helps AirAsia, have the ability to take a large market share in Thailand. In order to allow close cooperation with Airbus, they are now able to effectively get a good discount Boeing 737 has been used in many other airlines, so they can reinvest in purchase more aircraft fuel. Good performance and management team to implement the development of the strategy. It is a combination of strategic and other low-cost airlines, they have a good, initially in the United States and Europe. For example, hotels and other suppliers of services such as car rental forming a complementary
The airline industry has long attempted to segment the air travel market in order to effectively target its constituents. The classic airline model consists of First Class, Business Class and Economy, and the demographics that make up the classes have both similarities and differences to the other classes. For instance, there may be similarities between business class travellers on a particular flight, but they will not all be travelling for the same reason. An almost-universal characteristic of air travel is that customers do not fly for the sake of flying; the destination is the important element and the travel is a by-product, a means-to-an-end that involves the necessity of an aircraft that gets the customer from point A to point B. Because the reasons can differ greatly in the motivations for a customer wanting to fly, it can be difficult to divide the market into discrete segments, that is, there is always going to be overlap in the preferences and characteristics of any given segment. With that in mind, the commonalities that are shared between the clientele that make up the respective classes can easily withstand analysis.
...leader. Certainly, it has to take into account the implications of completion from both the direct and the indirect competitors. That is why EasyJet centers on the cost management strategy and the differentiation strategy (Hanlon, 2007). Through an analysis of EasyJet Airplane company strategies and performance, it is clear that they are ambitious and strive for the best. They not only survive in an industry that is intensely competitive, as shown through the analysis by Porter's Five Forces, but also succeed in terms of offering their customers the best that they have to offer in terms of value for money. The advantage this airline gains over its oligopolistic competitors stems from flexible ticketing and complete access to all primary routes. However, in keeping airline industry, there is room for improvement and growth as the analysis using Ansoff Matrix reveals.
Delta Air Lines was founded in the year 1924 and is among the oldest airlines in operation. It operates thirteen hubs across the world with the largest being located at Hartsfield-Jackson Atlanta International Airport. The airline flies to 335 destinations across the world, in North America, Africa, Europe, South America, Oceania and Asia. Delta is among the founding members of the Sky Team alliance and has developed codeshare agreements with around seven different airlines. The airline has a fleet of 809 airlines which include Boeing, McDonnell Douglas and Airbus planes. Depending on the aircraft, the planes may involve categories of classes such as first and business classes, Delta One which is an international business class,
Today, the air transportation industry prospects remain optimistic. As the market rebound, patrons’ benefit from healthy economic growth, firms
As a continuation of the discussions in Assignment 1, the cost structure and evolution of American Airline is analyzed here. It is worth noting forehand that American Airline bankrupted in 2011; nevertheless, the bankruptcy did not disturb the airline’s operation significantly, that continuous curves in cost could still be observed. American Airlines also merged with US Airways in 2015, therefore, the costs of US Airways and American Airlines are summed before the year of 2015 to avoid confusion. One part of the total cost is the operating cost. The operating cost includes fuel, crew (pilots only), maintenance, and ownership cost.
Abstract Jet Blue is the U.S based airline headquartered in New York. Jet Blue airline became one of the biggest airlines after nine years of its establishment. This airline was a great success in a very short time. More than 32 million passengers use the opportunity to travel through the Jet airline every year to over 90 cities. This airline operates approximately 825 flights in a day, which proves the success of Jet Blue airline.
The basis for Value Creation of a classical hub-organised airline consists of its operating hub and spoke strategy. This system implies that all flights move along spokes connected to a hub placed at the centre. In fact all long-haul flights depart from the hub, to which all passengers are flown in the first place. Therefor it is necessary to own a heterogeneous fleet to secure an outstanding efficiency of the long distance flights. To have an attractive and used to capacity hub at one’s disposal is the linchpin of the entire operation. For this purpose it is extremely important for the airline to possess a high percentage of the airport’s available slots and gates which represent a distinctive key resource in this dynamic industry. Some of the major flag carriers own their capacities for decades through the protection by the grandfather rule which signifies a competitive advantage in this infrastructure restricted industry. Besides this, human capital can be seen as another crucial resource. This relates on the one hand to a capable and motivated workforce and on the other hand on the management. Foremost to cope with the extensive scheduling of a hub demands a high degree of management skill which decides of the success or failure of the operations. In addition the fact that hub-organised airlines control such a significant number of slots leads to a high negotiation power with this airport. Furthermore customer retention and loyalty is of great importance for a flag carrier, because their passengers are normally less price sensitive than low-cost carriers’ customers and are consequently able to fly more often. This goal can be achieved for instance by excellent customer service, frequent flyer programs and strong brand reputation. The mentioned capabilities apply best to long-haul traffic and business travel. The reasons therefor are that business passengers are willing to pay higher prices for more convenience and service on board which is also true for long distance flights where entertainment, food and service in general get more important. Accordingly this leads to higher yields for the airline. This does not fit for price-conscious customers, because they prefer cheaper flights.
The main threats to the industry over the next five years are the rise in price of oil, legislation, the TSA, and labor costs. Each of these threats effect the scheduled air transportation industry not only endangers Delta Airlines but the entire industry. As the price of labor increases for ground operations and pilots this creates a burden on the industry by causing them to spend more to satisfy their labor requirements. The price of fuel increasing leads to the price of fuel to increase, which not only affects a single airline but every airline. With each time that the crude oil price rises the prices associated with the costs of refining the jet fuel as well as transporting it. These costs are distributed to each airline as they use this resource to transport passengers. As new politicians are elected to Congress and new administrators take charge of the FAA new regulations regarding this industry. These regulations affect everything from mergers to the airspace that the airlines operate in as well as what hubs and airports each airline operates out of. These factors are not issues that the industry faces, the TSA, the Transportation Security Administration, creates an unnecessary burden for the passengers attempting to travel from one location to another. The TSA inspections required before a passenger is allowed to board their respective flights allows time for each passenger to become frustrated with the amount of time they have to allot for inspection as well as the invasion of their privacy.
Kingfisher Airlines (KFA) was founded by Vijay Malaya and he is the chairman of United Breweries group (UB group) in the year 2003. Its first airplane was launched from Mumbai to Delhi in 9th may 2005. It started as a premium business class airline company. The airlines have a tag line “Fly the good times”. At the launch of airline, Vijay Malaya said “we are committed to achieving our ambition of making Kingfisher Airlines, India’s largest private airline both in capacity and market share. The airline ushered in a new era of luxury in India’s domestic aviation sector and its brand new aircraft with stylish red interiors, and smartly dressed crew and ground staff. Kingfisher was the first Indian airline to have in-flight entertainment (IFE) systems”. (Malaya, 2005). Kingfisher airlines are one of the seven airlines which were awarded the rating of five stars by skytrax. It operates 400 flights daily including the regional and international services. In 2009 it gave the highest market share in Indian airlines industries, carrying more than 1 million passengers. The main mistake was lack of understanding of customer requirements and luxurious facilities in airlines. Organizations focus on reducing costs and usually just CEO’S and top level managers prefer business class travel. Rest of the staff mostly travels by economy class. Moreover, buying most expensive business class tickets doesn’t go down well, when seniors aim to project the image of walking the talk. Secondly, the company is facing financial crisis since Mid-2008. After merging with Air Deccan in 2007, it is a low-cost airlines, provides minimum frills to customers at reasonable rates. Th...
Air India airline is one of the biggest airline in the India. It was established by the famous company TATA and since its incorporation. It has grown very well and has spread all over the world in the different destinations. It has become the reputable brand in the airline industry with having the operations over 152 destinations. It has link up connection in the 35 countries and it has currently having 137 fleets. This company becomes the public limited company in the 1946. The company has international and the local route and its performance is increasing day by day with the pace of the good growth as compare to the other airlines in the industries in the area and the channels in which this airline is working.
AirAsia Berhad (AirAsia) is a leading Low-Cost Carrier in the Association of Southeast Asian Nations (ASEAN) region. AirAsia focuses on providing high-frequency services on short-haul domestic and international routes. The main goal of this paper is to analyse the business strategy of AirAsia as a low-cost airline. This paper aims to apply the management process of strategy and analyse the three levels of strategy by which AirAsia is able to maintain its reputation as the top Low-Cost Carrier (LCC) in Asia. This paper will then show how innovation is a key aspect in AirAsia’s strategy, and will finally consider the external environment framework in which AirAsia is succeeding.
Based on IATA fact sheet of World Industry Statistics, the total net profits of world airlines have shown remarkable instability over the past 24 years. From 1990 to 1993, due to the Gulf War and subsequent economic recession, the world airline industry announced four consecutive years of losses totaling over $22 billion. In the late 1990s, it returned to record profitability with total net profits in excess of $25 billion being reported by world airlines from 1995 to 1999. Even more dramatic was the industry’s plunge into record operating losses and a financial crisis between 2000 and 2005, with cumulative net losses of $40 billion. There are various factors that influence the airline performance such as efficacy of capacity, structural changes, increase in competition, economy slowdown, high labor, as well as, high fuel prices which jeopardize the aviation industry.
AirAsia can enter to the market like Thailand, Malaysia, Indonesia, Japan, Hong Kong and so on. Those countries are included in the list of destinations that AirAsia offer. AirAsia offers 88 destinations that let the customers to travel along these places. (AirAsia, 2015) Therefore, AirAsia can slowly enter to the market from country to country. AirAsia is mostly travelling to the Asian countries; therefore AirAsia should enter the Asia market with the brand new Auto-inflate lifejacket with additional features. This may be attracted by the public of the Asian countries.
Within the airline industry currently the airlines can be divided into low cost airlines and full service airlines. The low cost airlines targets customers that are seeking no frills connectivity between cities at low ticket prices. The full service airlines provide several add-ons like free meals, on plane entertainment, and communication facilities. The target market for full service airlines are customers who are willing to spend extra for the services that the airlines provides.
The next characteristic of service offered by AirAsia is inseparability. Inseparability refers to a distinguishing characteristic of services that reflects interconnection among the service provider, the customers involved in receiving the service and other customers sharing the service experience (Hoffman&Bateson, 2010). Based on this definition, it can be concluded that the inseparability in the service involves the participation by both the customers and also the service provider. Different from the goods that are manufactured prior to its sale, the services production includes the presence of the customers in its production process. For AirAsia, the production of the services started as soon as the passengers board the plane. Since the production and the consumption of the services happen simultaneously, then punctuality is very important especially for AirAsia, which is an airline. AirAsia must ensure that their flights depart on time and should try their best to avoid flight delays. This is because flight delays will cause dissatisfaction to the customers and might cause inconvenience to them.