The increase in oil prices has critically impacted the operations of the organisation. Strengths. 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. In Kuala Lumpur. Due to few suppliers in market, this has increasing the bargaining power of supplier. The Air Asia X mainly focuses on the long-haul routes (Yarimoglu, 2014). They may force to continue their operation even they are facing losses in order to cope with fixed costs. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. Following are the opportunities in Air Asia SWOT Analysis: 1. The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. The company makes use of Yield Management System (YMS), Customer Reservation System (CSR) and Enterprise Resource Planning (ERP) system, which makes it more effective in providing its services, reduces overall cost, and eliminates inefficiency in their business. The strengths of Air Asia looks at the key aspects of its business which gives it competitive advantage in the market. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). Their target audience is- travelers looking for inexpensive flights. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. Other than that, hes a fun loving person. Air Asia is known for treating its employees and customers well. AirAsias mainproducts and servicesare KL Syariah Index of Bursa Malaysia, low price Santan meal, and duty-free merchandise, drinks, food, and other menus if you buy on board. Switching Cost is low. 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. Some factors like increased competitor activity, changing government policies, alternate products or services etc. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). Air Asia Revenue : RM 10,638 million (FY 2018) (9.6% increase YoY) RM 9,710 million (FY 2017) Competitive Analysis of Air Asia SWOT PESTLE The SWOT analysis of Air Asia is presented below: AirAsia Airline As the best low-cost passenger. 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. Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. Web- High margins compare to Airline industry's competitors - Even though Airasia is facing downward pressure on profitability, compare to competitors it is still racking in higher profit margins. Jet Star Airwaysare considered as the safest low cost carriers among the 10 safest carriers in the airline industry of Australia. There is no product differentiation while the only different is the airlines packages offered. The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. Continue reading more about the brand/company. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. Some more of these improvement areas can be found through its SWOT analysis. AirAsia launched AirAsia Berhad in 2001, which provides air transportation services, particularly in Malaysia. As compared to industry leaders, they dont operate on as many routes, Merging with other low-cost airline companies, They can introduce more flights for popular and busy destinations, The increasing traffic from India as Indians prefer budget airlines. 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 organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. 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. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. Start-up Cost is high. 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). There are several brands in the market which are competing for the same set of customers. The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. Malaysia Airlinesis a member of the oneworld airline alliance and it is also considered as the flag carrier of Malaysia which is head-quartered in Kuala Lumpur International Airport. 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. In order to build buzz, cheap flight tickets are given out based on demand in the form of promotional schemes. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. Required fields are marked *. As the rivalry is strong, Airasia may constant in price reduction to compete with them. Lets take a look at AirAsias marketing mix. 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. 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$ The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. The primary product of this company is the low-cost services that are provided to the customers. They have a vast network of operations around the world, flying domestically and internationally. Air Asia Competitors There are several brands in the market which are competing for the same set of customers. Lets get into discussing their marketing efforts, starting with their marketing mix. 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. WebCompare AirAsia against competitors. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. The case involves the It has a fleet of over 70 aircrafts, which fly to over 120 destinations and operates over 400 flights daily from its hubs situated in Thailand, Malaysia and Indonesia (AirAsia, 2018). The increasing cost, competitors, and limited international destinations are some of the main challenges. Your topic helped a lot, Your email address will not be published. The opportunities for any brand can include areas of improvement to increase its business. Our core asset in successfully accomplishing our objective is our experienced writers. 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. 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. It has subsidiaries in Indonesia, Thai, Phillipines, Japan, 5.It has a fleet size of nearly 300 aircrafts. The increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. Interested in learning more? Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. 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. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. 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. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. Tony Fernandes was recognised as for his outstanding work in AirAsia, and he was awarded by the International Herald Tribute Award and he also became the Malaysian CEO of the year in 2003 (Roy, 2014). AirAsia is an experienced brand in the airline industry. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. The competitions are depending on the services provided and the suitability of the flight time for the customer. Moreover, the performance of the rivalry companies also affects the business of Air Asia as there is no remarkable difference in the services that are provided by Air Asia and other companies. 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. However, the airline doesnt serve pork and alcoholic drinks based on Islamic religious grounds. Air Asia PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. 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. The company is constantly using innovative solutions to provide low-cost transportation. The company cannot control a number of charges and costs which are regulated by government and airline authorities which may result in a significant loss in profits and consistency of the organisation. Do you have a 2:1 degree or higher? 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. AirAsia has won many awards over the years. This article has been researched & authored by the Content & Research Team. The cost-cutting strategies of AirAsia are effective and beneficial in terms of financial growth and maintenance (Ahmad and Neal, 2006). Rising Labour Costs 3. Webprice wars with competitors, taxes and duty imposed on the firms products. Study for free with our range of university lectures! As per the past experiences and the feedback of the customers, Malaysia Airlines are found to react their destinations on time in comparison to AirAsia. The brand names and other brand information used in the SWOT Analysis section are properties of their respective companies. AirAsia X share began trading on Bursa Malaysia, formerly known as the Kuala Lumpur Stock Exchange, on 10-Jul-2013. The acronym refers to political, economic, social and technological factors. February 2, 2019 By Hitesh Bhasin Filed Under: SWOT of Brands. Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). Below are the top 3 competitors of Air Asia: 1. However, the low-cost pricing strategy has allowed the company to target price-conscious customers in the Asian market. 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. In the context of this fact, the loyalty of the customers of Air Asia has been decreased because of the increasing competitors of Air Asia in the airlines, such as Jet Star and Tiger Airways. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. 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. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. The threats in the SWOT Analysis of Air Asia are as mentioned: 1. Just over 790 million shares were sold, including 592.6 million new shares, at MYR1.25 per share (USD39 cents), making it the largest IPO in Malaysia As there are no significant differences in product offering, the customer may differ them through the service provided. Student Life Saviour is a prominent name in providing assignment, essay and dissertation help services to students. WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. Customers have access to market information. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Student Life Saviour 2022 - All rights reserved. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. The organisational image is consistent and successful concerning the competition in the market. Relative Price. Air Asia is known as one of the most low-cost airlines in the airline industry. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. Lets see how they compare amongst a few key indicators. It allows its customers to choose the services they want without compromising on quality. Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. Many airline companies have entered the airline industry and they have made the market very competitive. Lets understand AirAsias competitors better with analysis. Some writers often extend the acronyms to include legal and environmental factors. 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. AirAsia has prioritised the adoption of technological advancements to enhance their services and operations. Let us now get into its marketing strategy. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. AirAsia is known for its low fares and no-frills policy. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. Step 4 - Determine overall industry structure and test analysis of consistency. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. Jet Star Airways is a low cost Australian airlines services head-quartered in Melbourne. 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. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. However, the company has employed more than20,000employees to manage its worldwide operations. The major competitors for Air Asia as per the market analysis are Jet Star Airways, Tiger Airways, JAL Express, and Air Arabia. 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. Improvement areas can be found through its SWOT analysis the article below lists the Air Asia uses sales! The largest low-fare airlines and rapidly growing in Asia since 2001 market which are competing for the same of. 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