Table of Contents
1. Introduction 1
2.1. Company background 2
2.2. Key strategies
2.3. Business process
2. Main discussion
3.4. AirAsia’s strategic decisions in offering short-haul services
3.5. AirAsia X’s strategic decisions in offering long-haul services
3. Recommendation for future growth of AirAsia
1.1. Company background
In the year 1993, AirAsia was founded by DRB-Hicom which is a government owned conglomerate. The first operation of the company was started on 18 November 1996. Since the year 2001, AirAsia has been expanding its business rapidly and until the present ...view middle of the document...
In general, some key strategies of the company consist of safety first, low fare and no frills, high aircraft utilization, streamline operations, lean distribution system and point to point network strategy (Cary, 2009). To more specific, the implementation of the safety first strategy helps the company to develop its relationship with other partners and providers in maintenance management process. Therefore, the operational process of AirAsia can be complied with the global airline industry. Whist, the use of high aircraft utilization positively contributes to the success of the company by providing effective management on the operational costs and the organization’s productivity. Moreover, streamline operations allow the company to simplify its business process by which also contributes to the cutting costs in the company’s operations. Similarly, the use of point to point network supports the lower operational costs of AirAsia. While, lean distribution system helps to broader the distribution channels of AirAsia. And all products and services of AirAsia are customized based on the mission of low fare no frills with the aim to improve the customer value by offering high quality aviation services.
1.3. Business process
From a standpoint of view, the major issue leads to a massive success of AirAsia is reflected in the cutting operations of the company (Haddad, 2003). In fact, the company offers lower salaries to the organizational employees and AirAsia is being in efforts to lower the other costs in the company’s operational process. From another point of view, the company leverages the advances of the Internet and information and communication technology (ICT) into the company’s operational process as well as its business strategies. In specific, the use of Internet technology reflects into the company’s online booking services. It can be said that the electronic site of AirAsia has been well managed to offers a lot of benefits to the customers and thus AirAsia’s electronic site is defined as the most important marketing and sales channel of the company (Cary, 2009)
2. Main discussion
2.1. AirAsia’s strategic decisions in offering short – haul services
In a part of offering short-haul services, the company believed that there is a dramatically decrease in the demands of short-haul services in Asian aviation industry. In other words, it is implying that short-haul service is not a profitable service to the aviation market players in Asia. As a result, AirAsia conducted an alternative strategy which focus on long – haul low cost aviation services since the short-haul service are becoming more challenge and unprofitable to aviation businesses (CAPA, 2012). In fact, some short-haul flights are still offered by AirAsia however its operation mainly depends on the company’s hub. Furthermore, the a two-stop product using short-haul affiliate Malaysia AirAsia in Kuala Lumpur and short-haul affiliate Thai AirAsia in Bangkok seems failed...