Case study air asia flying low cost

Unfortunately, due to industry saturation in international long haul flights, AirAsia would have to fght to obtain a strong customer base from established airlines by providing actual or perceived value while trying to maintain cost and utilization optimization. These facts can be seen in Appendixes 1, 2, and Exhibit 2, 3, 9 and 10, 11 and Therefore, I recommend that the company continue to use the no frills, low cost.

Airasia flying low-cost with high hopes case analysis

Another issue AirAsia may face should it overly focus on airline expansion is the fact that barriers to entry n South East Asia are relatively low. However, the company improved in its customer base and profits when it introduced a new strategy using No Frills, Low Cost strategy. By implementing low cost strategies, AirAsia was able to capture and capitalize on the underutilized segment. Recommendation Air Asia has improved its business in terms of expansion and attracting more customers since it changed its strategy as seen in Exhibit 1. In order to grow and meet the demands of the customers, AirAsia should invest in some fleet upgrades to provide additional customer value. This Joint venture could be along the lines of providing flights into and out of smaller AirAsia additional branding opportunities through allignment with such a prominent airline. These facts can be seen in Appendixes 1, 2, and Exhibit 2, 3, 9 and 10, 11 and Additionally, further risk revolves around the fact that expansion into long-haul flights would result in a significant increase in competition with reputable and established global airlines. Air travel was viewed as a luxurious mode of travelling because it targeted businesspersons and upper middle class customers. Furthermore, such expansion places AirAsia in direct competition with government backed Malaysian Airlines pg. However, AirAsia will not be able to utilize its point-to-point cost reduction and aircraft utilization strategy.

This was costly to the company because it performed poorly in the market. Another issue AirAsia may face should it overly focus on airline expansion is the fact that barriers to entry n South East Asia are relatively low.

Case study air asia flying low cost

However, the company improved in its customer base and profits when it introduced a new strategy using No Frills, Low Cost strategy. The change in strategy has seen the company get awards as seen in Exhibit 9. Regionally, South East Asia is densely populated with a large market segment onsisting of budget leisure and business travelers that had been under served prior to AirAsia pg. With its growth, AirAsia could expand its resources and enter into the air shipping market where it would likely turn a profit by exploiting its strong capabilities. It has also improved its operating cost as shown in Exhibit 6. Additional conflicts exist between LCC strategies and long-haul success factors. Unlike long-haul strategies, the goal is not to significantly increase price to subsidize economy class tickets. In order to grow and meet the demands of the customers, AirAsia should invest in some fleet upgrades to provide additional customer value. Therefore, company growth based solely on expansion as a LLC airline may not be sustainable. Hire Writer By expanding into the long-haul market, AirAsia is required to increase its resource base adding newer, larger aircraft models in turn requiring expansion of spare parts, loss of purchasing economies until sufficient rowth has been achieved , additional training and loss of specific specialized knowledge possessed by pilots and mechanics resulting in increased costs and reduced efficiencies.

Hire Writer By expanding into the long-haul market, AirAsia is required to increase its resource base adding newer, larger aircraft models in turn requiring expansion of spare parts, loss of purchasing economies until sufficient rowth has been achievedadditional training and loss of specific specialized knowledge possessed by pilots and mechanics resulting in increased costs and reduced efficiencies.

However, the company improved in its customer base and profits when it introduced a new strategy using No Frills, Low Cost strategy. Recommendation Air Asia has improved its business in terms of expansion and attracting more customers since it changed its strategy as seen in Exhibit 1.

airasia and the tune group diversifying across industries

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