Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. They have been a major player in the low-fare airline industry and have connected over 88 countries together. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. 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. In the AirAsia case study, we shall decode AirAsias marketing strategy, marketing mix, SWOT analysis, social media presence, and also analyze its competitors. It is also because they are providing same service to the customer which is sent their customer to their destination by flight. This comes with a lot of competition. The company confronts various complaints and issues from the customers who are numerous to resolve instantly and result in customer dissatisfaction. The cost may include staff retrenchment fee, paying off the loan or debts and refunds due to flight cancellation so it may expensive for an airline company to leaving the industry. The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. AirAsia participates in a lot of price-based promotions. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. Some factors like increased competitor activity, changing government policies, alternate products or services etc. It is the largest airline company based on the concept of the Low-Cost Carrier (LCC) (Zhang et al., 2017). 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. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. AirAsia uses various media platforms for the marketing and promotion of its products and services. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. The company provides its services to people of every age group of society, and to the people belonging to the medium and high ranged of income or financial status. The complaints received by the organisation are identified to be the consequences of low prices as the organisation may face critical problems in ensuring service and assistance with the low-cost flights. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. This strategy encourages the customers to choose Air Asia over any other airline company. The company AirAsia, demographic segmentation is preferred. The created segments consists of consumers who share similar interests, requirements and locations. 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. However, the company has employed more than20,000employees to manage its worldwide operations. Government regulations are strict. The company engages in anchor pricing strategy in its marketing mix. The case involves the Tiger Airways. One of the most successful campaigns that are run by the company is Big Loyalty Programme, in which the privileged customers earn a lot of points for every transaction that is carried out along with redeeming points against free air ticket for travel. It was named as the Best Low-Cost Airline Company in the world for 9 consecutive years at the Skytrax World Airline Awards. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. Lets understand AirAsias competitors better with analysis. The basic product strategy in its marketing mix is its low-cost air services. Air Asia is known as one of the most low-cost airlines in the airline industry. 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 increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. The increasing cost, competitors, and limited international destinations are some of the main challenges. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and It allows its customers to choose the services they want without compromising on quality. In contrast to this, Jet Star Airways has more types of planes that are provided to its customers that includes A320, Bombardier Q300, A321 and Boeing 787 Dream Liner; whereas AirAsia offers only two types of planes to its customers, which are A330 and A320. To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. Free resources to assist you with your university studies! Before we get started, lets get to know the company a little more. 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. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. This article has been researched & authored by the Content & Research Team. Exit Cost is high. Strong Promoter 2. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. SWOT Analysis is a proven management framework which enables a brand like Air Asia to benchmark its business & performance as compared to the competitors. 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. The company also uses the strength of a strong network to have a constant insight into the new strategies which are being used by the competitive companies and design its policies and strategies accordingly. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. However, there is also a barrier to the establishment of the new entrant in the airlines, which is the high start-up cost that is required for the airline services. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. AirAsia is a Malaysian low cost and no-frills airline company, which has a unique slogan stated as Now Everyone Can Fly. AirAsia adopted the Computer Reservation System (CRS), which enabled it to introduce the first-ever ticket-less travel facility and also provides features such as advanced boarding passes and online ticket booking. 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. Below are the top 3 competitors of Air Asia: 1.Jetstar Airways 2.SilkAir 3.Tiger Airways. AirAsia is known for its low fares and no-frills policy. It mainly constitutes of two major subsidiary airlines that includes MASwings and Firefly. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. In addition, rates are determined by the class of flight, airline load factors, travel dates and days, and competitor pricing in the airline industry. AirAsias main subsidiaries are AirAsiaIndia, Thai AirAsia X, Thai AirAsia,PhilippinesAirAsia,IndonesiaAirAsia, and AirAsia X. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. Step 3- Assess the Porter Five Forces in relation to the Airline industry and assess which forces are strong in Airline and which forces are weak. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. The cost-cutting strategies of AirAsia are effective and beneficial in terms of financial growth and maintenance (Ahmad and Neal, 2006). 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. They may force to continue their operation even they are facing losses in order to cope with fixed costs. Kamarudin Meranun and Tony Fernandes bought the airline on Sep 08, 2001. Jetstar Airways 2. Very interesting and informative. 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. It has been reviewed & published by the MBA Skool Team. 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. Let us now get into its marketing strategy. A recipient of numerous awards Air Asia has been consecutively designated as the leading low-cost carrier in the Asian region. 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. Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia India are its affiliate airlines, while AirAsia X, its sister carrier, focuses on long-haul routes. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. Air Asia Competitors There are several brands in the market which are competing for the same set of customers. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. The following are the strengths of Air Asia : Weaknesses are used to refer to areas where the business or the brand needs improvement. Concentration of Buyers power in many hands. The Indian market is highly price-conscious. Thank you for reading this case study. There are several brands in the market which are competing for the same set of customers. AirAsia is a Malaysia-based aviation company that owns and operates jet aircraft that offers scheduled passenger and cargo transportation services. Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. Jet Star Airways is a low cost Australian airlines services head-quartered in Melbourne. Since AirAsia is a low-cost airline and the Indian market is price-conscious, it would be a win-win situation for both. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. AirAsia has been a successful part of the airline industry for over a decade. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. The content on MBA Skool has been created for educational & academic purpose only. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. Build a competitive intelligence sales and marketing strategy based on the data Moreover, it also provides numerous opportunities to travel and explore overseas, developing skills for new cultures. All work is written to order. It works towards providing the highest quality products by making technological advancement to reduce cost and enhance service levels. The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. Air Asia maintains its image in the market by choosing the right set of employees depending on their capabilities (Shaw, 2016). 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. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. It seems as the destination and customer market share of AirAsia is only limited to the Asian countries. WebDecision Makers can use Porter Five Forces model to analyze the competitiveness faced by Airasia in Airline industry. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. The company believes that customers are the key to their expansion along with their growth. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. AirAsia has won many awards over the years. He has been a guest speaker at prominent colleges in India including IIMs[Read full bio], Your email address will not be published. This paper will examine the results of the strategic actions of AirAsia in the Malaysian domestic airline market. 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. This increases the probability of people to avail of airline services frequently. The increasing fuel cost and the labor cost have amplified the overall expense of AirAsia. Apart from that, AirAsia engages in popular promotions such as social media advertising, print advertisements, and simple but efficient billboard advertising. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia (AirAsia, 2018). AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. 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. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). Some writers often extend the acronyms to include legal and environmental factors. Moderate Portion of buyers expend on airline. Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. The company makes use of innovative solutions in order to provide low-cost aviation. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. This model is widely implemented by various organisations for the development of their strategies in the industry. Pacific (Cebu Air Inc, 2012), AirAsia (AirAsia, 2011), and JetStar Airways (Jetstar Airways, 2012) all reporting increase in revenues and recording profits over the previous year. WebStep 2 Identify the competitors and group them based on the segments within the industry. 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 the past years, this company has enhanced its customer base by providing different service options through efficient payment channels along with other facilities like ticket-less services. The airline brand should exploit these circumstances. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. Physical evidence encompasses the ways in which the company can maintain their position in the industry. Like Manchester United, Queens Park Ranger, Jamshedpur FC, Singapore national football team, Malaysia national football team, and others. The airline company has already got a subsidiary AirAsia India for the local market. It is essential to choose the right set of employees for the organisation in order to maintain their position. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). 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. AirAsia should expand into more countries, increase the market, and target new customers. Best regards from Kazakhstan.My name is Ainash. There are a lot of operations that are conducted by the company as it is spread across 25 countries in more than 160 destinations. The company can increase its sales in these pandemic times as well by leveraging its low-cost flights. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. The major issue with maintaining low ticket price is the increasing competition in the airline industry. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. 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. Sponsorship is also one of the great marketing tools. 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. 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. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. This tells us that AirAsia mainly needs to understand its customers a little better and provide them with the extra services they need. AirAsia uses anchor pricing to offer incredibly low rates on its services and fares, enticing consumers to consider traveling with the airline. Interested in learning more? For example, they had a #responsibletraveller campaign on Instagram. Your email address will not be published. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. AirAsia offers transportation services to its passengers along with several other services, which includes courier services and cargo services. The branding of the logo of Air Asia is essential for them. Some more of these improvement areas can be found through its SWOT analysis. That was AirAsias 4Ps mix, detailing each strategy and its purpose. Step 4 - Determine overall industry structure and test analysis of consistency. As there are no significant differences in product offering, the customer may differ them through the service provided. 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%. Do you have a 2:1 degree or higher? Their slogan Now Everyone Can Fly itself sets the tone for the brand. But in 1993, Air Asia was established to finally connect Asia like no other airline company. Since the airline brand follows the tight costing strategy and it allowed the company to offer cheap fare to the customers. Airlines allowed to increase ight operations, with strict Maximising revenue in a reduced capacity/ competition 2020 environment 14 74,642 mil 45-60% of 2019 85% of 2019 AirAsia is headquartered in Malaysia and provides transportation services to its passengers along with cargo and courier services. Interested in learning more? Air Asia is one of the leading brands in the airlines sector. The competitions are depending on the services provided and the suitability of the flight time for the customer. Knowing the increase of competition in the market, AirAsia applied the adaptation process (Hanan & Freeman, 1984) by expanding its operation to long haul services to various destinations. Your email address will not be published. Learn how your comment data is processed. High Switching Cost. 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. 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. If you did, be sure to share, comment, and let us know! Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. This is due to Airbus is a UK based aviation company and their customer may come from around the world. can be threats. The Threat of New Entrants In the business of airlines, the loyalty of the customers is found to be weak. 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. AirAsia X has amplified its profit-making routes to multiple countries such as Australia, France, Iran, South Korea and New Zealand. 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. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of Their target audience is- travelers looking for inexpensive flights. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. The verdict overturned the Malaysian Competition Commission (MyCC) ruling that AirAsia and Malaysia Airlines (MAS) had colluded to share the market. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). It mainly operates on a large scale domestic networks, regional and international services to its customers. document.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); This site uses Akismet to reduce spam. Air Asia is a low-cost airline headquartered in Malaysia. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. The acronym refers to political, economic, social and technological factors. It is an international air travel carrier that started its flights in Malaysia and expanded its base globally. Similar service provided among every airline company so the competitive may be fierce. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. 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. Jet Star Airwaysare considered as the safest low cost carriers among the 10 safest carriers in the airline industry of Australia. 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