Well established LCC operating out of South East Asia, 3. 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. This strategy of networking is beneficial for Air Asia and every organisation, as it helps the company to have a thorough analysis of market and sustain in the market (Abdullah, Chew and Hamid, 2017). Air Asia Competitors There are several brands in the market which are competing for the same set of customers. The increase in oil prices has critically impacted the operations of the organisation. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. The threats for any business can be factors which can negatively impact its business. AirAsia participates in a lot of price-based promotions. Airasia may be small portion of customer whom orders 200 aircraft from the total 9,113 aircraft order from other customer of Airbus. A Marketing mix mainly focuses on the 4ps of an organization, which are Product, Place, Price, and Promotion. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. Below are the Strengths in the SWOT Analysis of Air Asia : 1. In this context, Air Asia will be focusing on the use of the strategy of service innovation as it is the best strategy to effectively implement the factor of providing new and enhanced services to passengers at low cost. AirAsia has won many awards over the years. Fixed Cost is high. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. The management of costs in relevance to the dynamic prices of fuels and maintenance results in a significant issue for the organisation to sustain its low-cost flights with profits. Required fields are marked *. The company believes that customers are the key to their expansion along with their growth. The important thing the buyers look for is the fly to destination which shows the strong bargaining power of buyers. 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. Out of which, the net income of the airline was-5097million MYR, and it has decreased by1513.76%. Best regards from Kazakhstan.My name is Ainash. 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. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. It mainly operates on a large scale domestic networks, regional and international services to its customers. Today, well discuss the swot analysis of AirAsia. The low lost product is the primary product of the marketing mix strategy that is used by the company. Rise of Other LCCs in Market. AirAsias positioning is very clear in being low-cost. 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. As we know that Asia has established a reputation as LCC (low-cost carrier) airline in the Asian and global market. Extensive Marketing Strategy Of Ahluwalia Contracts In-Depth Analysis, Extensive Marketing Strategy Of KEC International In-Depth Analysis, Extensive Marketing Strategy Of Manappuram Finance In-Depth Analysis, Online Digital Marketing Course (4 months). MBA Skool is a Knowledge Resource for Management Students, Aspirants & Professionals. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. AirAsia X share began trading on Bursa Malaysia, formerly known as the Kuala Lumpur Stock Exchange, on 10-Jul-2013. For example, they had a #responsibletraveller campaign on Instagram. The increasing cost has made it impossible for the company to offer low prices and remain profitable. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. 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 Air Asia implements the strategy of networking in order to maintain sustainable relationships with its suppliers, as this helps the company to maintain a significant level of customer satisfaction and customer loyalty. In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). Browse marketing analysis of more brands and companies similar to Air Asia. The case involves the WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. Brands, such as Jet Star Airways and Tiger Airways, are sustaining in the competition as they also provide air transportation at cheap costs to people along with enhanced in-flight services and varied options for passengers.This directly affects the customer strength of Air Asia, andthese companiespose a threat to the company. This section covers SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP of more than 2500 brands from over 20 industry sectors. Like Manchester United, Queens Park Ranger, Jamshedpur FC, Singapore national football team, Malaysia national football team, and others. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. Supplier concentration in a few hands. It has been reviewed & published by the MBA Skool Team. 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. The bargaining power of buyers is strong when the switching cost of airlines is low. The purpose of this report is to examine the market environment for AirAsia, which has established its business in Malaysia. As the rivalry is strong, Airasia may constant in price reduction to compete with them. Customers have access to market information. In our previous article, we learned in detail about the marketing strategy of a leading global Digital Marketing Courses Across The World, Mumbai | Navi Mumbai | Andheri | Mulund | Vashi | Thane | Churchgate | Delhi | Noida | Hyderabad | Gurgaon | Udaipur | Surat | Pune | Patna | Nagpur | Lucknow | Kolkata | Jaipur | Indore | Chandigarh | Ahmedabad | Nigeria | Dubai | Abu Dhabi | Egypt | Nepal | Malaysia | Sri Lanka, Geographic segmentation- AirAsia caters to mainly the Asian market, hence the name Air Asia. It allows its customers to choose the services they want without compromising on quality. Customers are the priority of the company due to which they have a strong customer base (Yarimoglu, 2014). It would be a strong competitive edge to AirAsia after the pandemic ofcovid-19because the purchasing power of the people has dropped significantly. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. 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. The microenvironmental analysis for any company or organisation is performed using Porters Five force model. gained a smart rating of 54 whereas Malaysia Airlines has gained the rating of 85 which, signifies the contrast of both the airlines in terms of acceptance of the services and feedback by the customers (Holiday.My, 2018). Following are the opportunities in Air Asia SWOT Analysis: 1. Thank you for reading this case study. This has been possible through excellent brand positioning. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. Looking for a flexible role? Low switching costs. Lets see how they compare amongst a few key indicators. Disclaimer: The reference paper provided by Student Life Saviour should be used as a model paper, and are not intended to be submitted to the universities. AirAsia X was regarded as having the worlds best low-cost airline premium seat and the worlds best low-cost airline premium cabin for five consecutive years (AirAsia X, 2018). He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. The company is constantly using innovative solutions to provide low-cost transportation. Air Asia operates flights to around 165 destinations that include both domestic and international with a fleet size of 92. SWOT analysis of Air Asia analyses the brand by its strengths, weaknesses, opportunities & threats. The Indian market is highly price-conscious. AirAsia focuses on delivering accessible promotions, in which customers are aware of new product offers with minimal company intervention through simple tools such as emails. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. As increasing in the number of airline competitor such as Jet Star and Tiger Airways which are also promote low cost fare may decrease the shifting cost of the customer lead to decrease of Air Asias customer loyalty. Orient Thai previously competed as a third LCC domestically but has essentially withdrawn from this market, initially shutting its LCC brand One-Two-Go in 2008. The brand names and other brand information used in the SWOT Analysis section are properties of their respective companies. Their target audience is- travelers looking for inexpensive flights. After starting the first main hub, AirAsia began its second hub in Johor Bahru. There are several companies associated with AirAsia including AirAsia X, Tun Hotel, Tune Monkey, AirAsia Berhad, Thai AirAsia Co. Ltd., AirAsia Japan Co., Ltd., PT Indonesia AirAsia (India) Limited. 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. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. The profits of the organisation have been observed to be remarkable which introduce an opportunity to new competitors causing a severe threat to AirAsia for sustainable profits. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. It has been observed to be critical to fly outside Malaysia which can be accounted as a forbidding factor for AirAsia considering its low-cost carrier facility. Another important strategy that Air Asia will consider enhancing is improving Information Technology (IT) services in the company, as well as in the aeroplanes. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. 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 Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). 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. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. Consistent complaints concerning services and facilities may result in a downfall for the organisational reputation and prioritisation. AirAsia uses various media platforms for the marketing and promotion of its products and services. The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. But in 1993, Air Asia was established to finally connect Asia like no other airline company. Some more of these improvement areas can be found through its SWOT analysis. Focusing on providing air travel without frills at substantially lower prices, AirAsia has managed to achieve lower prices to attain high passenger loads, market share, and profitability by eliminating provision of It is also because they are providing same service to the customer which is sent their customer to their destination by flight. Today it is one of the most reputed Asia-based airline companies. Quizzes test your expertise in business and Skill tests evaluate your management traits. Learn how your comment data is processed. Do you have a 2:1 degree or higher? Lets get into discussing their marketing efforts, starting with their marketing mix. The major issue with maintaining low ticket price is the increasing competition in the airline industry. SIA introduced 2 budget airlines; ValuAir and Tiger Airways.. Porter five forces analysis of Airasia will help in understanding and providing solution to nature & level of competition, and After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. This company provides both domestic, as well as international flights in its routes. Revenue performance has greatly improved with sales across the group up 57% this week versus the preceding week, supported by the latest AirAsia has expanded its routes to different countries all around the world including Indonesia, China, Singapore and the Philippines. Due to few suppliers in market, this has increasing the bargaining power of supplier. In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. 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. About Air Asia This may makes the industry very competitive. However, the low-cost airline has made partnerships and alliances with AirAsiaChina, AirAsiaVietnam, AirAsiaJapan, AirAsiaIndia, AirAsia X, and others. Over the years Air Asia has broken the travel norms for Asian countries and is known as the pioneer of low-cost travel in Asia. In the AirAsia case study, we shall decode AirAsias marketing strategy, marketing mix, SWOT analysis, social media presence, and also analyze its competitors. 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. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. AirAsia segments its market on the basis of three distinct, but overlapping factors: AirAsias entire branding makes their target market quite self-explanatory. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. In order to build buzz, cheap flight tickets are given out based on demand in the form of promotional schemes. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. Moreover, there is also a competition between the rivalries for the routes in which they services in comparison to AirAsia. Liked our work? But the company is only operating its business only in 25 countries. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. The major competitors for Air Asia as per the market analysis are Jet Star Airways, Tiger Airways, JAL Express, and Air Arabia. Diversified in product offered. Firstly, macro analysis has been performed with the help of PEST analysis, in which the political, economic, social and technological analysis has been conducted in correlation with AirAsia. They have a vast network of operations around the world, flying domestically and internationally. Our core asset in successfully accomplishing our objective is our experienced writers. Basic things to know before seeking help in assignment. Considering the competitive characteristic of Malaysian airline market, AirAsia has comparatively gained significant customer attention from the customers due to its affordable tickets and additional services. 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: The company will increase the current IT facilities used in the aircrafts to enhance the facilities provided to the customers. Government regulations which target various aspects such as particular routes, landing permissions and share possession cause a drastic impact on the operations of the organisation. With the increasing number of services by different competitors, AirAsia has also expanded its facilities including the tour packages and hotel booking services that help the company to sustain in the market. Build a competitive intelligence sales and marketing strategy based on the data AirAsia can be accounted to lack financial assistance from organisations or sponsors which consequently minimise the investment opportunities for the organisation (Abdullah, 2010). 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. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. AirAsia was named as the best low-cost airline company in the world for 9 consecutive years at the Skytrax World Airline Awards. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. Thank you very much Mr. Hitesh Bhasin for this SWOT analysis. AirAsia is known for its low fares and no-frills policy. The largest airline in Malaysia the business is known to be highly employee centric. But of course, there exist many competitors that require constant evaluation of strategies. This pricing strategy helps the company to create a base for pricing all the operations that are carried by them. Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. Points to consider while selecting a topic for dissertation help. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. Our academic experts are ready and waiting to assist with any writing project you may have. The competitions advantage is the centre of a companys performance to face a direct competition. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. 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. 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. They may force to continue their operation even they are facing losses in order to cope with fixed costs. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. Rising Fuel Costs 2. WebDecision Makers can use Porter Five Forces model to analyze the competitiveness faced by Airasia in Airline industry. Air Asia maintains its image in the market by choosing the right set of employees depending on their capabilities (Shaw, 2016). Besides, Airbus is using advance technology in designing aircraft, thus the power of supplier is high due to Airasia must depend to the Airbus engineers to do maintenance of the aircrafts and seek advices. 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. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. KLIA-Singapore is also served by four Singapore-based carriers Jetstar Asia, Tigerair, SilkAir and Singapore Airlines. Jet Star Airways is a low cost Australian airlines services head-quartered in Melbourne. They should be used as a reference paper for further research. Required fields are marked *. This isbecauseof increased globalisation among industries and travelling, and the tourism industry has been severely affected by it. The organisational image is consistent and successful concerning the competition in the market. It was started in 1993, and the operations began in 1996. Air Asia is known for treating its employees and customers well. 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. Jet Star Airwaysare considered as the safest low cost carriers among the 10 safest carriers in the airline industry of Australia. Human resource management undergoes significant political pressure as the recruitment process of AirAsia is focussed on the racial determination of the applicants rather than their merits. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. It constantly delivers on this promise of affordability, It is extremely difficult to keep costs as low as possible due to fluctuations in fuel prices and increases in service costs, AirAsia does not have its own MRO facility, Cut-throat competition in its sector. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. 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. The price offer by an airline company may not be fixed but it will depend on the time differences between the date of booking and flight. Sponsorship is also one of the great marketing tools. - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. The company was established in 1993, and the official operation of the company was started on 18 November 1996. 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. Currently, most of the Airasias aircraft are using Airbus model which using Boeing model previously and Airasia is then lease it and replace with Airbus model.If in case Airasia may wish to switch to Boeing again, the cost of training employee in operating the aircraft feature is high. 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! And thus Indians meet their target requirements perfectly, Government charges and costs that are not in the control of the company may lead to severe losses in the future, With dynamic management and other operational costs, it becomes difficult to manage low-cost flights, AirAsia has 62.K followers on Instagram, 93.5K followers on Twitter, and 12M likes on Facebook, They post regularly on their pages, at least a couple of times a week, and maintain this consistency, They post a variety of content that aims at staying relevant in the minds of the customers, Their main strategy seems to be posting about exotic travel destinations with Call-to-Action, encouraging customers to avail their services in exploring these locations, The company also posts environmentally friendly content to echo the ethos of its brand. Air Asia is one of the leading brands in the airlines sector. This results in significant reduction in the cost as the commission fee paid to travel agents are saved and can be used to maintain the facilities and services of the company (Pinto et al., 2015). As reported in The Edge Markets in 2019, Khazanahs managing director Datuk Shahril Redza Ridzuan claimed that the airlines CASK was only 15 per cent to 20 per cent higher than AirAsia and was in fact lower than regional airlines such as Singapore Airlines, Thai Airways and Cathay Pacific. We're here to answer any questions you have about our services. Direct competitors market the same product to the same audience as you, while indirect competitors market the same product to a different audience. Before we get started, lets get to know the company a little more. 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. Besides @flyairasia and Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in Similar service provided among every airline company so the competitive may be fierce. 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). They truly contribute their lifelong learning in allowing students to succeed in their academics. Consistent complaints concerning services and facilities may result in a downfall for the same product to the set of and. Saturated the customer satisfaction Asia is known as the Kuala Lumpur Stock Exchange, 10-Jul-2013... Of an organization, which has established its business only in 25 countries increase in prices. Reviewed & published by the company is only operating its business, known. 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