air asia - group 3 - section c

8/6/2019 Air Asia - Group 3 - Section C

1/17

Deepika Kaur -2010133Dushyant Bhadauria -

2010134Edwin Sneham -2010135Eshita Batta -2010136Gaurav Golwalkar -2010137

-


2/17

The Asian Aviation

Industry By 2025, Asia will be the worlds largest aviation market

up from third place today.1

Airlines product include:

On the ground services booking offices, paperwork,tickets

In-Flight services Seating configuration, ambience,good interiors, hospitality

Asia-Pacific carriers recorded demand improvement of15.5% compared to June 2009.2

Business model followed The service marketing triangle


3/17

Case OverviewStudy of a very successful LCC Air Asia

Business Strategy followed by Air Asia

The Air Asia Value ChainOCL & Product Differentiation at Air Asia

Porters Five Forces Analysis

Future Prospects


4/17

AirAsiaNow Everyone can Fly

Low cost carrierNo-frills, hassle-free, low fare business conceptA fleet of 84 aircraftsAirAsia flies to over 61 domestic and

international destinations with 108 routesOperates over 400 flights daily3

Fourth Quarter results (Oct-Dec09):4

Net profit: RM 549 millionCore operating profit: RM 447 millionPassenger growth : 21% YoY


5/17

Net IncomeNet Income (in 1000's RM)

-600000

-400000

-200000

0

200000

400000

600000

2002 2003 2004 2005 2006 2007 2008 2009

Net

Income

(in 1000's

RMB)


6/17

Current Products New Products

BUSINESS STRATEGY


7/17

The Air Asia AdvantageOverall Cost Leadership

Purchase of fuel efficient Airbus A320-300

Superior pilots Lower fuel consumption,longer tyre life

Pay for meals on board Lesser weight to becarried

Turnaround time between flights 25 minutes5

Route rationalization with MAS


8/17

The Air Asia Advantage

contd.Product Differentiation

Choose your seat

Online Ticket reservationOnline Check-in

Citibank-Air Asia Credit Card

On-time-guarantee & Air Asia e-gift vouchers

Holiday packages


9/17

Value Chain

Margin

Marg

in

Air Hubs, Legal Dept, Finance , Govt. Relations

AirAsia Acad., Safety Procedures training, Baggage training

Baggage systems, Online Booking systems, CRS

Staff,

Passenger

s, Fuel,

Aircrafts,

Catering,Spares

Baggage

Systems,

Security

operations,

Gateoperations ,

Cargo

Operations,

Aircraft

Mgmt

Passengers(

at

destination),

Baggage,

Groundshuttles,

Safety and

Security

procedures

Targeted

promo

campaigns,

Print media

campaigns,Exciting

offers, Online

sales

Lost and found, Baggage

Claims, Follow up with

existing customers

Inbound

Logistics

Operations Outbound

Logistics

Mktng &

Sales

Service

S

E

C

O

N

DA

R

Y

P

R

I

M

A

R

Y

Technical Advancement, Key skills procurement


10/17

SWOT AnalysisStrengths

Strong management team Brand name

Low cost leader in Asia Excellent utilization of IT

Opportunities

Increasing oil price ASEAN Open Skies Increasing population of Asianmiddle class

Threats

Service rates beyond thecontrol of airline operators Full service airlines have orplanning to create a low costsubsidiary Users perception that budget

airlines may compromise safety ASEAN Open Skies

Weaknesses

Does not have its ownmaintenance, repair and overhaul

(MRO)

A lot of complaints fromcustomers


11/17

Porters Five Forces

AnalysisCompetition rivalry within the Industry

MAS Golden Holidays Great Getaways Package, 20036

Malaysia Airlines Everyday Low Fare campaign 2008

Countered by Sub-Zero fare campaign Abolished Fuel Surcharges & Ticket booking fee in 20097

Threat of New Entrants

Silverfly launched in Malaysia in Sep 20098

Happy Air (Thailand) took over Bangkok- Langkawi route8

Hawaiian Airlines plans to enter Asia9

Air Asia brand loyalty can retain customers

New entrants will have high capital investment


12/17

Porters Five Forces

Analysis contd.Threat of Substitute products

Tiger Airlines also modeled on Ryanair

Firefly by Malaysia Airlines (10 routes common toAir Asia, 7 new routes)

Bargaining Power of Suppliers

Ordered 175 airplanes from Airbus Uniformity infleet

Hedged Aviation fuel prices for 3 years from 2008to Dec 2010

Air Asia X signed MRO contract with LufthansaTechnik , Philippines


13/17

Porters Five Forces

Analysis contd.Bargaining Power of CustomersCustomers can switch to another airline

Customer reviews on online forums


14/17

The Skies AheadKey attributes to help Air Asia sustain its

competitive advantage in the long run :

Better passenger experience

Focus on customer feedback

Advertising on TVs in planes

Market safer travel due to newer aircrafts

Purchase smaller planes for charter servicesand low-traffic routes


15/17

The Skies Ahead contd. Partner collaboration African skies

Projected growth Cities being promoted for travel

Ties with domestic airlines

Places for tourism and important Routes South Africa and Egypt

South African air travel market is 50% bigger than any other inAfrica (weekly seat capacity)

Within central Africa the largest markets are Nigeria and Kenyafollowed by Ethiopia and Sudan.

Ghanas capital Accra will soon be welcoming new international

services from Virgin Atlantic to London Heathrow and UnitedAirlines to Washington.


16/17

Thank You!


17/17

Service Marketing

TriangleCompany

Management

Employees Customers

External Marketing

Setting the promise

The service product

Internal Marketing

Enabling the promise

Service environment

Interactive Marketing

Delivering the promise

Service deliveryBack

air asia - group 3 - section c

Documents