MISSION

To be the best company to work for whereby employees are treated as part of a big family

Create a globally recognized ASEAN brandTo attain the lowest cost so that everyone can

fly with Air AsiaMaintain the highest quality product,

embracing technology to reduce cost and enhance service levels

VISION

To be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares.

HISTORY OF AIR ASIA

• Air Asia was established in 1994 and started the operations on 18 November 1996.

• On 2 December 2001, Air Asia debt is about USD 11 million (MYR 40 million).

PEST ANALYSIS

Political

Malaysia• Fares charged by Malaysia government were

the lowestInternational• Airline markets in ASEAN- India and China• Political uncertainty in India, Thailand and

Indonesia

Economic

Malaysia• Gross Domestic Product (GDP) increase• AirAsia low cost strategies gaining attraction in

the region• Oil priceInternational• H1N1 influenza• Economic reform “Doi Moi”

Social

Malaysia• Main sector Malaysia economy is the tourism• AirAsia commits to "Safety First“International• Towards increased transportation consumption • Jain-vegetarian foods for India market• Vietnam trained workforce, charges relief to

airlines

Technology

Malaysia• AirAsia provides the online service • Introducing the GO holiday• From Airbus A320 replace Boeing 737 International• USTDA - long-term effort to promote Indian aviation

infrastructure• Vietnam will become the world’s third fastest-growing

market for international passengers and freight

Porter 5 forces

Threat of new entry

• High capital • Brand

awareness & brand loyalty

• Government legislation

Bargaining power of supplier

• Air Bus & Boeing

• Global economic crisis

Bargaining power of buyer

• Sensitive to price

• Switch to other airlines service

Threat of substitute products

• Indirect substitute

• Direct substitute

• Internet

Rivalry among existing competitor

• Limited customer

• Other low cost airlines

SWOT ANALYSISSTRENGTHS WEAKNESSESS

Good promotion campaigns

Strengthen geographic position

Expanding skill workers

Brand awareness through CSR

Positive towards competition

Utilization of aircraft and efficient operation

Termination of Joint Venture

Poor services

Websites down

OPPORTUNITIES THREATS

Additional aircraft

Growth expectation

Easy access

Advertisements problem

Financial speculation

Effect of fuel price

Authority interferences and policy

SWOT MATRIXSO STRATEGIES WO STRATEGIES

- Focus on improving basic quality of services to improve prices (S1, S2, S3, O1, O2, O3)

- Soft bundling tour packages (S1, S2, S5, O1, O2)

- Have the expertise on their own maintenance and services (W2, W3, O1, O2, O3)

- Establishing a tele-sales hotline (W2, W3, O1,O3)

ST STRATEGIES WT STRATEGIES

- Fuel conscious aircraft (S2, S5, S6, T3)

- Attractive designs of advertisements (S1, S4, T1, T4)

- Train ground crew for higher airborne time (W2, T3, T4)

- Negotiator organisation within AirAsia staffs (T1, T2, T3, T4, S3, S4, S6)

SPACE ANALYSIS

FINANCIAL POSITION (FP) STABILITY POSITION (SP)

Profit year end 2012 RM 4.95 billion (Increase by 10%)

Low-cost flight, increase in revenue by 60% Maintain high profitability & growth (Malindo

Airlines) Gain regional expertise (AXN) Corporate Social Responsibility Collapse of AirAsia Japan

5.0

3.04.0

3.01.01.0

World best low cost airline (Skytrax World Airline Award 2011)

Fuel price increase to about USD 100 per barrel Seasonal demand Joint Venture Tata Sons & Singapore Airlines

(India Market)

-1.0

-1.0-3.0-5.0

COMPETITIVE POSITION (CP) INDUSTRY POSITION (IP)

Establishment brand name globally and domestically.

Fast on-line and advance booking, reduce queue and hustle

Kuala Lumpur prefer gateway into Malaysia and South-East Asia Region

Customer Loyalty (36.97 million including (Air Asia X)

-5.0

-5.0

-3.0

-4.0

Deregulation provides geographic and flight freedom. (Air Asia India)

Increase demand in overseas routes (Air Asia X) Internet service allow-online booking for

domestic and international flight. Utusan refused to advertised ads

AirAsia faced fined issue

6.0

4.0

5.0

1.0

2.0

INTERNAL ANAYSIS EXTERNAL ANALYSIS

SPACE MATRIX

0 1 32 4 5 6 7-7 -6 -5 -4 -3 -2 -1

1

3

2

4

5

6

7

-1

-3

-2

-4

-5

-6

-7

FP

SP

CP IP

x-Axis = 1.17 y-Axis = -0.67

• Market Penetration• Market Development• Product Development

COMPETITIVE STRATEGY

RECOMMENDATION• Improve local responsiveness- Flight and routes ( avoiding flight delayed)• Improve on advertisement- Guerilla marketing and promotion• Giving extra luggage allowance- High utilization of aircraft- Give convenience to passengers• Expand business sponsorship- Next summer Olympic 2016( Rio de Janeiro,Brazil): to increase the income, expose and maintain the brand in future.