The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. Air Asia can also implement a cost leadership business strategy. Very interesting and informative. Their slogan Now Everyone Can Fly itself sets the tone for the brand. The company is constantly using innovative solutions to provide low-cost transportation. Step 4 - Determine overall industry structure and test analysis of consistency. The company believes that customers are the key to their expansion along with their growth. The organisational image is consistent and successful concerning the competition in the market. - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. Similarity in product offering. There are several brands in the market which are competing for the same set of customers. The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. 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. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. In this strategy, the company uses activities such as inbound logistics, where all the aircrafts are of one type; hence, reducing the maintenance cost, scheduling cost, and cost of managing inventory. In addition, there is competition among competitors on the routes offered to AirAsia. It follows vital certain strategies, which include safety first, high aircraft utilisation, streaming operations, lean distribution system and point-to-point network to amplify the working of its low-cost model (Zhang et al., 2017). Do essay writing needs professional writers? Today, well discuss the swot analysis of AirAsia. Rising Fuel Costs 2. 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. This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. 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. The Threat of Substitution The international airline market has sufficient low-priced airline options available for passengers to travel. Air Asia is known as one of the most low-cost airlines in the airline industry. Comment * document.getElementById("comment").setAttribute( "id", "a896926ff00456d33666396e451bba6e" );document.getElementById("i2e65971ac").setAttribute( "id", "comment" ); Copyright 2023 Marketing91 All Rights Reserved. Further, Air Asia also faces competition from Malaysia Airlines in concern to the factors, like financial status, employee satisfaction, and customer loyalty. Strong Promoter 2. 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. It provides an understanding of the company's strengths, weaknesses, opportunities, and threats (SWOT) in relation to its competition. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. AirAsia X aimed to ensure high frequency and point-to-point networks to the businesses situated at long distances. There are a lot of operations that are conducted by the company as it is spread across 25 countries in more than 160 destinations. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. 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. Malindo will compete against AirAsia on all three routes. can be threats. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). A recipient of numerous awards Air Asia has been consecutively designated as the leading low-cost carrier in the Asian region. As AirAsia expanded its services, the company expanded its facilities, including travel Air Asia Competitors There are several brands in the market which are competing for the same set of customers. Air Asia uses direct sales methods, such as sales through the internet, call centres, and walk-in airport sales. Discover AirAsia alternatives or similar companies to benchmark and competitors' market analysis. Premium airlines, such as Singapore Airlines and Cathay Pacific, taking advantage of the healthy macro-economic variables in Low Cost Model: Low cost operations and fixed costs . We hope you found what you were looking for. AirAsia uses various media platforms for the marketing and promotion of its products and services. 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. This has been possible due to the companys relentless communication through various marketing channels. The airline company has already got a subsidiary AirAsia India for the local market. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. 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. Hence this concludes the Air Asia SWOT analysis. Government regulations are strict. The competitions are depending on the services provided and the suitability of the flight time for the customer. Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. WebStep 2 Identify the competitors of Airasia and group them based on the segments within the Transportation industry. WebAirasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. WebAnalysis for Cost Leadership Strategy and Core. 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). February 2, 2019 By Hitesh Bhasin Filed Under: SWOT of Brands. The increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. Thank you for reading this case study. Malaysia Airlines is also considered as one of the competitors for AirAsia. Thus, the customer may choose to purchase premium airline which may offer them more comfortable facility in almost same price with Airasia. The headquarter of the company is in Kuala Lumpur International Airport, Sepang, Selangor,Malaysia. The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. The Marketing mix refers to the set of actions and tactics which a company uses to promote its brand. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. Like Manchester United, Queens Park Ranger, Jamshedpur FC, Singapore national football team, Malaysia national football team, and others. 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. WebAirAsias main competitors are Firefly, Tiger Airways and Jetstar Asia. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. Another activity considered under this strategy is marketing and sales. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. Low switching costs. 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. In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. The market has confronted critical competition in the form of new competitors who have also introduced low-cost flights. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. Has Positioned itself as the major LCC in SE Asia. Competitiveness Points of Air Asia. Some of the opportunities include: Threats are those factors in the environment which can be detrimental to the growth of the business. This section covers SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP of more than 2500 brands from over 20 industry sectors. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). AirAsias positioning is very clear in being low-cost. Tiger Airways. Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. That was AirAsias 4Ps mix, detailing each strategy and its purpose. In addition, rates are determined by the class of flight, airline load factors, travel dates and days, and competitor pricing in the airline industry. WebFive steps to successful analysis of. Points to consider while selecting a topic for dissertation help. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. These include a 36% increase in passengers carried by AirAsia Malaysia, 79% increase in passengers carried by AirAsia India and an increase of 65% of passengers carried by AirAsia Thailand. 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. Best regards from Kazakhstan.My name is Ainash. In 2002, AirAsia became the first airline company in the region that allowed passengers with the facility to pay for their bookings by using credit card. 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. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. This is due to Airbus is a UK based aviation company and their customer may come from around the world. 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. 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. However, the company has employed more than20,000employees to manage its worldwide operations. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. AirAsia Airline As the best low-cost passenger. 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. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. 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 PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. The airline claims No Admin Fee, but all the services provided by AirAsia are not free, it has some fees for some services. AirAsiastop competitorsareAir India,American Airlines,Emirates Airlines,British Airways,Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. 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! This marketing mix 7 Ps model is used to explain the marketing strategy of Air Asia. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. 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. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. 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. 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. Continue reading more about the brand/company. No plagiarism, guaranteed! 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