Air Asia: External Influences

Running head: AIR ASIA: EXTERNAL INFLUENCES
AIR ASIA: EXTERNAL INFLUENCES
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1AIR ASIA: EXTERNAL INFLUENCES
PESTEL Analysis
AirAsia can be affected by many external factors. The factors are assessed in regards to
how much they can affect the company.
International Competition
International competition is a significant force that can affect the business of Air Asia.
The competition in the South East Asian Zone is mainly from Garuda Indonesia and Malaysian
Airlines. However, outside of the South East Asian zone, the company has strong competition
from other well established or growing low cost airline services. This include Indigo, Jet
Airways, Thai Airlines and other growing airline companies. Low cost airline services are
growing in the exact markets that are targeted for future growth of Air Asia. This is a significant
factor that can affect the business of Air Asia.
Political
The company is headquartered in Malaysia but has to fly to various international
destinations. The political issues that can affect the organization is related to international
agreements (Bowen Jr 2016). Moreover, there is significant underdevelopment in the low cost
airline services in the south East Asia. Terrorism is also a major threat. Hence, the effect of
political factor can be high on Air-Asia.
Economic
Air Asia offers cheap prices to the customers (Airasia.com 2019). This is a significant
advantage that it gains over main competitors Malaysian Airlines. Another significant factor that

2AIR ASIA: EXTERNAL INFLUENCES
can affect Air Asia is the cost of petroleum. The cost of petroleum is rising in Malaysia and can
end in the company bearing heavy fuel costs (Hirsh 2017).
Socio-Cultural
The socio cultural aspects that can affect the airlines is the reluctance of customers to use
low cost airlines for journeys that are long haul. Moreover, concerning the Malaysian passengers,
most people do not want to board flights that are no frills. There has been past incidences in Air
Asia where SARS have affected the passengers and the company has ever since followed strict
safety guidelines (Airasia.com 2019). Culturally, Air Asia accepts and promotes diversity and is
favored by people irrespective of cultural inclinations. Despite the past issues, the fact that the
company has made aviation affordable contributes to its popularity among consumers.
Technological
The company is offering services that provide all round services, starting from air travel,
to airport transport facilities to accommodation. Hence, it is technologically effective in
providing optimal levels of services to the customers. The company also offers online booking
services through which all kinds of services can be booked online. Moreover, the company also
offers SMS booking services and provides an updated mobile application to customers. The
company is technologically reliable and is stable in regards to this factor. The technology used is
at par with the competitors.
Environmental
The company is planning to use more eco-friendly technology in the future. Hence, Air
Asia can be said to be focused towards achieving sustainability. The demographic environmental