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Aviation Management Assignment | Asian Airline

   

Added on  2019-11-25

11 Pages3072 Words138 Views
Aviation Management

Running Head: Aviation Management 2Table of ContentsIntroduction................................................................................................................................3Problems faced by the industry..................................................................................................3Competitiveness.....................................................................................................................4The Fuel Factor.......................................................................................................................5Sustainability..........................................................................................................................6Recommendations......................................................................................................................7Conclusion..................................................................................................................................9Works Cited.............................................................................................................................10

Running Head: Aviation Management 3IntroductionThe Asian airline industry can be characterised through the immense competitionalong with the high price pressure which in turn continuously thrust over increasing theefficiency. On the other hand, the industry grows continuously with more passengers whotravel more often. Since the emergence of the continuous air traffic the airline industry havedemarcated a rigorously high level of growth in comparison with the GNP trend and increasethe productivity[ CITATION Wan17 \l 1033 ]. There is gradual liberalisation in the industrywhich in turn has significantly contributed in its business model. The Asian airlines and theircontinuously increasing passengers act as the driving force in the global airline's industry.The analysts predict that the Asia Pacific airlines will contribute to the half of the total airtraffic increase by the year 2020.Thai Air Asia X is identified as a low cost, long haul airline company which is basedat Don Meuang International Airport, Bangkok. The company was founded in the year 2014and since then it is operating quite effectively and efficiently. The airline mainly serves forthe scheduled destinations of Thailand, Japan, China and South Korea[ CITATION Gra13 \l1033 ]. As a manager of the airlines, a business development plan has been developed. In thisreport, three key management issues in relation to the airline industry have been discussedand the recommendations for coping up the issues have been provided. It is expected that thiswill help Thai Air Asia X to operate sustainably and successfully.Problems faced by the industryDespite the extensive growth, the airline industry faces a number of challenges. Thesechallenges affect the business adversely which in turn reduces the revenue and profit levels ofthe organisations. Here in this report, three key issues will be discussed which is the

Running Head: Aviation Management 4competitiveness, fuel price volatility and the environmental and financial sustainability of thebusiness. CompetitivenessIn the era of globalization and continuous economic development, the airline'sindustry is facing excessive competition from almost every aspect of the business. Thai AirAsia X is not an exception it is also facing tremendous competition specifically in the contextof pricing. Moreover, the strategic frameworks or expansion of the competitive airlines alsoimposes significant threat before the organization as well. Due to this competitive nature, theairline companies are required to focus more on their pricing mechanism, service quality andconsumer's satisfaction[ CITATION Sol14 \l 1033 ]. The Asian airline industry is distinguished by the feature of being extremelycompetitive and highly capital intensive. This capital intensive nature of the industry is thekey underlying reason for the higher fixed costs and high barriers to exit. The level ofcompetition in the airline industry is very intense as there are no such barriers toentry[ CITATION Yee14 \l 1033 ]. The liberalization of market access due to globalizationcan be held responsible for this lower level of barriers to entry. As per the data provided bythe IATA (International Air Transport Association) during the last 40 years nearly 1300 newairlines have been established. The nature of the competitiveness in airlines industry can besummarized as follows,The level of competition rises when a new airline with a new set of strategies entersinto the market or the existing airlines try to expand their area of operation by introducingnew service range. However, the strategy of expansion of the existing airlines seems to bebeneficial for them as they can enjoy the benefits of economies of scale and rights over theairport slots. Therefore it can be stated that the expansion into the new market possesses low

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