Air Asia Blue Ocean Strategy: Assignment

Contents
1. EXCEUTIVE SUMMARY...............................................................................................................2
2. INTRODUCTION............................................................................................................................3
3. GROWTH, DEVELOPMENT AND OPERATIONS....................................................................4
4. OTHER SUPPLY DETAILS..........................................................................................................5
5. DEMAND CHARACTERISTICS...................................................................................................6
6. SWOT ANALYSIS..........................................................................................................................7
7. COMPETITORS AND EFFECT ON SCHEDULED AND CHARTER CARRIERS................9
8. IMPACT ON HUB AIRPORT AND DESTINATIONS.................................................................9
9. FUTURE PREDICTIONS..............................................................................................................9
10. CONCLUSION AND RECOMMENDATIONS........................................................................10
11. REFERENCES...........................................................................................................................11
1

1. EXCEUTIVE SUMMARY
The development review of key elements related to the development of this airline is
detailed in this article: growth; Characteristics of supply and demand; strengths,
weaknesses, opportunities, Threats (SWOT); competitive environment; home-based
impact; (hub) Airport and destination; future expected. With AirAsia it has succeeded
in expanding its operations to another ten nations. Furthermore, by AsiaX, its affiliate
company launched low-cost, lengthy Malaysia air carriers to the United Kingdom and
Australia. The paper reports AirAsia's Business model and addresses its 'market
growth' approach and its 'approach 'Developing goods'. The Blue Ocean Strategy
theory was being used as a tool for investigating the bold decisions of AirAsia.
2

2. INTRODUCTION
Air transport markets are being gradually privatized, giving airlines new opportunities
and providing a chance for more demand. The emergence of the low cost carrier
(LCC) market, which has revolutionized the airline industry and put new and
demanding demands on the airlines industry, has become one of the most
noticeable impacts of this. Multiple airports serving LCCs have witnessed extensive
customer growth rates, but now have to react and adapt to the unpredictable
characteristics of these airlines around the same time (CAPA Centre for Aviation,
2012).
AirAsia is Asia Pacific's comprehensive strategic and financial network, offering
airline services, hospitality and leisure services, and also financial services. AirAsia
began as a low-cost carrier with operations in Malaysia, Indonesia, Thailand, the
Philippines and India, and has taken over than 600 million travellers to its system of
more than 160 locations across Asia, Australia, Middle East and US (Ahmad and
Neal, 2006). Recognized for its world-class service, the airline was named 11 years
in a row by Skytrax World's Best LC Airline from 2009 to 2019 and Global Travel
Awards Nation's top LC Airline from 2013 to 2020 for 8 years.
This report describing about AirAsia growth and development it’s operations in the
destination and other supply details, SWOT analysis. Effects on scheduled and
charter carriers and destination effects. Predictions for the future; suggestions for
future management.
3

3. GROWTH, DEVELOPMENT AND OPERATIONS
Tune Air purchased the airline for a token amount of one ringgit (0.26 US cents) to a
low-cost or budget airline profile table which managed to attract from its initial public
offering in October, US$ 200 million in new capital in 2004. The credit was granted to
AirAsia Berhad or Malaysia AirAsia (also referred to as AirAsia). In order to allow
Malaysians to fly by air to their destination in Southeast Asia.
AirAsia as a process involving AirAsia and AsiaX, will each located in Malaysia, Thai
AirAsia, centred in Thailand, and PT Indonesia AirAsia, centred in Indonesia, carried
over 60 international tourists as a LC airline from January 2002 to December 2008.
79 aircraft flown (Airbus 340, Airbus 340, Airbus 3) A330s, 56 Airbus A320s and 19
Boeing 737-300s), and 56 Boeing 737-300s for 110 routes 62 locations in 15
countries (Rizal Ahmad, 2010).
AirAsia has grown in step wise, as there first step by introducing its basic or key
service (passenger seats available) as a single class, Air travel, no-frills. For extra
amenities or frills, travellers had to spend. For the second step they utilized aircraft
rate and few 12 hours a day. AirAsia has continued its efforts to achieve a high
degree of performance. 2007 and 2008 were difficult operating periods because oil
accounted for approximately 50%of the budget of supplying ASK to the airline. After
all, AirAsia's costs were much less at 2.95 US cents per ASK than 6.35 US cents
reported by other regression analysis carriers in 2007. For the 4th step by attempting
to support management strategies, AirAsia held its operating expenses down
(Ahmad and Neal, 2006). As a central technique they treated some fixed costs as
variable costs, the crew was paying a proportion of its income as commissions
related to the actual selling of in-flight goods or performance bonuses based on the
productivity of employees. AirAsia took its ground mechanic on board its flights while
serving a minor road, such as Kuala Lumpur to Chiang Mai in northern Thailand,
rather than stationing him at Chiang Mai airport, and outsourced all other ground
aviation operations at the airport (Rizal Ahmad, 2010). For the next step thy kept the
material delivery cost minimum by introducing internet to customers, innovative
methods to book the seats. They use single aircraft type as the fifth step. The latest
4