Operations Management in Airline and Car Manufacturing Industry

This article discusses the operations management of Air Asia and PERODUA, the largest airline and car manufacturing industries in Malaysia respectively. It compares their manufacturing operations and services in terms of tangibility, customer engagement, and business strategies.

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Introduction
Airline Industry called Air Asia was inaugurated in 1993. It begins with its operations by 18th
November, 1996. The government owned conglomerate, DRB-Hicom has first found the
industry called Air Asia. It is headquartered in Kuala Lumpur, Malaysia (Air Asia, 2017). Air
Asia is the largest airline industry in Malaysia in terms of fleet sizes and destinations. The
group of Air Asia includes domestic as well as the international flights to more than 165
destinations extending 25 countries. Air Asia charge the lowest cost that is US$0.023 per
available seat kilometre in all over the world. Whereas the car manufacturing company called
Perusahaan Otomobil Kedua Sendirian Berhad (PERODUA) is inaugurated in 1992 and
headquartered in a 138-hectare site at Sunghai ChOh, Rawang, and Selangor Darul Ehsan. It
introduced its first car called the Perodua kancil in August 1994 (UKEssays, 2015). In the
beginning Perodua used to produce mini cars and superminis and it does not include the same
models in the same market categories as Proton.
Operations of PERODUA and Air Asia
PERODUA is the car manufacturing company whereas the Air Asia is the airline industry
which provides the airlines services to its customers that helps them to travel from one place
to another. The vision of PERODUA is to have professionalism in their operations, to achieve
the uniqueness in the products, to provide best of benefits to their customers and stakeholders
(Rosli & Kari 2008). Whereas the vision of Air Asia is to become the greatest airline
industry in Asia which provides the low cost plus high quality services to its customers. The
mission of PERODUA Company is to follow their values such as quality consciousness,
customer centric and others. PERODUA also aims to serve the best to its customers by
developing the quality and continuous improvement in all the procedures of business
(Thedon, 2009). On the other hand, the mission of Air Asia is to become the best company in
all over the world to work for and to have the minimum cost so that everyone can fly.
Difference between the manufacturing operations and services of PERODUA and Air
Asia in terms of Tangibility, Customer Engagement and Business Strategies:
Tangibility and Intangibility
The airline industry Air Asia has its main office in Kuala Lumpur, Malaysia. Its sub
headquarters are Kota KInabalu International Airport, Penang International Airport, Kuching

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International Airport, senai International Airport and lankawai. It has also one frequent flyer
programme called big loyalty programme. Its subsidiaries are Air Asia X, Indonesia Air Asia,
Indonesia Air Asia X and Thai Air Asia (Air Asia, 2017). The fleet size of Air Asia is 92
which are excluding subsidiaries. Destinations are 74 which are also excluding subsidiaries.
The mother company of Air Asia is Tune Group. The co-founder and GCEO of Air Asia is
Tony Fernandes and the CEO is Riad Asmat. Total employees working for Air Asia are
17000. Whereas the car manufacturing company PERODUA has its main office Sunghai
Choh, Rawang, and Selangor Darul Ehsan. It is government owned company. It comes under
automotive industry. The president of PERODUA is Datuk Aminar and the CEO is Rashid
Salleh. The total number of employees at PERODUA is 10,000 (Perodua, 2018).
Intangibility refers to those services which are not visible but valuable. Air Asia is airline
industry which provides services to its consumers. It is very difficult to sell intangible
services as it requires extra efforts to compete with the companies which sell goods (BMS,
2013). Selling services is a complex and very difficult task as services are intangible in nature
which cannot be displayed. Therefore it is very difficult to attract customers in case of
services. They can only compete with its competitors by providing some tangible services
such as an airline industry can make the service experience better by providing some tangible
cues like food and beverages, Music, newspapers, staff uniforms and seats and cushions. On
the contrary PERODUA car automotive industry provides intangible services such as
software installation, car repair and after sale service (Mulholland, 2018). PERODUA installs
and updates software in the cars for the customers to provide them great experience. They
also provide intangible service of repairing car to the customers. They try to give their best
while repairing cars. They also provide after sale service which very impressive. They try to
satisfy their customers as much as they can.
Customer Participation
The airline industry Air Asia provides the best of its services to its customers. They provide
the services to its customers at very low cost as per their commitment which says ‘Everyone
can fly’. They do not compromise with the safety to minimize the cost. Every vehicle of Air
Asia is fully adhered the terms and conditions of the International Aviation Safety. It is
governed by the Malaysian department of Civil Aviation. They are indulged with the great
international partners for the maintenance of their engine to have the safe planes. They
provide proper training to their employees so to have zero chances of accidents. On the other

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hand PERODUA provides Cars on very economical prices to its customers (UKEssays,
2015). They had recently introduced many new cars so to satisfy the needs of different social
class of people. They always aim at providing best to their customers. They also provide after
sale service to their customers. They always prefer to manufacture the product as per the
customer requirements. For middle class of people, they have launched 1000cc which is very
economical. For high class of people, they have launched 1500cc which is preferable for the
people who wants high performance and high utility. They provide flexible payment methods
to their customers as they accept credit cards, cheques and bank transfer. Both the airline
industry Air Asia and the manufacturing company PERODUA followed different business
strategies to achieve its business objectives. The car manufacturing company PERODUA
provides its best sales service to attract the large number of customers. They first trained the
sales representatives then accordingly set their position. They also entertain their customers
after sale of the products. They believe in satisfying the customers properly (Mutum, 2000).
To increase the sale of the company it follows many promotional techniques such as free gift
as sterling lock, lucky number, ‘touch and go card’ and discount up to RM 1500. It also
provides benefits like extended warranty period. PERODUA made its own different strategy
to advertise the products more on national holidays, Chinese New Year, Diwali and other
holidays. They prefer to advertise its products on different types of advertising media. To
promote their products they maintain the good relations with the cooperative banks as they
are the finance and insurance partnrs (UKEssays, 2015).
On the other hand Air Asia also has its own business strategies. They aimed at following the
minimum cost business strategy which focused on targeting those customers who belongs
from medium range of income. The targeted customers generally fall in the category of
middle class of people. They do not compromise with the safety to minimize the cost. Every
vehicle of Air Asia is fully adhered the terms and conditions of the International Aviation
Safety. They also aim at attracting high class of people by providing luxurious benefits
during travelling. High class of people refers to the people who belong to high range of
income group. They take care of every requirement of their passengers during travelling to
satisfy the consumers effectively (O’Connell & Williams, 2005). They provide their
customers great experience of travelling at their planes. The core business strategy of Air
Asia is providing seats at minimum cost (Lawton & Solomko, 2005). The belief behind this
strategy is ‘Now everyone can fly with Air Asia.

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Perishable
It becomes easy to compare both the industries automotive and airline when it is on the basis
of products. Both the companies are concerned for quality and safety. Perishable products are
those products which is likely to spoil soon. Therefore in terms of perishable products, Air
Asia faces many challenges. The airline industry Air Asia has to provide tangible goods
during the flight like food, drinks and some other items. Therefore it becomes very difficult
to store some products like that. They try to provide best of their services to its customers
while travelling. Perishable products are to be kept according to their nature. For instance
products like chocolates and some drinks need to be refrigerated at some particular
temperature. Now a day’s airline industries have developed many effective ways to store the
perishable products.
On the other hand PERODUA being a car manufacturing company does not have perishable
products. It also doesn’t have to provide services like food or drinks as compare to airline
industry. They only sell cars and provide related services to its consumers (UKEssays, 2015).
Under car manufacturing company 99.9 products are reliable. All related products have
enough life at PERODUA. The company PERODUA produces cars and mini cars and that
does not involve perishable products. As the parts of cars are also having enough life
therefore they cannot be called perishable products.
Conclusion
Air Asia is one of the largest airline industries in Malaysia in terms of number of vehicles and
destinations whereas PERODUA refers to a car manufacturing company. They aimed at
following the minimum cost business strategy considering their commitment ‘Now everyone
can fly’. On the other hand PERODUA aims to serve the best to its customers by developing
the quality and continuous improvement in all the procedures of business. The mission of Air
Asia is to become the best company in all over the world to work for. The maximum
employees at Air Asia are 17,000 whereas the maximum employees at Perodua are 10,000.
PERODUA provides Cars on very economical prices to its customers. They had recently
introduced many new cars so to satisfy the needs of different social class of people. They
always aim at providing best to their customers. In terms of perishable products, Air Asia
faces many challenges. The airline industry Air Asia has to provide tangible goods during the

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flight like food, drinks and some other items. As compare to Air Asia, PERODUA is not that
much famous among people.

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References
Air Asia. (2017). The Beginner's Guide to AirAsia : Hi, We're AirAsia!. Retrieved on 23rd
February, 2018. Available at: https://www.airasia.com/in/en/about-us/hi-we-are-
airasia.page
BMS. (2013). Intangibility In Airline Industry. Retrieved on 26th February, 2018. Available
at: http://www.bms.co.in/intangibility-in-airline-industry/
Lawton, T. C., & Solomko, S. (2005). When being the lowest cost is not enough: Building a
successful low-fare airline business model in Asia. Journal of Air Transport
Management, 11(6), 355-362.
Mulholland, T. (2018). Services Offered by Car Dealerships in the United States. Retrieved
on 26th February, 2018. Available at:
http://www.streetdirectory.com/travel_guide/50513/new_car/services_offered_by_ca
r_dealerships_in_the_united_states.html
Mutum, D. S. (2000). Entry of Proton and perodua into the Indian passenger car market: a
study from the marketing perspective (Doctoral dissertation, Universiti Malaya).
O’Connell, J. F., & Williams, G. (2005). Passengers’ perceptions of low cost airlines and full
service carriers: A case study involving Ryanair, Aer Lingus, Air Asia and Malaysia
Airlines. Journal of Air Transport Management, 11(4), 259-272.
Perodua. (2018). Perodua. Retrieved on 23rd February, 2018. Available at:
http://www.perodua.com.my/corporate/manufacturing
Rosli, M., & Kari, F. (2008). Malaysia's national automotive policy and the performance of
proton's foreign and local vendors. Asia Pacific business review, 14(1), 103-118.
Thedon, N. (2009). Vision & Misson. Retrieved on 23rd February, 2018. Available at:
https://www.scribd.com/doc/55532952/Vision-Misson
UKEssays. (2015). History of perodua analysis. Retrieved on 23rd February, 2018. Available
at: https://www.ukessays.com/essays/marketing/history-of-perodua-analysis-
marketing-essay.php

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UKEssays. (2015). Perodua Marketing Mix. Retrieved on 23rd February, 2018. Available at:
https://www.ukessays.com/essays/marketing/a-successful-company-organization-
marketing-essay.php