AirAsia

COMPANY BACKGROUND

AirAsia Berhad, is a Malaysian low-cost airline. It operates scheduled domestic and international flights and is Asia's largest low fare, no frills airline. AirAsia was a pioneer of low cost flights in Asia. It is also the first airline in the region to implement fully ticketless travel and unassigned seats. However, as of 5 February 2009, AirAsia has implemented allocated seatings across all AirAsia flights, including in their sister airlines, Indonesia AirAsia and Thai AirAsia. Its main base is the Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Its affiliate airlines Thai AirAsia and Indonesia AirAsia have hubs at Suvarnabhumi Airport, Thailand and Soekarno-Hatta International Airport, Indonesia, respectively. AirAsia's registered office is in Petaling Jaya, Selangor while its head office is on the grounds of Kuala Lumpur International Airport in Sepang, Selangor. In 2010 Air Asia won an award for the world best low cost airline.

Focusing on the low-cost, long-haul segment - AirAsia X was established in 2007 to provide high-frequency and point-to-point networks to the long-haul business. AirAsia X’s cost efficiencies are derived from maintaining a simple aircraft fleet and a route network based on low-cost airports, without complex code-sharing and other legacy overheads that weigh down traditional airlines without compromising on safety. Guests continue to enjoy low fares, through cost savings that we pass on to our guests. AirAsia X’s efficient and reliable operations are fully licensed and monitored by Malaysian and international regulators, and adhere to full international standards. AirAsia X is committed in offering X-citing low fares, X-emplary levels of safety and care, and an X-traordinary in-flight and service experience to all our guests - spreading the amazing AirAsia experience to X-citing destinations in Australia, New Zealand, China, Taiwan, Japan, Korea, India, Middle East and Europe. 

Vision

To be the largest low cost airline in Asia and serving the 3 billion people who are currently undeserved with poor connectivity and high fares.

Mission

• To be the best company to work for whereby employees are treated as part of a big family
• Create a globally recognized ASEAN brand
• To attain the lowest cost so that everyone can fly with AirAsia
• Maintain the highest quality product, embracing technology to reduce cost and enhance service levels

Values

We make the low fare model possible through the implementation of the following key strategies,

Safety First:

Partnering with the world’s most renowned maintenance providers and complying with the with world airline operations.

High Aircraft Utilisation: 

Implementing the regions fastest turnaround time at only 25 minutes, assuring lower costs and higher productivity.

Low Fare, No Frills:
Providing guests with the choice of customizing services without compromising on quality and services.

Streamline Operations:
Making sure that processes are as simple as possible.

Lean Distribution System:
Offering a wide and innovative range of distribution channels to make booking and travelling easier.

Point to Point Network:
Applying the point-to-point network keeps operations simple and costs low.

Stepheny (KK0870048)

IT IMPLEMENTATIONS AND STRATEGIC ALIGNMENT  

In todays globalize economy; information technology has driven fundamental changes in the nature and application of technology in business. The implementation of information technology in its value chain provides powerful strategic and tactical tools for AirAsia, which if properly applied and used, could bring great advantages in promoting and strengthening the competitive advantages.

Current Strategic IT Implementation

Air Asia has currently adopted information technologies strategically to integrate the operations and coordinate all the business and management function. The following are few system implementations that Air Asia has done in its marketing and sales activities as well as operation activity in the value chain.

Yield management system (YMS)

Anticipates and react to the behavior of customers to maximize the revenue- taking into account the operating cost and aids Air Asia to optimize price and allocate capacity to maximize the expected revenues by 2 levels.

a) seat- seats are available at various prices in different points of time. A reservation done at a later date will be charged more than the one done at a later date will be charged more than the one done earlier for the same seat.

b) Route- by adjusting price for routes/ destinations that have a higher demand when compare to others.

Results increase revenue (3-4%) by taking advantage of the forecast of the high/low demand patterns, lower prices as YMS has aided Air Asia to increase the revenue by offering higher discounts, more frequently during off-peak times while raising prices only marginally for peak times.

Computer reservation system ( CRS)

• An integrated web-enabled reservation and inventory system suite powered by Navitaires open skies technologies that include internet, call center, and airport departure control functionality.
• Satisfy the unique needs of Air Asia implementing a low-cost business model to transform the business process to efficiently streamline operations.
• Helps Air Asia to grow at a dramatic pace in the past few years as started below “ navitares open skies technology has truly enable Air Asia growth from 2 million passengers to 7.7 million passengers in less than two years. Open skies scaled easily to accommodate our growth.” Tony Fernandes, CEO Air Asia.

Enterprise resource planning system ( ERP)

• An integrated ERP solution powered by Microsoft Busniess solutions ( MBS) on Microsoft technology platform which is implemented by Avanade consultants in MA 2005.
• With the robust ERP technology platform, Air Asia is able to successfully maintain process integrity, reduce financial month-end closing processing time, speeds up reporting and data retrieval process.

Siti Norlaila (KK0950327)

BUSINESS PROCESS AND OPERATION

AirAsia has fostered a dependency on Internet technology for its operational and strategic management, and provides an online ticket booking services to traveler online. The following shows the home page of AirAsia.com as the company key channel of marketing and sales.

To book a flight with AirAsia, customers can either choose the following channels or simply visit the AirAsia.com home page and follow the below 5 steps:

1. Call centre

2. Sales office and airport sales counter

3. Authorized travel agents

4. Mobile booking via mobile.airasia.com or

5. Online (http://www.airasia.com) in 5 easy steps as shown below.

The following diagram shows the online electronic ticket ordering process:

In management of AirAsia Company, they have the system in terms of inputs, processes and outputs in businesses process and operation.

Business Model

Low-Cost-Carrier (LCC) Business Model
Simple Product	• Catering on demand for extra payment • Planes with narrow seating and only a single class • No seat assignment • No frequent flyer programmes
Positioning	• Non-business passengers, especially leisure traffic and price conscious business passengers • Short-haul point to point traffic with high frequencies • Aggressive marketing • Secondary airports • Competition with all transport carriers
Low Operating Costs	• Low wages • Low airport fees • Low costs for maintenance, cockpit training and standby crews due to homogeneous fleet • High resource productivity • Short ground waits due to simple boarding processes • No air freight, no hub services, short cleaning times, and high percentage of online sales

Cressima (KK0950086)

HIERARCHY AND MANAGEMENT

 

Investor Relations
Organizational Structure
The following chart shows the corporate structure and principal operating companies for AirAsia.

Why AirAsia need a strategic management?

 According to Daniel Chan (2000), since the 1970s, the competition for the Asian air travel market has always been intense. This became more intense in the 1990s as traffic volumes were squeezed.

When the competition in the airplane industry becoming though, complex, and rapidly change, AirAsia company as a company that joined in the airplane industry business need to thinking strategically and also must preparing a good strategic management.

    

The first reason is because the airline industry is a unique and complex industry. Based on the statement, the complexity and unique of the airline industry, AirAsia need to come out with the greatest strategy to compete with their rival in the same industry. Without the right strategic management, it’s possible AirAsia could not be able be compete with the complex business environment in the airline industry.

The second reason is because in a company nowadays, general management which is the process of achieving organizational goals by engaging in the four major functions of planning, organizing, leading, and controlling may not sufficient and supportive for the organization succeed in the world of complex environments. It concerns about the process to manage the company internally but do not concentrate more on creating competitiveness regarding environments affecting the organization.

The organization or company nowadays is faced with constantly changing external environments and needs to ensure that its own internal resources and capabilities are more than sufficient to meet the needs of the external environment.Organizations or companies do not exist simply to survive in the market place but want to grow and prosper in a competitive environment. 

In order to understand and how take an action about external and internal environment, a company needs to support themselves with a good strategic management.

The strategy that AirAsia need is not just how to reduce cost and make the operational activities running effectively. But, AirAsia needs to come out with the strategy that can make competitive position that the company performs different activities from rivals or performing similar activities in different ways to achieve their business successfully.

The globalization consideration impacts virtually all-strategic decisions in a company. The globalization also forced AirAsia to see and appreciate the world from the perspective of others has become a matter of survival business. The globalization makes a rapid change in the business environment. 

Nowadays, E-commerce is becoming a business tool. E-commerce also has become a vital strategic management and allows a company to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, eliminate paperwork, and share information. In total, electronic commerce is minimizing the expense and cumbersomeness, improved products, and higher profitability.

Chin Mei Chien (KK0870049)

TECHNOLOGIES FEATURES

The purposeful application of information in the design, production, and utilization of goods and services, and in the organization of human activities. Technology is generally divided into five categories for example tangible, blueprints, models, operating manuals, and prototypes. Intangible to consultancy, problem-solving, and training methods. Almost entirely automated and intelligent technology that manipulates ever finer matter and ever powerful forces. Intermediate, semi automated partially intelligent technology that manipulates refined matter and medium level forces. Then the low labor-intensive technology that manipulates only coarse or gross matter and weaker forces. While customer relationship management according to the long term that should be fostered for Air Asia to maintain competitive advantages and profitability. When planning and implementing CRM application, management is recommended with the following approaches.

In order to gain market share and sustain its competitive advantaged to be the cost carrier in the high demanding environment, Air Asia must develop new ways and program to manage both customer relationship loyalty, supplier relationship and revenue. Between the program customer relationship :

Customer Relationship Programmer

Anita Lagani (KK0950719)

IMPORTANCE OF SYSTEM USED

As the leading low-cost airlines in the region, AirAsia fly to 12 countries through more than 106 routes to 56 destinations. Businessmen who travel a lot, not only can enjoy lower fares but flexibility and convenience through our flight schedule more often. Online booking system allows transactions simple and efficient. You can make reservations at least 3 hours before departure time by logging on. There are many benefits that will be enjoyed by all walks of life that have been provided by AirAsia. Between the interests we all experience as users, including Greater savings for individual travel expenses as the price of tickets on offer is very inexpensive when compared with an appreciable portion of tickets sold by other airlines. This enables us to buy a ticket at the time of need, such as the arrival of the festive season.

Low Fare with great flexibility

There are various facilities that are provided although we pay the price of tickets at low prices. For example, the trip back home and be accompanied by this package. It also gains more by reducing travel costs. The costs of travel usually are very much more expensive when traveling long distances. But by flight with AirAsia, all costs can be reduced. Online systems are more easy to use. We can book tickets online, so we can make a reservation no matter the time or anywhere we are. And we only need to show your identity card for verification at the time of the flight if we can not print the tickets. 

An early detection and effective management is definitely to fulfill the needs of all parties. For example when it comes to filling their online form to identify and accept passengers only to show their identity card. But if the thought many possibilities which could happen if we fill out the online form. Extensive route network to over 60 destinations in Asia. AirAsia has a lot of access in and out to the number of destinations inaccessible by other airlines. The company also has more frequent flights from other companies. We can get more advantages from the airline. Although it is cheap, but it is a win-win situation to all parties.

Fahdila (KK0910399)