Company Profile AirAsia Group Berhad Reference Code 87149dd8 ✓ Solved

Company Profileairasia Group Berhadreference Code 87149dd8 9a73 4eaf

AirAsia Group Berhad (AirAsia) is a provider of low-cost airline services. It offers passenger and cargo transportation across domestic and international markets. The company provides airline network operations, travel and lifestyle commerce, financial and insurance services, logistics, lifestyle and entertainment services, courier services, cafes, charter flights, and car rentals. AirAsia has hubs in Malaysia, Thailand, the Philippines, India, Indonesia, and Japan.

The company is headquartered in Sepang, Malaysia, reporting revenues of MYR11,860.4 million for the fiscal year ended December 2019 (an 11.5% increase over FY2018). The operating margin decreased to 6.1% in FY2019 from 18.1% in FY2018, reflecting a net loss of MYR315.8 million in FY2019 compared to a profit of MYR1,967 million in FY2018. In the third quarter ended September 2020, revenues fell by 82.6% compared to the previous quarter.

AirAsia's SWOT analysis indicates strengths in its robust network and market position, along with a strong liquidity position. However, weaknesses exist in its cost efficiency and solvency. Opportunities are seen in the growth prospects for the aviation industry, while threats arise from regulations in the airline industry, volatile fuel charges, stringent labor laws in Malaysia, and the impacts of the coronavirus outbreak.

In FY2019, AirAsia operated 10,000 flights weekly and had a market share of 49% in Malaysia and significant shares in Thailand, the Philippines, Indonesia, India, and Japan. The company benefitted from growing traffic volumes, which increased 16.02% YoY. Strategic initiatives include partnerships with technology firms to enhance operational efficiency and fill gaps in customer service.

The aviation industry's positive outlook, alongside strategic initiatives and a commitment to technology, positions AirAsia for potential growth despite current challenges.

Paper For Above Instructions

AirAsia Group Berhad, a leading low-cost airline, has navigated through various challenges and opportunities in the aviation industry. This analysis will cover the company’s profile, its operational strategies, and the implications of its SWOT analysis while evaluating its capability to adapt to emerging needs within the market.

Company Overview

AirAsia was founded in 1993 and began operations in 1996 as a low-cost carrier. The airline has significantly grown, expanding its routes and fleet. Headquartered in Sepang, Malaysia, AirAsia operates in multiple countries, including Thailand, Indonesia, the Philippines, India, and Japan. Its business model focuses on low operational costs and high efficiency, allowing it to offer affordable air travel to various destinations.

In terms of passenger transportation, AirAsia has established a strong competitive edge in the Asian market, connecting over 160 destinations across 23 countries. The strategic location of its hubs enhances accessibility and operational efficiency, catering to an increasing number of passengers each year. As of FY2019, the airline carried approximately 51.56 million passengers, exhibiting robust growth rates despite market fluctuations and economic challenges.

Mission and Vision

The mission of AirAsia is to provide low-cost travel options to everyone, fostering connectivity and promoting accessibility to different travel destinations. Its vision is to be the largest and most preferred low-cost airline in Asia, thereby driving tourism and contributing to economic growth in the region.

Organizational Initiatives

Currently, AirAsia is pursuing initiatives aimed at enhancing customer experience and operational efficiency. One such initiative is the adoption of technology through partnerships with data analytics firms to better understand customer preferences and streamline operations. The introduction of 'Scan2Fly' technology represents a significant step in harnessing data to ensure passenger eligibility before arriving at airports, thereby improving safety and efficiency. Furthermore, partnerships with other airlines, like Turkish Airlines, expand its network reach and improve service offerings globally.

Organizational Plans

To achieve its objectives, AirAsia employs several types of organizational plans:

• Strategic Plans: Developed by top management to guide overall direction.
• Tactical Plans: Implemented by mid-level management that focuses on operational aspects.
• Operational Plans: Day-to-day execution plans created by lower management for routine operations.

SWOT Analysis

The SWOT analysis of AirAsia reveals several internal and external factors affecting its operation:

• Strengths: Includes its robust network and market share dominance, strong liquidity position, and growing passenger volume.
• Weaknesses: Notably, a declining solvency position and cost efficiency highlighted in recent financial reports.
• Opportunities: Emerging markets and positive forecasts for passenger volume growth drive demand for low-cost services.
• Threats: Strong regulatory pressures, competitive market dynamics, and external shocks like the COVID-19 pandemic which heavily influences travel patterns.

Evaluation

In evaluating AirAsia’s mission, vision, and operational strategies, it is evident that while the company has performed admirably, there remain unmet needs regarding diversification of service offerings and customer engagement strategies. For instance, anecdotal evidence suggests a potential market for virtual travel experiences, particularly in light of the pandemic.

Upon analyzing competitive advantages, it is evident that AirAsia’s low-cost model is uniquely protective against price volatility; however, enhancing service offerings, such as loyalty programs or premium services, could leverage competitive positioning further. Moreover, benchmarking against other low-cost carriers, such as Southwest Airlines, can provide insights into service innovation and customer engagement.

Should AirAsia capitalize on the rising trend of sustainable travel, implementing eco-friendly initiatives could serve as a unique market differentiator. Innovative solutions could involve partnerships with sustainable operations and community-based tourism, appealing to the growing demographic of environmentally conscious travelers.

To successfully execute this competitive initiative, a high-level timeline emphasizing research, partnerships, and marketing strategies will be essential. Operational steps can include market assessments to tailor offerings and strategic implementation of promotional campaigns aimed at customer engagement.

Conclusion

AirAsia Group Berhad remains a formidable player in the low-cost airline sector. By continuously analyzing its market landscape and implementing strategic initiatives, the company can maintain its competitive advantage. Emphasizing innovation in service offerings and expanding its market presence will be crucial for future growth and sustainability in a rapidly evolving industry.

References

• AirAsia Group Berhad SWOT Analysis. (2021). AirAsia Group Berhad SWOT Analysis, 1–7.
• World Travel & Tourism Council Report. (2020). Direct Contribution of Travel & Tourism to GDP.
• International Air Transport Association. (2020). Jet Fuel Price Analysis.
• Airports Council International. (2020). Global Passenger Volume Forecasts.
• MarketLine Reports. (2020). AirAsia Group Berhad Financial Overview.
• Tourism Malaysia. (2020). Strategic Initiatives for Domestic Tourism.
• GrayMatter Partnership Overview. (2020). Scan2Fly Technology Launch.
• Southwest Airlines Corporate Website. (2021). Customer Loyalty Programs.
• International Monetary Fund. (2020). Economic Impact of COVID-19.
• Business Source Complete Database. (2021). Organizational Analysis Resources.