Air Asia started with only 2 Boeing 737 300 series and started their first point-to-point flights. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. We're here to answer any questions you have about our services. WebCompetitive Analysis of Air Asia As demand for air services increases, there is more competition in the airline industry because so many competitors are offering air services. Very interesting and informative. The importance of pricing strategy is to know the strategies that are used in the market and to analyse the rivals that are present for Air Asia n the airline industry (Shaw, 2016). As per the results of the survey, AirAsia has. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. WebAirAsias top competitors are Air India , American Airlines, Emirates Airlines , British Airways , Delta Airlines, Tiger Airways, Silk Air, Jetstar Airways, and many others. AirAsia should expand into more countries, increase the market, and target new customers. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. At last, Strategic priorities are identified and analysed to provide the values that help AirAsia in fulfilling its aim. Low Cost Model: Low cost operations and fixed costs . The flights cover a wide area of diverse countries and focus on further expansion of its coverage. Interested in learning more? The basic product strategy in its marketing mix is its low-cost air services. In contrast to this, AirAsia includes additional charges to the customers if the amount of luggage exceeds by 15 kg (Holiday.My, 2018). AirAsias mainproducts and servicesare KL Syariah Index of Bursa Malaysia, low price Santan meal, and duty-free merchandise, drinks, food, and other menus if you buy on board. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. The new handles will reflect AirAsia's brand identity and values, and make it easier for customers to connect with the airline and the super app on social media. Use Slintel to connect with top decision-makers at AirAsia. Air Asia has expanded their product line by not only sales ticket but also offering tourism package which is offering hotel booking while booking the ticket. AirAsia focuses on providing guests with comfort through competent facilities that meet industry standards, as well as regular flights and secure point-to-point connectivity. Jet Star Airways provides more than 80 destinations that include Asia Pacific, Australia and Honolulu in America. Marketing mix 7 Ps and SWOT analysis can improve the brand value of AirAsia and identify the strengths and weaknesses of AirAsia along with determining the future opportunities. This model is widely implemented by various organisations for the development of their strategies in the industry. February 2, 2019 By Hitesh Bhasin Filed Under: SWOT of Brands. In contrast to this, AirAsia is offering more than 130 destinations that include the Middle East, Honolulu and the Asia Pacific. They have been a major player in the low-fare airline industry and have connected over 88 countries together. AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). Besides @flyairasia and The airline which was set up in the year 1993 started operations in the year 1996 and is thus a fairly new airline. Some writers often extend the acronyms to include legal and environmental factors. AirAsia has won many awards over the years. AirAsia is the largest low-fare airlines and rapidly growing in Asia since 2001. The approach towards technology assists the organisation in minimising risks and problems and facilitating enhancement in customer services. The Essay Writing ExpertsUK Essay Experts. Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The branding of the logo of Air Asia is essential for them. In accordance with the increased demands, the options available for flying has also increased, and hence, the bargaining power for buyers is examined to be high for Air Asia. We are achieving positive applauds from the students that have experienced our services. Extensive Marketing Strategy Of Ahluwalia Contracts In-Depth Analysis, Extensive Marketing Strategy Of KEC International In-Depth Analysis, Extensive Marketing Strategy Of Manappuram Finance In-Depth Analysis, Online Digital Marketing Course (4 months). The price offer by an airline company may not be fixed but it will depend on the time differences between the date of booking and flight. The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). The brand colours of Air Asia are red and white, which represent determination along with passion, perfection, and positivity to serve customers high-quality services at low prices (Mele, Pels and Storbacka, 2015). Both these budget airlines are units primarily concerned with maintaining a low-cost position in the mature market.. History of Garuda Airlines. They may force to continue their operation even they are facing losses in order to cope with fixed costs. The airline claims No Admin Fee, but all the services provided by AirAsia are not free, it has some fees for some services. (vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display("vi_23289101301") }). They have achieved effective targeting to this segment by making their brand synonymous with low-cost services. Continue reading more about the brand/company. Required fields are marked *. Although the two major suppliers of aeroplane structures are Airbus and Boeing, the suppliers of other facilities required in an aeroplane, for hospitality services including food and merchandise, are available in adequate amount in the market. The company is constantly using innovative solutions to provide low-cost transportation. Let us start the Air Asia SWOT Analysis: For Air Asia, SWOT analysis can help the brand focus on building upon its strengths and opportunities while addressing its weaknesses as well as threats to improve its market position. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. Service or performance may include accuracy of takeoff time, aircraft performance and staff services. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. The airline offers400destinations both local and international in25countries across the world. The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. In order to establish a new airlines company, high amount of capital along with risk-bearing capabilities and monetary funds to cope up with the challenges faced while sustaining in the airline industryare required. AirAsia has expanded its routes to different countries all around the world including Indonesia, China, Singapore and the Philippines. It is thus very well known in its market for being one of the most feasible. They should be used as a reference paper for further research. That was AirAsias 4Ps mix, detailing each strategy and its purpose. Certain weaknesses can be defined as attributes which the company is lacking or in which the competitors are better. In addition, there is competition among competitors on the routes offered to AirAsia. The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. Below are the top 3 competitors of Air Asia: 1. The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. Get best assignment helper in Malaysia as offered by Student Life Saviour to ensure best grades in all Malaysian assignments. Rising Fuel Costs 2. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. Other than that, hes a fun loving person. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. In anchor pricing strategy, the company prices its services along with the tickets at a low price. Do check. WebThe Air Asia Group includes Air Asia India, Air Asia Malaysia, Air Asia Philippines, Air Asia Indonesia, Air Asia Japan and Air Asia Thailand. The major competitors for Air Asia as per the market analysis are Jet Star Airways, Tiger Airways, JAL Express, and Air Arabia. Fixed Cost is high. Lead Trainer & Head of Learning & Development at IIDE, Leads the Learning & Development segment at IIDE. Step 4 - Determine overall industry structure and test analysis of consistency. Due to few suppliers in market, this has increasing the bargaining power of supplier. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. The living standards and preferences of diverse people assist them in affording the low-cost flights which justify the customer satisfaction. Well established LCC operating out of South East Asia, 3. The Threat of Substitution The international airline market has sufficient low-priced airline options available for passengers to travel. Air Asia Revenue : RM 10,638 million (FY 2018) (9.6% increase YoY) RM 9,710 million (FY 2017) Competitive Analysis of Air Asia SWOT PESTLE The SWOT analysis of Air Asia is presented below: It would be a strong competitive edge to AirAsia after the pandemic ofcovid-19because the purchasing power of the people has dropped significantly. The company confronts various complaints and issues from the customers who are numerous to resolve instantly and result in customer dissatisfaction. Concentration of Buyers power in many hands. Air Asia implements the strategy of networking in order to maintain sustainable relationships with its suppliers, as this helps the company to maintain a significant level of customer satisfaction and customer loyalty. This reduces the chances of small or medium enterprises to enter this industry, and hence, the threat of new entrants for Air Asia is very low. Some of the key weaknesses of Air Asia are: Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Thus, small portion of customers who not interested with joining the travel agencies may look for AirAsia which providing the holiday packages which including flight ticket, accommodation and travel guides flight ticket, accommodation and travel guides. In Air Asia SWOT Analysis, the strengths and weaknesses are the internal factors whereas opportunities and threats are the external factors. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. AirAsia is already trying to achieve that by expanding their facilities to hotel bookings, tour packages, etc to try and gain some competitive edge along with diversifying their product portfolio. Another strategy that the company will implement in the future is networking. As compared to the services of the AirAsia,Malaysia Airlinesprovides better services and gain efficient customer satisfaction. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. Apart from that, AirAsia engages in popular promotions such as social media advertising, print advertisements, and simple but efficient billboard advertising. Learn how your comment data is processed. In the increasing demand of the airline services, there is a tough competition in the airline industry because of the varied numbers of the competitors that are providing the airline services. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. It allows its customers to choose the services they want without compromising on quality. Furthermore, landing charges can be identified as the negative aspect resulting into underdevelopment of the airline industry as the aviation sector is strictly obligated to abide by precise air rights regulations and norms. AirAsias positioning is very clear in being low-cost. Sponsorship is also one of the great marketing tools. Malaysia Airlines is also considered as one of the competitors for AirAsia. Your email address will not be published. Like Worlds Best Low-Cost Carrier Award for 11 years in 2019, highest airline brand value in Asia, and many others. Furthermore. AirAsia is known for its low fares and no-frills policy. The major issue with maintaining low ticket price is the increasing competition in the airline industry. This has raised the threat of substitution for Air Asia, as in any case of customer dissatisfaction or unavailability of service, it will be easy for the passengers to shift to some other airline company. As increasing in the number of airline competitor such as Jet Star and Tiger Airways which are also promote low cost fare may decrease the shifting cost of the customer lead to decrease of Air Asias customer loyalty. It has been reviewed & published by the MBA Skool Team. Today, well discuss the swot analysis of AirAsia. The company was established in 1993, and the official operation of the company was started on 18 November 1996. In this section of the blog, we shall understand AirAsias marketing with the help of its STP (segmentation, targeting, and positioning) strategy. AirAsia is one of Asias most successful low-cost carriers. Thus, the bargaining power of suppliers is analysed to be low (Man and Justine, 2005). A brand's opportunities can lie in geographic expansion, product improvements, better communication etc. The competitions are depending on the services provided and the suitability of the flight time for the customer. Many airline companies have entered the airline industry and they have made the market very competitive. Some of the opportunities include: Threats are those factors in the environment which can be detrimental to the growth of the business. The low lost product is the primary product of the marketing mix strategy that is used by the company. The two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). Lets take a look at AirAsias marketing mix. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. The company cannot control a number of charges and costs which are regulated by government and airline authorities which may result in a significant loss in profits and consistency of the organisation. The microenvironmental analysis for any company or organisation is performed using Porters Five force model. Similarity in product offering. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. It creates and maintains their competitive advantage by offering the cheaper prices and services than competitors price. The competitions advantage is the centre of a companys performance to face a direct competition. The airline has four subsidiaries including Air Asia X, Indonesia Air Asia X, Indonesia Air Asia and Thai Air Asia. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. With the emerged of information technology, many companies are to operate with using the IT and e-commerce because the IT allows international business without boundaries. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. *You can also browse our support articles here >. Such events and teams have got millions of fan following, when an airline sponsors a team or an event, then it allows the company to reach new customers. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of Hence, customer may access to the current airlines information which are available at all time, this has reduced the power of negotiation for airlines and producing a strong customers bargaining power. In 2002, AirAsia became the first airline company in the region that allowed passengers with the facility to pay for their bookings by using credit card. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. It employs an anchor pricing policy, which establishes a baseline for pricing all AirAsia-operated flights. Thai AirAsia faces new competitive threats in Thai Lion and Thai VietJet. The companies are not associated with MBA Skool in any way.Edit the brand or add a new one to SWOT Analysis section : Contribute. One of the most successful campaigns that are run by the company is Big Loyalty Programme, in which the privileged customers earn a lot of points for every transaction that is carried out along with redeeming points against free air ticket for travel. Has Positioned itself as the major LCC in SE Asia. Low switching costs. Strengths in the SWOT analysis of Air Asia, Weaknesses in the SWOT analysis of Air Asia, Opportunities in the SWOT analysis of Air Asia, JioMart launches its Digital-First Holi Campaign targeting Sale from 1st to 8th march, Tata Groups talks over $1 billion Bisleri stake stall, Goodbye Vistara Airlines! Another important strategy that Air Asia will consider enhancing is improving Information Technology (IT) services in the company, as well as in the aeroplanes. Interested in learning more? Below are the top 3 competitors of Air Asia: 1.Jetstar Airways 2.SilkAir 3.Tiger Airways. Do essay writing needs professional writers? Given the current situation, in-flight experience, especially hygiene matters a lot to customers so AirAsia should heavily market its hospitality and put customers at ease in availing their services. Ease to switching. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). As AirAsia expanded its services, the company expanded its facilities, including travel The major factor that enhances the competition between the Malaysia Airlines and AirAsia is the luggage handling service that is provided by the Malaysia Airlines. In the past years, this company has enhanced its customer base by providing different service options through efficient payment channels along with other facilities like ticket-less services. Start-up Cost is high. Similar service provided among every airline company so the competitive may be fierce. Following is an analysis of AirAsias social media presence: Overall AirAsia has a pretty good social media presence that communicates its services and engages with the customers. Technology is a major component of organisational structure which is completely analysed on the basis of IT framework of Airasia in particular region. Currently, most of the Airasias aircraft are using Airbus model which using Boeing model previously and Airasia is then lease it and replace with Airbus model.If in case Airasia may wish to switch to Boeing again, the cost of training employee in operating the aircraft feature is high. Back in the 1900s Thai National Airlines was the only airline that could fly in the main routes of Bangkok Chiang Mai with non-stop flights. Heres the swot analysis of AirAsia as follows; AirAsia has a large fleet size comprising300aircraft. Competition: The company faces a lot of competition from brands such as Air India, Singapore Airlines, Virgin Airlines etc. Their slogan Now Everyone Can Fly itself sets the tone for the brand. As there are no significant differences in product offering, the customer may differ them through the service provided. Through its efficient STP, AirAsia has been able to successfully develop its marketing strategy and make a name for itself in the market. Continue reading more about the brand/company. The company is observed to possess a significant reputation among the competitors, customers and the markets of the establishment. Furthermore, competitive analysis has also been conducted for AirAsia in this report along with marketing mix 7 Ps and SWOT analysis. Synonymous with low-cost services are Malaysian Airlines and rapidly growing in Asia 2001., 2017 ) essential for them the environment which can be defined as attributes which the company was established 1993. 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