Swot Analysis For Air Asia Strengths Management Essay

The first phase of the swot analysis is the strengths analysis for Air Asia. There are some unique strengths of Air Asia that others company could not defeat them. First and foremost, Air Asia has a very cooperative and strong management team with strong connections with the government and the airline industry leaders.This is because Air Asia consists of different background of executive management members team from different kinds of industry professionals and ex-top government officials. For an example, Shin Corp in the past which owned by the family of former Thai Prime minister which name ThaksinShinawatra have hold around a fifty percent of shares in the Air Asia branch which situated in the Thailand. Due to this reason, it has help to create and explore up yet attract a sizeable market in Thailand. Besides that, Air Asia have a strong working relationship with Air bus which help them to purchase aircraft for discount and this air craft can save more fuel which is fuel efficient compared to Boeing 737 planes that many airlines company are using currently.

Besides that, air asia management team is also famous in strategy formulation and execution.The strategy thatthey have created at the beginnings was a brilliant blend of strategies that have proven by other low cost airlines which situated in US and Europe. Those strategies include Ryanair’s operational strategy which is mean no frills or landing in secondary airport, second is the Southwest’s people strategy which also named as employee comes first strategy, third is the Easyjet’s branding strategy which mean a link between other service providers such as hotels, car rental and so on.On the other handAirAsia’sbrand name is well established in Asia Pacific. Ignoring the common print media advertising and promotions, Air Asia’s top executives also expert in making promotions through news with their slogan of ‘media friendly’ and provide free sharing and advertisement of the latest updated information of Air Asia which include current packages, fees, discounts and the others. On the other hand, Air Asia have a good partnership relationship with the other service industry such as hotels, hostels, car rental firms, medical tourism such as hospitals, buses, taxis and others. Meanwhile, Air Asia also have partner with Citibank to create an Air Asia Citibank Card and have master and visa card. This have really convenient the tourism and hence create a very special image among the travellers. Air Asia also have alliance with Galileo Global Distribution System that convenient the travel and tourism agents internationally to check the flight information such as the flight fees and schedule and make booking which also consequence strengthen Air Asia string brand name. Moreover, Air Asia have some strong branch in other country such as Indonesia Air Asia and Thailand Air Asia have successfully improve the brand to become a regional brand and can compete with Malaysia branch of Air Asia. Air Asia also has invited one of the world’s famous football team Manchaster United and the AT&T Williams Formula One team to advertise and increase the quality reorganization image to a greater extend.

Meanwhile, AirAsia is the low cost leader in Asia. Through Air Asia Academy, Air Asia has successfully produced a low cost airline mentality and image among their working environment and workforce. This workforce is very important, flexible and high competence and promises in letting Air Asia become the leadership of low cost airlines in Asia. This low cost leadership can let all various income customers to have enjoyed the affordable air fees.With the excellent utilization of IT and technology, Air Asia can directly involved in their promotional activities which include email to customers and desktop widget which was partner developed with Microsoft for new promotions, with over three millions hits per month and the most famous surfed booking engines internationally brand building activities and also maintaining their low cost strategy through enable customers directly purchase tickets and hence can save the airline agent fees. The main vision of the Air Asia that have make Air Asia being successful is the logo of “A low cost carrier which offers five-star service where everybody can fly.”

Furthermore, Air Asia hasprovided various local Malaysia foods for all the Malaysian customers andoffers in-flight services that promote Malaysian hospitality with their friendly and warm welcoming service. Besides of providing a good hostility service, Air Asia also has provided internet and mobile services as mediums for check-in and booking. Customers can always use their mobile phone to serve internet and online booking the seats or reserves. Moreover, it is quite convenience for customers is, Air Asia provide fly schedule and the prices from Malaysia to other countries or other countries to Malaysia price. Besides, customers can easily check out the time of fly schedule of Air Asia. With all the convenient, Air Asia become the most favourite airline in Malaysia for the customers. On the other hand, Air Asia provides comfortable seats, secure safety and a cleanliness environment for the customer so those customers feel comfortable during their fly times with the low price.

Furthermore, Air Asia have a very strong promoter and media of advertising. Air Asia always have promotions that attract customers interests. Besides that, Air Asia have good marketing skills employees and technology of advertising which can influence customers attractions and choice of purchase. Moreover, Air Asia is a well-established LCC operating out of South East Asiaand it has operations in over 25 countries and over 400 international and national destinations, and the most famous destination is Bali- Indonesia, Thailand – Bangkok, Korea-Seoul, Japan- Tokyo and Nagasaki, Taiwan and the other. Meanwhile, it has subsidiaries in Indonesia, Thai, Philippines, Japan and it has a fleet size of nearly 300 aircrafts.

Weaknesses

Air Asia does not have its own maintenance, repair and overhaul (MRO) facility. Although it is a good strategy with the hub and few planes only need to maintain when Air Asia getting their first journey which only in Malaysia. However, with those few hubs that only situated in Malaysia, Thailand and Indonesia with over 100 planes that owned by Air Asia currently and another 100 planes which intended to be received in future next few years, Air Asia have to take proper actions of confirmation such as continuous of maintenance of planes with maintaining the overall costs low. This is a competitive disadvantage that Air Asia do not have its own belonging of MRO facility which cause many difficulties.

Meanwhile, AirAsia receives lot complaints from customers on their service. Examples of complaints are around flight delays, being charged for a lot of things and not able to change flight or get a refund if customers could not make it. It is crucial for Air Asia to have a good customer service and management when the market competition is more and more intense. Besides, this is also due to do not have too many routes as compared to market leader. Which mean Air Asia can’t provide many fly schedule compared to the MAS for example. And Air Asia has a very stiff competition in its sector.

Opportunities

First and foremost, there are 2 major events that are taking place. First of all, is the ever increasing oil price. Second, is the “ASEAN OpenSkies” agreement that has been reached. Fuel price that have been increase in society and competitors eyes may seem like a threat for Air Asia. But yet Air Asia is a low cost leader, it cost will still remain as the lowest among the other regional airlines this is because Air Asia is an upper hand among the others. Hence, Air Asia have a great chances to attract parts of the existing consumers of full service and customers that prefer low cost from other airlines. However, there will be also some decrease in overall travel performance which includes casual or budget travellers. The “ASEAN Open Skies” allows unlimited flights among ASEAN’s regional air carriers beginning December 2008. Due to this factor, Air Asia can remain competence and defeat the other regional airlinesHowever;this agreement can be seen as more of an opportunity with the “first mover” advantage as well as its strengths in management, strategy formulation, strategy execution, strong brand and “low-cost” culture among its workforce. Besides that, Air Asia have created some opportunity to partner with other low cost airlines as Virgin to tap into their existing strengths or competitive advantages such as brand name, landing rights and landing slots in other meaning is time to land on ground. Meanwhile, the population of middle class consumers have being continuously increased and hence creates a larger market and a huge opportunity for all low cost airlines in this region including AirAsia.

On the other hand, Air Asia will have the opportunity to promote Malaysian tourism, which in return will increase the company’s revenue. This is due to Air Asia has a good government and citizen relationship of Malaysia. Furthermore, Air Asia have contract with Malaysia in the ‘Cuti-Cuti Malaysia’ and the entire customer that relate to the ‘Cuti-Cuti Malaysia’ will promote the Air Asia fly.

Meanwhile, within the South-East region there are lots of potential customers that consist of foreign workers from neighbouring countries which include Indonesia, Myanmar, Philippines, and Vietnam which allow Air Asia to grab huge opportunities and hence also increasing the travel from India and the Indians customers normally prefer cheap and budget airlines as they are very particular about the airlines fees.

Threats

There are some of the threats that face by the Air Asia SdnBhd, firstly, the air asia faced certain rates like airport departure, security charges and landing charges are beyond the control of airline operators. These costs that have been mention is a serious threat towards the airlines that intention to maintain their low cost strategy. For example, Changi airport in Singapore charges SGD21 for every person who departs from Singapore. Besides, AirAsia’s profit margin is about 30% and this has already attracted many competitors. Furthermore, lots of the small airlines competitors provide full service airlines have or planning to create a low cost subsidiary to beat down AirAsia. For example, Singapore Airlines has created a low cost carrier Tiger Airways. On the other hand, Air Asia users’ perception that budget airlines may compromise safety to keep costs low.

Moreover, Air Asia faced the threat of rising fuel cost and labour costs. The price of the fuel that keep on increase caused the Air Asia can’t be able to have low cost production and expense high, consequence either increase price or reduce the fly route. Meanwhile, the employees of the Air Asia demand of the high salary and the increase cost of the training and staff welfare cause Air Asia expenses have been increased.