AirAsia Customer Relationship Management

In today’s world economy, information technology (IT) has driven fundamental changes in the nature and also the application of technologies in a business. The use of IT in its value chain provides the company a very strong strategically and tactical tools. If these tool are properly applied and used could bring great advantages in promoting and strengthening the competitive advantages.

In order to gain more market share and sustain its competitive advantages to be very low cost carrier in these days high demanding environment, Air Asia tries to develop new ways of make the customers, suppliers loyal. Focus on supplier and alliances and the customer will drive positive values to Air Asia can achieve. Customer relationship management application will be one of the areas of strategic implementation that company can focus to achieve high values to both Shareholders and Customers.

Customer Relationship Management (CRM)

In order to long term, customer relationship should be fostered for company to maintain competitive advantage and profitability. When planning and implementing CRM application, management is recommended the following approaches:

Customer segmentation-mileage- based segmentation is inadequate, rather should focused on value-based and needs-based approaches can be guide investment decision and drive greater insight into needs of high-value customer.

CRM initiative development-to different from the other competitors’ approach e.g. installing kiosks for the fast check in. Air Asia should implement CRM program in favour of investing in initiatives with a high return, which respond to the needs and desires of their own customers.

Organizational design and management-Air Asia needs to train the employees’ empowerment them with a complete view of the customer and clearly fluent the employees’ role in the CRM strategy.

Advanced and classy CRM information system should include the key functions that are;

Travelling Planning:

Site personalization for on line customer to create travel plan, bundled services information, flights notification systems, and gate information displays etc.

Reservation and Ticketing:

ITA search engines, roving agent check-in, kiosks, internet check-in, and phone check in systems etc.

Frequently Flyer Program:

Membership based or point based rewarding scheme offering to the applicable customer.

Campaign Management:

Email campaigns and promotion system are used for marketing.

Customer Care:

Web based self services such as e-ticket booking and reservation, online baggage tracing. RFID baggage tags, internet lounge, and in air internet services.

Business intelligence:

Dynamic update and multidimensional reports that helps management to do analytics in various areas, such as customer profile.

To justify the investment and implementation scope of the CRM program, Air Asia is recommended to look into the ROI and financial impact to the shareholder value driven by each of the CRM initiatives.

By taking the steps to implement a truly consumer-centric approach to relationship management, Air Asia will be in better position to attain , develop, and hold on to high value of the clients

Company wants to be the lowest short-haul airline in every market it goes, that why they are using some strategies such as Lean cost structure, different ways of promotion, keeping safety, satisfying guests and developing human resource very strongly these days. Air Asia always tries to keep their operations as simple as they can.

SWOT Analysis:

To figure out the internal factors such as Strengths and Weakness, and external Opportunities and Threats to business objective, a SWOT analysis of Air Asia can be conducted;

Strengths:

Low cost operation

Fewer management level, effective, focused and aggressive management

Simple proven business model that consistently distribute that the lower fares

Penetrate and motivate to the potential markets

And multi skilled staff means efficient and incentive workforce

Single type of Air buses minimize the maintenance cost and easy for pilot dispatch

Streamline Operation: making sure that the processes are as simple as possible, that customer can approach and use it with no difficulty

Lean Distribution System: offering a wide and innovative rang of distribution channels to make a booking and take a step toward a travelling easy

Point to point network: applying the point to point network keeps operation simple and low cost, that it connect the booking offices with call centres

Partnering with the world’s most renowned maintenance provider company and complying with the airline operation in the world.

Implementing the regions fastest turnaround at 25 minutes only, assuring lower cost and higher productivity

Weaknesses:

Due to lower costs the services possessions are limited, so someone can think that Air Asia cannot serve as well as they advertise

During irregular situations the company could not handle them well with limited number of personals

Government interference and regulation on airport deals and passenger compensation

Non central location for secondary airports

Its low cost strategy makes the brand critical for market position and development is always a challenge for Air Asia’s management

One of the weak point is that the company trust heavily on outsourcing, it shows the Air Asia depends on other for some of their tasks and seems not good for company’s repute in the customer’s mind

New entrance to provide the price sensitive services

Providing guests with the choice of modify services without compromising on quality and services.

Opportunities:

Long haul flights an experiment to get underdeveloped market share, which is better for the company’s growth.

The Air Asia can differentiate from traditional Low Cost Carrier model by adding customer services or operating as a full services airline with low fare for the haul flights.

Ongoing industry consideration has opened up projection for new routes and airports deals, by making such kind of deals the company expand his business

High inflation rate and also fuel prices will pinch out unprofitable competitors

Threats:

Keeping in view the current economic situations the full services airline cut their cost to compete.

Other companies like Virgin etc may think towards Low Cost Carriers (LCCs)

In the coming time the high rates of fuel decrease the yield of the company is a big threat for them

Accident, terrorist attack and disaster affect customer confidence.

For example on 28 July 2010 a plane crash in Pakistan and almost one month later on 24 of august 2010 there is a another plane crash in China, these kind of accident creates a doubt in the mind of customers. Due to their (Air Asia) low cost model the people may think about that there is risk involve like services and safe journey. I think this is a major threat in these days that Air Asia can face.

Aviation regulation and government policy, Air Asia’s ongoing business in long haul flights have always threat for the changing policies of the those countries and day to day changes in the regulations of the international airport authorities

Increase in operation cost in producing value added services, as Air Asia X using value added services by long haul flights so it results in increase their operation and value added cost.

As Air Asia policy from the January 2002, company belief online seat reservation and also online flight schedule but a threat is always there that the system disorder can arise big problem for Air Asia’s online system

Economical factor of Air Asia

According to the profit and loss account of company it was good in 2009, weather it receive loss in 2008 due to fuel hedging and the crisis situation in Bangkok. The company bear a heavy loss upon their short and long contracts when fuel price shot through to the roof before collapsing around the end of year. On November 2008 the company abolish fuel surcharges. It is the first air line in the world to abolish fuel surcharge. As other air lines are downsize with decreasing in travel, because of global economic circumstances. In 2009 and in 2010 Air Asia expands its operations. The companies target to get around one Million customers in 2008, adding new plans and also introducing new destinations like India etc. At the end of 2009 and start of 2010 Air Asia targets get 5.1 million in 2009 that is 4.2 million up that was in 2008. The new plans were operate usefully towards new destinations like India, China etc.

Current Activities:

The Air Asia invited the customer to come and take part in photography competition in a sense of making journey Happy with Them(AIR ASIA), the winner of this competition will be awarded a ticket to Bangkok with accommodation and other offers such like that to get market penetration.

From 2009 the company starts scholarship for students related to pilot courses this is another try to get more market penetration in term of Air Asia’s sales and make the customer interested in their new routes and keep the existing and as well as new customers.

These Air Asia using Social security checks for buying ticket on special prices.

Red Megastore. They start red megastore for online services for the purpose of make more ease for the new and little educated customers to buy Air Asia’s offered facilities. As we know the target customer of Air Asia is less educated, Middle class and small business men’s, so this plan works very fruitful for the company.

Customer Satisfaction of Air Asia:

The customer satisfaction on company depends on four variables that are Safety, Service Quality, Price and Promotion;

Safety:

The safety factor is related to the Engine and other parts operate during flight

Take a good care of the hand caries and make sure that there is better place for them without any disturbance

The company have much focus on the insurance of passengers while they travel

Service Quality:

Good manners of attendance during flight

The flight attendants’ are very skilled , knowledgeable and charming

The Attendant’s must offer their services with keeping in mind of serving

Price:

Equality of ticket price

Offer the low comparative price

Promotion:

Air Asia was very care while lunching promotions they should be Interesting, After a reasonable time and also good frequency of lunching promotions