AirAsia-Sustaining Competitve Advantage Essay

AirAsia was conventional in 1993 and began operations on 18 November 1996. It was origin all(prenominal)y founded by a goernment-owned conglomerate, DRB-Hicom. By Flying inexpensive With High Hopes, AirAsia started out as a Malaysian government-controlled, expert-service regional air duct that offered slightly pitifullyer beds than its number-one competitor, Malaysia Airlines (MAS). On December 2, 2001 the heavily-indebted air hose was bought by origin Time Warner executive Tony Fernandess company Tune Air Sdn Bhd .He took over the debt-ridden skyway for the symbolic sum of US$0. 26.Despite the air-travel downturn following the 11 September 2001 terrorist attacks, Fernandes believed that the timing for entering the airline market place was just right, as aircraft leasing addresss had dropped sharply and experienced ply were quick available due to airline layoffs. Moreover, the acquisition was welcomed by the Malaysian government, which hoped to move on the under-used K uala Lumpur outside(a) Airport (KLIA). Fernandes restructured AirAsia into the first no-frills(prenominal), low- toll carrier (LCC) in Asia, and the naked business model was a huge success. The company is a Malaysian low- personify airline headquartered in Kuala Lumpur.It is Asias largest, and the worlds beat out, low-fare, no-frills airline and a pioneer of low-monetary value travel in Asia. AirAsia collection operates scheduled domestic and planetary flights to 78 destinations spanning 25 countries. Its main hub is the affordable Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Its affiliate airlines siamese connection AirAsia, Indonesia AirAsia, AirAsia Philippines and AirAsia Japan lead hubs in Don Mueang International Airport, SoekarnoHatta International Airport, Clark International Airport and Narita International Airport respectively.AirAsias registered office is in Petaling Jaya, Selangor duration its head office is at Kuala Lumpur International Airport. Asias leading airline was established with the dream of making flying possible for everyone. Since 2001, AirAsia has swiftly befuddled travel norms around the globe and has risen to become the worlds best. With a route ne iirk that spans done to over 20 countries, AirAsia continues to coat the way for low-cost aviation with their innovative solutions, efficient processes and a passionate approach to business.To come upher with their associate companies, AirAsia X, Thai AirAsia, Indonesia AirAsia, Philippines AirAsia Inc and AirAsia Japan , AirAsia is commit to take low-cost flying to an all new highschool with our belief, at one time Everyone Can Fly. Focusing on the low-cost, long-haul segment AirAsia X was established in 2007 to brook high-frequency and back breaker-to-point networks to the long-haul business. AirAsia Xs cost efficiencies are derived from maintaining a easy aircraft fleet and a route network based on low-cost airports, without complex code-shar ing and other legacy overheads that weigh down handed-down airlines without compromising on sentry duty.Guests continue to enjoy low fares, by cost savings that they pass on to their guests. AirAsia Xs efficient and authoritative operations are fully licensed and monitored by Malaysian and international regulators, and adhere to full international standards. AirAsia X is committed in whirl X-citing low fares, X-emplary levels of safety and care, and an X-traordinary in-flight and service experience to all our guests public exposureing the fearful AirAsia experience to X-citing destinations in Australia and Greater Asia.In August 2011, AirAsia agreed to stamp an alliance with Malaysia Airlines by means of a share swap. The alliance was taken with(p) down by the Malaysian government, in effect voiding the engagement of both airlines. On 2 April 2012 Air Asia had their first flight from Sydney to Kuala Lumpur. By early 2013, AirAsia had seen a steep increase in its positive ness. The year-on-year comparison had shown a 168% increase in profits as compared to 2012. For the quarter ending 31 December 2012, the airlines net profit stood at 350. 65 million ringgit (US$114. 08 million).Despite a 1% rise in the average provide price, the airline had recorded profits of 1. 88 billion ringgit for the full financial year 2012. In February 2013, AirAsia submitted an application to the Indian Foreign enthronization Promotion Board, through its investment arm, AirAsia Investment Limited, to seek approval for commencing its operations in India. AirAsia wanted to take up a stake of 49% in the airline, which was the maximum allowed by the Indian government at that time. AirAsia ab initio invested an amount of 50 million United States dollars in the airline.The airline wished to father operations from Chennai and expand its network in South India, to where AirAsia already operated flights from Malaysia and Thailand. AirAsias Strategy pic AirAsias success has taken flight through the continued confidence of the companys guests who prefer a no-frills, hasslefree, low fare and convenient option in air travel. The key to delivering low fares is to consistently keep cost low. Attaining low cost requires high skill in every spot of the business and maintaining simplicity. Therefore every governance process must incorporate best industry practices.In install to commence this possible, AirAsia do implementing several key strategies. First is stressing on synthetic rubber. preventative is the single just about important criteria in every aspect of the operations, an field of force that AirAsia will never compromise on. AirAsia complies with the conditions set by regulators in all the countries where the airline operates. In addition, AirAsia partners with the worlds most re outrightned tutelage providers to ensure that its fleet is forever and a day in the best condition. AirAsia has committed itself to a program of reducing risks and haza rds normally associated with our industry through a Safety Management dodge.This commitment is extended to ensure the full integration of a safety culture, safety policy and safety objectives in a proactive approach to aviation safety. In short, AirAsias Safety Management System is not just an add-on but a core part of its business process. It is the way the companys do business. The critical safety functions of senior anxiety are in the areas of strategy and leadership. Senior management will provide a vision for safety management and provide adequate resources to achieve this level of safety. Second is ensuring high aircraft utilization.AirAsias high frequency flights wee-wee made it more convenient for guests to travel as the airline implements a quick turnaround of 25 minutes, which is the fastest in the region. This has resulted in high aircraft utilisation, lower costs and greater airline and staff productivity. Efficient Fleet, AirAsia continues to invest in new aircraft. As of the end of 2008, the concourse real a total of 56 Airbus A320 aircraft and the deployment is as follows. Malaysian operations has received 46 and is now a fully Airbus A320 aircraft feet. Thailand operations has received six and Indonesian operation, four.AirAisas fleet is among the youngest in Asia and they will get even younger as they take delivery of 14 Airbus A320 aircraft and fork out nine older Boeing 737-300 Classics aircraft in 2009. These Airbus A320 are ultra modern, more fuel efficient and environmentally friendly aircraft with unparalleled levels of passenger comfort, serviceability and reliability. They have received positive feedback that that passengers love this aircraft. These aircraft have reduced operational cost signifi domiciliatetly and helped to deliver strong profits. Third is offering low fare but no frills.AirAsia targets guests who are prepared to do away with frills such as meals, frequent flyer miles or airport lounges in convince for fares l ower than those currently offered without comprising on quality and service. Guests have the choice of purchasing exclusively prepared meals, snacks and drinks from their in-flight service at an affordable price. While onboard AirAsia the best thing to do, of course, is to eat and drink. They are offering a vast alternative of food and drinks without punching a hole in your wallet. Fourth is ensuring streamline operations. reservation the process as simple as possible is the key to AirAsias success.The company is working towards a single aircraft fleet, which greatly reduces duplicating manpower requirements as well as stocking of maintenance parts. There is only one home seating, which is first class, and passengers are free to sit where they choose. Fifth is ensuring lean statistical distribution system. AirAsia offers a wide and innovative range of distribution channels to build booking and traveling easier for its guests. AirAsias ticketless service provides a low cost alte rnative to issuing printed tickets. The company have worked very hard through countless hours of research and development to ensure that their istribution system is, simple. Simple is a relative word when you are catering to the needs of millions of people crosswise the world. AirAsia have developed a comprehensive, yet simple distribution system. maven that is capable of handling the most technologi strainy savvy customer to the most technologically deprived. The companys website www. airasia. com is available in seven languages and their call centre is conversant in the major spoken Asian languages. For those always on the go, they can book a flight using smooth phone at www. mobile. airasia. com.The company have recently upgraded their self sign in machines with a simpler and more powerful version. The transaction takes not more than two minutes to complete. This new machine besides has an advanced security device characteristic which effectively cuts the risk of fraud. Othe r than that, the company have also grow their web check-in facility to all stations and destinations. Customer can now use the web check-in facility even if they have baggage (previously web check-in was only for passengers without baggage). Sixth is point to point network. The Low Cost Carrier model shuns the hub-and spoke system and adopts the simple point to-point network.All AirAsia flights are shorthaul (four hour flight or less). The primal business is to get a person from point A to B. On Time Performance, nothing irks airline passengers more than a delay. Often, these delays are caused by factors beyond the companys control. This leading low fare airline in the Asia has been expanding rapidly since 2001, to become an award winning and the largest low cost carrier in Asia. With a fleet of 72 aircrafts, AirAsia flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs fit(p) in Malaysia, Thailand and Indonesia.To date, AirAsia has flown over 55 million guests across the region and continues to spread its wings to create more extensive route network through its associate companies, Thai AirAsia and Indonesia AirAsia. AirAsia with the ordinary symbol but with strong brand, now everyone can fly nowadays has been phenomena in Airlines industry especially in Asia region. AirAsia is one of the airline companies who more focused with the strategy how to reduce inefficiency and make it low possible fare in the world.With the cost-efficiency, low complexity and profitability are always the cornerstones of building a strong business. According to Dawna and Blaise (2005), the most successful carriers came to dominate their hub markets allowing them to exert greater control over determine and capacity. This is what AirAisa successfully done. Till date, AirAsia had received many awards and recognition form assorted parties. The achievement was not only given to the company itself, but also to Ybhg. Da to Tony Fernandez as well. In 2010, he was awarded as Masterclass Global CEO of the year. (See Appendices).