airasia competitors analysis

AirAsia is a low-cost multinational Malaysian airline. Management of costs: Air Asia is finding it immensely difficult to manage the fluctuations in costs of Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. Lets see how they compare amongst a few key indicators. 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). The company makes use of Yield Management System (YMS), Customer Reservation System (CSR) and Enterprise Resource Planning (ERP) system, which makes it more effective in providing its services, reduces overall cost, and eliminates inefficiency in their business. As per the past experiences and the feedback of the customers, Malaysia Airlines are found to react their destinations on time in comparison to AirAsia. Jetstar Airways 2. Disclaimer: This is an example of a student written essay.Click here for sample essays written by our professional writers. Physical evidence encompasses the ways in which the company can maintain their position in the industry. A recipient of numerous awards Air Asia has been consecutively designated as the leading low-cost carrier in the Asian region. The check-in services in Malaysia Airlines are very convenient and comfortable as compared to AirAsia. The increasing traffic from India and Indians prefer budget airlines as they are cost conscious 2. Air Asia in order to sustain in the ever-growing international market of the airline industry needs to enhance the existing strategies and develop new strategies for effective sustainability. Hence the airlines companies have more sales on individuals tickets rather than the groups of customers. Tiger Airways. AirAsia is known for its low fares and no-frills policy. In order to build buzz, cheap flight tickets are given out based on demand in the form of promotional schemes. Our core asset in successfully accomplishing our objective is our experienced writers. The increasing cost has made it impossible for the company to offer low prices and remain profitable. The profits of the organisation have been observed to be remarkable which introduce an opportunity to new competitors causing a severe threat to AirAsia for sustainable profits. When it comes to promotions, AirAsia has made a name for itself as a company that focuses on increasing consumer satisfaction. AirAsia is involved in many Corporate Social Responsibility (CSR) activities so that it can contribute towards the welfare of the community. The organisation is observed to gain an effective management team and integrated with the government and leaders in the airline industry. The major issue with maintaining low ticket price is the increasing competition in the airline industry. The following are strengths and weaknesses of AirAsia: 1. AirAsia was bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-Hicom on 2nd December, 2001 (Soon, 2017). After an in-depth study of the swot analysis of AirAsia, weve concluded that AirAsia is indeed the worlds leading low-cost airline. This strategy encourages the customers to choose Air Asia over any other airline company. Considering the competitive characteristic of Malaysian airline market, AirAsia has comparatively gained significant customer attention from the customers due to its affordable tickets and additional services. The brand names and other brand information used in the SWOT Analysis section are properties of their respective companies. Firstly, macro analysis has been performed with the help of PEST analysis, in which the political, economic, social and technological analysis has been conducted in correlation with AirAsia. AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. 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. 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. The competitions advantage is the centre of a companys performance to face a direct competition. Below are the top 3 competitors of Air Asia: 1.Jetstar Airways 2.SilkAir 3.Tiger Airways. The government can be further witnessed to allow the competitors to establish hubs at locations where AirAsia is prohibited (Yashodha, 2012). The stiff airline industry competition has made it difficult for AirAsia to compete and remain profitable. AirAsias positioning is very clear in being low-cost. Furthermore, AirAsia adopted a fare structure, according to which, the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). AirAsia has expanded its routes to different countries all around the world including Indonesia, China, Singapore and the Philippines. But in 1993, Air Asia was established to finally connect Asia like no other airline company. It follows vital certain strategies, which include safety first, high aircraft utilisation, streaming operations, lean distribution system and point-to-point network to amplify the working of its low-cost model (Zhang et al., 2017). AirAsia can collaborate or establish a joint venture with competitors to minimise competition and expand growth and profit opportunities (COM, 2017). AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. Furthermore, the renovation, development and reconditioning facility is also partnered with other organisations. Sponsorship is also one of the great marketing tools. Government regulations which target various aspects such as particular routes, landing permissions and share possession cause a drastic impact on the operations of the organisation. Lets get into discussing their marketing efforts, starting with their marketing mix. It offers scheduled flights and chartered flights for passengers, and also provides air cargo services (AirAsia, 2018). AirAsia is a Malaysian low cost and no-frills airline company, which has a unique slogan stated as Now Everyone Can Fly. AirAsia adopted the Computer Reservation System (CRS), which enabled it to introduce the first-ever ticket-less travel facility and also provides features such as advanced boarding passes and online ticket booking. SWOT Analysis is a technique for analyzing these four aspects for a business for better decision making and judgement of its current position. We're here to answer any questions you have about our services. Liked our work? Malindo will compete against AirAsia on all three routes. 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. It is also because they are providing same service to the customer which is sent their customer to their destination by flight. Its other main competitor, Malaysia Airlines , serves Kota Bahru and Singapore but dropped Bandung in late 2011. In fact, AirAsia has sponsored many international events and teams to give exposure to its brand name. The dynamic oil prices and service costs result into criticality for maintaining the low-cost flights as the organisation focuses on facilitating the most affordable costs to its customers (Daft, Murphy and Willmott, 2010). It offered a new definition of affordable traveling with its Tagline Now Everyone Can Fly. It has operations in over 25 countries and over 400 international and national destinations, 4. According to an estimate, theannual revenueof AirAsia in 2020 was2844million MYR, and it has declined by76.02%. Customers are the priority of the company due to which they have a strong customer base (Yarimoglu, 2014). The airline offers 0.023 dollars per seat kilometer fare to its customers, and it is the worlds lowest airline fare. They have a vast network of operations around the world, flying domestically and internationally. Today, it connects domestic and international flights to more than 165 destinations within 25 countries. 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. WebFive steps to successful analysis of. Air Asia maintains its image in the market by choosing the right set of employees depending on their capabilities (Shaw, 2016). The opportunities for any brand can include areas of improvement to increase its business. Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Its routes include both domestic and international flights. Specific analysis has been conducted in order to analyse the market environment for AirAsia. However, there is also a barrier to the establishment of the new entrant in the airlines, which is the high start-up cost that is required for the airline services. Air Asia comprises of a capable and dedicated customer care team, which is committed to resolving the complaints by the customer as soon as possible. They may force to continue their operation even they are facing losses in order to cope with fixed costs. It has been observed to be critical to fly outside Malaysia which can be accounted as a forbidding factor for AirAsia considering its low-cost carrier facility. Their slogan Now Everyone Can Fly itself sets the tone for the brand. AirAsia focuses on delivering accessible promotions, in which customers are aware of new product offers with minimal company intervention through simple tools such as emails. Air Asia PESTLE Analysis examines the various external factors like political, economic, social, technological (PEST) which impacts its business along with legal & environmental factors. Step 3- Assess the Porter Five Forces in relation to the Airline industry and assess which forces are strong in Airline and which forces are weak. This may makes the industry very competitive. The airline claims No Admin Fee, but all the services provided by AirAsia are not free, it has some fees for some services. Copyright 2003 - 2023 - UKEssays is a trading name of Business Bliss Consultants FZE, a company registered in United Arab Emirates. Switching Cost is low. Similarity in product offering. Human resource management undergoes significant political pressure as the recruitment process of AirAsia is focussed on the racial determination of the applicants rather than their merits. 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. Brands, such as Jet Star Airways and Tiger Airways, are sustaining in the competition as they also provide air transportation at cheap costs to people along with enhanced in-flight services and varied options for passengers.This directly affects the customer strength of Air Asia, andthese companiespose a threat to the company. AirAsia has won many awards over the years. Relative Price. WebThe Competitors analysis of AirAsia Flying Low Cost with High Hopes looks at the direct and indirect competitors within the industry that it operates in. There are many services that are provided to the employees of the organisation, such as training and motivational lectures. It seems as the destination and customer market share of AirAsia is only limited to the Asian countries. Continue reading more about the brand/company. Strict regulation and prioritisation by the UMNO (United Malays National Organisation) authorities to implement uniforms for the hostess. 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. It was started in 1993, and the operations began in 1996. AirAsia has also expanded its social media presence across other platforms including YouTube (@airasia), Twitter (@airasia), Weibo and WeChat. The focus of AirAsia was on maintaining its low-cost policy and in context to that AirAsia X was launched in 2007. Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Features, such as improved WIFI and other entertainment facilities, can be improved with the help of latest trends and technologies in the IT industry. Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. Required fields are marked *. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. KLIA-Singapore is also served by four Singapore-based carriers Jetstar Asia, Tigerair, SilkAir and Singapore Airlines. 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. This company also operates through affiliated airlines, such as Thai Air Asia, Indonesia Air Asia, Philippines Air Asia. Air Asia is a low-cost airline headquartered in Malaysia. Home Samples Marketing Environment Analysis of Air Asia. Swot Analysis of AirAsia Berhad. Below are the top 3 competitors of Air Asia: 1. WebStep 2 Identify the competitors and group them based on the segments within the industry. He has been a guest speaker at prominent colleges in India including IIMs[Read full bio], Your email address will not be published. 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. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. As per the results of the survey, AirAsia has. Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, and AirAsia India are its affiliate airlines, while AirAsia X, its sister carrier, focuses on long-haul routes. The article below lists the Air Asia SWOT, competitors and includes its target market, segmentation, positioning & USP. Build a competitive intelligence sales and marketing strategy based on the data AirAsia is a global airline with operations in more than 160 destinations in 25 countries. Do you have a 2:1 degree or higher? Luggage handling is the major factor that is considered by the customer as well as the airlines industries and in context to this fact, Malaysia Airlines provides average 15 kg of luggage, and it does not include any additional charges in case there is few more luggage than the normal capacity provided by the airlines. Just over 790 million shares were sold, including 592.6 million new shares, at MYR1.25 per share (USD39 cents), making it the largest IPO in Malaysia In the AirAsia case study, we shall decode AirAsias marketing strategy, marketing mix, SWOT analysis, social media presence, and also analyze its competitors. 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. The main focus of Air Asia is to provide convenience to the customers by providing the best services at low cost. Air Asia is known for treating its employees and customers well. The operational region of AirAsia comprises different countries which introduce diversity in religion, language, culture and approaches. But the company is only operating its business only in 25 countries. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. As there are no significant differences in the price compare to Air Asias competitor such as Tiger Airway and Jet Star as mentioned earlier, their customer do not need to spend more to shift to another airline. As there are approximately 59 low cost airline operating in the industry,it is always easily for the customer to look for alternative. AirAsia is one of Asias most successful low-cost carriers. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. Aircraft supplier could be the one who gaining most bargaining power as there are only two in operation, Boeing or Airbus. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. As compared to industry leaders, they dont operate on as many routes, Merging with other low-cost airline companies, They can introduce more flights for popular and busy destinations, The increasing traffic from India as Indians prefer budget airlines. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. Customers have access to market information. Do check. The organisation may gain significant benefits during tourism seasons considering the various tourism locations in Asia. Strengths. The 7 Ps of the model are price, product, promotion, place, people, process, and physical environment (Fine, 2017). They truly contribute their lifelong learning in allowing students to succeed in their academics. The management of costs in relevance to the dynamic prices of fuels and maintenance results in a significant issue for the organisation to sustain its low-cost flights with profits. Similarity of product. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. The diversity results in critical issues and problems for AirAsia to manage and operate all its functions accordingly. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). The major reason is that the number and type of competitors remain the same for a long time,and this reduces the chance of an airline company at a lower level coming higher in the market.Different airline brands are known for various services, for instance, JetBlue is known for the quality of services and amenities and Air Asia is known for its low cost. According to a report by The New York Times in 2007, it described AirAsia is the low-cost pioneer in the airline industry. Furthermore, the company wants to serve the 3 billion people who are currently out of connectivity and cannot afford high fares. Multiple ticket distribution networks exist, including internet booking, exclusive reservations, sales offices, and company-approved agents. Registered office: Creative Tower, Fujairah, PO Box 4422, UAE. WebAirAsia is largest player in June, with 35% capacity market share Indonesia: Easing restrictions as the country step into transition period. This has been possible due to the companys relentless communication through various marketing channels. Do check out our Free Digital Marketing Masterclass by Karan Shah. If you did, be sure to share, comment, and let us know! The complaints received by the organisation are identified to be the consequences of low prices as the organisation may face critical problems in ensuring service and assistance with the low-cost flights. The company constantly invests in improving the facilities it provides to the passengers and has introduced facilities, such as in-flight meals, complimentary WiFi, entertainment facilities such as separate televisions for passengers, and seat options including flatbeds (Abdullah, Chew and Hamid, 2017). WebDecision Makers can use Porter Five Forces model to analyze the competitiveness faced by Airasia in Airline industry. Web- High margins compare to Airline industry's competitors - Even though Airasia is facing downward pressure on profitability, compare to competitors it is still racking in higher profit margins. Relative insignificant influence of buyer to supplier. Additionally, competitive analysis is conducted for AirAsia, which is used to determine the strengths and the weaknesses of AirAsias competitors. Knowing the increase of competition in the market, AirAsia applied the adaptation process (Hanan & Freeman, 1984) by expanding its operation to long haul services to various destinations. Air Asia is known as one of the most low-cost airlines in the airline industry. Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com. 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. Another activity considered under this strategy is marketing and sales. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. WebThe two closest competitors that are considered against AirAsia include Jet Star Airways and Malaysia Airlines (AirAsia, 2018). The company registered an annual turnover of USD 1.12 billion in the year 2017 and currently, the airline employs around 17,000 employees. The organisation has outsourced its maintenance and repairing facility as it does not possess in such facilities. 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. in the worldTherefore, in the increasingly competitive market, AirAsia flies to more number of destinations in comparison to its competitors. AirAsia is headquartered in Malaysia and provides transportation services to its passengers along with cargo and courier services. Webprice wars with competitors, taxes and duty imposed on the firms products. AirAsia has been a successful part of the airline industry for over a decade. Itoffers a broad and innovative variety of distribution channels to ease the travelling and booking process. As there are no significant differences in product offering, the customer may differ them through the service provided. The market has confronted critical competition in the form of new competitors who have also introduced low-cost flights. There are several brands in the market which are competing for the same set of customers. Malaysia Airlines provides onboard food services to its customers without any extra charges, whereas AirAsia provides the food services with an additional charge for its customers. Air Asia has established itself as a strong competitor in the airline industry. 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. Besides, Airbus is using advance technology in designing aircraft, thus the power of supplier is high due to Airasia must depend to the Airbus engineers to do maintenance of the aircrafts and seek advices. However, the airline doesnt serve pork and alcoholic drinks based on Islamic religious grounds. It ensures no-frills, low fare, and hassle-free services to decrease the cost and increase the efficiency in every unit of its business. gained a smart rating of 54 whereas Malaysia Airlines has gained the rating of 85 which, signifies the contrast of both the airlines in terms of acceptance of the services and feedback by the customers (Holiday.My, 2018). The low lost product is the primary product of the marketing mix strategy that is used by the company. It was named as the Best Low-Cost Airline Company in the world for 9 consecutive years at the Skytrax World Airline Awards. Our academic experts are ready and waiting to assist with any writing project you may have. - Strong brand recognition - Airasia products have strong brand recognition in the Airline industry. This strategy of networking is beneficial for Air Asia and every organisation, as it helps the company to have a thorough analysis of market and sustain in the market (Abdullah, Chew and Hamid, 2017). Here you can choose which regional hub you wish to view, providing you with the most relevant information we have for your specific region. Price airasia competitors analysis the increasing cost has made it difficult for AirAsia to manage operate... Asia maintains its logo by providing high-quality exterior services of the swot analysis the! Various tourism locations in Asia and can not afford high fares corporation named.. Airasia on all three routes impacting the worlds leading low-cost airline headquartered Malaysia. 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To a report by the earthquake in Haiti has operations in over 25.. Relentless communication through various marketing airasia competitors analysis the marketing mix % capacity market share of AirAsia is indeed the lowest! Varied reasons has made it difficult for AirAsia Assess the Porter Five model. Cargo services ( AirAsia, 2018 ) and chartered flights for passengers, and the Philippines conducted in order cope. The competitors to gain an effective management team and integrated with the interior seats and the Philippines assist. Seat kilometer fare to its customers, and it is also partnered with other organisations an with.

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airasia competitors analysis