1. University of South Pacific
MBA – 439
2013
Business Economics
Group 3
"Now Everyone Can Fly".

2. Please fasten your seatbelts…

3.  Revenue: 4Q 12 USD 1.62 Billion
(1 Malaysian ringgit = 0.3257 USdollars)
 Number of employees: 8,000+
 HQ location: Kuala Lumpur, Malaysia
 Ownership: Listed on the Malaysian stock exchange
 Year founded: 2001
 The company grew from two planes in 2002 to a fleet
of 120 aircraft flying 30 million people
AirAsia

4. AirAsia History
• 7 September 2008 - 106
new routes added to its
then-current list of 60.
• On 2 April 2012 Air Asia
had their first flight from
Sydney to Kuala Lumpur.
• August 2011, AirAsia
agreed to form an
alliance with Malaysia
Airlines by means of a
share swap.

10. Subsidiaries
• Indonesia AirAsia
• AirAsia Japan
• Thai AirAsia
• Air Asia X
• AirAsia Philippines
• Air Asia India

11. Destination Map
• 142 routes to 78 destinations
(Over 400 daily flights covering
Indonesia, Malaysia and
Thailand).
• International routes:
•Australia
•Brunei, Cambodia
•People's Republic of China
•India, Nepal
•Japan
•Laos, Philippines
•South Korea, Singapore
•Sri Lanka, Taiwan, Vietnam.
•Over 400 daily flights covering:
Indonesia
• Malaysia and Thailand

12. FLEET
Fleet size 120 (+355 orders)

13. Competitors
• EasyJet plc
• Malaysian Airline System
• Ryanair Holdings
• Singapore Airlines Limited
• Tiger Airways.
• Southwest Airlines
• Thai Airways International

14. Organizational Structure

15. STRATEGY

16. Vision
“To be the largest low cost airline in Asia and serving
3 billion people who are currently underserved with
poor connectivity and high fares.”

17. Mission
• To be the best company to work for whereby employees
are treated as part of a big family
• Create a globally recognized ASEAN brand
• To attain the lowest cost so that everyone can fly with
AirAsia
• Maintain the highest quality product, embracing
technology to reduce cost and enhance service levels

18. VALUES
• Safety first
• High aircraft utilization
• Low fare, no frills
• Streamline operations
• Lean distribution system
• Point to point network

19. Employees before customers

20. Financial KPI’s
Third straight increase in quarterly profit as a
surge in passenger numbers helped offset higher
fuel costs.
Net income increased 3.6 percent to 157.8
million ringgit ($52 million) in the three months
ended Sept. 30 2012.
Revenue rose 15 percent to 1.24 billion ringgit.

21. • Outsourcing
•Limited human resources
•Heavy reliance on IT
• Non-central location of
secondary airports
WEAKNESSES
• Strong management Team
• Strong Strategy and Execution –
plan on fuel hedging, buying low
cost airbuses.
• Low cost Model
• Single type fleet
• Efficient Operations
• First to market with ICT
collaboration
• Strong Brand Name
• Multi-skilled Staff – seamless
transition within workforce
STRENGTHS
INTERNAL
SWOT Analysis

22. •Entrance of new LCCs
• High fuel price decreases yield
• Regulations and Policies
• Customer confidence affected by
Terrorist Attacks, Accidents
• Increase in operation cost in
producing value-added services
• System disruption on IT
•
THREATS
• Long haul flights – new routes
• High fuel prices – survival of the
strongest airlines
•Industry consolidation means new
routes and airport deals
•Recycling routes abandoned by
struggling rivals
OPPORTUNITIES
EXTERNAL
SWOT Analysis

23. • Threat of Entry – Low
• Power of Suppliers – Moderately Low
• Power of Buyers – Very High
•Threat of Substitutes – Medium/Low
• Rivalry amongst existing competitors – very high
Porter’s 5 Forces

24. • Oligopoly – Since Air Asia and MAS are large
firms competing with each other.
• As a oligopoly market structure both firms have
ability to control their prices to maximize profits.
• Both Air Asia and MAS formed high entry
barriers due to economies of scale and limited
licences.
•However if these two decide to collaborate, it
becomes a large monopoly.
Market Structure

25. Low Cost Model

26. • Compete in the budget carrier space, currently dominated
by IndiGo and SpiceJet.
• JPMorgan said. “Challenging to sustain higher yields and
entry of a new player could put pressure on pricing."
• Shares in SpiceJet, India's No. 4 operator by market share,
fell sharply.
Economic Outlook –
Entry into India - The target:
"1 million people that travel
by train".

27. Opportunities:
• Vast population.
• Enormous size and
growing middle
class.
Economic Outlook –

28. Economic Outlook –
Challenges:
• Indian airports are very expensive.
• Jet – Etihad deal looming.
• Regulator uncertainty - Indian govt.
• High operating costs.

29. Awards and Recognition

30. Sustainable Growth and Competitive
Advantage
•Aggressive in its branding and marketing campaigns
•“Single aircraft type” in use, which results in fixed costs and low cost
operations.
•Its flat organizational structure
•Employees have multiple roles so as to save on costs.
•Employees are given opportunities to grow in the organisation.
•Available Seat per Kilometre (ASK) - Having the lowest cost on available
seat/kilometre ensures efficiency and cost savings.

31. Conclusion
Innovative mindset and keeping faith in its employees to maintain a
competitive advantage.
Financially shrewd and have dynamic layered-hedge strategy so as to
save on fuel costs due to volatile oil prices.
Partnerships with various corporate organization and diversify its
services such as partnerships with Financial institutions. Not only will this
provide extra revenue streams but increase its brand power and image,
via indirect marketing.
Diversification would also spread risks among partners. It should
continue to be aggressive in advertising, innovative and first to market
new ideas and seek to enter other countries/regions.

32. References
http://en.wikipedia.org/wiki/AirAsia
_Group_destinations
http://www.flightglobal.com/blogs/a
sian-skies/2009/10/airasia-tries-to-
move-low-cost.html
McNamara,F, 2013, ‘Academia.edu’
,Air Asia: The Worlds Lowest Cost
Airline, viewed 12 March 2013,