AirAsia Company’s Strategic Management

Subject: Company Analysis
Pages: 5
Words: 1354
Reading time:
5 min
Study level: College

AirAsia, according to recent research and airline ranking, is Asia’s leading airline. The company offers flight services, training, and flight consultation services. AirAsia was established in 2001 with the dream of making flying possible for everyone. On average, AirAsia estimates to be able to carry over 40 million passengers in a year. The company however targets to carry over 70 million passengers by the year 2014 to different destinations. Over the years, AirAsia has rapidly changed the normal trends in the travel industry internationally and throughout the globe. The company is currently ranked as the best in the world. The company has over 65 destinations in over 20 countries in Europe, Australia, Africa, and America. From 2007 to 2010 their income tripled by a value of over 3,948 Malaysian Ringgit.

Among the key attributes to the company’s great performances include:

  1. The company’s operations are streamlined. The company uses a single type of aircraft, with a single class sitting which eases operations of the pilots and other employees as all the aircraft are similar. Moreover, it incurs low maintenance and training costs as a result.
  2. The company offers no frills. There are no free drinks and food, no tickets for boarding, and no refunds in case of a missed flight. This lessens the burden in terms of costs and time to manage different aspects.
  3. The company offers point-point connection networks. Rather than connect with other airlines for other destinations, the AirAsia Company only offers point-point networks which are majorly less than three-hour flights.
  4. Use of a lean system in distribution. The company has only a few offices for sales, travel agents, and call centers. The major transactions done by the company are via the internet.

AirAsia has continued to pave the way by providing lower-cost aviation services through its innovative solutions. They have efficient processes and a passionate approach to business which are contributing factors to the cheap services they offer. AirAsia believes in enabling every individual, regardless of their financial class, to be able to fly with their Now Everyone Can Fly slogan. Given the reduced flight costs provided by the company, it believes that it is the only company that is capable of offering flight services to low-income earners. Even at these minimal costs, the company still offers five-star services to its clients. AirAsia is also praised for endorsing both the Malaysian dishes and thus increasing local business sales. As another strategy is that the company takes pride in its quality products and a great level of technology they have employed in their flight services delivery. The company believes in the professionalism with which they offer their services. Another major strategy that is being employed by the company is the simplicity in the manner in which they manage their operations. They have also created a globally recognized brand that aids in marketing their services.

A company’s business strategy is a customized set of rules and instructions that enables a company and its management to succeed in its operations. It is a very vital obligation for the key management of the company as it helps the leaders to attain the goals for every business unit. If I was in charge of the growth strategies at AirAsia Company, I would ensure differential value is added to the company in the different units. My growth objectives for the company would address the issues of the provision of a compelling corporate vision. They also address the company’s appropriation of performance goals and leverage a repeatable operation model that facilitates the execution of a balanced financial strategy. My growth objectives for the company include:-

Increase the airline’s destinations to over 100 by the year 2014

This can be achieved by introducing additional routes, developing the existing flight frequencies, and also adding additional frequencies. This objective will ensure AirAsia utilizes its resources maximally since its transport network is growing at an alarming rate. Moreover, this will boost the annual sales of the company. There will be the provision of access to a larger number of locations much more cheaply than ever before. Through the increase in the airline route coverage, the company shall be able to reach more destinations than those covered by other airlines. Potential areas where there is no direct connection and of which a series of flights have to be taken shall also be covered. Tourist destinations, African countries, and even Polar Regions shall be covered to increase the client base of the company. I shall also increase the number of flights in areas where the company’s current flight services are being overwhelmed. There are many destination areas in the world lack enough airplanes to cover all their destination sites. A good number of destinations do not have planes and proper transportation channels and, therefore, an introduction of flights to cover all the destination routes will be of great mutual benefit.

To improve on the online booking services

Online booking is an emergent technology in the flight industry. Due to the daily improving technological services in the flight industry, it is highly recommended that companies improve their online portals to carter for the new and emergent platforms including mobile phone booking and any other alternative method. This shall be able to help manage flight bookings easily including rescheduling and reservations. Improvements on the portals shall also enable efficient communication between the clients and the responsible customer care desk.

Reschedule flight schedules to minimize the amount of time taken for turn around

Major losses in time, man-hours, resources, and aircrafts utilization. With a reduced amount of time taken by the aircraft at any given airport and airstrips, more destinations will be able to be covered. There will also be no need to have to buy additional aircraft as the few that are available shall be effectively utilized. In addition to this, there will be lower costs incurred over long landing durations. Due to the shorter return and landing to off-take durations, reliability shall also be created among the clients. This will aid in the overall marketing of the company and a higher ranking in customer satisfaction from the company.

To reduce the number of equipment used in the aircraft

Since the main aim of AirAsia is to provide affordable transportation costs to the clients, the amount of luxurious and optional equipment should be reduced to offer more passenger space and also reduce costs related to their usage and transportation. Fixing more passenger seats in these spaces that would have however been occupied by this equipment is also increased. By maintaining low operation costs, the company can sustain manageable fares. To achieve low-cost operations, every business unit should be kept simple but optimally efficient. For this to be realized, all the operations in the company should be up to date with the requirements of the industry

The type of growth strategy that I will employ in this organization is New Market penetration. This is an effective method for growth for products or services that are entering new markets. It is essential to access more customers in areas that have not yet been exploited or in areas where there is not much exploitation that has taken place. In these areas, more travelers and flight customers can be created. This shall result in an increased number in the customer base and a niche in the market. These unexploited areas also offer easier penetrability and the overall marketability of the flight services that are to be offered in the regions. I shall be able to target new markets by opening additional destination locations, improving online flight booking services. Marketing internationally and reaching new types of customers shall also be lessened. Most African countries and South American countries have no direct flight planes which connect directly to their destinations. Defining the various segments of the new markets which are intended to be exploited proper identification of the kind of transportation services required by the clients is another essential area that has to be addressed. Promotion of the flight services and bundles to be offered in the new markets shall also be ensured to ensure a proper and penetrable means of information dissemination.