The details to be written in this work will be about Air Asia X, its account and general results. With the benefits of aircrafts, it is vital to consider a good air company for security and quality services. The aim of this work is to show the difference between Air Asia X and Air Asia itself. This report shows the profits of Air Asia X how they operate and provide their services.
INTRODUCTION TO AIRASIA X
Air Asia X was setup in 2007 with 20% of its show capital performed by Air Asia and 20% by the Virgin Group. From November 2007 it controlled only two long-haul routes from Kuala Lumpur with a leased A330 aircraft: Hangzhou in China and Silver Coast in Australia. Originally, it plans to operate to Trichy in India and Perth in Australia, with a Japanese city and London Stansted added in early on 2009. The cheapest air fare for its Perth service. Air Asia X plainly has many features that are similar to the recently failed Oasis Hong Kong. The main element difference is at the choice of Kuala Lumpur as its bottom. (Michelle Fong 2010).
Australia Silver coast became the X's first vacation spot which occurred in November 2 2007. Concentrating on the low-cost, long-haul section - Air Asia X was set up in 2007 to provide high-frequency and point-to-point systems to the long-haul business. Air Asia X's cost efficiencies are derived from maintaining a simple aircraft fleet and a way network predicated on low-cost airports, without intricate code-sharing and other legacy overheads that weigh down traditional airlines without compromising on safety. Friends continue steadily to enjoy low fares, through cost benefits that we pass on to our friends.
Air Asia X's efficient and reliable functions are fully licensed and supervised by Malaysian and international regulators, and adhere to full international criteria. Air Asia X is dedicated in offering X-citing low fares, X-emplary levels of safety and health care, and an X-traordinary in-flight and service experience to all our guests - spreading the amazing Air Asia experience to X-citing places in Australia and Greater Asia.
Air Asia x business environment
Business environment consists of all the factors that affects a company's operations; including customers, opponents, suppliers, vendors, industry movements, substitutes, regulations, government activities, the overall economy, demographics, public and ethnic factors, improvements, and technological trends.
In examining air Asia X business environment, I will use the porter makes to explain the business environment.
THREAT OF ENTRY
There is a high barrier getting into airlines industry since it requires high capital to create everything such as purchase or lease air craft, setup office, retain the services of staffs, etc. Thus, it has reduced the treat to Air Asia X. Moreover, brand awareness is quite important generally in most industry like the air travel industry. Hence, to get into this industry not only required high capital but also need to take the time to set-up brand consciousness. Consumers always choose the merchandise or service they really trust and since Air Asia X comes from Asia and has been around operation since 2007 Thus, rather than creating brand recognition, new entry must create so called brand devotion. Hence, this is minimizing treat to Air Asia too. However, the government legislation is one of the barriers for getting into airlines industry. For example, Air Asia x which has its own getting gateway that is LCCT Therefore Air Asia X find itself easy obtaining a new way from federal government. This not only influences the timeline established by Air Asia X but also impact their earnings. Nevertheless, it has limited the new entrance because of the government insurance policy. In overall, the treat of admittance is low to Air Asia.
Threat of access can depend on;
HIGH EXIT COST
Once access the airline industry, it is hard for an flight company to exit the industry. It really is due to the cost in paying the lending options is high, personnel retrenchment and air travel cancellation refunds. Even making loss, the firms have to keep running to handle fixed costs. It creates the industry very competitive.
Power of suppliers
Most sectors have you to definitely play the role as provider. Electric power of the suppliers is important as it'll have an impact on the industry. In airline industry, the power of suppliers is quite high since there are only two major suppliers which can be Airbus and Boeing hence there aren't many choices to flight industry. Nevertheless, the global economic crisis has limited the new entrant and also minimizing the update of planes in the immediate future. However, both suppliers provide almost same standard aircrafts therefore the moving over to Air Asia X is low. Moreover, Air Asia x placed a big amount of order from Airbus to be able to develop its international routes. Because of this, the energy of suppliers may be reduced as Airbus's earnings may be influenced by Air Asia x. Generally, the energy of supply is average low to Air Asia X.
Threat of substitutes
Substitutes are products or services which can replace the originals and present almost same satisfaction to the consumers. In air travel industry, there are two types of substitutes, indirect and immediate substitutes. Indirect substitutes include train, bus, sail and etc. On the other hand, direct substitutes indicate the other airline. Consumers usually choose low cost. For example, from Kuala Lumpur to Singapore, there are few transports that consumers can choose such as bus, coach and flights. If the client is going to a budgeted trip, definitely he will choose bus which is the cheapest price on the list of three. Additionally, the technology is currently make information much more easily to determine. Customers can certainly compare the price among few airlines just by assessing internet as internet make information more transparency. Air Asia X makes air travel the most feasible, effective and convenient mode of transportation. For instance, travel from Kuala Lumpur to Bangkok, the customer might want to take bus or air flight. However, air aircraft are a lot more convenient and also minimal time consuming equate to taking bus to Bangkok. Thus, the risk of substitutes is modest to Air Asia X.
Rivalry among existing competitors
In every industry, there may be positive or negative craze to industry growth rate. When there is a positive craze, then the companies have not to steal the marketplace share included in this. In air travel industry, the development rate is absolutely low anticipated to limited customers. Thus, to be able to extend, Air Asia must steal the marketplace talk about from its competition. ( Roy L. Simerly) Second, Air Asia X leads the primary battlefield in cost among competitors because of its low operating costs. However, there are more competitors enter in to airline industry who have major providers as their backers or owners which might lead to price conflict in the future. Furthermore, Air Asia X is not the only one who provides flight service. You will discover few low priced service providers such as Firefly, Tiger Airway and etc. making their services provided weakened differentiation. Thus, it becomes a threat to Air Asia X. In this case, the rivalry among existing rivals is quite high to Air Asia X.
AIRASIA
Strengths
Low functional cost
Highly Trained, well paid and encouraged staff
High Utilization of Resources
First mover advantage
Influential Political support
Strong Brand Presence
Excellent Utilization of IT
Strong Management Team
Well established brand across Asia
Partnership in Expedia
Quick turnaround times
Weakness
Service resources limited by lower costs.
Depends intensely on outsourcing.
Increased customer complaints.
Air Asia X objective and vision
To grow and keep maintaining great level of low priced fees
To be great in conditions of flight services
Trying to be the best in the globe.
Analyse AirAsia X current strategy
Aligned using its mission assertion, Air Asia X business strategy is centered on cost management.
Air Asia x always attempts to keep the businesses simple and successful to keep a low cost, for example by like the chair and departure/landing fees but explicitly excluded all frills, and also making these subsequent optional such as couch assignments checked baggage, onboard food and beverages, Inflight entertainment, journey copy/changes, pillows and blankets.
Another Air Asia x way to save cost is never to provide food and drinks on the planes as the goal of the airline in respect to the sister air Asia which is just to move someone from one destination to another. It sells its foods on the plan generally it makes it optional even when booking ticket.
Fu sen said, Air Asia x also tries to keep the cost low by recruiting only numbers of workers needed and selecting only capable and hard employees, so each employee will have work to do and the company doesn't have to pay staff who do not work effectively.
INNOVATION STRATEGY
Unlike other airlines gives good packages on the airplane, travellers who buy air solution from air Asia x are not entitled to get free food on board, to allow them to get more income for their low priced. Air Asia x innovated good services and low priced of transportation in one location to another, though their services are kind of poor. Their determination is to overcome the cheapest air travel worldwide. Air Asia X innovated their own advertising products once and for all benefit for boarder; they also had to increase their existing products. Air Asia X announces Supersize Luggage Strategy, proposing boarders up to 50% reserves with their savings.
Air Asia X it has been explained that Air Asia X is the only real Malaysian company which includes taken the award for the world best fifty most innovative companies, and also gained the award for the best low cost airline in the world and then for service, customer and product quality in 2011 at the world airline awards, in which they were in a position to obtain this award for 3yrs.
Possible alternate strategies evaluation
There are three strategies that Air Asia x can go after to become a significant player on the planet or international level. they are substantive progress through diversification, limited strategy through market penetration or market development and retrenchment which i will clarify from my very own point of view
Diversification is when a company is advertising new product into a fresh market. The risky part of diversification is a risky strategy and any business going into it needs to be prepared prior to going in. Diversification cost plenty of more money than doing limited development strategy.
Air Asia X for example by offering all airfare tickets without the help of agencies and open up many air Asia X ticket location. Air Asia x can control all the costs and can sell tickets for lower prices. That is possible because air Asia X can maintain and educate staffs to be friendly and helpful all the time,
In summary, diversification strategy needs lot of cash for the building or renting office structures, to pay more employees and the business needs to understanding of the new field that it's going to enter.
CONCLUSION
As shown above, I composed about air Asia X's account, its status, objective and eye-sight, both their business environment, and on hoe they operate, discussing Asia X, I detailed the SWOT evaluation abiding by the business. Not excluding the high exit cost, and the low solution cost of air Asia X, their competition, organizational strategy, the pestle conditions, analysis, & most importantly the reduced cost style of long distance travel of over five hours and above were not an exception.
For what I have learnt so far about Air Asia X, Personally i think Air Asia is a superb company and will continue to be great in years to come in the world. Their motive from Asia to develop an international airfare services came to feed their determination and inspires of other great company's like Lufthansa and all.
This work has been recognized some areas for possible further studies which include; plan versus reacts, global IPO and other priorities, and also in building the global brand.
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