Airline company – AirAsia

Introduction

AirAsia originally was based by authorities and on 2 December 2001 was purchased byTonyFernandes. AirAsia was established in yr 1993. AirAsia has journey around the earthandascend to turn into the world’s best in yr 2001. AirAsia continues to unfold out the way for low-cost aviation by way of the innovation, environment friendly and passionate strategy to businesswith a route a network that extent through over 20 countries. There are some companieswhich hyperlink withAirAsia such as AirAsia X, Thai AirAsia, Philippines’ AirAsia Inc., AirAsiaJapan and Indonesia. In addition, for the vision half in AirAsia, AirAsia goals to be the biggest low price airlinein Asia and serving the 3 billion people who discover themselves presently underserved with poor connectivity and excessive fares.

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While for the mission of AirAsia, AirAsia wants to be the most effective airlinecompany to work whereby workers are treated as a part of the big family. Besides, AirAsiatry to maintain the bottom cost therefore everybody can fly with AirAsia. Highest quality product,embracing technology to lower the price and enchancment in service ranges might be maintained by the AirAsia airline additionally.

Tan Sri Dr. Tony Fernandes has a personal credo – “Believe the unbelievable. Dream the inconceivable. Never take no for an answer.” He studied at Epsom College, UK, and the London School of Economics and certified as an Associate Member of the Association of Chartered Certified Accountants in 1991. He turned a Fellow Member in 1996. He was admitted as a member of the Institute of Chartered Accountants in England and Wales (ICAEW) in 2008. Tony has been the Group CEO of AirAsia since December 2001.

Prior to AirAsia, he was the Financial Controller of Virgin Communications London before becoming a member of Warner Music International London in 1989. He was promoted to Managing Director, Warner Music Malaysia in 1992 and to Regional Managing Director, Warner Music South East Asia in 1996. In 1999, he turned the Vice President of Warner Music South East Asia. Tony’s many awards embody: Honor of the Commander of the Order of the British Empire, conferred by Her Majesty Queen Elizabeth II in 2011 for providers to promote commercial and educational hyperlinks between the UK and Malaysia. In 2010, the French authorities had conferred on him the award of Officer of the Legion d’Honneur, the very best award that can be conferred on a non-French national. He was named as one of many world’s one hundred most inventive individuals in enterprise for 2011 by New York-based enterprise journal Fast Company, and awarded the Inaugural ‘Travel Business Leaders Award’ winner by CNBC.

Dato’ Kamarudin Meranun

Dato’ Kamarudin is the co-founder of Tune Group. He can also be the Deputy Group Chief Executive Director of AirAsia since December 2001. Prior to joining Tune Group and AirAsia, Dato’ Kamarudin labored in Arab-Malaysian Merchant Bank from 1988 to 1993 as a Portfolio Manager, managing each institutional and high net-worth individual clients’ investment funds. In 1994, he was appointed Executive Director of Innosabah Capital Management Sdn Bhd, a subsidiary of Innosabah Securities Sdn Bhd. He subsequently acquired the shares of its three way partnership associate of Innosabah Capital Management Sdn Bhd, which was later renamed Intrinsic Capital Management Sdn Bhd. Dato’ Kamarudin acquired a Diploma in Actuarial Science from University Technology MARA (UiTM) and was named the “Best Actuarial Student” by the Life Insurance Institute of Malaysia in 1983. He obtained a B.Sc. degree with Distinction (Magna Cum Laude) majoring in Finance in 1986, and an MBA in 1987 from Central Michigan University.

History

AirAsia was established in 1994 and began operations on 18 November 1996. It was originally based by a government-owned conglomerate, DRB-Hicom. On 2 December 2001, the heavily-indebted airline was purchased by former Time Warner executive Tony Fernandes’ firm Tune Air Sdn Bhd for the token sum of 1 ringgit (about USD 0.26 on the time) with USD 11 million (MYR forty million) value of debts. Fernandes turned the corporate round, producing a profit in 2002 and launching new routes from its hub in Kuala Lumpur, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as MYR 1 (US$0.27). In 2003, AirAsia opened a second hub at Senai International Airport in Johor Bahru close to Singapore and launched its first worldwide flight to Bangkok. AirAsia has since began a Thai subsidiary, added Singapore itself to the vacation spot record, and began flights to Indonesia. Flights to Macau started in June 2004, and flights to mainland China (Xiamen) and the Philippines (Manila) in April 2005. Flights to Vietnam and Cambodia adopted later in 2005 and to Brunei and Myanmar in 2006, the latter by Thai AirAsia. In August 2006, AirAsia took over Malaysia Airlines’s Rural Air Service routes in Sabah and Sarawak, working underneath the FlyAsianXpress model. The routes have been subsequently returned to MASwings a 12 months later, citing business causes.

At the end of 2006, Fernandes unveiled a five-year plan to additional enhance AirAsia’s presence in Asia. Under the plan, AirAsia proposed strengthening and enhancing its route community by connecting all of its the prevailing destinations throughout the region and expanding additional into Vietnam, Indonesia, Southern China (Kunming, Xiamen, Shenzhen) and India. Through its sister firms, Thai AirAsia and Indonesia AirAsia, the plan called for a focus on growing its hub in Bangkok and Jakarta. With elevated frequency and the addition of recent routes, AirAsia elevated passenger volume to thirteen.9 million in its 2007 fiscal year. On 27 September 2008, the corporate announced 106 new routes to be added to its then-current listing of 60. The number of old routes discontinued has not been publicly disclosed. In August 2011, AirAsia agreed to form an alliance with Malaysia Airlines by means of a share swap. The alliance was struck down by the Malaysian authorities, in effect voiding the settlement of both airlines. By early 2013, AirAsia noticed a steep improve in its profitability. The year-over-year comparability had shown a 168% improve in earnings versus the same period in 2012. For the quarter ending 31 December 2012, the airline’s net profit stood at 350.65 million ringgit (US$114.08 million). Despite a 1% rise in the common fuel value, the airline recorded earnings of 1.88 billion ringgit for its full 2012 fiscal 12 months. In February 2013, AirAsia submitted an application to the Indian Foreign Investment Promotion Board, through its investment arm, AirAsia Investment Limited, to seek approval for commencing its operations in India. AirAsia requested to take a 49% stake within the Indian sister airline, which was the maximum allowed by the Indian authorities at that time. Initially, AirAsia committed to invest up to US$50 million in the new airline. Operations would begin in Chennai, increasing its community throughout South India, the place AirAsia already operates flights

Growth

1946: Air Asia as an airline of cargo transportation in Mainland China for the China National Relief and Rehabilitation Administration which was generally known as CNRRA. 1946~1954: the company was reorganized into “Civil Air Transport” and “Air Asia Company Limited which had been each subsidiaries of Air America. 1955: Air Asia established in Taiwan and was the first MRO in Asia to obtain FAA License. 1987: Air Asia’s shares of stock transferred by Mr. Bill Monkman, a significant stockholder of Precision Air motive – a U.S. corporation specializing in various engines and parts work within the aviation trade. 1994: Taiwan Aerospace Corporation (TAC) acquired Air Asia and made it a subsidiary. Air Asia has been accumulating ample upkeep experiences and achieved the nice honor from many shoppers globally for its excellent upkeep efficiency. 1996: Air Asia established the Vertical Flight Center which was the only one helicopter maintenance facility in Asia that obtained the authorization from Bell Helicopter. Air Asia also celebrated the fiftieth Anniversary of its founding. 1998: Air Asia went public on the IPO (initial public offering) record. 2000: Air Asia carried out varied enlargement plans, upgraded facilities and established further capabilities.

Air Asia was additionally the primary Taiwan aviation firm to accumulate the ISO 9001 International Quality Standard Organization Certifications.Air Asia proactively engaged in the MRO initiatives of Boeing B737 commercial aircraft. 2001: Air Asia constructed the New Wide Body Aircraft Maintenance Hangar. 2002: Air Asia acquired several OEM’s Authorized Distributor Certifications together with Boeing, Bell, Hawker Beechcraft, Rolls-Royce, MD Helicopters, Honeywell, BF Goodrich, Sikorsky, Allison and Raytheon. 2007: Air Asia obtained the restore station certification from Japan Civil Aviation Bureau (JCAB). Air Asia signed the long-term agreement with Japan Airlines to offer heavy maintenance providers for MD-80 Fleet. 2009: Air Asia obtained the restore station certification from Civil Aviation Administration of China (CAAC). 2010: Air Asia signed the long-term heavy maintenance contract with Japan Transocean Air Co., Ltd. (JTA). 2012: Air Asia signed a 6-year fleet heavy maintenance contract & line operation service contract with T’way Airlines. Air Asia signed the long-term settlement with Avanti Aviation Corporation to supply upkeep providers for CESSNA 208B Fleet.

b)Objective

Firstly, to provide full-fledged training and development to AirAsia pilots, aircraft engineers, cabin crew and guest services employees. Secondly, to develop the academy as aviation coaching ground in course of fulfilling AirAsia’s aspiration in becoming a regional aviation training hub. Lastly, to serves as a platform to keep AirAsia All Stars on monitor with the latest industry developments and to incorporate finest practices into their operations.

Aim

To be the world’s greatest low value airline in the world on a constant foundation.

Vision

To be the largest low value airline in Asia and serving the 3 billion people who are presently underserved with poor connectivity and high fares

Mission

To be the best firm to work for whereby workers are treated as a half of an enormous household Create a globally acknowledged ASEAN brand
To attain the bottom value so that everyone can fly with AirAsia Maintain the very best quality product, embracing technology to cut back price and enhance service levels

Values

Safety: Adopting a zero tolerance to unsafe practices and strives for zero accidents by way of proper training, work practices, threat management and adherence to security rules at all times. Valuing our People: Committing to our people’s growth and well-being and treating them with respect, dignity and equity. Customer Focused: We care and deal with everyone in the identical method that we need to be treated Integrity: Practicing highest standards of moral behaviour and reveal honesty in all our traces of labor to find a way to command trust and mutual respect. Excellence in Performance: Setting objectives past one of the best and reinforcing prime quality efficiency standards and reaching excellence through implementing finest practices.

c) Organizational Structure

d) Past/present projects

i) Past projects which are being done by AirAsia group under AirAsiaRedTix, their leisure based subsidiary. Most of the tasks held are concerts and festivals that target attracting youth, particularly their employees who are often identified as AirAsiaAllstars.

These are a few of the events/projects held by AirAsia Entertainment:

Future Music Festival Asia

AirAsiaBloggers’ Community Annual Party

AirAsia Annual Party

ii) The proprietor of AirAsia, Tony Fernandes also took half in 2 excessive profile initiatives that concerned his AirAsia model such because the F1 Lotus (now known as Caterham) staff and the soccer staff, Queens Park Rangers. AirAsia are properly generally recognized as the main sponsor for each staff. Tony Fernandes’s goal is to reach out to completely different set of group other than travelling junkies and frequent fliers.

The Formula One project

Queens Park Rangers

Past awards/achievements

Year 2013

  •  World’s Leading Low Cost Airline by World Travel Awards 2013
  •  World’s Best Low Cost Airline
    by Skytrax
  • Year 2012
  •  World’s Best Low Cost Airline
    by Skytrax
  •  2012 ATW Value Airline of the Year

Year 2011

  •  Best Asian Low-Cost Carrier By TTG Travel Awards 2011
  •  World’s Best Low Cost Airline
     Best Low Cost Airline – Asia
    by Skytrax
  •  Best Company for Investor Relations – Mid Cap
     Best Investor Relations Website – Mid Cap by Malaysian Investor Relations Association’s (MIRA)
  •  Asia’s Best Low Cost Cargo Carrier Award by Aviation Awards Asia 2011
  •  Fastest Growing Foreign Airline for Cargo by Guangzhou Baiyun International Airport
  •  2010 Asiamoney’s Best Managed Company Award

Year 2010

  • Masterclass Global CEO of the Year awarded to YBhg. Dato’ Tony Fernandes
  •  World’s Best Low Cost Airline
    by Skytrax
  • AirAsia voted the Air Cargo Industry Newcomer Award on the ACW World Air Cargo Awards 2010 by Air Cargo Week

Year 2009

  •  Airline Of The Year by Centre for Asia Pacific Aviation (CAPA)
  •  Tony acquired the 2009 Frost & Sullivan Excellence in Leadership Award by Frost & Sullivan
  •  Best Asian Low-Cost Carrier by TTG Travel Awards 2009
  •  World’s Best Low Cost Airline by Skytrax

Year 2008

  •  The Laureate Award for Best Commercial Airport Transport from Aviation Week
  •  Tony awarded the Malaysia Brand Icon Award from Deputy Prime Minister YAB Dato’ Seri NajibTunRazak on the Global Brand Forum Malaysia
  • AirAsia – Malaysia’s 30 Most Valuable Brands 2008 By Malaysia’s Most Valuable Brands (MMVB)
  •  PIKOM ICT Organisation Excellence Award 2008 By Association of the pc and multimedia trade (PIKOM)
  • AirAsia X – Best New Airline Of The Year By Centre for Asia Pacific Aviation (CAPA)
  •  Best Asian Low-Cost Carrier
    by TTG Travel Awards 2008
  •  Top CEO model & third Best Corporate Brand in Malaysia
    by Pulse Group Survey
  •  World’s Best New Airline (AirAsia X)
    by Budgie World Low Cost Airline Awards 2008
  •  Friends Of Thailand Award 2008
    by Tourism Authority of Thailand
  •  Asia Pacific’s Top a thousand Brands 2008 Survey (AirAsia- Top 5 Airline) by Taylor Nelson Sofres
  •  Asia’s Best Budget Airline beneath Best In Travel Poll 2008 by SmartTravelAsia.com
  • AirAsia wins Airline Strategy Award within the Finance Category by Airline Business
  • AirAsia recognized as one of many 50 Most Innovative Companies In The World by FastCompany.com
  •  Airline Market Penetration Leadership of the Year
    by Frost & Sullivan
  •  Rising Leaders – The Next 10 Years
    by Singapore Institute of International Affairs (SIIA) in collaboration with AXN Asia
  •  Commendations of Prestige Award for outstanding contribution in Macau by Macau Special Administrative Region

Year 2007

  •  Airline Of The Year 2007 by Centre for Asia Pacific Aviation (CAPA)
  •  Asia’s Best Budget Airline underneath Best In Travel Poll 2007 by SmartTravelAsia.com
  •  Airline Human Capital Development Strategy Award by Frost & Sullivan
  •  Asia’s Best Emerging Companies almost about Corporate Governance by The Asset
  •  Best Low Cost Airline in Asia by Skytrax
  •  The Brand Laureate 2006-07 for model excellence in the Airlines-Low Cost Carrier Category

Year 2006

  •  Malaysia’s Ernst & Young Entrepreneur of the Year 2006 awarded to YBhg. Dato’ Tony Fernandes
  •  Low Cost Airline of the Year in KLIA Awards 2006 by Malaysia Airports Holdings Berhad
  •  Merit Award for CAPA Airline of the Year 2006 by Centre for Asia Pacific Aviation (CAPA)
  •  Asia’s Best Budget Airline under Best In Travel 2006 by SmartTravelAsia.com
  •  Best Managed Company, Best Corporate Governance, Best Investor Relations, and Most Committed to Strong Dividend Policy beneath The Annual Investor Poll by FinanceAsia.com

Year 2005

  • The CAPA Aviation Executive of the Year 2005 awarded to YBhg. Dato’ Tony Fernandes
  • Regional/ Low Cost Leadership Award in Airline Business Startegy Awards 2005 by Airline Business – awarded to YBhg. Dato’ Tony Fernandes
  • Airline Market Leadership Award by Air Transport World (ATW)
  • Transport Company of Excellence Award by Ports World Sdn. Bhd
  • Asia’s Top 200 “Best Under A Billion” Companies by Forbes Asia
  • RHB AirAsia Credit Card by Superbrands
  • Best Chip Program for MasterCard Marketing Leadership Award 2005 by MasterCard

Year 2004

  • Asia Pacific Low Cost Airline of the Year 2004 by Centre for Asia Pacific Aviation (CAPA)  Asia Pacific Aviation Executive of the Year 2004 awarded to Tony Fernandes, Group CEO by Centre for Asia Pacific Aviation (CAPA)  Asia Pacific Low Cost Advertising Award for Best Asia Pacific / Middle East Low Cost Airline Print Advertisement 2004 by Centre for Asia Pacific Aviation (CAPA)
  • Asia’s Best Managed Company within the Airlines and Aviation Sector by Euromoney  Best Newly Listed Company (3rd place) by Euromoney
  • Triple A Regional Award for Best Airline IPO for 2004 by The Asset Magazine
  • Best IPO of the Year by The Edge Singapore
  • 25 Stars of Asia honoree itemizing (Tony Fernandes) by Business Week
  • Best Uniform’ for Miss Airlines International Contest 2004 fifth China Air Show, Zhuhai
  • Market Leadership Award, 2005 Airline Achievement Awards by Air Transport World Magazine

Year 2003

  • Developing Airline of the Year 2003 by Airfinance Journal
  • CEO of the Year (Tony Fernandes) by Business Times and American Express
  • CIO Top a hundred Honoree for excellence in strategic IT deployment
  • Obtained Malaysian Superbrands standing by Superbrands International

SWOT Analysis for AirAsia

Strengths

Air Asia has a really sturdy management staff with robust hyperlinks with governments and airline business leaders. This is partly contributed by the various background of the manager management groups which consists of trade experts and ex-top government officers. For example, Shin Corp (formerly owned by the family of former Thai Prime Minister – Thaksin Shinawatra) holds a 50% stake in Thai AirAsia. This has helped AirAsia to open up and capture a sizeable market in Thailand. With their robust working relationship with Airbus, they managed to get huge discount for plane purchase which can additionally be more gas environment friendly compared to Boeing 737 planes which is being utilized by many other airways The administration team can also be superb in strategy formulation and execution. The strategy that they have formulated on the beginnings was a clever blend of proven methods by different low cost airlines is US and Europe. They are Ryanair’s operational technique (no frills, landing in secondary airport), Southwest’s folks strategy (employee comes first) and Easyjet’s branding technique (linking with different service providers like motels, car rental). AirAsia’s model name is nicely established in Asia Pacific.

Besides the normal print media promoting & promotions, AirAsia’s top management additionally capitalized on promotions by way of information by being very “media friendly” and freely sharing the most recent information on Air Asia as well as the airline industry. Their partnership with other service providers similar to motels and hostels, automotive rental firms, hospitals (medical tourism), Citibank (AirAsia Citibank card) has created a very distinctive picture among travelers. Alliance with Galileo GDS (Global Distribution System) that allows travel brokers from round the world to check flight particulars and make bookings have additionally contributed to their string brand name. Air Asia’s local presence in few international locations such as Indonesia (Indonesia AirAsia) and Thailand (Thai AirAsia) have efficiently “elevated” the brand to turn into a regional brand past simply Malaysia. The hyperlinks with Manchester United (one of the world’s most well-known soccer teams) and AT&T Williams Formula One team have additional boosted their image to a greater prolong past simply the this region

AirAsia is the low price leader in Asia. With the help of AirAsia Academy, AirAsia has successfully created a “low-cost airline mentality” among their workforce. The workforce could be very versatile and high dedicated and really critical in making AirAsia the bottom value airline in Asia. The wonderful utilization of IT have immediately contributed to their promotional actions (email alerts and desktop widget which was jointly developed with Microsoft for new promotions), brand constructing exercise (with over 3 million hits per 30 days and on probably the most broadly surfed reserving engines within the world) as well maintain the cost low by enabling direct buy of tickets by shopper thus saving on airline agent fees

Weaknesses

Air Asia does not have its personal maintenance, restore and overhaul (MRO) facility. It could additionally be a good technique after they first started with solely Malaysia as the hub and few planes to maintain. But now, with few hubs (Malaysia, Thailand and Indonesia) and over a hundred planes presently owned and about one other a hundred planes to be received in the next few years, AirAsia have to ensure proper and steady upkeep of the planes which may also help to maintain the overall costs low. It is a aggressive drawback not to have its personal MRO facility AirAsia receives lots complaints from clients on their service. Examples of complaints are around flight delays, being charged for lots of issues and not able to change flight or get a refund if prospects could not make it. Good customer service and administration is critical especially when competition is getting intense.

Opportunities

There are 2 main occasions which are happening now or going to take place in less than 6 months from now. First, is the ever rising oil price. Second, is the “ASEAN Open Skies” agreement that has been reached. The growing oil value at the first glance may appear like a risk for AirAsia. But being a low cost chief, AirAsia an higher hand because its value shall be still the bottom amongst all the regional airways. Thus, AirAsia has a fantastic alternative to capture some of the present customers of full service and other low value airline’s clients. However, there will be also some discount in overall travel particularly by casual or price range travellers.

The “ASEAN Open Skies” allows unlimited flights among ASEAN’s regional air carriers starting December 2008. This will definitely increase the competition among the regional airlines. However, with the “first mover” advantage as properly as its strengths in administration, technique formulation, strategy execution, strong model and “low-cost” culture amongst its workforce, this agreement may be seen as more of an opportunity. There can be some opportunity to associate with other low cost airways as Virgin to faucet into their existing strengths or competitive advantages similar to model name, landing rights and landing slots (time to land). The population of Asian center class shall be reaching almost seven-hundred million by 2010. This creates a larger market and a huge alternative for all low value airways on this area including AirAsia.

Threats

Certain charges like airport departure, safety charges and touchdown charges are beyond the management of airline operators and this is a risk to all airlines particularly low value airways which tries to keep their price as low as attainable. For example, Changi airport in Singapore costs SGD21 for every person who departs from Singapore. AirAsia’s revenue margin is about 30% and this has already attracted many rivals. Most of the complete service airways have or planning to create a low price subsidiary to compete instantly with AirAsia. For instance, Singapore Airlines has created a low price service Tiger Airways.

Conclusion

AirAsia will be the greatest airline firm as they supply the most value effective price for tickets and granting everybody the affordability to fly around the world. As travelling by way of plane are becoming the norm these days, especially throughout trip time, the low price airline are always the goal for travellers and thus, aiming to be the most effective among the rest will show profitable in the future. To make the company higher, AirAsiawas really helpful by way of surveys to offer extra decisions of meals and drinks to have the ability to reach thesatisfaction of passengers. In addition, AirAsia can actually profit fromthe increment of baggage allowance to twenty Kg to the passengers, if the improve do happened.Furthermore, a good management style can affect the entire firm in a nice way andmotivate workers to be more creative and innovate. With the motivation and innovation, customers consider that AirAsia can be untouchable within the low price airline scene and attempt towards turning into the world best airline company. Tony Fernandes progressive and out of the field thinking led him into creating the current finest low cost airline on the earth. This reveals the standard he possesses and the vision he owned. Dethroning AirAsia as the world’s greatest low price carrier could be a monumental task for others because of its credibility alone. I hope AirAsia will remain the most effective in the future and will not be too complacent with their feat. As a last notice, hopefully incidents such because the current MH370 that occurred to MAS may be prevented, particularly to a Malaysia-owned airline.

Reference

Website

  1. http://www.slideshare.net/SM3027/air-asia-presentation
  2. http://airlines-malaysia.com/tag/history-of-airasia/
  3. https://www.airasiamegastore.com/smart-travel-tips/the-story-of-airasia-aircrafts
  4. https://www.inkling.com/read/contemporary-strategy-analysis-grant-7th/case-9/the-history-of-airasia