Rising Fuel Costs 2. It is an international air travel carrier that started its flights in Malaysia and expanded its base globally. High Switching Cost. The major competitors for Air Asia as per the market analysis are Jet Star Airways, Tiger Airways, JAL Express, and Air Arabia. Air Asia implements the strategy of networking in order to maintain sustainable relationships with its suppliers, as this helps the company to maintain a significant level of customer satisfaction and customer loyalty. However, the low-cost pricing strategy has allowed the company to target price-conscious customers in the Asian market. This section covers SWOT Analysis, Competitors, Segmentation, Target Market, Positioning & USP of more than 2500 brands from over 20 industry sectors. AirAsias marketing strategy has worked wonders for the company in communicating exactly what they wanted to the customers. Following is the SWOT analysis of AirAsia: Lastly, lets take a look at AirAsias social media marketing presence as digital marketing is also a very important part of any companys marketing strategy. It was started in 1993, and the operations began in 1996. The biggest competitors of AirAsia though, are Malaysian Airlines and JetStar Airways. Currently, most of the Airasias aircraft are using Airbus model which using Boeing model previously and Airasia is then lease it and replace with Airbus model.If in case Airasia may wish to switch to Boeing again, the cost of training employee in operating the aircraft feature is high. Air Asia can also implement a cost leadership business strategy. Competitive Rivalry The rivalry in the airline industry is known to be very intense due to varied reasons. Learn how your comment data is processed. This LLC trend has saturated the customer market, and it has declined the overall profitability of AirAsia. The bargaining power of buyers is strong because most of the customers for Airlines Company are individual travellers instead of travel in group. Let us now get into its marketing strategy. If your specific country is not listed, please select the UK version of the site, as this is best suited to international visitors. Similarity in product offering. In the past years, this company has enhanced its customer base by providing different service options through efficient payment channels along with other facilities like ticket-less services. AirAsia is one of the largest low fare airline companies in Asia, which has been expanding its routes to different countries since 2001. As the rivalry is strong, Airasia may constant in price reduction to compete with them. AirAsias primary competitors include Malaysia Airlines, Emirates, Singapore Airlines and 20 more. High numbers of Competitor. The weaknesses of a brand are certain aspects of its business which are it can improve to increase its position further. See insights on AirAsia including office locations, competitors, revenue, financials, executives, subsidiaries and more at Craft. Interested in learning more? The largest airline in Malaysia the business is known to be highly employee centric. About Air Asia Secondly, microanalysis has also been conducted for AirAsia with the help of PORTERs five forces model. There are many services that are provided to the employees of the organisation, such as training and motivational lectures. Below are the top 3 competitors of Air Asia: 1. This has raised the threat of substitution for Air Asia, as in any case of customer dissatisfaction or unavailability of service, it will be easy for the passengers to shift to some other airline company. Airasia are now facing competition with approximately 59 low fares airline such as JAL Express, Tiger Airways, Air Arabia, JetStar Airways, and etc. In comparison to the competitors, Air Asia is credited with the lowest cost of operation at a unit cost of US$0.023 per available seat kilometer (ASK) and a passenger breakeven load factor of 52%. Relative insignificant influence of buyer to supplier. Required fields are marked *. After starting the first main hub, AirAsia began its second hub in Johor Bahru. Continue reading more about the brand/company. Many airline companies have entered the airline industry and they have made the market very competitive. Let us start the Air Asia SWOT Analysis: For Air Asia, SWOT analysis can help the brand focus on building upon its strengths and opportunities while addressing its weaknesses as well as threats to improve its market position. Very interesting and informative. Thailand s market currently has just two local LCCs, Thai AirAsia and Nok Air. Apart from that, AirAsia engages in popular promotions such as social media advertising, print advertisements, and simple but efficient billboard advertising. The company maintains its logo by providing high-quality exterior services of the aircraft along with the interior seats and the uniforms. Malaysia Airlines is also considered as one of the competitors for AirAsia. It offered a new definition of affordable traveling with its Tagline Now Everyone Can Fly. Competitive analysis is the process of researching and evaluating the competitive landscape of a business entity. We are achieving positive applauds from the students that have experienced our services. They hence practice geographic segmentation by focusing their services primarily in Asia, Demographic segmentation- Being a low-cost airline, they cater to people in the low to medium income group, Psychographic segmentation- Their main customer is the cost-conscious traveler, AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to JetStar Airlines, JetStar is providing more payment options or gateways to its customers, AirAsia provides services to 130 destinations as compared to JetStar which provides services only to 80 destinations, Malaysia Airlines generates 113% of AirAsias revenue, Malaysia Airlines also has fewer employees, at 7,159 compared to AirAsias 20,000, AirAsia is the low-cost airline leader in the Asian market, The company has subsidiaries in Indonesia, Thailand, the Philippines, and Japan, It boasts a fleet of nearly 300 aircrafts, AirAsias positioning is steady and consistent in being a low-cost airline. The goal of AirAsia is always looking to cut costs across the value chain from competitors to gain the greatest cost advantage. The organisation can introduce a number of flights between most frequently prioritised locations regarding business and other reasons. Liked our work? The other supplier such as fuel supplier, merchandise supplier, or food supplier may be depend on market condition. The companys primary focus is to build customer value. 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. Air Asia Revenue : RM 10,638 million (FY 2018) (9.6% increase YoY) RM 9,710 million (FY 2017) Competitive Analysis of Air Asia SWOT PESTLE The SWOT analysis of Air Asia is presented below: AirAsia Airline As the best low-cost passenger. DRB-HICOM, a government conglomerate laid the foundation of AirAsia in 1993 and it became operational on Nov 18, 1996. AirAsia is a low-cost multinational Malaysian airline. Use fundamental and technical analysis of AirAsia Group and its peers Please click here if you are not redirected within a few seconds. Exit Cost is high. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. The first decision by the Malaysian Competition Appeal Tribunal since its inception more than four years ago caught the media and publics attention. The company is observed to possess a significant reputation among the competitors, customers and the markets of the establishment. 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. AirAsia has the vision to be one of the best and largest airlines that operates at a low cost. Furthermore, Jet Star Airways has comparatively more number of payment options that are available for the convenience of the customers (Finder, 2018). AirAsia is a reputed and leading Asian based airline company, which is headquartered in Malaysia by a government-owned corporation named DRB-Hicom. Simply put, AirAsias target market is the people whose purchasing motivations are price and simplicity. Competitive analysis involves identifying your direct and indirect competitors using research to reveal their strengths and weaknesses in relation to your own. This is act as a barrier of entry for the competitor as there are high in capital requirement such as set up of headquarters, purchasing or hiring aircraft, appointment pilots and other staffs like air supervisor. The large fleet size and the high number of destinations help the company to diversify its resources and amplify its target market. AirAsia managed to become one of the most popular and profitable airline companies in the world by implementing visionary leadership and innovative business approach. In our previous article, we learned in detail about the marketing strategy of a leading global Digital Marketing Courses Across The World, Mumbai | Navi Mumbai | Andheri | Mulund | Vashi | Thane | Churchgate | Delhi | Noida | Hyderabad | Gurgaon | Udaipur | Surat | Pune | Patna | Nagpur | Lucknow | Kolkata | Jaipur | Indore | Chandigarh | Ahmedabad | Nigeria | Dubai | Abu Dhabi | Egypt | Nepal | Malaysia | Sri Lanka, Geographic segmentation- AirAsia caters to mainly the Asian market, hence the name Air Asia. 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). Today, well discuss the swot analysis of AirAsia. But in 1993, Air Asia was established to finally connect Asia like no other airline company. 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 Strong Promoter 2. The route network of AirAsia is one of the largest in the world, which covers more than 20 countries all around the world. Start-up Cost is high. Your email address will not be published. These are people ranging from those who could not afford to fly previously, to corporate business employees whose employers are looking to fly them while cutting costs. 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. The created segments consists of consumers who share similar interests, requirements and locations. As there are adequate options available for passengers to choose from, at the similar price as Air Asia, the company needs to focus on the amenities and hospitality services it provides to the customers. Jetstar Airways 2. The competitions are depending on the services provided and the suitability of the flight time for the customer. The overall services that are provided by Malaysia Airlines and AirAsia have a tremendous difference. The content on MBA Skool has been created for educational & academic purpose only. AirAsia X joins AirAsia Berhad and Thai AirAsia with stock listings. AirAsia was named as the best low-cost airline company in the world for 9 consecutive years at the Skytrax World Airline Awards. 2.1.2 Pest Analysis PEST analysis is a useful tool for scanning the general environment. The company is over depending on the Asian market as its main source of earning and its a very risky business strategy. In addition to this, the IT management of AirAsia adopts precise and effective approaches to ensuring the convenience of its customers (AIRASIA.COM, 2017). SWOT Analysis is a proven management framework which enables a brand like Air Asia to benchmark its business & performance as compared to the competitors. Some factors like increased competitor activity, changing government policies, alternate products or services etc. As per the results of the survey, AirAsia has. Home Samples Marketing Environment Analysis of Air Asia. UNICEF collaborated with AirAsia to raise $ 128 million for the people who were affected by the earthquake in Haiti. It has been reviewed & published by the MBA Skool Team. Furthermore, competitive analysis has also been conducted for AirAsia in this report along with marketing mix 7 Ps and SWOT analysis. AirAsia is an experienced brand in the airline industry. In contrast to this, Jet Star Airways has more types of planes that are provided to its customers that includes A320, Bombardier Q300, A321 and Boeing 787 Dream Liner; whereas AirAsia offers only two types of planes to its customers, which are A330 and A320. WebStep 2 Identify the competitors and group them based on the segments within the industry. 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). Its going to analyze the internal and external factors impacting the worlds leading low-cost airline. Market segmentation is the concept where the potential target customers for any organisation are divided into groups or segments based on various characteristics. The competition will be fiercer if there is high number of competitor, this is a normal phenomenon. 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. Step 3- Assess the Porter Five Forces in relation to the industry and assess which forces are strong and which forces are weak. However, AirAsia provides service packages to its customers at a very reasonable charge that is affordable to the customers in comparison to the competitors in the airline industries.