Past-year October 2009

Case Study : AIRASIA - NOW EVERYONE CAN FLY

Question 1

Identify five (5) of competitive advantages used by AirAsia.

1. Launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed.
2. Undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1 (US $0.27).
3. AirAsia operates scheduled domestic and international flights and is Asia's largest low fare.
4. AirAsia pioneered low cost travelling in Asia.
5. The first airline in the region to implement fully ticketless travel and unassigned seats.

Question 2

Which of the Porter's generic strategies were applied by AirAsia in the case study and
explain with examples.

Cost leadership is the Porter's generic strategies that were applied by AirAsia. It is because, AirAsia is the one and only in Malaysia that proposed with a low-cost producer that allows the company to give a lower prices to customer. Besides that, others airline approach with a higher costs that some of customer cannot afford.

Question 3

Based on Porter's Five Force Model, analyze AirAsia's buyer power and supplier power.

Buyer Power
Air Asia assessed by analyzing the ability of buyers to directly impact the price to pay for an item. As an example Air Asia giving a low cost traveling to their customers and also operate s with the world's lowest unit cost of US$0.023(ASK). Usually airline industry has high buyer power because of customer have many choices.

Supplier Power
Air Asia assessed by the suppliers' ability to directly impact the price they are charging for suppliers. For example Air Asia is currently the main customer of the Airbus A320. The company has place an order of 175 units of the same plane to service its route network by connecting all the existing cities in the region and expending further. Usually airline industry has high supplier power has an there are limited plane and engine manufactures to choose from.