An Internal and External Analysis of Air Asia X

1040 words | 4 page(s)

AirAsia “established itself as Asia’s most successful low-cost airline” by the year 2009 (Grant, p. 558) and through a review of the case study entitled “AirAsia: The World’s Lowest Cost Airline,” it is possible to provide both an internal and external analysis of the company and determine its development statement. The growth of AirAsia is closely linked with the amount of entrepreneurial spirit put into the company by a man named Tony Fernandes, a man who decided to try to start an airline while sitting in a pub in London (Grant, p. 559).

It may best be said that AirAsia’s development statement was one of renewal. Fernandes took a failing governmental airline, bought it out, and was able to, through a strategy of cost effectiveness, turn the airline around into one of the most cost effective airlines in the world, with airfares as low as 19 USD (AirAsia, 2013).

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Externally, the company presents as a glowing picture of health, with “79 aircraft and 11.8 million passenger journeys…cover(ing) 10 Southeast Asian countries. Not only was it experiencing high levels of success, but it was also able to provide the lowest costs per available seat kilometer, below all of its competitors. They partner with the most renowned maintenance providers worldwide, and comply with all worldwide airline regulations (Grant, p. 560). They offer turnaround times of 25 minutes on all their flights, far surpassing any other carrier (Grant, p. 560). Even better, the fees they offer are for the baseline, no frills services, though guests of the airline, those who are flying, are welcome to upgrade items of their choosing, tacking on various amenities for nominal fees, such as hot meals, different seating options, entertainment, and duty free merchandise (AirAsia, 2013).

Externally, the company has several different things going for it. First, they opted to utilize only one type of aircraft, as opposed to some airlines who go for multiple makes and models (Grant, p. 562). This type of specialization ensures that all maintenance personnel only have to have information on one type of airplane, allowing their training to be that much more specialized, and ensuring that there are no issues as a result of an individual placing a coupling on wrong because they forget that they are working on an Airbus and not a Boeing. These airplanes all offer the same class, providing the availability of having more seats, not less, and they opted to forego boarding via aerobridges in order to pass along the savings to their customers as opposed to adding on to the ticket prices in order to provide this service (Grant, p. 562). The company engages in direct sales through its website and call center, as opposed to working with, and having to pay fees for, travel agents, which allowed them to decrease the cost to the customer on that front as well (Grant, p. 562). One of the other ways that they have worked to reduce the cost to their guests is through the use of outsourcing, with their information technology (IT) department, and much of their maintenance, being outsourced to companies who specialize solely in those tasks, negating the need for specialized training in those areas, and pushing along those savings to their clients as well (Grant, 9. 562).

Looking internally, the management style of those who are responsible for AirAsia is one similar to that of Fernandes original style, one of informality, and of a friendly and casual nature, and the group is proud to be of a strong team oriented management style, concerned only about the quality of the service they provide, that everything runs smoothly and efficiently, and that all customers are happy (Grant, p. 561). The company works to promote enthusiasm and commitment in staff members and are about creating a healthy work environment, with social activities and outings to ensure that life is not all work and no play, and that team members are all able to interact with each other in a healthy and beneficial manner (Grant, p. 562). AirAsia strives to maintain a transparency in all of its business dealings, and works to nurture a culture within the company that is not only non-discriminatory, but allows for all promotions to be solely merit based (Grant, p. 562). In other words, if an individual is able to prove that they are willing to go the distance for the company, demonstrate exceptional skills, and are able to provide new and innovative ideas to the company, the individual will be promoted. Nepotism is not present within this company. All employees are offered opportunities for advancement, regardless of their beliefs, level of education, race, religion, gender, age, or nationality (Grant, p. 562). The company works to emphasize a high level and quality of customer service throughout all of their operations, and employees from different locations are allowed to move about through the different offices present in order to foster higher levels of inter-cooperation (Grant, p. 562).

The end result of their endeavors is that AirAsia has managed to, successfully, take a failing airline, purchase it, and turn it around into one of the most successful budget airlines in the world, with cost efficiency unlike any other, a continual rate of growth, a level of brand awareness that is not seen by many of the other airlines, and as always, award winning customer service. Through an understanding of what makes an airline great, and a willingness to think outside of the traditional airline box, coupled with an easy familiarity and a desire to see their employees succeed, AirAsia has truly exceeded all expectations and flourished. A possible merger between AirAsia and AirAsia X may occur in the future, though only time will tell, as AirAsia X has many policies and practices that were in place similar to those that were present before Fernandes bought out AirAsia, and it is clear that AirAsia X would need a complete overhaul by AirAsia if it was hoping to do as well as Fernandes did in his first endeavor (Grant, p. 567).

  • Airasia.com. 2013. AirAsia | Cheap flights to Bangkok, Singapore, Hong Kong, Siem Reap, Taipei | Book online now. Available at: http://www.airasia.com/
  • Airasia.com. n.d.. AirAsia | Seat options | Choose the seat that you want. [online] Available at: http://www.airasia.com
  • Grant, R. 2009. Case Study 9: AirAsia: The World’s Lowest-Cost Airline. pp. 559-567.

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