Air Asia Current Issues

The leading low fare airline in the Asia – AirAsia has been expanding rapidly since 2001, to become an award winning and the largest low cost carrier in Asia. With a fleet of 72 aircrafts, AirAsia flies to over 61 domestic and international destinations with 108 routes, and operates over 400 flights daily from hubs located in Malaysia, Thailand and Indonesia. To date, AirAsia has flown over 55 million guests across the region and continues to spread its wings to create more extensive route network through its associate companies, Thai AirAsia and Indonesia AirAsia.

Established on 12 December 2001, AirAsia has been such a big phenomenon in airline industry especially in Asia. AirAsia with the ordinary symbol but with strong brand, “now everyone can fly” nowadays has been phenomena in Airlines industry. AirAsia is one of the airline companies who more focused with the strategy how to reduce inefficiency and make it low possible fare in the world. With the cost-efficiency, low complexity and profitability are always the cornerstones of building a strong business.

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Furthermore, according to Dawna and Blaise (2005), the most successful carriers came to dominate their hub markets allowing them to exert greater control over pricing and capacity[7]. Based on this statement, the current issues in AirAsia Company are how to achieve to be a lowest carrier in the world in Airplane industry. Regarding to this issues, Dawna and Blaise said, the most successful carrier in the airline industry allowing them to exert greater control over pricing and capacity. In addition, according to Haddad (2003), the key to their current success has been to cut costs to the bone through lower salaries and reduced overhead [8].

In airline industry nowadays, customer not only looks at the service that airline company offered to them, but the price of the airline ticket also can influencing the customer to use an airline company. AirAsia Company can compete with the other competitor in the airline industry if they can cut costs through lower salaries and reduced overhead. Moreover, according to Daniel Chan (2000), these moves but a very small price to pay for continued and greater access to the world’s most prospective air travel markets[9]. The very small price are offered to the customer also can give biggest affect in this business.

As all airlines in low cost carrier (LCC) industry compete on costs, AirAsia needs to offer the lowest possible fare in order to win the competition in the current markets served as well as new markets[10]. In conclusion, the current issues in AirAsia Company are more focused in the competition of the cost among an airplane industry. AirAsia as an industry company which is more focusing in the low cost carrier airplane industry need to consider to make the lowest possible cost to compete with the other competitors in their airplane industry.

To achieve the lowest possible cost, AirAsia Company has some strategy to achieve it. [8] Haddad, C. (2003), “Catch him if you can”, Business Week, September 15, pp. 93-4 [9] Chan, D. (2000). “Air wars in Asia: competitive and collaborative strategies and tactics in action. ” Emerald management and development 19: 483. [10] Kho, C. , S. H. Aruan, et al. (2005). AirAsia- Strategic IT Initiative. Faculty of Economics and Commerce University of Melbourne: 3.