Introduction

It began as a government-owned Malaysian Airline Company before Tony Fernandes privately owned it. The reason behind being individualistic held it was debt driven. He, Fernandes, came up with the introduction of the no-frills in the industry. He also introduced low-cost carrier business strategy in which it was the first time in Asia that to happen. Moreover, it was an enormous success ever to happen. His acts have positive impacts on the growing industries because it inspired more flight companies in Asia and assisted it in acquiring the low-cost carrier strategy.

Even though the low-cost fares worked in favor of the Air-Asian Airline and it was straightforward for it to compete into the market. But in the process, the business became hard because other Airline companies, especially for Malaysia, had adopted the same strategy of offering low-cost transportation to their customers. For this strategy to be successful and beneficial to the Airlines which have adopted it, there are some factors which must be put into consideration. For instance, the prices of the fuels, the charges of the services offered during the flight together with the rewards for customer’s services given out. By doing so, the services to be provided will be improved hence quality enhanced.

In addition, the Asian Airline came up with additional services specifically designed for the customers to better its competitions and have more customers. Such services included flight bookings which were online based, registration of tickets using the technology means that the mobile phones. Furthermore, it increased the seats for the regular attendance customers associated with the same cost but of different class, high class. This lead to the increment of the number of passengers which was a significant thing as it eased in achieving its primary goal of getting huge profits. However, there are variables which were not considered, for instance, cost of operation which dragged its development because it was too high with minimal returns. On the other hand, the unexpected changes in fuel prices for the Air-Asia Airline Company led to reduced profits thus a threat towards various departments.

Despite the Malaysian Airline Company prioritizing the use of low-cost strategy to free seats in flights, the business did not go into there as the competition was very high due to the presence ofother cheaper airline flights. This competition was unfair as it was not fruitful thereby causing wars in fair prices due to surged oil costs. These competitions deteriorated the market for flights causing a decrement in profits and collapsing of the projects which were to take place.

For the problems to be reduced, the Air-Asia Company should employ its best strategy to ensure a safer place and a competitive environment for future working which will help in reducing the operating costs at a great extent. With the low-cost approach being employed and considered to be the most efficient way of providing solutions, more customers will be attracted thus a guarantee in profit making. However, setting up the less costly value-added services like the customer services will increase the profits. Another approach is economizing. It will include the pilots trying to cut the fuel consumption rate as well as ensuring more significant intervals in aircraft maintenance.

I would recommend the Air-Asia flight company to cut down the costs which are adding burden to themselves in the deliverance of the services to their customers. It will aid in understanding and evaluating their problems thus providing solutions for them.It will help in dropping needless expenditure on the flights. By so doing, they will be in a position to save many funds which can be used for other activities without tampering with the satisfaction of their customer. The best way to go about the cost cut down is by creating new levels of customer service. Having high-quality services to all the customers is a good thing, but there might be other customers who require better facilities and are willing to pay for them. It is an excellent opportunity for the company to introduce high-class services at a higher cost for flexible customers.

However, while introducing this strategy to the domestic flights which network along short distances the company must be careful. Just like any other new strategy in a business, it will take time to be appreciated, and so the company should consider introducing it bit by bit. Also, maintaining simplicity in customer attendance in the domestic flights will help to avoid unnecessary spending, and this will increase the profits and also help the AirAsia Company to remain relevant in the competition.

References

Stephen, K.O (2018) the University of Hong Kong: Asia Case Research Center

AirAsia.com (2008) “Promotion of the Month,” http://www.airasia.com/nl/nl080506-en.htm

 
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