san mig (qms)

Colegio de San Juan de Letran151 Muralla St., Intramuros, Manila

College of Business Administration and Accountancy Bachelor of

Science in Business Administration

Strategic Management Paper Presented to

the

College of Business Administration and Accountancy Of

Colegio de San Juan de Letran Intramuros,

Manila

In Partial fulfillment of the Requirements For the

degree

Bachelor of Science in Business Administration Major in

Marketing Management

Beronas, Diana Mae C.

Catapang, Ronald C.

Guevara, Tiffany MK4A

Colgeio de San Juan de LetranCOLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY 2

I. EXECUTIVE SUMMARY

INTRODUCTION

1.1 Company Background

AirAsia Berhad is a Malaysian low-cost airline. It operates scheduled

domestic and international flights and is Asia's largest low-fare, no-frills

airline. AirAsia is a pioneer of low- cost flights in Asia and was also the

first airline in the region to implement fully ticketless travel. Its main

base is the Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur

International Airport (KLIA). In 2010 AirAsia won the Skytrax World's best

low-cost airline award. Air Asia budget with no-frills airline is introduced

by Tony Fernandes with the tagline “Now everybody can fly” and the

man himself is also the founder of Tune Group. No fuel surcharge and

no admin fee. However, ticket fare and airport tax need to be paid.

AirAsia group operates scheduled domestic and international flights to 78

destinations spanning 25 countries.

From its beginnings with just two jets and debt of $11 million in 2001,

AirAsia has grown to become a profitable short-haul budget carrier in

Asia with a fleet of close to 200 aircraft. The group operates mainly in

Asia-Pacific region, including operations in Indonesia, the Philippines and


Thailand. AirAsia recently launched AirAsia India in an alliance with Tata

Group, plying India's domestic market. It is also seeking a re-entry into

Japan in a tie-up with Rakuten Japan, after its first joint venture with All

Nippon Airways broke up in 2013.

AirAsia is 23% owned by Tune Air, a private company controlled by

Group CEO Tony Fernandes, a former executive of music producer Time

Warner. Inspired by the success of its peer Ryanair in Europe, he runs

the airline strictly adhering to the low-cost and no-frills business model,

and made flying affordable to many in Asia. AirAsia's success has led to

the burgeoning of budget carriers in the region, many of which are

owned by full-service airline companies. The group recently introduced

premium services targeting business travellers and parcel delivery

services to boost its ancillary income. Its listed associate, AirAsia X, is a

long- haul budget carrier, flying all over Asia.

1.2 Paper Design and Methodology

This study for Airasia Philippines is a qualitative research that attempts to

accumulate existing information and data regarding the Airasia and its

company. Trochim stated that "a key reason for doing qualitative research

is to investigate and become more experienced with a particular


phenomenon of the researcher's interest in order to deliver a detailed

description." This study wishes to know the status of ariasia Inc. after an

incident about one of the airplane crash the Airbus A320-200 flight code

QZ8501 and the intense competition in the market, can airasia go head to

head with cebu pacific and other airlines in the Philippines ? The

researcher decided to use the qualitative approach in order to provide

accurate data answering the problems that we gathered.

The research would utilize both descriptive and exploratory research

methods in the conduct of the study. Descriptive research is a method

used to obtain information relating to the current status of an issue or

phenomenon to describe "what exists" within the variables or conditions of

the situation. The two most common types of descriptive research

tools are surveys and observation (Key). The researcher would make

use. Exploratory research, on the other hand, is often utilized in order to

yield information to explain problems which are not yet clearly defined or

the real scope is still unclear. It allows the researcher to familiarize

himself/herself with the concepts of the problem under study to

facilitate development of insights and hypotheses (Exploratory Research).

The researcher makes use of existing literature in order to verify her

observations and come up with preliminary ideas regarding the research

problem.


1.2 Scope and Delimitation

The study only focus on the Airasia Philippines and not the entire Airasia

Company, it will only deal with the Airline industry of Airasia Philippines

particularly in the competition in the domestic flights. The study will find

the Marketability and Brand Equity of Airasia Inc.,The proponents want to

know the insights and the possible strategy that can be used by Airasia

Philippines to compete against its competitors.-NOT CONSISTENT WITH

THE ONE UNDERLINED ABOVE.

II. External Analysis

General Note: Whatever you write in this section, it should have something

to do with the domestic and travel airline industry so that you can relate it to

your paper.

a.Economic Forces

“The Philippines is moving in a different direction, casting off its long-held

reputation as the “Sick Man of Asia” – Larano, Chris

THRIVING ECONOMY GROWTH STATUS AND TRENDS


Reading the article of Larano titled As Economy Soars, Philippines No

Longer ‘Sick Man of Asia’, this supports the fact that Philippines now have a

thriving economy, which is a very impactful factor in entering a business.

According to the article, Philippines had a 6.4% growth of the economy on

2014 in the second quarter mainly because of business-related reasons.

This is very great news not only for the country but also to other business,

which gives them an open door of opportunity for investment. All

businesses, even Airasia, want to invest their assets on succeeding

countries, for this will bring them profits and success, and stay on the game.

Also, with the rising economy, Airasia must cope with the escalating trends

of the country which will makes the game tougher and difficult for this will

attract more competitors and subtle changes.

CONSUMPTION

The consumption power of the market is a very great factor to consider.

Even though the company has a great strategy in all aspect, but if no one,

not even your market, can buy the product, it will never be successful.

According to the article (Lanzon, Chris, 2014), the consumption of the

people on Philippines increased 5.3%, due to the remittances from the OFW

which grew 14% (in local currency terms). This shows that the Filipinos are

now capable in consuming not only local products but international/imported

products as well. With the great increase of this force, many businesses are

attracted to establish and invest here in the country for the high buying

power of the market.


Inflation

Inflation is one of the economic forces, for if prices of fuel and other related

inputs increases, Airasia will also experience rising operational costs. In the

end, this could signal higher cost margin, lower profit. Also, it will result to

an increase of the price of the services and will result to a decrease of

number of customers. Quoting from the same article of Larano, Chris,

“Rising inflation and higher rates could dent consumption in months ahead

(some economist said)”. Although the consumption and spending rate of

the consumers in increasing, rising inflation will always affect the decision of

the consumers to purchase and it may affect the prices of final products if

the inflation hit the prices of the raw materials; oil, for example and relating

to Airasia.

Peso devaluation

Part of the raw materials used in the transportation services is sourced from

other countries like the part, services and repair. The continuous increase in

the economy of the Philippines can decrease the cost of these raw

materials. Hence, additional increase in profit for the company.

Exchange Rates


The exchange rates will affect the profitability of Airasia, it can help them to

increase or decrease on their profit margin. The economy of the Philippines

is increasing and the value of the peso is increasing against dollar it will

result to an increase in profit for Airasia Philippines.

Source:

Larano, Chris (2014, August 28). As Economy Soars, Philippines No Longer

'Sick Man of Asia' Retrieved January 2, 2015, from

http://www.wsj.com/articles/philippines-economy-picks-up-pace-in-second-

quarter-1409197042

-

b. Political Forces

PHILIPPINE CONSTITUTION SECTION 10, ARTICLE XII[1]

On the said article, the state forbids foreign companies to fully-owned

company which operates here in the Philippines. With this being said,

Airasia Inc. is owned by Mr. Fernandez, a Malay business tycoon and group

of Filipino businessmen. With cultural difference of the owners, this may

have different political and management insights and preferences, which

can lead to misunderstanding and collision of minds. Mr. Tony Fernandez,

though technically is the founder and owner of AirAsia, he can’t run the

AirAsia Inc. individually for as part of the constitution, he must abide with the

Philippine laws and coordinate with his Filipino partners in every matter.

Source:


[1] THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES

– ARTICLE XII | Official Gazette of the Republic of the Philippines. (n.d.).

Retrieved January 19, 2015, from http://www.gov.ph/constitutions/the-1987-

constitution-of-the-republic-of-the-philippines/the-1987-constitution-of-the-

republic-of-the-philippines-article-xii/

NEW RULES AND REGULATION OF THE STATE

The new rules and regulations that the government will impose due to some

circumstances that compelled the government to create a new constitution

or a decree to cope with the situation. A sample of this change is the new

imposed rule of BIR regarding tax exemptions in international line [2], under

the Republic Act No. 10378 signed by his Excellency on 2013. This made

the airlines that have international flights to alter their prices and strategy in

related to the new rule. These kind of new rules and laws could really affect

the whole operation, plan and function of the Airasia Inc. and can lead to

new set rules and policies which may create a minimal or huge change on

Airasia Inc.’s entire plan to survive the current situation, and eventually be

useful for longer time.

[2] BIR issues new rule on tax exemption of airlines. (2013, September 27).

Retrieved January 19, 2015, from

http://www.philstar.com/business/2013/09/27/1238492/bir-issues-new-rule-

tax-exemption-airlines


Domestic and International Political & Government Stability

Unsettled issues like the PDAF [3], the Philippines can have a bad reputation

and unstable government due to this issue that still remain unresolved,

investors might think twice to invest due to these issues, in spite of the

thriving status of the economy. This can result to low profitability of the

country and can lead to inflation and a declined in the economy. The

government will not be strong and one due to this conflict between the

government officials and the citizen of the Philippines demanding for justice

and result in the issue. Because of this the government will lack on the

guidance and on the maintenance on the industries and can lead to rally,

strike and outbreak. Airline companies like Airasia can’t afford to have these

commotions for this may have an effect on operations and decrease in the

number of customer.

[3] Campbell, C. (2013, September 11). Philippines’ ‘Pork Barrel’ Graft

Probe Has Lawmakers Squealing | TIME.com. Retrieved January 2, 2015,

from http://world.time.com/2013/09/11/philippines-pork-barrel-graft-probe-

has-lawmakers-squealing/

c. Socio- Cultural

New Media is Emerging (Ex. how is this related to your strama?)

According to an article with the same title by S. Blog, new media is

emerging in this generation, with a 15% Internet penetration and a 50%


take-up rate for mobile telephony. Anyone now is dependent to our mobile

phones and use it to several tasks like internet surfing, messaging,

calendar, alarm clock, even as navigator and planner. It is like the remote

control of our life. As I quote from the article, “The mobile therefore a

technology of transformation, a banality has a significant role to play in this

context; it provides a reassurance in the context of an increasing complex

and incomprehensible world”[3]. The quote says that transformation is

inevitable because of the presence of banality. The world doesn’t want

boring and always looks for new things, and with mobile as a device for

transforming and introducing “new” things. Everyone is now hooked with

their mobiles and can’t make any action without their mobiles in their hands.

The culture now is relied to these kinds of technologies that give us more

access and ease. Also, customization is a trend now where customers may

be in charge on how and what will the product released or produced and

design it personally just for their use and advantage. The new media also

provide a new space for cultural participation and interaction, and the

development and exploration of different personas. This significantly

changes social relationships, and allows new spheres for sociality to

emerge. More and more people interaction thru social media sites, even

though they aren’t related. Freedom of expression is freely expressed now

through tweets, blogs, photos, status, and sometimes is abused. Instead of

speaking their reactions, they’ll post their feelings toward something, tweet

their concerns and comments, and maybe make hashtags as a support for

something. But either way, new media is a window to communicate to wider


market and build relationship, share and hear thoughts and the voices of

each people and adapt/learn cultures of other ones. With new media,

diversification will be easily spread and communication happen faster.

Source:

[3] Blog, S. (2007, February 7). Cultural Transformations through New

Media in the Philippines. Retrieved January 3, 2015, from

http://snurb.info/node/690

Urge to Travel

As an personal observation, when you ask people now between to travel or

to have a car, most people with no hesitation to grab the travel package.

The increase of the fondness for travelling and actual doing it starts when

flying became more convenient. It shows that most Filipinos are price-

conscious and price-based consumers. But the great this with the society

now is that they are now capable and willing to spend their moneys for the

leisure of travelling to different countries.

d. Technological

Technological-based Weather Hazard Tool

Project NOAH, the Nationwide Operational Assessment of Hazards, is a

technology-based system intended to ascertain when and where natural

disasters strike. Philippine Geologist Carlos Primo David said, “we refuse to

believe that we cannot predict rainfall” when asked about his thoughts


towatd the phrase weather weather lang which is somehow like the phrase

que sera sera (whatever will be, will be). The idea behind this project of the

DOST is to change the prevailing “weather whether” attitude in this

archipelago, which is susceptible to heavy rains with deadly floods,

earthquakes, tsunamis and volcanic eruptions.[4] The system aims to break

the culture of the Filipinos on being ignorant in terms of knowing the

weather, for us to be more prepared and avoid the worst thing might happen

if we are not prepared. Connecting this on the company, predicting the

weather with high percent of accuracy will be a great help for airlines.

Airlines may cancel flight earlier and avoid any inevitable disasters that

were resulted by bad weather. The airlines will now have safer flights for

they know when and where the bad weather occur and they may alter their

routes or schedule for it, all for the safety of the customers and staffs.

Source:

[4] Orendain, S. (2012, September 12). Philippines Developing New

Technology-based Weather Hazard Tool. Retrieved January 2, 2015, from

http://www.voanews.com/content/philippines-developing-new-technology-

based-weather-hazard-tool/1513634.html

Mobile Access

As part of the new techie culture, companies adapt the evolving culture and

now also connected to mobile and internet. Mobile accesses of the

companies are more effective and efficient that any advertisements and


customer feedback forms that is traditional. Customers now are more

technology-savvy in terms of their mobiles and they give more trust to the

things they see and receive thru mobiles. Airline companies now use the

mobile as a window to connect with their customers thru applications of app

where they can check flights, see promos, update their purchase, verify the

destination of the airplane and such things.

Adaptation of New Technology for Airplanes

Airbus has a concept design for their future innovation for airplanes. Some

of their ideas of their innovation is a holographic technology (holographic

sceen), energy harvesting (like solar panel for chairs-collecting body heat

and converted to energy), Ecological Materials (usage of plant fibers) and

many else[5]. If ever this idea comes to life, acquiring this beauty makes the

airline not only technologically-updated but ecological-friendly too, which

attracts more customers. Not only attraction but expanding the usage and

possibilities of an airplane will give the airlines convenience and efficiency.

[5] Future Technologies | Airbus, a leading aircraft manufacturer. (n.d.).

Retrieved January 25, 2015, from http://www.airbus.com/innovation/future-

by-airbus/concept-planes/the-airbus-concept-cabin/future-technologies/

e. Environmental

Cost of Resources


Airasia use fuel for their airplanes to function and to provide services to their

customers by being their transportation in different destinations. Airasia

should plan on the conservation of their energy like fuel and to help in

decreasing of the cost of resources such as fuel. But with the news about

China will also now produce crude oil, there is a possibility of decrease in

price in fuels because of the surplus of crude oil and alternative of supplier.

Carbon Emission when flying

Airplanes emit carbon dioxide when flying and it is contributing to global

warming. Airasia can have a bad reputation and a bad image as an industry

contributing to the global warming. Being an ethical company, one must

also be environmental friendly and lessen the usage of airplanes and fuels

that causes carbon emission that may translated to air pollution and global

warming. Air pollution, if omitted have corresponding punishment and fine[6],

according to our constitution.

[6] PHILIPPINE ENVIRONMENT LAWS - REPUBLIC ACT NO. 3931, AN

ACT CREATING THE NATIONAL WATER AND AIR POLLUTION

CONTROL COMMISSION - CHAN ROBLES VIRTUAL LAW LIBRARY.

(n.d.). Retrieved January 25, 2015, from

http://www.chanrobles.com/RA3931.htm#.VMVfx9KUdSg

Unpredictable Weather and Climate change

The unpredictable bad weather and climate change may results to typhoon

and other calamities can affect the operation of the Airasia in the Philippines


and to other countries, for it will result to delay and cancellation of flights

and a change in the operation schedule that can lead to an expense to the

company. Calamites affect the flights of the airlines, mostly if the affected

area is where their destination located. It shows decrease customers, sales

and profit. Not only that, with it being unpredictable, the safety of flying and

the customers and staffs carrying it has a small percentage of

unpredictability.

III. Industry Analysis

3.1 Industry Analysis

Air travel remains a large and growing industry,it Facilitates economic

growth, world trade,international investment and tourism and is therefore

central to the globalization. The travel for both business and leisure

purposes grew strongly worldwide and the Dynamic growth is centered on

the Asia/Pacific region, where fast-growing trade and investment are

coupled with rising domestic prosperity. Air travel for the region has been

rising by up to 9% a year and is forecast to continue to grow rapidly. In 2010

the Growth in air travel rose to 10%,it open to new revenue streams and

new channels to market. Technology has become a competitive advantage

for airline company’s and it opting for more customer self-service.

The Industry Today

1952: Civil Aeronautics Act was passed by the Philippine

Government


1973: Philippine Airlines (PAL) was granted had a virtual monopoly

1978: PAL was given a new franchise but with a provision Pre-

Liberlization

1995: Liberalization of the Airline Industry

Established domestic and international civil aviation

liberalization policy

Restrictions on routes flight frequencies and fares were

removed

Encouraged at least two operators in any route

Markets with at least two operators are deregulated with

regard to fare

1999: PAL’s market share decreased significantly

Prior to the second liberalization of the Philippine airline industry in 1995,

state-owned Philippine Airlines enjoyed virtual monopoly with the country's

adopted policy of "one country, one airline" imposed during President

Ferdinand Marcos' administration. The government's subsidy in the form of

mail freight payments supported the company's massive expansion program

in the 1960s. During the 1970s, the government ordered the absorption by

Philippine Air Lines, Inc. of two other privately owned airlines; Air Manila

and Filipinas Orient Airways - to form Philippine Airlines as the single flag

carrier of the Republic of the Philippines.


Commercial Airlines

The skills and experience needed by workers in air transportation differ by

occupation. Some jobs may be entered directly from high school, while

others require extensive specialized training. Most airline positions involve

extensive customer service contact requiring strong interpersonal and

communication skills. Mechanics and pilots require extensive specialized

formal training. Most skills for many other air transportation occupations

can be learned on the job or through company-sponsored training.


The transportation industry is global in nature and its growth has been

spurred by the increased adoption of new technologies that allow time-

specific delivery and electronic tracking of cargo. (Hoover's Online)

Employment in transportation and material moving occupations is projected

to grow by 1.1 million between 2004 and 2014. Two-fifths of new jobs

should be for truck drivers and driver/sales workers. (U.S. Bureau of Labor

Statistics, 2006-07 Career Guide to Industries)

Transportation and material moving occupations, which include laborers

and hand freight, stock and material movers are projected to increase by

more than 248,000 new jobs between 2004 and 2014. (U.S. Bureau of

Labor Statistics, 2006-07 Career Guide to Industries)

The recent statistics provided by the www.researchandmarkets.com the

global road freight transportation services industry experienced good growth

over the last five years and is expected to continue that momentum to reach

approximately US $2,021 billion in 2017. Only prove that the Transportation

Services Industry is profitable and growing business sector.

In order to boost the tourism industry of the country, The Department of

Tourism coined the idea of developing the Philippines as a Tourist

Destination. The recent campaign made by Department of Tourism was “It’s

More Fun in The Philippines” Campaign. The idea emerged from the fact

that Filipinos are known for their hospitality. Hence, government wants to

promote the country with its undying paradise.


source: http://en.wikipedia.org/wiki/List_of_airlines_of_the_Philippines

3.2 Marketing Mix

3.2.1 Product and Market Share

Market Share

Although, the Philippines lists many registered airline companies

mostly chartered, there are mainly four competing commercial airline

groups with scheduled flights serving the domestic market. The top

leading contenders are Cebu Pacific-Tigerair Philippines alliance and

Philippine Airlines-PAL Express group. With the recent acquisition by

Cebu Pacific of Tigerair Philippines, the airline has effectively

controlled more than half of the domestic market in the Philippines

followed by Philippine Airlines group.

They are followed by the struggling AirAsia Zest group which is the

merger of AirAsia Philippines and the former Zest Airways. In 2013,

SkyJet Airlines, a new airline company launched its domestic

commercial flights to leisure island destinations such as Batanes,


Palawan, Baler, Balesin and Boracay. SkyJet is the first Boutique

Airline Company in the Philippines focusing on the niche market in

island leisure destinations. Meanwhile, Operations of Spirit of Manila

Airlines which was launched few years back has been halted

temporarily by the Philippine aviation authorities.

Order by market share in the domestic market:

1 Cebu Pacific(50.36%) [2]

2 PAL Express (21.39%)

3 Philippine Airlines (12.69%)

4 AirAsia Zest (9.78%)

5 Tigerair Philippines (4.77%)

(putting this in a graphical format will give a better presentation)

Other locally registered airlines operate either domestic charter

services or cargo services only.

source: http://en.wikipedia.org/wiki/List_of_airlines_of_the_Philippines

Market Share

http://en.wikipedia.org/wiki/List_of_airlines_of_the_Philippines


•Most number of passengers carried

•Third most Market share among its competitors.

•Most extensive network : 59 routes, 34 destinations, 1,977 weekly

flights

3.2.2 Price

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eCagayan de Oro P 2,287 P

4,400P 2,478 - *P3,789 P 5,156

Cebu P 1,835 P 5, 230

P 1,299 P 1,462 *P 2,998 P 5,156

Davao P 1,685 P 5, 230

P 4,209 P 1,785 P 3,365 P6,258

Kalibo-Boracay P 1,370 P 4,546

P 1,399 P 1,451 - P4,258

Puerto Princesa P 2,700 P 4,689

P 3,209 - *P 4,289 P5,987

Tacloban P 1,685 P 4,689

P 2,789 P 1,998 *P 4,189 P5,258

Tagbilaran P 1,985 P 4,719

P 2,236 P 2,453 *P 4,489 P6,258

- Prices may change based on what month

- Air Asia has low fare and Premium Flex


- Price is always from Manila to Destination above.

- Equivalent to 1 adult

*PAL Economy Class prices

3.2.3 Promotion

3.2.4 Distribution Channels

3.2.5 Customers

The customers of the Airlines are the Business Travellers and the

Leisure travellers. The Business travellers are mostly like to pay the

Premium fare that is more expensive, while the Leisure travellers

prefer a less price a much lower price. (CONTINUE)

3.2.6 Target Market


3.2.7 Competition


3.2.7.1. Rivalry among competitors

Rivalry is high because Air Asia is an airline that offers a Good travel

experience with a low price in which other Airlines such as Tiger Air,

Cebu Pacific are does this too. It has also a hard competition in the

market because other airline companies offer greater services and

with a great price to compete with each other promotion.

3.2.7.2 Potential Entry among Partners

The potential entry among partners is low. There is a need for a high

capital in order to create an airline and with the government

regulation and restrictions making it hard for a new entry of

competitors. Also their is a lot of budget needed for the marketing

and advertisement of the new business since the new company will

compete against the well established airline companies in the

Philippines and it is much prefer by the customers because they

created a trust and loyalty towards these airlines. There is also a

need for a skilled pilot, engineers and technicians it is because of the

news and tragedy that happen to the other airline companies, so the

company need those skilled workers to be able to secure the safety

of their customers.


3.2.7.3 Potential Development of Substitute Product

The potential threat of substitute product is moderate because there

are other mode of transportation that the customer can choose aside

from travelling through a plane there are bus, ferry, train that the

customer can use. Aside from that there are other airlines companies

that offer the same services, but it will take a much more time for the

customers to arrive to their destinations and riding an airplane can

reduce the travel time of the customers.

3.2.7.4 Bargaining Power of Consumer

The power of the consumers toward the price and the product is

high. It is because there is also other Company who offers the same

services as their company but the only edge of the Air Asia is they

have flight that the other Airlines don’t have such as Kota Kinabalu.

The customers are also sensitive with the price and any increase

with the price the customers might look for another airline that offers

the same services but with a lower price.

3.2.7.5 Bargaining Power of Suppliers

The bargaining power of the suppliers is high. Since there are only

two major aircraft manufacturer in the world the Boeing and Airbus,


Airasia has no choice but to deal with these manufacturers because

they will not have any plane or maintenance without these

manufacturers.

3.3 Operation

3.3.1 Process

Airport Process : Departure to Arrival

1st - Entry Check

2nd - Airline Check

3rd - Pay Departure Tax

4th - Immigration Clearance

5th - Security Check

6th - Select a lounge

7th - Departure gate Check

8th - Passport Boarding Check

2. Capacity

Rank Airline Totals Seats

1 Cebu Pacific 258,120

2 Philippine Airlines 220,302


3 PAL Express 103,102

4 Air Asia (Together with Air Asia Zest)

77,232

5 Cathay Pacific Airways 29,170

6 Asiana Airlines 17,624

7 Korean Air Lines 12,996

8 Singapore Airlines 12,600

9 Tiger Air 11,436

3. Quality

In terms of quality the The Civil Aeronautics Board (CAB) is the

agency of the government mandated to regulate the economic

aspect of air transportation, and shall have the general supervision,

control and jurisdiction over air carriers, general sales agents, cargo

sales agents, and air freight forwarders as well as their

property, property rights, equipment, facilities, and franchise (R.A.

No. 776, as amended by P.D. 1462). CAB is an attached agency of

the Department of Transportation and Communications (DOTC). In

the exercise of its regulatory powers, it is authorized to issue

Certificates of Public Convenience and Necessity (CPCN) to

domestic carriers, Foreign Air Carrier's Permit (FACP) to foreign

carriers, and Letters of Authority to airfreight forwarders, general

sales agents, cargo sales agents who are fit, willing, and able to


perform services as required by public convenience and necessity.

CAB likewise performs quasi-judicial functions.

Passenger Bill of Rights

JOINT DOTC-DTI ADMINISTRATIVE ORDER NO. 01

Series of 2012

SUBJECT: PROVIDING FOR A BILL OF RIGHTS FOR AIR

PASSENGERS AND CAREER OBLIGATIONS

WHEREAS, pursuant to the Republic Act No. 776, otherwise known

as the Civil Aeronautics Act of the Philippines, the Department of

Transportation and Communications (DOTC), through the Civil

Aeronautics Board (CAB), is mandated by law to regulate the

economic aspect of aviation, and develop and promote the air

potential of the Philippines, with due regard to public interest and

convenience;

WHEREAS, pursuant to the Republic Act No. 7394, otherwise known

as the Consumer Act of the Philippines, the Department of Trade and

Industry (DTI) is the agency mandated to protect the consumers

against deceptive, unfair, and unconscionable sales act or practices

and from misleading advertisement and fraudulent sales promotions,


other than those falling under the jurisdiction of the Department of

Health;

WHEREAS, the Philippine Aviation Industry, under a liberalized

aviation regime, and especially with the emerging dominance of low

cost carriers, has dramatically expanded, as shown by the

unprecedented and consistent double digit growth rates of domestic

and international travel in the last five (5) years;

WHEREAS, it is the thrust of public policy to encourage the entry of

more players in the air transportation industry and promote greater

competition among air carriers, which, in turn will enhance air service

availability and create more options for better, safer, and more

efficient and affordable air transportation, in support of trade, tourism

and public convenience;

WHEREAS, it is equally the objective of public policy to maintain a

level playing field in the air transportation industry, conductive to

sound, healthy and fair competition among industry players, as

against disastrous and ruinous competition that can undermine public

interest;


WHEREAS, an air carrier ticket constitutes a contract of carriage

between an air carrier and a passenger, whereby the air carrier, for

consideration, obligates itself to transport a passenger by air safely,

efficiently and conveniently along a stipulated route at a given date

and time, subject to certain conditions and/or restrictions.

WHEREAS, such a contract of carriage creates an asymmetrical

relationship between an air carrier and a passenger, considering that,

while a passenger has the option yo buy or not to buy the service,

the decision of the passenger to buy the ticket binds such passenger,

by adhesion, to all the conditions and/or restrictions attached to the

air carrier ticket on an all-or- nothing basis, without any say,

whatsoever, with regard to the reasonableness of the individual

conditions and restrictions attached to the air carrier ticket;

WHEREAS, there is a need to infuse a certain measure of balance,

fairness, and reasonableness between the precarious position of a

passenger vis-a-vis the vast resources at the disposal of the air

carrier, especially in a liberalized and highly competitive aviation

environment, which, if unfettered can lead to unsound business


policies and practices of air carriers that are prejudicial to the rights

and interest of the passenger.

NOW, THEREFORE, this Order is hereby prescribed for the

information, guidance, and compliance of all concerned.

4. Industry Analysis Ratio

5. Industry Trend

6. Industry Problems

IV. Company Analysis

4.1 History

“Born in the aftermath of 9/11 and coming through the global financial

crisis, AirAsia has faced some of the most turbulent times in the

airline industry. With our successes today, we stand as testimony to


the power of great innovation, passion, teamwork and well-executed

ideas.” – AirAsia Inc.

AirAsia is a Malaysian-international airline which is based on Malaysia and

founded by with the government-owned conglomerate, DRB-Hicom. The

airline was established in 1993 and began its operations on the 18th of

November 1996. Its main hub before is the Low-Cost Carrier Terminal

(LCCT) at Kuala Lumpur International Airport (KLIA). With the loss making

of AirAsia with the management and being in debt of USD 11 Million, Mr.

Tony Fernandez bought and managed the AirAsia in 2001. Having 2

aircrafts and debts, the current CEO and a real game changer Mr.

Fernandez turned the airline to a whole new level reflecting its success by

having profit in one year span and release new launching hub in the same

year. AirAsia now is famously knows for its low-cost fares and no frills airline

in Asia.

As part of the growing success of AirAsia, they expanded their hub and

invested in Philippines, under the name of AirAsia Inc. AirAsia Inc is a joint

venture of AirAsia and some Filipino tycoons namely Mr. Antonio

Cojuangco, Jr., Mr. Micheal Romero and Ms. Marianne Hontiveros. The

joint venture is approved on 2010. In 2012, the company gained the Air

Operation Certificate from Civil Aviation Authority of the Philippines (CAAP)

which entitles the company and its airplanes to fly in Philippine airspace.

AirAsia Inc has two hubs: one was on Clark International Airport on Clark,


Pampanga and other one is on Ninoy Aquino International Airport in Pasay,

Manila. With the triumph of AirAsia Inc, the company adopts the Zest Air or

formerly called Asian Spirit in 2013, while in the midst of crisis when Zest

Airways was suspended in any air flights by the CAAP. With their strategic

alliance, Asia Zest Airways Inc. or AirAsia Zest is born, making the owner of

Zest Airways Alfredo Yao one of the owners of the company. AirAsia Inc

and AirAsia Zest is both under the same company but is being sold in

separate brands.

http://en.wikipedia.org/wiki/AirAsia https://prezi.com/w-ee64ceukic/airasia/

http://en.wikipedia.org/wiki/AirAsia_Philippines

4.2 Management

His management style upholds transparency on decision-making and high

accessibility to media and investor community. He reiterates that

management must keep talking to the staff about the brand. In his daily

interactions with the staff, he tries to promote a sense of loyalty, dedication

and commitment of the staff to the company and the need to be vigilant at

all times to protect its image.

4.3 Culture

To know if a company is an ethical one, a company must not only show

their Mission, Vision, Core Values and Code of Conduct of their websites, to


be visible and transparent of whom they are to their customers. With that

idea being said, the proponents could say that AirAsia Inc is an ethical

company for they posted the said codes, statement and values up to their

websites and make the cyber world access and identify AirAsia Inc (and the

whole AirAsia community) by their adoption and comprehension towards

their Mission, Vision, Core Values and Code of Conduct, making them as

their bible in the workplace. They had shared it to the world to make them

know and see what is an AirAsia AllStar means and is.

The AirAsia employees called themselves as Allstars. Coming from their

website, as an Allstar, they have these 6 values which was an Allstar is

composed of.

Fun

Fun means we celebrate life. It means we laugh louder, our smiles

are wider, and we can be our own unique selves. We're a sociable

bunch and we enjoy sharing ideas and solutions to make things even

better. After all, fun is meant to be shared.

Caring

It's a warm and friendly feeling to have, so we take pleasure in caring

for our guests in ways that make them feel at home.

Passionate


Being passionate means going the extra mile to achieve a purpose

much larger than ourselves. They say passionate people can change

the world and that's something that's very close to our hearts.

Full of integrity

The company believe everything that is worth doing, is worth doing

right. It's about us doing the right things at all times.

Safety conscious

A safe airline is a happy airline. Our guests' safety is our primary

concern so we do our jobs with care. Because where safety is

concerned, every little thing matters.

Hardworking

It means one team, working together towards a common goal.

Whether it's meeting our 25 minute turnaround time or making

sure we keep you connected to the best destinations at the

lowest prices, we do it as a team. All for one. One for all.

To sum up the Code of Conduct, these are the points of beliefs that the

makes the management of AirAsia Inc and what they keep importance of,

courtesy of AirAsia Inc’s website.


• That we do our business fairly, impartially, ethically, and with

the utmost regard to safety.

• That we obey all applicable laws and regulations.

• That we will create a positive working environment

• That integrity be the basis of all our relationships whether with

guests, suppliers, communities and with each other.

• That we respect the environment and are aware of, and

minimize our impact on it.

• That we don’t do anything that may raise questions

about AirAsia’s honesty, impartiality, reputation or ability to conduct

its business.

• And that we don’t get other parties to carry out any tasks

prohibited under AirAsia’s policies and practices and Terms &

Conditions of employment.

AirAsia made sure that their customers know and feel that they are in good

hands when they are travelling by following with these corporate values and

the company’s code of conduct.

http://www.airasia.com/ph/en/about-us/airasia-mission-vision-values.page


4.4 Organizational Structure

With the Philippine Constitution which prohibits any foreign investors to

completely own any business here in Philippines, AirAsia Inc is born by the

treaty of 40%-60% joint venture between Mr. Tony Fernandez and a group

of Filipino tycoons namely Mr. Antonio Cojuangco Jr., former owner of TV5

TV Station, Mr. Micheal Romero, a real estate operator and Ms. Marianne

Hontiveros, former music industry executive and host.

http://www.airasia.com/ph/en/about-us/corporate-profile.page

(put the organizational structure here)

4.5 Human Resources

Hiring

AirAsia Inc acquires their employees thru several channels. One channel is

the over-the- counter where the applicant may go directly to the head office

of the company on Manila. Another way is thru their website. You only have

to go to their website which is www.airasia.com , click for Career, deposit


your resume and wait for their call. Also, they have LinkedIn account where

you may see their latest hiring and openings.

Core Value and Code of Conduct

After the hiring stage, the Human Resource department is the one who is in

charge in cultivating these new recruits to be an AirAsia AllStar. They will

orient them with the company’s mission, vision, their corporate values and

code of conduct. Not only they remind the new comers but also remind the

whole AirAsia community by their websites and annual reminders.

4.6 Mission Statement

“Our mission is to attain the lowest cost so that everyone can fly with

AirAsia and maintain the highest quality product, embracing

technology to reduce cost and enhance service levels.”

Simple, but realistic and ambitious (in a good way). The Mission statement

of AirAsia Inc is mostly actions to cope up the issue in the airline industry

which is high airfares and slow technology that results difficulty in booking

flights and transactions. Described below are the detailed mission

statements of AirAsia Inc.

• To be the best company to work for whereby employees are

treated as part of a big family


• Create a globally recognized ASEAN brand

• To attain the lowest cost so that everyone can fly with AirAsia

• Maintain the highest quality product, embracing

technology to reduce cost and enhance service levels

Source:

http://www.airasia.com/ph/en/about-us/corporate-profile.page

4.6.1 Analysis of Mission Statement

Airasia’s mission statement is simple, direct yet attainable. With the

current status of AirAsia Inc now, almost its entire mission is already

accomplished except for attaining the lowest cost in this country. As

we all know, the well-known low cost airline her in Philippines is

Cebu Pacific, and AirAsia still can’t beat the nor get a big market

share from Cebu Pacific. With this note, AIrAsia Inc isn’t fully

accomplished the last statement of their mission which is to reduce

cost by embracing new technologies, given that Cebu Pacific is still

cheaper than AirAsia Inc. The analysis for the Mission Statement is

shown in this table.


Criteria Present Inclusive Statement

Customers Yes to attain the lowest cost so that

everyone can fly with AirAsia

Product/Services Yes maintain the highest quality

product and enhance service

levels

Market Yes Create a globally recognized

ASEAN brand

Technology Yes embracing technology to reduce

cost

Concerns Yes Enhance service levels

Philosophy No not specified

Self Concept No not specified

Concern on Public Image Yes Known to be the lowest cost

airline

Concern on Employees Yes To be the best company to work


Criteria Present Inclusive Statement

for whereby employees are

treated as part of a big family

“Now Anyone can Fly”

Short. Straight. Powerful. Indeed, AirAsia gave anyone the

opportunity not to move but to fly to another country with their low-

cost airfares. AirAsia is the leading low-cost airline in Asia. The

company reached this peak of their game because they have these

diagram and strategy.


4.7.1 Low Cost Carrier (LCC)

Low Cost Carrier shows the 4 main strategy of AirAsia Inc: Low Fare,

Safety, Service and Simplicity. The origin of the LCC strategy is from

SouthWest Airlines in USA, with their one simple notion: "If you get

your guests to their destinations when they want to get there, on

time, at the lowest possible fares and make darn sure they have a

good time in doing so, people will fly your airline." -Rollin King and

Herb Kelleher . The concept of Low Cost Carrier is simply to move a

maximum number of passengers in the minimal cost as possible. It is

a win-win situation between the customer and the company. AirAsia

nailed this strategy by using this LCC Business Model.

No-frills

This is the secret of AirAsia’s huge profit despite with their USP of

low-cost airfare. The “No-Frills air flights” do not include the flight

meals, basic amenities, seat reservation, loyalty programmes,

refunds, printed tickets and other more add-ons which make

travelling expensive. AirAsia’s Chief Executive Officer, Tony


Fernandes, believes in simplicity. That in every aspect of the

business must be simplified so that the whole philosophy, vision,

mission and objectives can be understood by all the stakeholders,

especially the staff and customers (AirAsia, 2008). AirAsia’s mission

is to literally and plainly deliver the passenger from point A to point B

safely, comfortably and on time. No luxury and special treatment

included.

High Aircarft Utilization

This talked about how fast the turnaround of the aircraft is. AirAsia

maintains the 25 minute turnaround from landing. This is somehow

dangerous in ensuring that the aircraft spent less time in the ground.

As what AirAsia said, an airline makes money when the aircraft is

flying, not when the aircraft is parked.

Streamline Operations

Simplicity is one of the main strategy of AirAsia which makes the

become success in this field. The operations of the AirAsia can be

described as universal for their equipment and materials are

common. They have a single type of aircraft for the efficiency of staff

training & workplace rotation. Also, they have a single class seat,

where people will seat on same kind of seats. But for people who

desires for classier seats, AirAsia X offers premium seats which

gives more leg space.


Point to Point Network

Related to the High Aircraft utilization, this key is about the length of

reaching point a from point b. The faster the aircraft land its

passengers to their destinations, the earlier will be the turnover of the

aircraft, greater profit will be received. Also, the convenience of the

fast travel for the customers is a highly recommended by them, not to

mention the 4-hour travel time of most AirAsia airflights.

Lean Distribution System

Cutting the excess and unprofitable distribution channels and sticking

to what is the profitable and investing on it is the ingredient to this

key. AirAsia use travel agents in very minimum level to lessen the

outflow of profit cause of commission but instead focuses on call

centers, business partnersa and on their web-check in where the

customers themselves will book for their flights. By eliminating the

provision of costly in-flight services, flying a standard fleet, selling

tickets to passengers and minimizing labor, facilities overhead costs

and adding the best personnel to cater the service and being on time,

AirAsia has managed to achieve a successful low-cost structure,

which enables it to charge lower prices to achieve high passenger

loads, market share, and profitability.

http://www.airasia.com/ph/en/about-us/ir-strategy.page

http://www.airasia.com/ph/en/about-us/ir-what-is-lcc.page


4.8 Marketing Mix

4.8.1 Product

4.8.1.1 Flight Products

AirAsia Inc offers local and international flights in low-cost fares. For

local destination, AirAsia offers flights to Cebu, Kalibu, Tacloban,

Tagbilaran, Cagayan de Oro, Puerto Prinscesa and Davao. For the

international destinations, there are flights to Seoul, Busan,

Shanghai, Macau, Kuala Lumpur and Kota Kinabalu. The availability

of the destinations depends on the place of origin.

With the widening range of customers, AirAsia Inc target now also

the Class B to Class A passengers with their Premium Flex flights

where they could have the privileges that the low fare don’t have. In

Premium Flex, the passenger may check in up to 20 kls of luggae,

have premium meals included, seat reservation, Xpress boarding

and baggage delivery and could change their flight schedule. That’s

how lavish the Premium Flex is.


4.8.1.2 AirAsia Café & Merchandises

AirAsia Inc offers multiple of merchandizes from tumbler to travel

pillow. These merchandises complete the travel experiences of the

customers. Despite of the no-frills strategy, AirAsia still offers meals

and goodies for satisfy your starvation. . The meals may be ordered

on pre-booking of your flight or on your flight as well as the

merchandizes.


4.8.1.3 AirAsia Car Rentals

Provided by Avis Philippine s Rent a Car, there’s no need to worry of who

and what will pick you up after you arrive in the area. Also, the struggle in

finding taxi or any rental vehicle will be washed off in just one click. AirAsia

Car Rentals is available not only for pick up but also for arriving to the

airport.

4.8.1.4 AirAsia Cargo

“Give us your demads and we will make it happen” This quote is from the

AirAsia Coargo website where you could place your shipments and let

AirAsia Cargo do the flying. For AirAsia Inc here in Philippines, AirAsia

Cargo is working with their business partner John Gold Cargo Forwarder

which is based also on Pasay. Though it is new on the cargo and aerial

shipping industry, the performance of AirAsia Cargo is 98% , which means

they don’t delay and able to send it successfully.


4.8.1.5 AirAsia Go

- Hotel accomodations in partnership with TripAdvisor

4.8.2 Price

The price of AirAsia Inc for airfares for local flights changes depends of the

date of your booking, the place and the season of it. With our canvass, the

price of airfare from Manila to Cebu on January 24, 2014 costs up to PHP

1,550 maximum on low rates and PHP 5,240 on Premium Flex. For

international destination, a one way flight to Kuala Lumpur on January 31,

2014 rates to PHP 3,600 in low rates and PHP 9,350 on Premium Flex. The

prices of the airfares consist of fare base and Airport charges and fees,

according to the booking summary of AirAsia.com.

4.8.3 Place

There are different distribution channels AirAsia use to reach their

customers being available for purchase.


4.8.3.1 Online Booking

Customers may book their flight in AirAsia by online booking in AirAsia’s

website. There, they could see and filter the rate and schedule that suits

them.

4.8.3.2 Mobile Booking

By downloading the AirAsia app and using the location of Philipppines,

customer may book and web check-in themselves anytime and anywhere.

This is to reach the on-the-go, last minute travellers and the travellers who

is a seeker for promos and discounts.

4.8.3.3 Over-the-Counter/Kiosks

All passengers may acquire tickets, book and check-in to any AirAsia sales

offices. AirAsia Sales officers are gladly to help and assist any needs and

questions for clearer and safer travelling.

4.8.4 Promotion

Airasia have dif ferent promotions that make their low rates even lowermost

of their promotions are price reduction of their base rate. Example of the

promotional base rate prices are PHP 99, PHP 88 and the PHP 1, as their

celebration for their 1 Million likes in Facebook. This promotion is very

catchy for in first thought, you will think that the airfare will be that number,

which isn’t. But this promotion do really lessen the actual price of the flight.


Another is bundle deals like buy 3 tickets, get 1 free for their Valentine’s

Day Promo for last year 2014. Also, one part of

their promotions is entering and launching promos and deals the

discount voucher websites like Ensogo Philippines and Metrodeal.

4.8.5 Customer

Most of the customers of AirAsia Inc are the Class B-C travellers who seek

for low-cost airfares. These people are the one which also applies AirAsia’s

CEO Tony Fernandez value, simplicity. The class has no care about the

complimentary but only wants the plain reason of transportation, without any

grandiose luxuries.

4.8.6 Competition (Expand more your analysis of competition, relate back

to the MVO to determine the factors of comparison)

The main competitors of AirAsia Inc are Cebu Pacific , PAL express and

Tiger Airways. These airlines are familiarized and implement the low-cost

flight rates. Though AirAsia is the fastest growing airline in Asia, reality says

the Cebu Pacific is still dominating the low-cost air flight industry here in

Philippines. It is because Cebu Pacific knows more its market for it is a

Filipino company.


4.8.6.1 Cebu Pacific

Cebu Air, Inc., operating as Cebu Pacific Air, is an airline based on the

grounds of Ninoy Aquino International Airport (Manila Terminal 3), Pasay

City, Metro Manila, the Philippines. It

offers scheduled flights to both domestic and international destinations. Its

main base is Ninoy Aquino International Airport, Manila, with other hubs at

Mactan-Cebu International Airport, Clark International Airport., Francisco

Bangoy International Airport,Iloilo International Airport and Kalibo

International Airport.

4.8.6.2 Philippine Airlines

Philippine Airlines (PAL) (A trading name of PAL Holdings Inc.) (PSE:

PAL), also known historically as Philippine Air Lines, is the flag carrier of

the Philippines. Headquartered at the

PNB Financial Center in Pasay City, the airline was founded in 1941 and is

the first and oldest commercial airline in Asia operating under its original

name. Out of its hubs at Ninoy Aquino International Airport of Manila and

Mactan-Cebu International Airport of Cebu, Philippine Airlines serves 31

destinations in the Philippines and 36 overseas destinations in Southeast

Asia, East Asia, Middle East, Oceania, North America and Europe.


4.8.6.3 PAL Express

PAL Express, formerly Air Philippines or Airphil Express, is operating

under

business name of Air Philippines Corporation. After operating as PAL

Express for a while, the airline transformed again the brand into Airphil

Express. It operates both domestic and international scheduled services

from Manila, Cebu, Davao City and Zamboanga. The airline was re-branded

for a number of times, first as Air Philippines, then as PAL Express. After a

series of financial losses, Air Philippines ceased operations for a short while

until it was acquired by investors from Philippine Airlines. After the

acquisition, the airline was re-launched as PAL Express, to operate some

routes and slot assignments of its sister company Philippine Airlines until

the management decided to re-brand the carrier as a budget airline now

known as Airphil Express. However, in March 2013, the company's CEO

announced that the name will be reverted to PAL Express. As a codeshare

of Philippine Airlines, PAL Express will be operating as a full service carrier

with low-cost management.

4.8.6.4 Tiger Air

Tigerair Philippines, formerly known as SEAir and South East Asian

Airlines, is a low-cost airline headquartered in Manila, Philippines. It is


a franchise and subsidiary of JG Summit, the parent company of Cebu

Pacific which operates the airline. Its main base has been transferred from

Clark International Airport (formerly Diosdado Macapagal International

Airport), Angeles to Ninoy Aquino International Airport, Metro Manila.

4.9 Operations

4.9.1 Process

4.9.1.1 Web Booking

1) Visit AirAsia website

2) Choose if Flight, Hotel, Flight with Hotel or Car

3) Fill in your destination, date of departure, number of passenger

4) Pick the schedule that suits you. The price of the whole flight may be

seen on the right side of the website titled Booking Summary.

5) Fill up the contact details.

6) Fill up the Traveller details. In this page, you may add extras in your

fare like meal, inflight comforts, etc.


7) Add-ons. Like car rentals.

8) Seating Reservation. Passengers who might want to reserve a seat

for them to decrease the toil and to capture a great seat. This comes with

additional charge depends on the seat. For those who aren’t reserved a

seat, the site will automatically assign the passenger a seat for him.

9) Payment. The passenger may choose on how he will pay the fare.

Channel of paymentare thru Credit Card, Internet Banking (Dragon Pay),

Payment Partners, E-Gift Vouchers.

4.9.1.2 Web/Mobile Check-in

1) Check in online/mobile app.

2) Click on Web Check-in and put your name, destination and booking

number

3) Departing flight will be checked. If the passenger wishes to check-in

also his return, he may check it also. Put the name of applicable guest and

other details.

4) Add ons. Add ons can be changed and edit here like meal, seats,

etc.

5) Print the boarding passes which is emailed to the passenger’s email

address.


Exhibit 1 – AirAsia.com Home PageTo book a flight with AirAsia, customers

can either choose the following channels or simply visit the

AirAsia.com home page and follow the below 5 steps.

1. Call centre

The Customer can contact the call centre to make a reservation and to buy

the ticket by simply dialling the number.

2. Sales office and airport sales counter

The client can go to the sales office or to the airport sales counter to buy a

ticket.

3. Authorized travel agents

There are authorized travel agencies that

selling tickets, the customers just need to go to this agencies and buy the

ticket.

4. Mobile booking via mobile.airasia.com or

They an book via mobile phone and enter the website mobile.airasia.com.

5. Online (http://www.airasia.com) in 5 easy steps as shown below.

Step 1 - Search

Step 2 - Select


Step 3 - Guest & Contact Step 4 - Payment

Step 5 - Itinerary

4.9.2 Capacity

AirAsia uses Airbus A320 which has a capacity of 180 passengers.

The AirAsia Philippines fleet consists of the following aircraft:


AirAsia Zest fleet includes the following aircraft (as of April 2014

4.9.3 Quality

AirAsia Group receives a plenty of awards and tropies from different

associations and organizations. One is being 5year-consistent World’s Best

Low Cost Airline by Skytrax, a United Kingdom-based consultancy in

airlines and airport industry. Another recent award is World Leading Low

Cost Airline by World Travel Awards 2013. Last 2011, AirAsia won 6 awards

from different associations and organizations. AirAsia has more than 40

achievements from Forbes to TTG Travel Awards. This shows the quality

and excellence of the whole AirAsia Group is.

4.9.4 Technology


AirAsia Inc have now its brand new looking website where it is easy access

and lot of tabs that will sooner introduce AirAsia more to its customers. The

usage of internet and mobile app is a wider way to reach its market and

customers, to know their voices and suggestions, to serve them even

better.The excellent utilization of IT have directly contributed to their

promotional activities (email alerts and desktop widget which was jointly

developed with Microsoft for new promotions), brand building exercise (with

over 3 million hits per month and on the most widely surfed booking engines

in the world) as

well keep the cost low by enabling direct purchase of tickets by consumer

thus saving on airline agent fees

4.9.5 Research

As part of their mission to attain lower costs as possibly, AirAsia keeps on

exploring other opportunities that can lead to lower airfares and profitability.

4.10 Financial Analysis

- TBA . Still in process with SEC


4.11 Trends

The trends now in AirAsia is that they have now a basketball league and

other sports. On the year 2014 Airasia joined the Philippines Superliga

Grand Prix, a volleyball tournament were Airasia is one of the team and

compete against other teams like generika Army, Perton Blaze, Cignal Hd,

RC Cola Air Force and more.

4.12 Problems

4.12.1 Fortuitous Events

- With the unfortunate accident that happens to AirAsia Indonesia

Flight QZ8501, AirAsia Inc, being part of the AirAsia Group, is in the fragile

status of its brand of safety. People now look AirAsia Inc as a dangerous

and precarious airline. Despite of the numerous achievements in the past

and their irresistible low-cost airfare, there’s will be a hesitation in choosing

AirAsia as their airline for no one wants to ride a plane with plane crash

history which is very freshly happen, even though it isn’t their flight. The

problem is, even though it isn’t their flight. The problem is that the trust and

brand equity of AirAsia Inc lessens, and how can it be regained.

4.12.2 Intense Competition


- If one asked if what is the cheapest airline in the Philippines is, most

of the Filipinos will say Cebu Pacific. This tough competition with Cebu

Pacific is been a long length of time already. It is time to outgrow Cebu

Pacific and conquer the industry.

san mig (qms)

Documents

airasia group

airasia philippines

airasia x

nofrills airline

business administration

launched airasia india

business travellers

malaysian lowcost airline