AirAsia: Flying Low Cost with High Hopes Harvard Case Solution & Analysis

Private entrepreneur Tony Fernandes took over the debt-ridden airline AirAsia from the Malaysian Government in December 2001, months after the attacks of 9/11. A month later, he resumed as the first airline in the lower Southeast Asia cost carrier (LCC) and achieved instant success with increased profitability and rapid expansion of the route. Under the slogan "Now everyone can fly", AirAsia has been able to keep low the cost structure of its competitors and offer low airfares to customers. Being innovative to corporate bone, AirAsia for the first time several new services for its operations, including an ambitious plan that many other low-cost, short-haul carriers are considered as risky, the expansion of services includes long transport routes. In 2007, AirAsia has been recognized as the best LCC in Asia. His success is not only inspired many followers LCC in the Asia-Pacific region, but also seriously threaten the welfare of a full range of operators, especially its main rival at home, Malaysia Airlines ("MAS"). In May 2008, MAS has initiated an unexpected price war by launching "Everyday Low Rates" campaign, offering zero tariff for domestic and short-haul flights, which were largely dominated by AirAsia. Against the background of the rising costs of flights all over the world and never keen competition in the Asia-Pacific region, as AirAsia would improve its competitiveness? "Hide
by Steven Ko, Claudia HL Woo Source: University of Hong Kong, 20 pages. Publication Date: June 11, 2009. Prod. #: HKU833-PDF-ENG

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