AirAsia X: Can the Low Cost Model Go Long Haul Harvard Case Solution & Analysis

By 2007, AirAsia has become one of the most successful low cost airlines in the world. Having conquered the South-East Asia, and China and India have entered, AirAsia was ready to strengthen its position as one of the leading budget airlines and one of the most consistently profitable in the world. But the company's founder, Tony Fernandes had big plans. From the start in 2001, Fernandez plans to offer long service distance to compete with the largest and most reputable airlines in the world. Still, his advisers urged him to focus on the regional, short and medium-distance service. With many successes under his belt, Fernandez was again ready to settle long term. Despite persistent calls from industry insiders that the low cost long-haul flights will never be profitable, Fernandez pushed forward with a. Hiring a 36-year Azran Osman-Rani, as the new CEO for the company long distance, known as X, was an important step in this process. First flight of X in Australia in November 2007. In early 2010, X received its eleventh plane and flew to 15 destinations on three continents. However, over time, significant differences between long-term and short-haul service requirements have become more apparent. Consequently, the management decided to formally separate from AirAsia X. This separation, and the inherent problems for X and the newly appointed head of commercial operations, Darren Wright included: (1) how best to use a wide network of regional AirAsia's sister company in the selection of new and profitable directions for X, (2) how to increase revenue without raising prices tickets, (3) how best to position the brand globally airlines in non-Asian markets, (4) moving the mentality of its marketing team from the start thinking, and (5) how to prepare for a global initial public offering in the next 12 months. "Hide
by Thomas Lawton, Jonathan P. Doh, Andreas Schotter, Ben Forrey Source: Richard Ivey School of Business Foundation 22 pages. Publication Date: February 17, 2012. Prod. #: W12704-PDF-ENG

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