Strengths TheTfirstTstageTofTtheTswotTanalysisTisTtheTstrengthsTanalysisTforTAirTAsia

Strengths
TheTfirstTstageTofTtheTswotTanalysisTisTtheTstrengthsTanalysisTforTAirTAsia.TThereTareTsomeTuniqueTstrengthsTofTAirTAsiaTthatTothersTcompanyTcouldTnotTdefeatTthem.TFirstTandTforemost,TAirTAsiaThasTaTveryTcooperativeTandTstrongTmanagementTteamTwithTstrongTconnectionsTwithTtheTgovernmentTandTtheTairlineTindustryTleaders.TThisTisTpartlyTcontributedTbyTtheTdiverseTbackgroundTofTtheTexecutiveTmanagementTteamsTwhichTconsistsTofTindustryTexpertsTandTex-topTgovernmentTofficials.T
Besides,TcustomersTcanTeasilyTcheckToutTtheTtimeTofTflyTscheduleTofTAirTAsia.TWithTallTtheTconvenient,TAirTAsiaTbecomeTtheTmostTfavouriteTairlineTinTMalaysiaTforTtheTcustomers.TOnTtheTotherThand,TAirTAsiaTprovidesTcomfortableTseats,TsecureTsafetyTandTaTcleanlinessTenvironmentTforTtheTcustomerTsoTthoseTcustomersTfeelTcomfortableTduringTtheirTflyTtimesTwithTtheTlowTprice.Furthermore,TAirTAsiaThaveTaTveryTstrongTpromoterTandTmediaTofTadvertising.TAirTAsiaTalwaysThaveTpromotionsTthatTattractTcustomersTinterests.TBesidesTthat,TAirTAsiaThaveTgoodTmarketingTskillsTemployeesTandTtechnologyTofTadvertisingTwhichTcanTinfluenceTcustomersTattractionsTandTchoiceTofTpurchase.TMoreover,TAirTAsiaTisTaTwell-establishedTLCCToperatingToutTofTSouthTEastTAsiaandTitThasToperationsTinToverT25TcountriesTandToverT400TinternationalTandTnationalTdestinations,TandTtheTmostTfamousTdestinationTisTBali-TIndonesia,TThailandT–TBangkok,TKorea-Seoul,TJapan-TTokyoTandTNagasaki,TTaiwanTandTtheTother.TMeanwhile,TitThasTsubsidiariesTinTIndonesia,TThai,TPhilippines,TJapanTandTitThasTaTfleetTsizeTofTnearlyT300Taircrafts.

Weaknesses
AirTAsiaTdoesTnotThaveTitsTownTmaintenance,TrepairTandToverhaulT(MRO)Tfacility.TAlthoughTitTisTaTgoodTstrategyTwithTtheThubTandTfewTplanesTonlyTneedTtoTmaintainTwhenTAirTAsiaTgettingTtheirTfirstTjourneyTwhichTonlyTinTMalaysia.THowever,TwithTthoseTfewThubsTthatTonlyTsituatedTinTMalaysia,TThailandTandTIndonesiaTwithToverT100TplanesTthatTownedTbyTAirTAsiaTcurrentlyTandTanotherT100TplanesTwhichTintendedTtoTbeTreceivedTinTfutureTnextTfewTyears,TAirTAsiaThaveTtoTtakeTproperTactionsTofTconfirmationTsuchTasTcontinuousTofTmaintenanceTofTplanesTwithTmaintainingTtheToverallTcostsTlow.TThisTisTaTcompetitiveTdisadvantageTthatTAirTAsiaTdoTnotThaveTitsTownTbelongingTofTMROTfacilityTwhichTcauseTmanyTdifficulties.

Meanwhile,TAirAsiaTreceivesTlotTcomplaintsTfromTcustomersTonTtheirTservice.TExamplesTofTcomplaintsTareTaroundTflightTdelays,TbeingTchargedTforTaTlotTofTthingsTandTnotTableTtoTchangeTflightTorTgetTaTrefundTifTcustomersTcouldTnotTmakeTit.TItTisTcrucialTforTAirTAsiaTtoThaveTaTgoodTcustomerTserviceTandTmanagementTwhenTtheTmarketTcompetitionTisTmoreTandTmoreTintense.TBesides,TthisTisTalsoTdueTtoTdoTnotThaveTtooTmanyTroutesTasTcomparedTtoTmarketTleader.TWhichTmeanTAirTAsiaTcan’tTprovideTmanyTflyTscheduleTcomparedTtoTtheTMASTforTexample.TAndTAirTAsiaThasTaTveryTstiffTcompetitionTinTitsTsector.

PestelT2.1.1.TPoliticalTBudgetTairlinesTgrowsTrapidlyTinTtheTSoutheastTAsiaTregionTafterTtheTtheTliberalisationTofTtheTindustry.TCountriesTincludingTThailand,TMalaysia,TCambodia,TPhilippinesTandTSingaporeTunderwentTderegulationTofTtheTbudgetTairlineTindustry.TMoreover,TreciprocalTaccessTagreementTwereTimplementTamongTSoutheastTAsiaTcountriesTwithTtheTUnitedTStatesTtoTembraceTtheTliberalizationTofTtheTindustry.TThisTimpliesTtheTopenTskiesTservicesTagreementTencourageTmoreTairTtrafficTtoTenterTandTexitTtheTregionTdomesticallyTandTinternationally.TFinally,TgovernmentsTinTtheseTcountriesTallowTmoreTnewTprivateTbudgetTairlinesTwereTintroducedTtoTtheTindustryTtoTincreaseTcompetition.

2.1.3.TSocialTTheTlargeTpopulationTbaseTofTtheTSoutheastTAsiaTregionTcreatesTaTlargeTmarketTforTaviationTtravel.TAmongTthose,TIndonesiaTthatTwithT235TmillionTpotentialTpassengersTfuelsTtheTgrowthTofTbudgetTairlineTindustry.THowever,TthereTisTanTperceptionTofTAsianTpassengersTvaluesTqualityTmoreTthanTprice.THence,TdespiteTtheTlowTpriceTstrategy,TcertainTinflightTqualityTstandardsTwillThaveTtoTmetTtheTexpectationsTofTAsianTpassengers.T
2.1.4.TTechnologicalTInfrastructuresTsuchTasTinternationalTandTdomesticTairports,TpublicTtransportsTtoTtheTterminalTareTquiteTsophisticatedTinTtheTregion.TMalaysiaTforTexample,TeveryTstatesTatTleastThasTaTdomesticTairport,TwhileTbiggerTcitiesTmightThaveTaTcombinationTofTinternationalTandTdomesticTterminals.TInternetTcoverageTareTusuallyTadequateTforTtheTpurposeTofTpurchasingTonlineTticket,TwhichTlowerTtheToperatingTcostTinTbudgetTairline.

2.1.5.TLegalTCompetitionTregulationTimplementedTinTseveralTcountriesTsuchTasTMalaysia,TmajorTmergerTorTacquisitionsTwereTmostlyTprohibitedTbyTtheTlocalTgovernmentTtoTensureTtheTindustry’sTcompetition.TForeignTdirectTinvestmentsTwereTalsoTlimitedTtoTjointTventuresTorTalliancesTbyTseveralTcountriesTinTtheTregion.TMoreover,TregulatoryTsystemsTinTsomeTofTtheseTcountriesTareTquiteTweak,TwhichTmightTaffectTtheTbusinessTplanningTinTthisTregion.T
2.1.6.TEnvironmentalTEnvironmentTisTreallyTaTbigTadvantageTforTtheTairlineTindustry,TparticularlyTtoTbudgetTairlines.TThisTisTdueTtheTlackTofThighTspeedTcrossTcountriesTrailwaysTorThighways,TwhichTmakeTlandTtravellingTamongTcountriesTdifficult.TMoreover,TmostTtheTcountriesTareTseparatedTbyTseaTwhichTpaveTwaysTtoTtheTbudgetTairlinesTinTtheTregionTasTeitherTtravellingTinTbusinessTorTpleasureThaveTtoTtakeTaTflightTtoTanotherTcountry.TAdditionally,TtourismTindustriesTareTaTmajorTindustryTinTtheTSoutheastTAsiaTcountries.TTheTspilledToverTofTtheTgrowthTtourismTindustryTalsoTincreasesTtheTdemandTforTbudgetTairline,TasTmoreTpassengersTdemandTforTmoreTlowTcostTandTfastTtravelToptionsTwhileTtravellingTinTtheTregion.TFinally,TtheTcountriesTwereTlocatedTnearTtoTeachTother,TwithinT3ThoursTflight,TfewTcountriesTcanTbeTreachedTfromTMalaysiaTtoTSingapore,TIndonesia,TPhilippines,TBruneiTandTThailand.TWhichTbudgetTairlineTcanTachieveTaTcostTbenefitTfromTtheirTfuelTconsumption.

PestelLegalMalaysianTgovernmentTdoesTnotThaveTaTclearlyTwrittenTpolicyTforTcommercialTairTtransport.TThereforeTinTtheTpastTyears,TmoreTemphasisTwasTplacedTonTdomesticTflightsTandTwithTAirAsia’sTapprovalTtoToperateTcheapTflightsTlocallyTandTinternationally,TtheTcompanyThasTmanagedTtoTstrikeTaTbalanceTinTitsTflights.

DemographicTenvironmentPopulationTgrowthTaffectsTsalesTofTAirAsia.TIncreasingTpopulationTinTtheTcountryTincreasesTsalesTofTtheTairlineTbearingTinTmindTthatTmanyTclientsTpreferTaffordableTservices.TDemandTforTproductsTandTservicesThaveTalsoTincreased.THowever,TtheTcompanyTshouldTtakeTadvantageTofTthisTtoTexpandTitsToperations.

AirAsiaTSWOTTanalysisStrengths,TWeaknesses,TOpportunitiesTandTThreatsTAnalysisTareToneTofTtheTimportantTthingsTinTaTcompany.TThisTSWOTTanalysisTisTforTidentifyingTtheTinternalT(strengthTandTweakness)TandTexternalT(opportunitiesTandTthreats)TfactorTforTAirAsiaTCompanyTtoTachieveTtheirTgoalsTandTobjectivesTtoTbeTlowTcostTcarrierTcompanyTinTairlineTindustry.TToTbeTsuccessfulTinTtheTcompanyTmanagement,TaTcompanyTneedsTtoTconsiderTtheTcompanyTabilityTandThowTtoTintegratingTitTwithTtheTasTwellTasTmainTfactorTinTtheTinternalTandTexternalTfactor.TTheTmainTfactorTinTtheTinternalTandTexternalTfactorTcanTbeTidentifiedTwithTSWOTTanalysis.TOnTthisTsection,TITwillTidentifyToneTbyToneTtheTstrength,Tweakness,TopportunitiesTandTthreatsTinTAirAsiaTCompany.TTheTpurposeTofTthisTanalysisTareTforTidentifyTtheTinternalTandTexternalTfactorTthatTAirAsiaTneedTtoTconsiderTtoTbeTlowTcostTcarrierTinTairplaneTindustry.TTheseTareTtheTstrength,Tweakness,Topportunities,TandTthreatTinTAirAsia.

Strengths
AirTAsiaThasTaTveryTstrongTmanagementTteamTwithTstrongTlinksTwith
governmentsTandTairlineTindustryTleaders.

ThisTisTpartlyTcontributedTbyTtheTdiverseTbackgroundTofTtheTexecutiveTmanagementTteamsTthatTconsistsTofTindustryTexpertsTandTex-topTgovernmentTofficials.TAccordingTtoTJohnstonT(1996),TwithoutTtheTprotectionTofTnationalTairlinesTbroughtTaboutTbyTderegulation,TbuildingTalliancesTasTstrategyTbecameTnecessaryTforTmanyTairlinesTtoTstayTcompetitiveTandTgainTaccessTtoTaTglobalTmarketTtooThugeTforTanyTexistingTairlineTtoTdominate14.TTheTstrongTlinksTwithTtheTgovernmentTandTairlineTindustryTleadersTisToneTofTtheTstrengthTofTAirAsiaTCompany.

ForTexample,TShinTCorpT(formerlyTownedTbyTtheTfamilyTofTformerTThaiTPrimeTMinisterT–TThaksinTShinawatra)TholdsTaT50%TstakeTinTThaiTAirAsia.TThisThasThelpedTAirAsiaTtoTopenTupTandTcaptureTaTsizeableTmarketTinTThailand.TAndTalso,TwithTtheirTstrongTworkingTrelationshipTwithTAirbus,TtheyTmanagedTtoTgetTbigTdiscountTforTaircraftTpurchaseTwhichTisTalsoTmoreTfuelTefficientTcomparedTtoTBoeingT737TplanesTwhichTisTbeingTusedTbyTmanyTotherTairlines
TheTmanagementTteamTisTalsoTveryTgoodTinTstrategyTformulationTandTexecution.

`TTheTstrategyTthatTtheyThaveTformulatedTatTtheTbeginningsTwasTaTcleverTblendTofTprovenTstrategiesTbyTotherTlowTcostTairlinesTisTUSTandTEurope.TTheyTareTRyanair’sToperationalTstrategyT(noTfrills,TlandingTinTsecondaryTairport),TSouthwest’sTpeopleTstrategyT(employeeTcomesTfirst)TandTEasyjet’sTbrandingTstrategyT(linkingTwithTotherTserviceTprovidersTlikeThotels,TcarTrental).

AirAsia’sTbrandTnameTisTwellTestablishedTinTAsiaTPacific.

BesidesTtheTnormalTprintTmediaTadvertisingT;Tpromotions,TAirAsia’sTtopTmanagementTalsoTcapitalizedTonTpromotionsTthroughTnewsTbyTbeingTveryT”mediaTfriendly”TandTfreelyTsharingTtheTlatestTinformationTonTAirTAsiaTasTwellTasTtheTairlineTindustry.TTheirTpartnershipTwithTotherTserviceTprovidersTsuchTasThotelsTandThostels,TcarTrentalTfirms,ThospitalsT(medicalTtourism),TCitibankT(AirAsiaTCitibankTcard)ThasTcreatedTaTveryTuniqueTimageTamongTtravellers.TAllianceTwithTGalileoTGDST(GlobalTDistributionTSystem)TthatTenablesTtravelTagentsTfromTaroundTtheTworldTtoTcheckTflightTdetailsTandTmakesTbookingsThaveTalsoTcontributedTtoTtheirTstringTbrandTname.

AirTAsia’sTlocalTpresenceTinTfewTcountriesTsuchTasTIndonesiaT(IndonesiaTAirAsia)TandTThailandT(ThaiTAirAsia)ThasTsuccessfullyT”elevated”TtheTbrandTtoTbecomeTaTregionalTbrandTbeyondTjustTMalaysia.TTheTlinksTwithTManchesterTUnitedT(oneTofTtheTworld’sTmostTfamousTfootballTteams)TandTAT&TTWilliamsTFormulaTOneTteamThaveTfurtherTboostedTtheirTimageTtoTaTgreaterTextendTbeyondTjustTtheTthisTregion
AirAsiaTisTtheTlowTcostTleaderTinTAsia.

WithTtheThelpTofTAirAsiaTAcademy,TAirAsiaThasTsuccessfullyTcreatedTaT”low-costTairlineTmentality”TamongTtheirTworkforce.TTheTworkforceTisTveryTflexibleTandThighTcommittedTandTveryTcriticalTinTmakingTAirAsiaTtheTlowestTcostTairlineTinTAsia.

TheTexcellentTutilizationTofTITTheTexcellentTutilizationTofTITThaveTdirectlyTcontributedTtoTtheirTpromotionalTactivitiesT(emailTalertsTandTdesktopTwidgetTwhichTwasTjointlyTdevelopedTwithTMicrosoftTforTnewTpromotions),TbrandTbuildingTexerciseT(withToverT3TmillionThitsTperTmonthTandTonTtheTmostTwidelyTsurfedTbookingTenginesTinTtheTworld)TasTwellTkeepTtheTcostTlowTbyTenablingTdirectTpurchaseTofTticketsTbyTconsumerTthusTsavingTonTairlineTagentTfees
Weaknesses
AirTAsiaTdoesTnotThaveTitsTownTmaintenance,TrepairTandToverhaulT(MRO)Tfacility.

ItTmayTbeTaTgoodTstrategyTwhenTtheyTfirstTstartedTwithTonlyTMalaysiaTasTtheThubTandTfewTplanesTtoTmaintain.TButTnow,TwithTfewThubsT(Malaysia,TThailandTandTIndonesia)TandToverT100TplanesTcurrentlyTownedTandTaboutTanotherT100TplanesTtoTbeTreceivedTinTtheTnextTfewTyears,TAirAsiaThaveTtoTensureTproperTandTcontinuousTmaintenanceTofTtheTplanesTwhichTwillTalsoThelpTtoTkeepTtheToverallTcostsTlow.TItTisTaTcompetitiveTdisadvantageTnotTtoThaveTitsTownTMROTfacility
AirAsiaTreceivesTaTlotTcomplaintTfromTcustomersTonTtheirTservice.

ExamplesTofTcomplaintsTareTaroundTflightTdelays,TbeingTchargedTforTaTlotTofTthingsTandTnotTableTtoTchangeTflightTorTgetTaTrefundTifTcustomersTcouldTnotTmakeTit.TGoodTcustomerTserviceTandTmanagementTisTcriticalTespeciallyTwhenTcompetitionTisTgettingTintense.

Opportunities
ThereTareT2TmajorTeventsTthatTareTtakingTplaceTnowTorTgoingTtoTtakeTplaceTinTlessTthanT6TmonthsTfromTnow.

First,TisTtheTever-increasingToilTprice.TSecond,TisTtheT”ASEANTOpenTSkies”TagreementTthatThasTbeenTreached.TTheTincreasingToilTpriceTatTtheTfirstTglanceTmayTappearTlikeTaTthreatTforTAirAsia.TButTbeingTaTlowTcostTleader,TAirAsiaTanTupperThandTbecauseTitsTcostTwillTbeTstillTtheTlowestTamongTallTtheTregionalTairlines.TThus,TAirAsiaThasTaTgreatTopportunityTtoTcaptureTsomeTofTtheTexistingTcustomersTofTfullTserviceTandTotherTlowTcostTairline’sTcustomers.THowever,TthereTwillTbeTalsoTsomeTreductionTinToverallTtravelTespeciallyTbyTcasualTorTbudgetTtravelers.

Second,TisTtheT”ASEANTOpenTSkies”TallowsTunlimitedTflightsTamongTASEAN’sTregionalTairTcarriersTbeginningTDecemberT2008.TThisTwillTdefinitelyTincreaseTtheTcompetitionTamongTtheTregionalTairlines.THowever,TwithTtheT”firstTmover”TadvantageTasTwellTasTitsTstrengthsTinTmanagement,TstrategyTformulation,TstrategyTexecution,TstrongTbrandTandT”low-cost”TcultureTamongTitsTworkforce,TthisTagreementTcanTbeTseenTasTmoreTofTanTopportunity.

ThereTisTalsoTsomeTopportunityTtoTpartnerTwithTotherTlowTcostTairlines.

AsTVirginTtoTtapTintoTtheyTexistTstrengthsTorTcompetitiveTadvantagesTsuchTasTbrandTname,TlandingTrightsTandTlandingTslotsT(timeTtoTland).

TheTpopulationTofTAsianTmiddleTclassTwillTbeTreachingTalmostT700TmillionTbyT2010.

ThisTcreatesTaTlargerTmarketTandTaThugeTopportunityTforTallTlowTcostTairlinesTinTthisTregionTincludingTAirAsia.Threats
CertainTratesTlikeTairportTdeparture,TsecurityTchargesTandTlandingTchargesTareTbeyondTtheTcontrolTofTairlineToperators
ThisTisTaTthreatTtoTallTairlinesTespeciallyTlowTcostTairlinesTthatTtriesTtoTkeepTtheirTcostTasTlowTasTpossible.TForTexample,TChangiTairportTinTSingaporeTchargesTSGD21TforTeveryTpersonTwhoTdepartsTfromTSingapore.

AirAsia’sTprofitTmarginTisTaboutT30%TandTthisThasTalreadyTattractedTmanyTcompetitors.

MostTofTtheTfullTserviceTairlinesThaveTorTplanningTtoTcreateTaTlowTcostTsubsidiaryTtoTcompeteTdirectlyTwithTAirAsia.TForTexample,TSingaporeTAirlinesThasTcreatedTaTlowTcostTcarrierTTigerTAirways.

Users’TperceptionTthatTbudgetTairlinesTmayTcompromiseTsafetyTtoTkeepTcostsTlow.

InTconclusion,TtheTSWOTTanalysisTthatTAirAsiaThaveTisTonTofTtheTmajorTcomponentTtoTmakeTAirAsiaTmoreTstrengthTinTtheirTbusinessTandTcanTmakeTtheyTareTableTtoTcompeteTwithTtheTsameTlowTcostTcarrierTairlineTindustry.

AfterTI’mTdiscussedTaboutTtheTSWOTTanalysis,TITwouldTlikeTtoTdiscussTaboutTtheTAirAsiaTstrategyTtoTsolveTtheTcurrentTissues:THowTAirAsiaTcanTbeTaTleaderTinTtheTlowestTcostTcarrierTinTtheTairplaneTindustry.