Swot Analysis for Airasia

1269 words 6 pages
TABLE OF CONTENTS

AIRASIA’S BACKGROUND......................................................................3 SWOT ANALYSIS FOR AIRASIA.............................................................3 * Strength * Weakness * Opportunities * Threats LIST OF REFERENCES...........................................................................6

AirAsia’s Background
AirAsia was previously owned by DRB-Hicom, a government-linked company. Its airline had not been able to take off and was eventually sold to Tune Air Sdn. Bhd in 2001 which are owned by Tony Fernandes and four entrepreneurs, for a token sum of RM1.00 together with an accumulated debt of RM40 million.
AirAsia was listed in the Kuala Lumpur bourse within
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THREATS * Civil unrest in middle eastern countries causes fluctuations in oil prices.
As airline operations depend heavily on fuel prices, the currently rising fuel prices would trim the profit margins of AirAsia, despite measures taken to reduce the impact. This has also indirectly affected AirAsia X’s IPO listing. It was delayed by one year and is expected to commence listing in December 2012.

* Constant emergence of low-cost carriers to ride on the wave of budget travel.
As air travel becomes more affordable due to competitive pricing from various LCCs, more well-known companies are eyeing on budget airline. The formation of JetStar and Tiger Airways in 2003, Scoot in 2011, offering similar pricing as well as destinations, and the recently formed Malindo Airways which operates in Malaysia itself, directly affects the passenger load for AirAsia as consumers now have more products to choose from. * Newer and more attractive products of competitors

According to SkyTrax reviews, the overall satisfaction for AirAsia has dropped significantly with a score of 6.5 out of 10. Competitors with newer product offerings like Scoot employing a highly energetic team of cabin crew and Malindo Airways using newer aircraft types might prove to be a more attractive choice. Share prices have been rather stagnant for the past two years and is on a decline in recent months, dropping from MYR3.85 in July to the current MYR2.91.

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