2.

0 AirAsia Current issues: how to be low cost carrier leader in airline industry
On this section, I will discuss about the AirAsia current issues: how to be low cost carrier in airline industry. This section involve,
why AirAsia need to consider a strategic management, and than what is the current issues that happen in AirAsia Company. This
section will discusses the importance of developed and consider strategic management in AirAsia Company, and identify of
current issues in AirAsia Company.
2.1 Why AirAsia need to consider a strategic management
Why a company needs to consider a strategic management nowadays? According to Daniel Chan (2000), since the 1970s, the
competition for the Asian air travel market has always been intense. This became more intense in the 1990s as traffic volumes
were squeezed[3]. Based on that statement, the competition among airplane industry will become more grow, traffic volume
also would be increase, and also the Asian air travel market has always been intense. When the competition in the airplane
industry becoming though, complex, and rapidly change, AirAsia company as a company that joined in the airplane industry
business need to thinking strategically and also must preparing a good strategic management. The AirAsia strategic
management needs to effectively and efficiently prepare and implement in the AirAsia company management. Why AirAsia need
to consider strategic management? The first reason is because the airline industry is a unique and complex industry[4]. Based
on the statement, the complexity and unique of the airline industry, AirAsia need to come out with the greatest strategy to
compete with their rival in the same industry. Without the right strategic management, its possible AirAsia could not be able be
compete with the complex business environment in the airline industry.
Furthermore, the second reason why AirAsia need to consider a strategic management because in a company nowadays, general
management which is the process of achieving organizational goals by engaging in the four major functions of planning,
organizing, leading, and controlling may not sufficient and supportive for the organization succeed in the world of complex
environments. It concerns about the process to manage the company internally but do not concentrate more on creating
competitiveness regarding environments affecting the organization. Even companies adopt general management to sustain
profitability by reducing the defects or costs, and improving operations process in order to increase productivity, they may not
succeed in the competition because they perform only similar activities better than competitors but do not create distinctive
competitiveness.
Additionally, they perform only operational effectiveness but not strategy. Operational effectiveness and strategy are both
essential to superior performance but they work in very different ways. Strategy is about competitive position that the company
performs different activities from rivals or performing similar activities in different ways. To learn how the companies create
strategies and put them into action, the executives or strategists should examine carefully an aspect of strategic management.
Moreover, the organization or company nowadays is faced with constantly changing external environments and needs to ensure
that its own internal resources and capabilities are more than sufficient to meet the needs of the external environment.
Organizations or companies do not exist simply to survive in the market place but want to grow and prosper in a competitive

environment. In order to make sense of what is going on around them, firms must undertake an analysis of their external and
internal environment. To understand and how take an action about external and internal environment, a company needs to
support themselves with a good strategic management.
Because of this reason, AirAsia need to consider a strategic management as the important things in their company. The strategy
that AirAsia need is not just how to reduce cost and make the operational activities running effectively. But, AirAsia needs to
come out with the strategy that can make competitive position that the company performs different activities from rivals or
performing similar activities in different ways to achieve their business successfully.
In addition, the third reason, why AirAsia company needs to consider and stress to a strategic management? This is because,
strategic management becomes important in AirAsia due to the following reasons. The first reason why strategic management
becomes important is because the globalization. The globalization consideration impacts virtually all-strategic decisions in a
company. The globalization also forced AirAsia Company to survival for business. To see and appreciate the world from the
perspective of others has become a matter of survival business.
The underpinning of strategic management hinge upon managers gaining an understanding of competitors, markets, prices,
suppliers, distributors, governments, creditors, shareholders, and customers worldwide. The price and quality of firms products
and services must be competitive on a worldwide basis, not just a local basis[5]. The globalization makes a rapid change in the
business environment. Every company has a same chance and opportunity for doing their business. For those company doesnt
aware and take this as important consideration, they will failed to compete with their rival or competitors in their business.
Moreover, the strategic management becoming important due to the following reason is because the rapid development in ECommerce. Nowadays, E-commerce is becoming a business tool. E-commerce also has become a vital strategic management
and allows a company to sell products, advertise, purchase supplies, bypass intermediaries, track inventory, eliminate
paperwork, and share information. In total, electronic commerce is minimizing the expense and cumbersomeness, improved
products, and higher profitability[6].
In conclusion, Air Asia is need to aware and consider with the strategic management. The reason of the airline industry is a
unique and complex industry, not just how to reduce cost and make the operational activities running effectively. But, AirAsia
needs to come out with the strategy that can make competitive position that the company performs different activities from
rivals or performing similar activities in different ways to achieve their business successfully, and the last one is because the
effect of globalization and E-commerce becoming an effective tool in a company nowadays.
Regarding to the importance of strategic management for AirAsia Company, the next part will discusses about the current issues
that happened in AirAsia Company.
2.2 AirAsia current issues

The leading low fare airline in the Asia AirAsia has been expanding rapidly since 2001, to become an award winning and the
largest low cost carrier in Asia. With a fleet of 72 aircrafts, AirAsia flies to over 61 domestic and international destinations with
108 routes, and operates over 400 flights daily from hubs located in Malaysia, Thailand and Indonesia. To date, AirAsia has flown
over 55 million guests across the region and continues to spread its wings to create more extensive route network through its
associate companies, Thai AirAsia and Indonesia AirAsia.
Established on 12 December 2001, AirAsia has been such a big phenomenon in airline industry especially in Asia. AirAsia with
the ordinary symbol but with strong brand, now everyone can fly nowadays has been phenomena in Airlines industry. AirAsia is
one of the airline companies who more focused with the strategy how to reduce inefficiency and make it low possible fare in the
world. With the cost-efficiency, low complexity and profitability are always the cornerstones of building a strong business.
Furthermore, according to Dawna and Blaise (2005), the most successful carriers came to dominate their hub markets allowing
them to exert greater control over pricing and capacity[7]. Based on this statement, the current issues in AirAsia Company are
how to achieve to be a lowest carrier in the world in Airplane industry. Regarding to this issues, Dawna and Blaise said, the most
successful carrier in the airline industry allowing them to exert greater control over pricing and capacity.
In addition, according to Haddad (2003), the key to their current success has been to cut costs to the bone through lower
salaries and reduced overhead[8]. In airline industry nowadays, customer not only looks at the service that airline company
offered to them, but the price of the airline ticket also can influencing the customer to use an airline company. AirAsia Company
can compete with the other competitor in the airline industry if they can cut costs through lower salaries and reduced overhead.
Moreover, according to Daniel Chan (2000), these moves but a very small price to pay for continued and greater access to the
worlds most prospective air travel markets[9]. The very small price are offered to the customer also can give biggest affect in
this business. As all airlines in low cost carrier (LCC) industry compete on costs, AirAsia needs to offer the lowest possible fare in
order to win the competition in the current markets served as well as new markets[10].
In conclusion, the current issues in AirAsia Company are more focused in the competition of the cost among an airplane industry.
AirAsia as an industry company which is more focusing in the low cost carrier airplane industry need to consider to make the
lowest possible cost to compete with the other competitors in their airplane industry. To achieve the lowest possible cost, AirAsia
Company has some strategy to achieve it. On the next section, I would like to discuss about AirAsia business strategy: how to
implement and achieve it.
3.0 AirAsia Business Strategy: how to implement and achieve it.
On this section, I would like to discuss about AirAsia business strategy. On the previous section, it more focused about the
importance of strategic management for AirAsia Company and what is the current issue in AirAsia Company that was happening.
On this section, would be involved with the question, why AirAsia stressed to be low cost carrier in airline industry. And than what
is AirAsia SWOT analysis and how AirAsia solves the current issues in their company.

3.1 Why AirAsia stressed to be low cost carrier in airline industry

Datuk Tony Fernandez as CEO of AirAsia Berhad said his philosophy is very clear: before a business can grow, it needs to have its
costs under control. It must be cost-efficient and profitable, and it must create value. Costs that do not add value must be
contained, reduced and even eliminated. I have been asked by various people, How much lower can your cost reduce? Youre
already the lowest in the world! My direct answer is if we do not strive to be more efficient and choose to be complacent our
days are numbered. This is a continuous task we have to face head on year on year; it is the critical ingredient to operate a
successful business[11].
Based on the Datuk Tony Fernandez said, AirAsia can be growing in the airline business if they can control their cost. The cost
that they have to running there must be efficient and reliable. Everything that can make inefficiencies must be reduced and
possibly to eliminate. What a Datuk Tony Fernandez said is very strong opinion about their company to running their business.
AirAsia can be possibly competing with another airplane industries if they can make efficiencies to reduce cost and make the low
possible fare than another airplane industries.
Furthermore, based on the environmental scanning performed, the demand for low cost carrier (LCC) industry will keep growing
rapidly. The LCC industry attractiveness and profitability will attract many full services airlines to launch its version adding the
degree of rivalry in this industry. As the implication, AirAsia, current market leader of LCC in Malaysia, Thailand, and Indonesia,
will face competition from both existing and new players. In order to sustain its competitive advantage, AirAsia needs to
leverage its competency in creating cost advantages across multiple value chains[12]. Based on that statement, AirAsia need to
make a consideration and more stressed to be lowest cost carrier in the airline industry. The demand for lowest cost carrier is will
be growing rapidly, it can be the great opportunity for AirAsia Company to run their business.
In addition, AirAsia business strategy also centered on cost leadership. According to Porters generic strategies (1985), one of the
generic strategies is the cost leadership[13]. The cost leadership in AirAsia Company is already approving because AirAsia more
focused and concentrated in the lowest cost carrier in airplane industries. AirAsia wanted to be a leader in the lowest cost for run
their business. AirAsia builds and sustains its competitive advantage by providing services at a price that simply lower than
competitors price. Operation effectiveness and outstanding efficiency are the two main characteristics of low cost business
including in AirAsia.
Moreover, AirAsia believes in the no-frills, hassle-free, low fare business concept and feels that keeping costs low requires high
efficiency in every part of the business. Efficiency creates savings that are then passed on to guests so that affordable air travel
can become a reality. Through AirAsia philosophy of Now Everyone Can Fly, Air Asia has sparked a revolution in air travel with
more and more people around the region choosing AirAsia as their preferred choice of transport. As Air Asia continuously strives
to promote air travel, AirAsia also seek to create excitement amongst their guests with they range of innovative and
personalized service.

In conclusion, with there believes to make a low possible fare for to the customer, AirAsia was becoming an Airline company that
is chosen by so many customers. The best philosophy of AirAsia now everyone can fly means to giving an opportunity to all the
people to flight with the lowest possible fare and making them can flight even they only have the less money.
In conclusion, the reason why AirAsia more stressed to be low cost carrier in airline industry because:
1.

AirAsia believes to compete in the airline industry, it must be cost-efficient and profitable, and it must create value.
Costs that do not add value must be contained, reduced and even eliminated.
1.
Demand for low cost carrier (LCC) industry will keep growing rapidly.
1.
And than the best philosophy of AirAsia now everyone can fly means to giving an opportunity to all the people to flight
with the lowest possible fare.
The lowest possible fare that AirAsia was implementing is the best strategy that they are used to compete with their rivals in the
airplane industries. AirAsia believes with the lowest fare that they are offering to the customer, they can attract customer more
than their rival in the airplane industries.
In addition, to achieve the lowest possible fare in the low cost carrier airplane industry, AirAsia also need to make analysis about
their SWOT (strength, weakness, opportunity, and threat). On the next part, I would like to discuss about the AirAsia SWOT
analaysis
Pasted from <https://itsaboutmymot.wordpress.com/2009/08/31/the-airasia-company-strategic-management-%E2%80%9C-how-airasia-can-be-a-leader-inthe-lowest-cost-carrier-in-the-airplane-industry%E2%80%9D/>

The pilots' failure to correctly respond to a recurring rudder problem led to the crash of an AirAsia commercial jet into the Java Sea a year ago, killing all 162
aboard, Indonesian safety officials said Tuesday.
AirAsia Flight 8501 disappeared from radar screens Dec. 28 about 40 minutes out of Surabaya, Indonesia, bound for Singapore in stormy weather. Indonesia's
National Transportation Safety Committee in a report issued Tuesday said a rudder control system on the Airbus A320 had failed almost two dozen times in the
year before the crash.

"The degraded performance and ambiguous commands might have decreased the SIC's (co-pilot) situational awareness and he did not react appropriately in
this complex emergency resulting in the aircraft becoming upset," the report said.
Airbus, the plane's manufacturer, said in a statement Tuesday that the company is studying the report, to which it contributed technical expertise.
"We are now carefully studying its content," the statement said. "With safety being top priority, Airbus is fully committed to push the safety track record of our
industry even further."
Co-pilot Rmi-Emmanuel Plesel had 2,275 flying hours with AirAsia. Capt. Iriyanto, an Indonesian national who used just one name, had more than 20,000
flying hours.
Australian, French, Singaporean and Malaysian authorities assisted in the investigation. Maintenance records indicated increasing frequency in problems with
the rudder. The malfunction, caused by a cracked joint on a circuit board, occurred nine times in December.
The report said the flaw caused an alarm to go off several times during the flight. That led the pilots to attempt to reset the system, prompting a series of events
that led to the plane rolling out of control. Miscommunication between the pilot and second-in-command apparently added to problem, the report said.
Pasted from <http://www.usatoday.com/story/news/world/2015/12/01/rudder-problem-pilot-actions-led-airasia-crash-killed-162/76598590/>

"Subsequent flight crew action leading to inability to control the aircraft... resulted in the aircraft departing from the normal flight envelope and entering
prolonged stall condition that was beyond the capability of the flight crew to recover," the report said.
There were seven crew members and 155 passengers on board 138 adults, 16 children and one infant. The passengers and crew included three South
Koreans, a Malaysian, the French co-pilot, a British national and his 2-year-old Singaporean daughter. The rest were Indonesians.
After the report was released, AirAsia CEO Tony Fernandes tweeted out condolences to those who died. "There are scars that are left on me forever" due to the
crash, he said.

"There is much to be learned here for Airasia, the manufacturer and the aviation industry," Fernandes said. "We will not leave any stone unturned to make sure
the industry learns from this tragic incident."
The crash closed out a bumpy 2014 for Southeast Asia air travel. On March 8 of that year, Malaysia Airlines Flight 370 went missing soon after taking off
from Kuala Lumpur for Beijing with 239 people aboard. Four months later, another Malaysia Airlines flight was shot down over eastern Ukraine while on a flight
from Amsterdam to Kuala Lumpur. The 298 people on board were killed.
Pasted from <http://www.usatoday.com/story/news/world/2015/12/01/rudder-problem-pilot-actions-led-airasia-crash-killed-162/76598590/>

AIR ASIA- HOW TO BE A LOWEST COST CARRIER IN THE AIR PLANE INDUSTRY
Nowadays, competitions in airplane industry is very tough because of air transportation will incured higher cost. So to
reduce the cost its will take many aspect.Each Of Airplanes Company in the world trying to conduct some strategies to
compete with another competitor in their industry. A lot of airplane companies come out with different strategies to make
their company better than their competitors. To compete with their competitor in the business environment, a company
needs to make a strategy to achieve their long terms objective and can be successful for doing their business.
The two following reason are need to take into consideration ,a company needs to consider the company ability. The main
factor in the internal and external factor can be identify with SWOT analysis. The internal factor can take a look into
strength and weakness in a company, and for the external factor, a company can look at opportunities and threats in the
external environment. The growing numbers/travelers worldwide can be the wonderful opportunity for Air Asia for running
their business.
In addition, to captures and attract a customer to choose AirAsia as an airline option, AirAsia need to develop and create a
wonderful strategy and come out with special offering to their customer to successfully in their business. Traffic volume
also would be increase, and also the Asian air travel market has always been intense. When the competition in the
airplane industry becoming though, complex, and rapidly change, Air Asia company as a company that joined in the
airplane industry business need to thinking strategically and also must preparing a good strategic management. In order
to make sense of what is going on around them, firms must undertake an analysis of their external and internal
environment. To understand and how take an action about external and internal environment, a company needs to
support themselves with a good strategic management.

Because of this reason, Air Asia need to consider a strategic management as the important things in their company. The
strategy that AirAsia need is not just how to reduce cost and make the operational activities running effectively. But,
AirAsia needs to come out with the strategy that can make competitive position that the company performs different
activities from rivals or performing similar activities in different ways to achieve their business successfully. The process of
achieving organizational goals by engaging in the four major functions of planning, organizing, leading, and controlling
may not sufficient for the organization succeed in the world environment.
Malindo Airways, an affiliate of fast-growing Indonesian budget carrier Lion Air, began operating in Malaysia two months
ago, offering competitive fares on lucrative routes.
Malindo is also luring travellers with perks such as free snacks, a booked luggage allowance and enlarged seats. The new
player's entry has since sparked a price war. Malindo Airways, being a new entrant to the domestic market in Malaysia,
could go all out for market share at the expense of profitability by under-cutting prices. AirAsia, on the other hand, may
also want nip the competition in the bud by dropping fares. This could result in a full-scale price war.
Pasted from <http://transworldoflogistics.blogspot.my/2013/08/current-issue-of-air-asia.html>

The captain of the AirAsia jet that crashed into the sea in December was out of his seat conducting an unorthodox procedure when
his co-pilot apparently lost control, two people familiar with the investigation said.
Pasted from <http://www.theguardian.com/world/2015/jan/31/airasia-captain-left-seat-to-fix-computer-problem-before-jet-lost-control-reports>