CURRENT ISSUE OF AIR ASIA

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 it’s 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.

However, practically, Malindo Airways’ significance as a threat to AirAsia depends very much on how quickly and size ably it can scale up its operations (that remains unclear at the moment). Over the longer term, its survival also depends on its ability to beat or at least match AirAsia’s extremely low cost structure.