Airasia Value Chain Analysis Essay

Decent Essays
AirAsia has two main customers which is the young, fair conscious customer and business travelers whom are looking for low airfares to travel to their destination, safely and comfortably.
AirAsia adopted low cost leadership strategy, hence, all sources such as labour, fuel and aircrafts related to cost reduction must be exploited. AirAsia must reduce operating cost throughout its internal value chain activities. Therefore, we have used value chain analysis as a tool to analyze the effectiveness of AirAsia’s low cost strategy in adding value to their customers and achieve greater cost-efficiency.

AirAsia’s Value Chain Analysis
Inbound Logistic
Fuel Management: AirAsia has been working in partnership with GE’s Flight Efficiency Services (FES)
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Consequently, the brand AirAsia attracts millions of home viewers all over the world and is currently perceived as the world’s best low cost airline in Asia.
Advertising and Promotions: AirAsia successfully attracts millions of customers by offering ‘The Free Seats Promo’ for both domestic and international flights to Langkawi, Singapore and other selected destinations in 2014. The promotional fares begin from as low as RM0 excluding service tax. Further, if seats are booked along with hotel accommodation, AirAsiaGo offered discount up to 75% and up to 50% for the hotel accommodation. AirAsia’s famous slogan ‘Now everyone can fly’ have become successful marketing icons in Southeast Asia, hence, created a strong image of safe and cheap airlines as the ‘World’s Best Low Cost Carrier’. AirAsia enable everyone to fly by offering the lowest
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Further, ticket sales can be done via mobile as it is a simple and cost effective method
Baggage Service: Passengers can approach to any AirAsia’s friendly guest service officers if they encounter any problems such as baggage missing or damage. All the passenger’s baggage will be given a tag so that the guest service assistants can easily track the missing baggage through the Baggage Tracing System.
Hotel Reservation: AirAsia offers a reasonable travel packages including city tour, transportation and accommodation. Customer can make online hotel reservation through www.airasiago.com to choose over 435,000 best and discount hotels rates in the most popular destinations around the world.

Firm Infrastructure
Regulatory Compliance: AirAsia is one of the authorized airlines that received flight licenses from the Malaysian Federal Government to travel over 100 domestic routes by using Waran Perjalanan Udara Awam (WPUA) for duty

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