Airasia: The Sky’s The Limit

AirAsia: The Sky’s the Limit

AirAsia: The Sky’s the Limit AirAsia was the first airline in Asia to introduce the budget, no-frills airline concept. It was founded in 2001 by Chief Executive Officer (CEO), Tony Fernandes and his three partners when their company, Tune Asia Sdn. Bhd., bought the fledgling AirAsia, a Malaysian government-linked airline. Since then, the growth of this Lowcost Carrier (LCC) has been the envy of many. Today it is a public listed company boasting a large fleet of aircrafts flying to more than 61 domestic and international destinations. It flies 108 routes and operates more than 400 flights daily from hubs in Malaysia, Thailand and Indonesia and focuses on providing convenient and affordable air travel for the mass middle-class market. AirAsia offers savings of up to 60 % compared to MAS’s rates, and the company’s tagline, “Now everyone can fly”, truly reflects the company’s pledge to its customers. The airline was launched during a turbulent period when people were hesitant to fly due to the aftermath of the 2001 terrorist attacks. Visitors concerned about longdistant travel started to look for holidays in neighbouring countries which invariably worked well for AirAsia when it started to fly regional routes. Asians were enjoying the benefits of higher incomes and good economic growth and although many could not afford long-distance holidays, they were open to the idea of travelling to neighbouring countries. In addition, extensive media coverage on LCCs helped consumers understand the no-frills concept. The Internet also provided AirAsia with the opportunity to reach more customers through online booking. Fernandes, a strong believer in leadership role, insists on a mutual corporate culture. As CEO, Fernandes ensures that he is accessible to all his staff by giving them his mobile telephone number. In mid-2003, he secured the support of the former prime minister of Malaysia, Tun Dr. Mahathir Mohamad to network with neighbouring countries in an effort to develop an open-skies agreement. Since then, Indonesia, India, Thailand and Singapore have granted landing right to AirAsia. Although it has limited resources, AirAsia has been able to fulfil its customers’ needs by collaborating with partners. For instance, it appoints authorised travel agents to cater to travellers who are uncomfortable with making their booking over the Internet. Travellers without credit cards can also pay for their tickets by cash at any Alliance Bank branch in Malaysia. With the right partners and a strong marketing strategy focusing on the promise of low fares and good brand experience, Air Asia has evolved from an ailing company into one that has netted a profit of $14.4 million in its third year of operation. The global financial crisis in mid-2008 affected many industries, including the aviation industry. Fewer business and leisure travellers were flying due to the economic recession.