Airline Case

Airline is a large and growing industry. Air travel is a growing industry that facilitates economic growth through investment, international trade, and tourism . Across Asia emerging market economic growth has outpaced the development of road and rails infrastructure.domestic air travel has become very important in this market and it was the mode of transportation nowadays. Asia economic growth has strengthen the regional airlines through an increase in international air travelers. Industry is growing because open skies agreement loosening of government regulations increase demand of budget airlines services. Malaysia air travel industry I'd being monopolized by 2 main operators which are MAS and AirAsia. Running and airline is costly. Fuel accounts for 14-16% of an airline total cost with average prices fluctuating 5-10% monthly. Labour cost is another major expenses at almost 40% of tosl expenses. To move people off the play roll many airlines outsource their non crucial operations such as IT. IT itself has a major effect on the industry. The emergence of new technologies allows customers to access information to compare prices among airline via internet giving them many choices and stretching their bargaining power. This is in fact reduced the influence of the travel agents as the main distributor for mainstream airline

Low cost airline

The emergence of no frill low cost carriers couples with deregulation intensified the competition among airlines and resulted in a decline in airfares of more than 35% between 1970 and 2000. By 2011, the downward pressure on airfares was as relevant as ever. LCCs such as malaysia AirAsia sold ticket for as little as rm9.90 for one way ticket from kulaks lumpur to langkawi. A 400km flight, comparable to the flight from new York to Washington.