Air Asia Group CEO In Handling Pandemic Crisis

EBD8014
BUSINESS STRATEGY & LEADERSHIP

SEM 01 2020/2021

ASSOC. PROF DR ROHAYA MOHD NOR

GROUP MEMBERS MATRIC NO
MOHAMMED YAAKOB BIN HAJI MORSHIDI (20040021)
MURPHY NYAMBONG ANAK MICHAEL (20040020)
#1
AWANG HABIBURLLAH BIN AWANG ISMAIL (20040023) Situational
LEE KIM SENG (20040015)
Analysis
NURHIDAYAH BINTI SOKAT (20040024)
Presentation
 INTRODUCTION
Air transport represents a small share of
GDP but is closely linked to the activities
of other sectors, especially airports and
aircraft manufacturing – collectively
considered here as the “aviation
industry”. The aviation industry is a key
enabler of many other economic
activities.

The dramatic drop in demand for

passenger air transport (and freight, to a
lesser extent) due to the COVID-19
pandemic and containment measures is
threatening the viability of many firms in
both the air transport sector and the rest
of the aviation industry, with many jobs
at stake.
 IMPACTS OF COVID-19 ACROSS INDUSTRIES

(International Organizations Representing The Impacted Industries.) The COVID-19 virus has spread worldwide
without acknowledging borders. It
has impacted all industries, all sectors and all
aspects of our lives with devastating economic
and financial losses and significant
uncertainties.

Figures are sourced from the International Civil

Aviation Organization (ICAO), the International
Air Transport Association (IATA), the Airports
Council International (ACI), the UN World
Tourism Organization (UNWTO), the World
Trade Organization (WTO) and the International
Monetary Fund (IMF). All figures are in
comparison to 2019 data, except for figures
marked with an asterix (*) which are compared
to 2020 baseline.
AIRASIA LATEST STOCKS
 EXTERNAL ANALYSIS: AIRASIA MALAYSIA
OPPORTUNITIES
Growth through expansion in the global
commercial aviation market
New partnerships with competing /
complementing firms
Growing airline retailing market providing
new opportunities and additional income
Growth through diversification of service
offerings in or related to aviation
AirAsia can issue new shares to strengthen
its cash position to survive the Covid-19
pandemic
Raising more equity capital for the long-
term survival
THREATS
Safety concerns and the risk of accidents in
aviation
Regulatory changes in commercial aviation
Volatility of fuel prices
Rising Labour Costs
AirAsia current liabilities had surged to
RM8.5 billion, exceeding its current assets
by RM3.6 billion
Increase raises in equity capital would be
negative to its shareholder, and it is difficult
to make this decision
 OPPORTUNITIES
The increasing traffic from
India and Indians prefer
budget airlines as they are
cost conscious
Has Positioned itself as the
major LCC in Southeast Asia
AirAsia India is the first
domestic airline to offer
customer support through
WhatsApp in the country
THREATS
Limited population of pilots
affecting Asia's travel boom External
analysis:
Rise of Other LCCs in
Market AirAsia India
High competition with
other airline companies in
the Southeast Asian
aviation industry
 How Air Asia can bounce
back?

1. Promote Domestic Flight

• Increase number of domestic flights

• Currently there are fewer international flights.
Government across the world have closed their
borders.
• AA need to re-strategize by promoting flights inside
Malaysia.
• For example, Kuching - Langkawi, Tawau - KL.
• Some Malaysian not yet travel inside the country.
 How Air Asia can
bounce back?
2. Towards Touchless Passenger Processing

▪ Air travel industry need to regain travelling

confidence
▪ To reduce the spread, AA can consider
autonomous, hands-free passenger self-processing
solutions throughout
▪ Many CUSS (Common User Self Service) solutions in
the market
▪ Eg: Off-site check in and processing, Self-service
check in Iris Scanning and facial recognition.
How Air Asia can bounce
back?
3. Restructuring Its Financial
• Low-cost base
• Right market segment
• key markets are
• green zone which is likely to reopen first.
• Datuk Lim Kian Onn appointment as deputy
chairman to lead the restructuring initiative
and facilitate new equity injections
• Creation of new contracts, agreements and
new arrangements aimed at adjusting the
size of the group's operations and financial
obligations, which are critical to the group's
continued existence in the aviation
landscape.
 How Air Asia can bounce back?
4. Pursuing Corporate Downsizing

• Had to lay off 10 percent of its entire 24,000

workforce--Retrenchment
• Liquidity constraints and breach of some
potential contract commitments for the liquidation
of the airline.
• Operate on a smaller scale after this and AA will
work to save as many employees as possible---
Downsizing
• To rehabilitate these airlines and provide them
with other jobs
 Is he going to succeed or not??
Resource + Capabilities

Core Competencies

Competitive Advantages
• Transformational Leadership
• Charismatic
Above Average Return “ But there is only one things you can do in this life that is to
fight right back and that the challenge, you have to regroup,
rebrand, re pivot, re-everything really and come back stronger”
Tony Fernandez Sept 2020
Sustainable above average