Air Asia Case Study

Background of the Study

Air Asia was established in 1993, and its first flight took place in 1996. It was

started by the state company DRB-Hicom. The history of AirAsia's founding is legendary

in the aviation sector. An investment holding company called Capital A, formerly known

as AirAsia Group, has a portfolio of information and digital leisure and travel

businesses, including the airasia Super App, BigPay fintech, and Teleport logistics

venture.

It all beganin 2001 when Tony Fernandes and Kamarudin Meranun purchased a

failing travel company with two aircraft and 200 people, transforming it into the fourth-

largest in Asia with more than 200 aircrafts and 21,000 personnel dispersed over

Malaysia, Thailand, Indonesia, the Philippines, and other nations. Air Asia was

established in Kuala Lumpur, Malaysia as a one ringgit company having a 40 million

debt and with 2 airplanes which the government later sold these assets to transform Air

Asia into a commercial airline in order to meet the increasing demand for boosting the

travel and tourism sector. The airline claimed "No Admin Fee," but it does charge for

several things that are free on other airlines. The airline effectively positioned itself as a

no-frills airline with a marketing image of a low-cost carrier and the tagline "Now

everyone can fly."

The Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport

serving as the airline's main base of operation, with Kota Kinabalu International Airport,

Senai International Airport, and Penang International Airport serving as AirAsia's

supplementary airports. As a stand-alone organization, it expanded into the neighboring

regions in ASEAN nations. With its dedication to accessibility, affordability, and

inclusivity, AirAsia has carried more than 600 million passengers to more than 160

destinations across its route. It has linked people and locations with the intention of

assisting the underprivileged, and it is primarily credited with democratizing air travel in

the region. AirAsia has established its reputation as one of the biggest low-cost airlines

in the world today and a business that has fundamentally changed Asia.

Furthermore, AirAsia strives to keep its prices as low as possible so that anybody

may fly with them. The Air Asia airline will continue to provide products of the finest

quality while embracing technology to reduce costs and raise service standards. The

following main procedures will be used by AirAsia to implement its value proposition:

safety, low fares, no frills, a lean distribution network, a point-to-point route system, high

aircraft utilization, and efficient operations. The final goal for Asia will be to establish the

ASEAN brand as a worldwide force. AirAsia will have a "BIG" loyalty program. BIG was

renowned as the type of international program where users could accumulate BIG

Points to use toward "Free Airline Flights." As an AirAsia BIG member, members can

benefit from preferred booking, exclusive deals, and discounts with proper terms and

conditions (AirAsia, 2013).