EIB 3003

Managerial Economics
Session 2 2021/22
Instructor : Dr. Nurulhuda Binti Mohd Satar

Consultancy Project - Recovery for AirAsia Airlines

Group 2

Group Members Matric Number

Ahmad Bin Taib
Alvina Binti Asrul 17205469
Hilmiya Batrisyia Binti Hilmi 17204848
Nabilah Binti Talib 17204258
Siti Nur Asyikin Binti Mohd Hanifah 17205545
Sofea Nabihah Binti Mohd Yusof Chan 17207641
Current economic condition has placed business entities in a challenging situation. Business
owners, big or small, recognized the importance of making good managerial decisions. However,
making good decision requires not only the information collected to be adequate but it must also
be valid and relevant. It is common for companies to use third party consultancy service for
certain decision that they have to make.

In this assignment you need to imagine yourselves as a group of business consultants paid
by owner(s) of an organization (it can be a company, non-profit organization, or government
agency), to help them dealing with their most critical challenge/problem. Choose one
firm/organization and dig out its problem (loss of customers, slow growth, not making profit,
stagnant collections, inability to adapt to technology etc.), identify one critical challenge and
propose solution(s) to the problem based on scientific data analysis. The data and analysis
technique can be either quantitative or qualitative. Write the full report of your consultancy
project and present your ideas to the owner(s) of the company.

Content (weightage)
1) Background and case scenario, objective of the report (20%) -
2) Brief on organization background (5%)
3) Methodology and data (15%) -
4) Analysis and findings (25%) -
5) Proposed solution(s) (25%) -
6) Conclusions (5%)
7) Profile of consultants (5%) -
1.0 Background of AirAsia

AirAsia Berhad was originally founded in 1993 by DRB-Hicom before it was bought by Tune
Air Sdn Berhad in December 2001, under the owner Dato’ Sri Anthony Francis Fernandes,
otherwise known as Tony Fernandes. Under his management, he was able to turn company
losses around into the major leader in Malaysia’s passenger airlines industry, surpassing that of
its former industry leader, Malaysian Airlines Berhad. AirAsia had a vision to make air travel
accessible to everyone, as it was inspired by the first low-cost airline carrier, Ryanair. Adopting
Ryanair’s concept of low-cost flights, AirAsia became the first low-cost airline in Asia, with
promotional rates as low as RM1. Since its takeover in 2001, AirAsia rose to the top of the
airline ladder, by offering domestic and international routes, including 15 destinations in
Malaysia alone and over 50 destinations across the globe.

AirAsia's first hub was initially at Kuala Lumpur International Airport (KLIA) and only offered
domestic flights to its customers. However, in 2003, AirAsia launched its first ever international
flights to Bangkok, Thailand after it opened another airline hub at Senai, Johor. The success that
drew from it drove AirAsia to subsequently launch new international flight routes to destinations
such as Singapore, Vietnam, Hong Kong, Macau, and Indonesia. By early 2006, a new low cost
terminal was opened close to the Kuala Lumpur International Airport, and was called the Low
Cost Carrier Terminal (LCCT). All flights made by AirAsia had been based from LCCT ever
since its conception. Despite the terminal being smaller in size as compared to KLIA, LCCT is
reported to be able to handle up to 10 million passengers annually. Later on in 2014, a new Kuala
Lumpur International Airport 2 was built, replacing LCCT with bigger and better facilities.
1.1 Case Scenario of AirAsia

The pandemic induced by the Covid-19 virus, which is now sweeping the world, will definitely
and certainly have a substantial effect on the life of every individual. Due to the pandemic, many
activities have been interrupted, and the current situation has had disastrous effects on the great
majority of businesses, especially in the aviation sector. Due to the pandemic induced by the
COVID-19 virus, the financial performances, which were supposed to be working smoothly,
have suffered a considerable loss. Due to the disastrous pandemic in the year 2020, AirAsia
Berhad has seen a huge change in its income.

The reduction in sales and profitability is directly attributable to the global Covid-19 pandemic.
This is because various restrictions have been implemented throughout the outbreak. Despite
being immune from some restrictions, the company's key source of revenue and profit, its
customers, were badly affected by the circumstances. For instance, when the government put
limits on the general public, these constraints had an effect not only on the private lives of
people, but also on the areas in which they were active. The implementation of a policy that
prohibits customers from eating in the restaurant, for instance, not only requires customers to
take their meals to go, but also reduces the company's sales throughout the day. As a
consequence, AirAsia Berhad's revenue and earnings were affected to a greater or lesser degree
by the government restriction.

AirAsia is a low-cost airline based out of Malaysia. This is conventional wisdom. Thus, the bulk
of its income was derived from travellers. In order to prevent the spread of the COVID-19 virus,
everyone remained in their houses. As a result, fewer individuals will board the aircraft in total.
Only a few customers were permitted to travel, and even then, only if they had strong reasons to
do so. In addition, people who seek to travel, even for valid reasons, are compelled to through a
variety of tedious procedures. As a consequence, the majority of people choose to stay at home
rather than travel. In addition, swabs and rapid test kits are not believed to be affordable or
accessible to everyone, which is another reason why many people cancel their vacations.
Due to these factors and the fact that the COVID-19 crisis led to border restrictions in the
majority of AirAsia's key markets, including Malaysia, Thailand, Indonesia, the Philippines,
China, and India, the total number of passengers carried in the first quarter decreased by 22
percent to 9.85 million. Tony Fernandes, co-founder of AirAsia, has said that the breakout of the
coronavirus in February and March of 2020 has precipitously reduced air travel demand. Due to
this, aircraft were unable to take off. AirAsia owns a total of 97 A320 airbus, which were parked
at the airport rather than being placed into operation since the airline's aircraft were unable to
take off. This results in losses for AirAsia, since the business must continue to pay both the
airport parking fee and the airbus rental cost because it does not own the airbuses in issue. This
indicates that the firm faces an existential danger owing to the inability of its aircraft to fly.

Since the beginning of the MCO, Malaysia Airlines has restricted its operations, lowered
compensation, and granted more than 13,000 staff unpaid leave. Now, the corporation is
reorganizing to ensure its continued existence. Malaysia Airlines drastically reduced its total
network. Additionally, international flights to India are cancelled from March 17, 2020 to March
31, 2020, and international flights to the Philippines are cancelled from March 21, 2020 to March
31, 2020. This is because the governments of both nations have prohibited travel to and from
Malaysia. Border regulations prevented Malaysia Airlines from flying to Saudi Arabia, South
Korea, Beijing Daxing, Kota Kinabalu, and Shanghai prior to the Order. Additionally, they had
less room for flights to Australia and New Zealand since those two nations were unwilling to
share.

1.2 Objectives of the Report

This consultancy report aims to:

1) Analyze the trend of AirAsia's business operations from the year 2016 until 2021
2) Propose suitable solutions for the recovery of this low-fare airline system
2.0 Brief on AirAsia’s Background

Capital A Berhad, or better known as its operation name, AirAsia, is a Malaysian multinational
low-cost airline. On the 3rd of January of 2022, AirAsia Group Berhad announced that they will
be changing their corporate name to Capital A to reflect its expansion of the business portfolio.
Based on the fleet size and the number of destinations, AirAsia is the largest airline in Malaysia
as it has regular flights to more than 165 domestic and international destinations in 25 different
countries. It was founded in December 1993 and started its operations in November 1996. Their
subsidiary airlines are AirAsia X, Indonesia AirAsia, Philippines AirAsia, Thai AirAsia, Thai
AirAsia X, and AirAsia India. The difference between AirAsia and AirAsia X is that AirAsia X
focuses more on long-haul flights.

The basis of AirAsia is its low-cost flights, and Skytrax has awarded AirAsia as the world’s best
low-cost carrier for 11 years consecutively as of 2021. By the beginning of 2013, AirAsia's
earnings had increased by 168 percent over the same period in 2012. For the quarter ending
December 31, 2012, the airline had a net profit of US$114.08 million. Despite a 1% increase in
average fuel prices, the airline achieved 1.88 billion ringgit in earnings for the whole 2012 fiscal
year (Presse, 2013). AirAsia’s revenue continued to increase throughout the years, and in 2019,
they opened their first restaurant called Santan, that served in-flight meals.

Nevertheless, AirAsia is not an exception to the COVID-19 pandemic, which occurred at the end
of 2019 and caused the company to face a loss of 803.3 million ringgit by March 2020. At the
start of the COVID-19 pandemic, AirAsia retained some of their income by not immediately
refunding travellers whose flights were cancelled. Instead, they distributed travel coupons and
only compensated individuals on an individual basis (Forbes, 2020). In October 2021, the
Malaysian government lifted the travel restrictions, allowing AirAsia to resume their
international flights again.
3.0 Methodology and Data
In this chapter, the methodologies and approaches that were used in this consultancy will be
discussed in detail.

3.1 Review Method

The research relies on descriptive analysis, which is based on explaining the current state of
events without having any control over variables by the researcher. Qualitative data depends on
acquiring data for market research and this is through conversational contact as well as open-
ended contact. Descriptive analysis study necessitates this approach and has been created in such
a way that it may disclose the impact on AirAsia airline in relation to the current COVID-19
pandemic. Therefore, more descriptive results and inferences may be drawn easily from the data
through the qualitative method.

Other than that, secondary data was used in this study since it is less expensive and easier to
acquire because the information is available online on the official government website. We can
summarize and extract crucial information to describe the most critical challenge that faced by
AirAsia during the pandemic using this tool because it incorporates both numerical and graphical
data.

3.2 Study Design Strategy

In order to describe the most critical challenge faced by AirAsia, which is the decrease in its
profit, some issues will be highlighted where it will be focusing from the year 2016 until 2021.
Secondary data was gathered for this study from the Department of Statistics Malaysia's official
statistical database (DOSM) and Annual Report of AirAsia. As we are focusing our research in
Malaysia, data from the indexes were analyzed and observed to come up with a summarization
towards the associated variables during COVID-19 pandemic. In this research, we will look into
the numerical and graphical data to describe the impact of recent pandemic towards AirAsia
airline.
Despite the simplicity of using secondary data, we admit its flaws in other areas, such as the fact
that it may not statistically verify the research problem. Due to the lack of statistical testing, the
research results may be biased, so extra measures will be made in the adaptation of the secondary
data used in this study.

3.3 Synthesis of Data and Evaluation of Its Quality

The decision was made to conduct a descriptive analysis of the recovered records, with the main
theme categories established based on the themes mentioned in each included study. In the result
section, the extracted data was synthesized. However, because of their observational nature, the
bulk of descriptive studies are not ‘replicable.'
4.0 Analysis of Business Performances and Issue Identification of AirAsia (2016-2021)

In order to analyze the business performances and issue identification, we have come out with
three categories which analyze the revenue, net profit or loss, and operating statistics of AirAsia.

4.1 Analysis of Revenue

Figure 1: Revenue by Airasia Berhad in Year 2016 to 2021

Source: Annual Report Of Airasia

AirAsia is a Malaysian budget airline. As a result, an airline company makes money from
passengers, cargo shippers, and other transportation-related services. In addition, the airline
company will use the funds to fund flight operations, maintenance, and plane and tourist
services. Revenue is calculated using the terms of a contract with a client and does not include
monies collected on behalf of other parties. When the AirAsia Berhad hands over control of a
product or service to a customer, revenue is recognised. When (or as) the customer gains control
of an asset, it is said to be transferred.
As shown in Figure 1, revenue from the year 2016 to 2019 has increased steadily before the
pandemic hits. However, the revenue for AirAsia Berhad dropped significantly from
RM11,860,000 (2019) to RM3,274,000 (2020) and the lowest revenue they had was in the year
2021. Given that international flight operations were affected for the whole year, the AirAsia
Berhad faced much greater challenges in 2021 than it did in 2020. However, as the effects of
mass immunization were apparent near the end of the year, the situation improved. With the drop
of COVID-19 infections, travel lanes began to form, followed by the progressive opening of
internal and, to a lesser extent, international borders in the hopes of regaining revenue in 2022.

4.2 Analysis of Net Profit / (Loss)

Figure 2: Airasia’s Net Profit / (Loss) In 2016 - 2021

Source: Annual Report of AirAsia

Net profit or loss is important to analyze the performance of business. From this data, AirAsia
can manage and decide the appropriate strategies to overcome the net loss or increase the net
profit. Net profit represents the amount of money that has left over after paying all expenditures
while net loss occurs when the expenditures exceed the revenue.
Based on Figure 2 above, AirAsia has received the net profit in 2016 to 2018 although there was
a slight drop in 2017 which dropped from RM 1619 million to RM 1571 million and then
increased to RM 1695 million. However, in 2019, the year where the pandemic of Covid-19
began, AirAsia started receiving a net loss and it continued continuously until the year of 2021.
In 2020, due to the serious impact of Covid-19 on this industry, the net loss of AirAsia increased
significantly from RM 283 million in 2019 to RM 5888 million. Nevertheless, although the net
loss of AirAsia was still high in 2021, but it was not as much as the net loss in 2020 (RM 3721
million).

4.3 Analysis of Operating Statistics of AirAsia

This section discusses the market research and analysis of the operating statistics, among which
we will be focusing on a few elements, which are total passengers carried, the Revenue
Passenger Kilometres (RPK), and the Available Seat Kilometres (ASK).

4.3.1 Total Passenger Carried from 2016 - 2021

Figure 3: Total Passenger Carried From 2016 - 2021

Source: Annual Report of AirAsia
Figure 3 shows the total number of passengers carried by AirAsia Airlines from the year 2016
until 2021. The data shows an increasing trend from the year 2016 until 2018, from 26,510,922
passengers in the year 2016, increased by 48% to 39,092,972 passengers in the year 2017, then
increased to 44,437,381 passengers (2018) with an increment of 14%. Based on this pattern, it
can be said that AirAsia started to show a slow increment in the number of passengers from the
year 2018 to 2019. The number of passengers faced a drastic decrement from the year 2019 to
2021, when in 2019 there were 51,559,070 passengers, which was also the highest among the
study years, before decreasing to 13,309,353 passengers in the year 2020 (-74%). This number
continued to drop to 4,812,364 passengers in 2021, a decrease of 64%.

4.3.2 Analysis of RPK and ASK from 2016 - 2021

Despite the fact that practically every economic sector has been impacted, travel and tourism
have been hit the worst. This is primarily due to the imposition of internal travel restrictions as
well as, more importantly, the closure of international borders, both of which have not yet been
lifted. According to the International Civil Aviation Organization (ICAO), worldwide RPK fell
by 65% year on year, the largest drop in aviation history. Moreover, the total number of
passengers transported fell by 60% during the same time period.

Figure 4: Analysis of RPK And ASK (2016 - 2021)

Source: Annual Report of AirAsia
 Figure 4 shows the trend of RPK and ASK values from the year 2016 to 2021. Both RPK
and ASK are the highest in 2019, which is 63,382 million and 74,642 million, respectively. The
trend of the RPK increased continuously from 34,676 million (2016) to 50,805 million (2017)
with an increment of 47%, then increased to 55,962 million (2018). It shows an increase of 10%
but with a decrease in the percentage increase. RPK continued to increase to 63,382 million
(2019) before dropping drastically to 14,268 million in the year 2020, with a percentage drop of
77%. In the year 2021, the latest RPK of AirAsia was 4,812,364 million, a decrease of 64%, but
the difference in percentage drop was decreased by 13%, which is assumed to have started to
show a recovery.

In the airline business, RPK or revenue passenger miles (RPM) measure how far paying
passengers fly. The number of paying passengers is multiplied by the total distance travelled to
arrive at this figure. It is often referred to as "airline traffic" since it gauges the real demand for
air travel (Staff, 2016). Decreasing RPKs is a bad sign for AirAsia airline since it indicates a
lesser demand for their services. This indicates that AirAsia is seeing a fall in the number of
people utilising their service. RPKs are the fundamental building blocks of the majority of
transportation measures. On the other hand, ASK is a measure of an airplane's revenue-
generating capability. The number of seat miles available for purchase on an airline is referred to
as available seat miles. Seat miles are computed by multiplying the number of seats available for
a flight by the amount of miles that an aeroplane will be travelling. It is necessary for AirAsia to
make every effort to align their supply (ASKs) with the demand that exists in the market (RPKs).
When there is a lack of seats, the airfare usually goes up, but when there is a surplus of seats, the
margins might be cut since the fixed costs are larger.
5.0 Proposed Solutions

5.1 Digitalization
In the aftermath of the Covid-19 pandemic, digitization has never been more important as it is
today. It has been shown that an organization's responsiveness to the Covid-19 outbreak is
directly proportional to its proactive approach to e-business. In light of the Covid-19 problem,
this condition urges businesses to prioritize their commercial operations and activities in terms of
innovative e-business tactics. Digitalization is a cutting-edge technology with the ability to
increase industrial productivity while also enhancing its users' quality of life (Zhou, 2013.
Digitalization is a crucial strategy for enhancing efficiency and attracting new customers in the
aviation industry (La et al., 2021). During times of economic adversity, investment in
information technology (IT) may help difficult businesses extend their periods of profitability
(Altschuller et al., 2010). It has been shown that excellent IT skills and proactive behaviour are
crucial for enhancing the crisis resilience of organizations.

In order for the AirAsia Group to continue its rapid growth in revenue, the company made the
strategic decision to enter the digital industry and launch a new brand known as "AirAsia
Digital." AirAsia Digital is the newly rebranded digital venture arm of AirAsia Group. RedBeat
Ventures was its original name when it began in 2018. This acknowledgement supports the
company's belief that its strategy to grow its digital capabilities was the proper one in light of the
pandemic. This new brand includes many significant digital business lines, including the
AirAsia.com SuperApp and the e-commerce logistics provider offered by Teleport. Tony
Fernandes, the chief executive officer of the AirAsia Group, has said that the company's Plan A
is to diversify their digital business during the pandemic. This process did not get started until
the year Covid-19. It all began a few years ago (in 2018). After primarily concentrating on
airlines in the past, the AirAsia Group has decided to shift its emphasis to the newly established
AirAsia Digital business line.

AirAsia Digital has just partnered with Gojek to launch Gojek's operations in Thailand by mid-
2021. AirAsia Digital is managing Thailand in order to expand in the ASEAN region, and Gojek
would become a shareholder in the AirAsia SuperApp, which has a market value of around USD
1 billion. According to AirAsia CEO Tony Fernandes, more than fifteen various non-airline
products and lifestyle services have been successfully built on their digital platform in Malaysia.
It is time to take things to the next level. In response to the enormous regional demand, they
decided to spread SuperApp goods to other important markets in the region after a successful
launch in Thailand. AirAsia's digital operations are growing more robust than ever before as a
result of this collaboration, with the goal of being the ASEAN SuperApp of choice. Based on this
collaborative strategy, SuperApp seems to be seeking to dominate the ASEAN market. AirAsia
Digital has just successfully accomplished unicorn status (a valuation of over $1 billion) in
"quick time" of less than two years. AirAsia Digital is now one of three Malaysian companies in
the SEA's unicorn club, according to a study by Credit Suisse, a Swiss global financial services
organization.

5.2 Diversification of Operations

The COVID-19 pandemic has hit the aviation industry badly, which has caused the industry to
have declining revenues. This has affected AirAsia the most, since AirAsia is Malaysia's largest
airline based on fleet size and number of destinations. In terms of passengers carried, it is also
the largest low-cost airline in Asia. For that reason, because AirAsia is a low-cost airline, it
means that their cost management is an important factor in their company’s management. Hence,
following the COVID-19 pandemic, it would be difficult for AirAsia to recover as a low-cost
airline since their revenue in 2020 was 15% lower and they faced a loss of 803.3 million ringgit
as of March 2020 (Reuters, 2020). In order to increase their revenue again and ensure a recovery,
it is important for AirAsia to diversify their operations, especially since Malaysia is slowly
entering the endemic phase.

One of the ways that AirAsia can diversify their operations is by competing in a different sector.
In 2019, AirAsia opened its first restaurant called “Santan” restaurant, where they serve in-flight
meals on the ground. The launch of the restaurant is in response to consumer demand. Catherine
Goh, the restaurant's general manager, stated that in 2018, 8 million Santan hot meals were
served in-flight. This highlights the demand for the hot meals, which is why the AirAsia group
decided to bring them to the ground too. By early 2020, AirAsia group has opened 15 Santan
restaurants and the CEO of AirAsia, Tony Fernandez, stated that the expansion of Santan is
expected to contribute to 15% of the group’s earnings. This is good news as, amidst the
pandemic, AirAsia is able to sustain itself by receiving revenue in a different sector. Despite a
few challenges, the food and beverage sector in Malaysia is constantly evolving and adapting to
the current circumstances. AirAsia would definitely benefit the most from this, as the company is
known to be digitally innovative. Even with the Santan restaurants, Fernandez expects the
restaurants to be the next “digital” restaurants in which the food preparation will be automated
and digital kiosks will be added for a seamless ordering transaction. Additionally, the group
should also focus on expanding outside of Malaysia. This is because AirAsia is the number one
low-cost airline in Asia. Hence, the group can gain higher revenue by expanding its market
internationally rather than domestically, which can also introduce Malaysia to consumers. This
will then also lead to an increase in the number of people visiting Malaysia using AirAsia.

Moreover, another way that AirAsia has diversified their operations is by collaborating with the
Ministry of Agriculture and Food Industry (MAFI) in creating "Ourfarm." Due to the Movement
Control Order (MCO) imposed by the government, AirAsia has lost its passenger demand, which
left most of its airline cargo empty (Habibu, 2020). To solve this issue, AirAsia generated the
demand itself by using its empty cargo capacity to venture into the cargo business. Ourfarm is
essentially an e-commerce market that is intended to transform the agriculture industry by
directly linking farmers and businesses. As a result, there would be a reduction in the expenses
for the middlemen, which would then increase the farmers’ profits. The primary objective of
AirAsia Farm is to transport crops. To do this, they employ idle airbuses to transport agricultural
products domestically and internationally. Since the beginning of the operation, AirAsia Farm
has transported fish from Tawau, Sabah, to Kuala Lumpur, and they have also delivered fresh
fruits and vegetables from Kota Kinabalu, Sabah, to Kuala Lumpur. Since this cargo business is
successful, AirAsia should continue this food transportation business, and perhaps expand it to
ASEAN countries too, since the food supply chain is a vital component of every nation’s
economy. By diversifying their operations in different sectors, this would allow them to
withstand unexpected challenges. By having multiple streams of income, AirAsia is able to have
many sources of financial inflow, which can act as a backup if one of the income streams fails.
 5.3 Social Media Engagement

Another strategy AirAsia can implement is by improving customer relations through better social
engagement. Research has proven that customer engagement through social media platforms has
been linked to significant outcomes such as trust, satisfaction, value, commitment, and loyalty
(Tsiotsou, 2020). As the airline sector became one of the hardest hit sectors by COVID-19,
AirAsia found it extremely difficult to maintain flights at low costs without incurring too much
losses. As a result, a series of flight delays, reschedules and cancellations had caused public
outrage among its customers. Some have called out AirAsia’s unethical business practices of
unannounced and often late reschedules and its behavior of delayed refunds (or in some cases no
refunds) through social media such as Twitter (Daniele, 2022). Thus, it is imperative for AirAsia
to improve their customer relations through the realm of social media to increase its revenue,
especially in the post-pandemic era where domestic and international flights are once again made
available.

Historically, AirAsia had been one of the frontrunners of Malaysia’s airline industries in utilizing
the social media platform to engage with its customers. Schuckert noted in his article that
between three low-cost airline carriers (AirAsia, JetBlue and EasyJet), AirAsia was the most
engaging in its Facebook media page as it accumulated 1.5 million likes on its page, while also
having the highest average number of wall posts per day (85 wall posts, 1.81 average). The posts
can be classified into different categories such as promotions, link sharing, announcements,
invite engagement, celebrity endorsements, and user involvement. The article also noted that the
main interest of AirAsia fans on their Facebook page was their ticket promotions. Therefore,
AirAsia can take note of their customer base and rally potential customers by increasing the
number of promotional posts on their social media platforms. However, it is noted that the
procedure to book online tickets through the social media pages of AirAsia were oftentimes
difficult to navigate (Suntharam, 2020). Thus, AirAsia should create an improved user interface
which is friendlier and easier to use for first time users, which can improve customer experience
and boost social media engagement.
Furthermore, the use of social media campaigns can also increase brand awareness of AirAsia.
For example, recently AirAsia Philippines had launched its SimplyFly: Travelling Made Simple
online information campaign to spread vital travel-related information such as restrictions,
requirements and even travel hacks and tips. This strategy is extremely beneficial for AirAsia as
it was reported from a survey that a total of 76 percent of respondents preferred to receiving
news and information on travel via social media platforms, with Facebook being the most visited
social media platform with 96 percent of respondents regular logging on their feeds, followed by
YouTube at 80 percent. Users are able to view easy-to-digest social media posts on the latest
travel news through the hashtag, #airasiaSimplyFly on platforms such as Facebook, Twitter and
Instagram. As noted earlier, AirAsia’s Facebook page is one of the engaged social media
platforms among low-cost airline carriers and this can be used as leverage for the business to
increase its customer base. Therefore, through increased online engagements, AirAsia will be
able to spread awareness of its promotional campaigns and increase the revenue earned by the
company.
6.0 Conclusion

The effects of the COVID-19 pandemic have not yet finished being felt. Now that vaccines are
being administered in many regions of the globe, there is some respite to be found; but, the path
to recovery for aviation traffic will take several years to complete. The form that the post-
COVID-19 airline industry especially in Malaysia will take is beginning to take shape and will
have important lessons for airlines operating now. Multiple long-term trends, such as the
digitalization of everything and the elimination of planes with worse fuel efficiencies, have been
sped up in recent years. Many carriers have used up all of their financial reserves since they are
burdened by their debt. However, there are some rays of hope to be found in the prognosis.
People are yearning to travel again for the holidays, and travel will soon become more
environmentally friendly and efficient. If action is taken now, it will be easier for airlines to
prosper in this newly altered industry.

As of December 2021, the number of domestic passengers had reached around 45 percent of
2019's levels, and this demand will continue to rise even if the number of people travelling
internationally is still quite low due to the limitations (Ayisy Yusof, 2022). The Asia-Pacific
area has been experiencing a sluggish recovery as a result of the continuous limits placed on
international travel as well as the varying constraints and regulations imposed by the nations that
make up the region. By the end of 2022, it is anticipated that the domestic passenger demand,
measured in terms of revenue passenger kilometres, will have reached approximately 70 percent
of the levels seen in 2019, while the demand for international travel will have reached
approximately 30 percent of the levels seen in 2022. AirAsia ought to make the most of this
opportunity to improve their services, and we believe that the company also needs to carefully
monitor the effects that variants such as Omicron have, as well as be adaptable, agile, and
flexible in order to quickly adapt to these variants and make the necessary adjustments in order
to reduce their losses.
7.0 Profile of Consultants

TEAM MEMBERS EXPERTISE

Alvina binti Asrul Responsible for constructing the group

schedule and aid in the effective training of
team members. Establish constant
communication between team members to
offer support, modify tasks, and ensure that
task progress is always updated

Hilmiya Batrisyia binti Hilmi Responsible for preparing comprehensive

analysis and providing strategy
recommendations to the firm. Analysing
business practices to assist in the
identification of financial, operational and
technological risks.

Nabilah binti Talib Responsible for the collaboration with the

firm’s project team who are the primary
decision makers, to gain a complete
understanding of the company’s goals,
objectives and audiences.

Sofea Nabihah binti Mohd Yusof Chan Responsible for outlining, analysing and
developing potential strategies and solutions,
whether it be through established processes or
new and innovative systems.

Siti Nur Asyikin binti Mohd Hanafiah Responsible for providing guidance on the
firm’s management team, through
organisational restructures, onboarding and
training programs.

Ahmad bin Taib Responsible for providing data-driven

analytical insights to drive increased sales and
improve marketing effectiveness through the
company’s proprietary consumer panel
References
AirAsia launches e-commerce platform to help farmers. (n.d.). The Star. Retrieved 7 June 2022,
from https://www.thestar.com.my/news/nation/2020/06/15/airasia-launches-e-commerce-
platform-to-help-farmers
Airports Council International. (2019, November 6). Aviation industry collaboration
crucial to accommodating demand - ACI World. Airports Council International.
Retrieved June 10, 2022, from https://aci.aero/2019/11/06/aviation-industry-
collaboration-crucial-to-accommodating-demand/
Altschuller, S., Gelb, D., & Henry, T. (2010). IT as a Resource for Competitive Agility:
an Analysis of Firm Performance during Industry Turbulence. International Journal of
Information Technology and Management, 19(1), 39-59.
Ayisy Yusof. (2022, January 9). 2022 brighter year for airlines to rebuild capacity. NST Online;

New Straits Times. https://www.nst.com.my/business/2022/01/761453/2022-brighter-

year-airlines-rebuild-capacity

BigA Annual Report 2020. (2020). Annual Report 2020.

Airasia.com. https://capitala.airasia.com/misc/FlippingBook/ar2020/56/

Dayangku, S. (2021, October 13). AirAsia Digital becomes becomes the 1 of 3 Malaysia-
based unicorns. Vulcan Post. Retrieved June 10, 2022, from
https://vulcanpost.com/765992/airasia-digital-malaysia-unicorn-milestones-history/
Fernandes, T. (2020, December 17). How CEO Tony Fernandes and AirAsia are looking
to redefine the role of an airline in a post-COVID world. Business Insider. Retrieved
June 10, 2022, from https://www.businessinsider.com/airasia-redefining-role-of-an-
airline-in-post-covid-world-2020-12
France-Presse, A. (2013, February 27). AirAsia profit soars, bullish on outlook. INQUIRER.Net.
https://business.inquirer.net/109731/airasia-profit-soars-bullish-on-outlook
Horton, W. (n.d.). AirAsia Gives Refunds On A Case-By-Case Basis If Passengers Decline
Credit Voucher During COVID-19 Travel Cancellations. Forbes. Retrieved 7 June 2022,
from https://www.forbes.com/sites/willhorton1/2020/04/11/airasia-gives-refunds-on-a-
 case-by-case-basis-if-passengers-decline-credit-voucher-during-covid-19-travel-
cancellations/
La, J., Bil, P. C., & Heiets, D. I. (2021). Impact of digital technologies on airline operations.
Transportation Research Procedia 56, 63-70.
Malaysia’s AirAsia reports first-quarter loss as virus hits demand. (2020, July 6). Reuters.
https://www.reuters.com/article/us-airasia-group-results-idUSKBN24719B
Staff, AirlineGeeks. com. (2016, January 17). Airline Metrics: Revenue Passenger Kilometers –
AirlineGeeks.com. AirlineGeeks.com. https://airlinegeeks.com/2016/01/17/airline-
metrics-revenue-passenger-kilometers/#:~:text=Why%20is%20it%20important%3F,due
%20to%20higher%20fixed%20costs.
THE NATION. (2022, April 9). AirAsia powers up expansion with digital e-commerce platform.
Nation Thailand. Retrieved June 10, 2022, from
https://www.nationthailand.com/business/40014369
TheStar. (2021, March 6). AirAsia recovering well via digital transformation. The Star.
Retrieved June 10, 2022, from
https://www.thestar.com.my/business/business-news/2021/03/06/airasia-recovering-well-
via-digital-transformation
Zhou, J. (2013). Digitalization and intelligentization of manufacturing industry. Advances in
Manufacturing, 1(1). 10.1007/s40436-013-0006-5