Report On The Airasia Tourism Essay

Report On The Airasia Tourism attempt1.0 Executive summaryThe trustworthy situation of Air market is non steady and could satisfy ineluctably of customers, more and more negative discussion appear to visual aspect depression of AirAsia. AirAsia is a Malaysian-based company which owns melody lanes in Asia with base damage and provide 400 flight lines over 25 countries, the AirAsia was root founded in 1993 and operated in 1998 (Sen Ng, 2008). With al just about 20-year history, AirAsia could be regarded as the almost victorious company in Asia.Brief outline of AirAsia bequeath be given in the enshroud and win entropy go away be provided to further support assistance for readers to bop about AirAsia.2.0 IntroductionThe line market is struggling at present, more competitors argon involved in the passage of arms and the competence seems intense than ever before, graduate(prenominal)er bell of energy and begin price of flights drive most of personal credit line run down companies loss profit and quash revenue (Kernchen, 2007). Airline market in atomic number 63, America particularly in Asia is developing in opposite direction, with effects of financial crisis, little(prenominal) customers go out to travel by plane economy is in addition influenced by crisis which drives less businessmen go aboard to invest by plane (Shaw, 2011). The airline companies around world be all(a) displaceed by crisis, decrease the revenue. At the same time, the speed of growing of technology is beyond imagination of people, most airline companies purchase impertinently planes from countries expert in measuring planes such as America, chinawargon and Russia, which increase embody and fare more difficult to balance finance. The objective of the report is to deliver information of AirAsia for readers and assist them to better understand the factors refering AirAsia in the future, effectiveness threats AirAsia leave behind face with. The report al d epressive disorder state an analysis of AirAsia with PESTEL method, from various aspects to show the key external factors affect the development of AirAsia. Then the second vocalism result discuss how the Market Liberalization in the Asia-Pacific assisted AirAsia process in the region. The third part of report entrust implement data to show a SWOT analysis of AirAsia and Porters five-spot forces to further add up information of AirAsia. With SWOT analysis and Porters five forces, potential challenges depart be given which AirAsia go out face in the future. Finally a expiry will be referred to.3.0 External factors affect AirAsiaMany factors will affect the development of an industry, which could easily divided into external and internal factors. To drive organizations approach better in the flip-flopful world, to analyze and know what potential factors will affect organizations is essential. Eternal factors are favourable to handle and organizations could prepare in adv ance before problems appear, e particular(prenominal)ly for countries in Asia, most countries are at developing groups, external factors such as authorities, economy or climates will affect organizations development in coarse-term (Kohama, 2003). Airline industry is easy affected by those external factors, so the following content will give a PESTEL analysis to help readers know what will affect AirAsia.3.1 PESTEL analysisPESTEL analysis is used by managers as one of the most essential frameworks to study the external factors that affect development of organizations, PESTEL stands for Political, economical, social, technological, environmental and levelheaded ( William Green, 1997). The following content will focus on situation in Asia in the view of PESTEL analysis.Political factors Asia is a mixed region compared with early(a) areas, there are various countries with different government systems, besides, Asia has a long history, however, most Asian seem to have the similar c ultural backgrounds, the policies apiece country hold are totally different, and the independence movements are continues latterly ( Zhang, 2003). AirAsia owns many subsidiaries in many Asian countries, since cold war, with intense alliance between China and Japan, Taiwan, continues conflict between South Korea and North Korea, the flights of AirAsia are affected by these political factors, the relationships among Asian countries are difficult to fortell and the politics in each country seem unsteady ( Yahuda,2005).Economic factors The economic evolution in Asia increased faster since 1945, especially China and Japan, with nonparasitic and away from wars, these two countries develop beyond imagination. However, influenced by financial crisis, most Asian countries are struggling economic depression, the inflation rate raise, throw rates change daily (Adams, 2006). All these unsteady factors drive less exporting and less people spend money on tourism which directly affects the revenue of AirAsia. The profit decline with less customers and less export for AirAsia.Social factors In Asia, tourism is not thought about as usual as Europeans, which means, under the effects of cultural background, Asians spend less money on tourism. However, Asians are sensitive to change of price, especially when they appetency to go out by plane, set about price will delineate them, AirAsia holds the advantages of refuse price. With more branches set up in Asian countries, AirAsia will appeal more Asian customers. The population in Asia increase fast, changeable population in Asia drive more young people change locations to live, China and India, these two biggest countries in Asia means change of demand for AirAsia (Sanderson Tan, 1995) scientific factors Technology plays important role in the airline industry especially for AirAsia which implement the low cost carriers. With more and more experts appearance in Asia, competitors in the field of airline are able to invent impudently things to reduce cost to win in the battle, if AirAsia wants win finally, the key is to entice more professional experts to join them. Innovation of competitors affects revenue of AirAsia, too. tonic airplanes with high technology would appeal to customers to change purchasing habits.Environmental factors Climate is a key factor which influences the revenue of AirAsia, however, natural factors are not aforethought(ip) or changed by human beings. Most of Asia countries realize the importance of security measure for environment, with globalization and development of technology, the pollution raise and the living surroundings are damaged. Now, the slogan of energy saving and emission reduction is popular in China, governments pass along most organizations use clear energy to produce, especially for airline companies, demean cost entirely less pollutions to environment, raise or atom smasher must conform to law of countries.Legal factors Taxation requested for cust omers will be increase by most countries, which will affect the revenue of AirAsia. Facing more taxation for tickets, customers will feel uncomfortable and learn to reduce the price of tickets. Tariff will change according to current economic situation of the world, especially for Asian countries who export goods with land cost to compete with domestic industry. Environmental protection regulations will change to request AirAsia to use clear fuel or mess up which increase cost and reduce revenue. Laws of export and import will also affect AirAsia, all these depend on policies of Asian countries and economy of the world.3.2 SWOT analysisafter stating key external factors which will affect the revenue of AirAsia, the company also needs tools to analyze under these factors, what the development in the future, the SWOT analysis pursues an integrated strategical position by providing internal information to solve the strengths, weakness and external information of opportunities and threats ( Bohm, 2009). The SWOT analysis of AirAsia can be seen belowFigure 1StrengthsLow cost compared with other competitors, the warmness value of AirAsia is low cost in Asia.Effective management, correct strategic positions, target customers.Simple models implemented in AirAsia, exploring for long time to understand out suitable developing models.Secure time and high pure tone of service attract more customers.Expansion with more than five countries in Asia, multi-skilled employees in company means efficient workforce.Continues innovation, experts teams to invent juvenile cause of airplanes.Various airlines for customers, proving more choices for customers.WeaknessLower cost means lower salary for employees, could not appeal skilled employees. governing regulation and policies ofttimes change towards airports, higher taxation for customers and tariff for export and import.More needs of customers, higher compensation asked by passengers increase cost of the company.New entra nts in this field, more intense competition in Asia.Increasing price of gas and fuel, less profit for AirAsia.Brand is vital for market, airplanes only with service worsened than competitors who ask for higher price.OpportunitiesAirlines from Asia to other countries should be provided.Different model but still keep the principle of lower cost carriers.Increase character of customer service and try to set up a full-service with low fare.Aggressive competition will drive air market prospers for new routes.Higher price of fuel will push competitors out of air industry.ThreatsFull service increase cost of AirAsia.Entrants of air industry with lower cost.Accident, change of climate and disaster will influence confidence of consumers. be quiet relationship among each system in AirAis will limit development of company.Higher salary asked by skilled employees, increasing cost of labor.Government regulations and intense relationship among specific countries, unsteady politics in Asia.(Lim, 2012)3.3 Porters vanadium ForcesPorters five forces are used by managers to predict potential threats from competitors which will provide a model for managers to better understand the industry (Roy, 2011). aft(prenominal) stating PESTEL and SWOT analysis of AirAsia, further information related with competitors will be provided in the following part. The diagram of Porters five forces could better help readers to know more about potential threats for AirAsia.Figure 2Rivalry tender competitors from China and Singapore with the similar motto everyone can afford the air ticket as AirAsia.Examples such as Spring Airlines in China and Value Air, Tiger Airways in Singapore are strong competitors for AirAsia.SubstitutesIn the field of air industry, the substitutes are not essential threats for AirAsia. Cars and trains are of import substitutes, however, trains are chosen by passages only in China and India, with lower price and safe condition, not affected by change of climate, trains ar e influence air industry. Cars can be regarded as threats for AirAsia in expressage conditions, only for customers who like driving and do not care time.Threats of new entrantsAsian air market is a huge market with potential for most companies, not only for Asian air companies, new entrants from Europe and America also involve in intense competition with AirAsia. New entrants will change the supply and demand, affecting AirAsia market share. New airplanes and special service will attract loyal customers from AirAsia to new entrants.Bargaining actor of buyers.Consumers have more choices facing large numbers of air companies they will request higher quality of service and be strict with the stupefy off time and arrival time. They will compare prices of competitors with AirAsia, complaining lower price of other airlines to reduce revenue of AirAsia.Bargaining power of suppliersSuppliers concentrated, fuel or gas suppliers are mainly in East Asia, and the price of fuel and gas are cha nging without any bargaining of air companies. Fewer suppliers for fuel and aircrafts mean higher price they could ask for.The growth of AirAsia depends on many factors the report has stated key external factors which will influence revenue of AirAsia, internal factors of strengths and weakness of AirAsia.4.0 ConclusionIn conclusion, the report has stated three analysis of AirAsia in order to supply passable information for readers to understand the strategic positions and models the company implement. With PESTEL analysis, key external factors influencing AirAsia are mentioning and SWOT analysis to provide AirAsia strengths and weakness, AirAsia should keep the core value and supply better service with low cost carriers in long term. Porters five forces analysis also shows potential threats for AirAsia should notice in the future, with new entrants and existing competitors, AirAsia should change management strategy and appeal to more skilled staff.