Air Environment And Its Financial And Human Resources Essay Example

benefits obtained from products and services and the effort and cost involved in obtaining them.

The objective of this research is to examine the connection between customers and service providers, with a specific emphasis on a recent addition to the Asian airline industry. This particular company has gained recognition as a prominent low-cost carrier (LCC) in the area because of its assertive marketing tactics.

By acquiring stocks in domestic airline companies in Asian countries, Air Asia has effectively become a multinational company. The examination of their financial ratios reveals the reason behind Air Asia's success and growth in the highly competitive Asian market, despite its consistently low prices that may appear illogical.

Air Asia's Background

In December 8, 2001, Tune Air Sdn Bhd acquired 99.25% of Air Asia from DHB-Hicom, a Malaysian conglomerate. This acquisition resulted in Tune Air becoming the holding company and Air Asia remaining as the operating company. As a result of this strategic change, Air Asia has emerged as Malaysia's second largest airline and is recognized as Asia's pioneering low fare and ticketless airline, commonly referred to as a low cost carrier (LCC).

In just 5 years, Air Asia has rapidly grown in Malaysia's domestic market and the wider Asia region. The airline currently provides more than 100 point-to-point flights, both domestically and internationally. Air Asia operates from five bases in three countries: Kuala Lumpur International Airport (KLIA) and Senai Airport in Malaysia, Bangkok International Airport in Thailand, and Soekarno-Hatta International Airport in Jakarta, Indonesia (Air Asia, 2006a).

AirAsia, like other low-cost carriers, offers affordable flights without additional amenities. Their fares are cheaper

than those of traditional full-service airlines. Occasionally, AirAsia charges as low as $3 (excluding taxes) for one-way travel from Indonesia to Malaysia. In contrast, regular airlines usually charge an average of approximately $100.

Air Asia's business model is similar to other low-cost carriers (LCCs), such as Southwest Airlines in the U.S. and Ryanair in Dublin (Air Asia, 2006a).

The company's primary objective is to make air travel affordable and accessible to all individuals. They endeavor to offer essential services that guarantee convenient and pleasant travel experiences for their clients. This principle is encapsulated in their tagline "now everyone can fly".

II. An overview of the industry is given within the global economy.

III.1 Air Asia's position in the global economy.

Air Asia, a low-cost carrier, plays a vital role in supporting the global economy by offering affordable flying options. The global economy depends heavily on transportation for enhancing trade between nations, making Air Asia's contribution significant. Moreover, Air Asia aids businesses in building connections with counterparts in the Asian region.

Air Asia not only contributes to the revival of the air traveling industry after the aftermath of the 9/11 tragedy but also expands its routes, subsequently acquiring new aircraft from manufacturers such as Airbus.

The air travel industry is influenced by two factors: airlines prefer buying used airplanes instead of new ones due to the more efficient operational costs offered by new airplanes.

In addition, rather than using smaller airplanes like Boeing 737s and Airbus A320s which have a seating capacity of 120 to 200, carriers are favored. This leads to the benefit of low-cost air travel

for travelers.

Remarkably, airlines benefit from the common cockpits and cost-effective maintenance of these jets, leading to reduced operating expenses. Air Asia and other carriers have embraced Southwest's low-cost model, achieving high passenger-load factors by employing small airplanes and discount-airline strategies.