Malaysian Airline Took Over by Tony Fernandes in the Year 2001 (Case Study Sample)

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Executive Summary: AirAsia
AirAsia, a Malaysian airline, began as a company whose operations were controlled by the national government. The company was well known for providing full-services with lower fares compared its biggest competitor, Malaysia Airlines (MAS). Tony Fernandes, a private entrepreneur, took over the management of the airline in December 2001, at a time when the company was running with a lot of debts. Despite the downturn caused by the September 11 attacks, the prominent entrepreneur believed that he had the necessary resources to take the airline back to its feet. More specifically, he believed that there was enough experienced staff to work in the company. The Malaysian government perceived Tony’s acquisition of the airlines as an opportunity to convalesce or boost the Kuala Lumpur International Airport (KLIA) whose use at that time, was low. This paper will describe all the strategies that Tony implemented to boost and increase the airline’s competitiveness amid intense competition and increasing oil.
AirAsia, Malaysia’s most popular airline, adopted some necessary steps to improve its performance and productivity in the market. The airline, for example, started giving low-cost carrier (LCC) in Asia with first no frills. Being the first to provide the LCC, the company received more attention from its clients compared to other rival airlines. In addition, the airline provided domestic and short-haul services for maximum customers and it did not distinguish seats in classes. Moreover, it did not make any economic and executive class to treat customers on equal levels. The Airline’s short-haul flights proved to reduce the time spent by customers in travelling to their destinations. This has been an important strategy especially for customers who have to travel to different places for their business trips. As such, clients can easily travel within Malaysia without wasting their time for long-haul flights.
Another strategy that increased the competitiveness of the company is its provision of value-added services to its customers. For instance, passengers can pre-book their baggage on lower rates. However, the airline’s management encourages the customers to travel lighter so reduce air pollution from the burning of fuel. The lower fuel cost increases higher volatility and higher passengers’ attention. The company also partnered with several companies to distribute its services and to move down the value chain like online booking services for ...