8/6/2019 Air Asia -MKT

1/12

Air Asia PricingStrategy

8/6/2019 Air Asia -MKT

2/12

Comp any OverviewEstablished by DRB-Hicom Berhad in late1996

Part of Tune Gr oup 8th Dece mb er 2001, T ony Fernandes had

taken over AirAsia with RM 1 (40 m il)7 month in operation, gained RM 113m illion

Going public on 2004 and got its ownair po rt on2006

8/6/2019 Air Asia -MKT

3/12

N ow every one can Fly! A low-c ost carrier a mo ng the airline industry

- Offer low fare for all destination around the world.2. Low operating cost

- Have a very lean organization structure and operating costsare

kept to the bare minimum with low wages.

Manage ment strategyMaxi m ize shareh o lders value

P rofit creation by expending business reach within Asia and

Europe

8/6/2019 Air Asia -MKT

4/12

Focus on customer needs N o fuel charge, customers just need to pay

tickets price and tax

Comprehensive distribution channelOperation excellenceAll staffs are contribute-no ranks or hierarchy

P erformance based remunerations and incentives

8/6/2019 Air Asia -MKT

5/12

Pricing StrategyP rice Objective Maximum market shareAir Asia using randomized pricing strategy and this

strategy to increase the market demand and profitmaximize

With a randomized pricing strategy, a firm varies its pricefrom hour to hour or day to day basic, consequently.When a firm randomly changes the prices of their goods,

consumer cannot learn from experience which firmcharges the lowest price in the market

8/6/2019 Air Asia -MKT

6/12

Internet Air- f ares & e- marketing Usually direct t o consu mer

E mp loys s pecial event pricing andpsych o logical disc ounting

8/6/2019 Air Asia -MKT

7/12

Rivalry Malaysian Airlines

(MAS)Intr oduced Fire f ly to regain market share Aggressive disc ounting on internati onal

long haul f lights. ie. KL L ond onG oo d news for travellers, b rings d own air travel prices.

8/6/2019 Air Asia -MKT

8/12

Additi on of new r outes,

increased f lightsAir Asia airline now introduced new flights routes to countriesaround the world. (Air Asia X)

Over 13 destinations worldwide Europe, Asia and Oceania

Subsidaries, joint-ventures in asian countries Thai Air Asia,Indonesia Air Asia, VietJet Air Asia. increases the frequencyof flights for certain destination not only in Malaysia but Asiacountries too.

2009, Lowest cost airline in the world

8/6/2019 Air Asia -MKT

9/12

Pr ob lem AreasFl ight de lay comp laints from passengersAir Asia passengers start to complain about delays of the flights

for certain destinations.

passengers have to wait for the flights for long hours and thismake them feel uncomfortable

D iscriminatory po l icies for disab led passengers

8/6/2019 Air Asia -MKT

10/12

Co nclusi on Air Asia has gr own t o bec om e a leader in

low c ost air f are Str ong branding p ractices have made

mo re c onsu mers f a m iliar with the brandF ocus on mo re CSR a pp r oach

ie. Car bo n off seting f lights.

8/6/2019 Air Asia -MKT

11/12

Q &A

Sh ould Air Asia ex pand its op erati ons t o include carg o carriage?Can Air Asia retain its market share i f anew p layer enters the market?

8/6/2019 Air Asia -MKT

12/12

Thank y ou for your ti me