Teresa Carpenter, Jing Shun Chen, Suresh Lee Krishnamoorthy,

1

• Presented By
• Teresa Carpenter, Jing Shun Chen, Suresh Lee
  Krishnamoorthy,
• Erenst Ruslan

2
About AirAsia

• Its AirAsia, NOT Air Asia
• Acquired for 25 !!! (Dec 01)
• Inspired by RyanAir (Europe) Southwest (USA)
• CEO Tony Fernandes Brilliant!

3
AirAsia Cont.

• Now Everyone Can Fly
• Before AirAsia, 2 Traveled by Plane
• Operates Regionally S.E. Asia
• Main HQ in Malaysia
• Joint Ventures in Indonesia Thailand
• June 2006, Surpassed 20 Million Passengers (4
  of S.E. Asia Pop.)

4
About AirAsia Cont.

• Low, Low Price
• Bold Ads - http//www.airasia.com/site/en/advertis
  ements.jsp
• No Frills
• No Class - First Come, First Serve Seating
• No Pupus, Drinks
• Smaller Seats
• Get You From Point A to Point B!

5
Key to Success

• AirAsia, First Successful Low Cost Airline in
  the Southeast Asian Region
• Success due to
• Influence of Culture
• Leadership
• Operational Efficiency
• Strategic Orientation

6
Important Events

• Dec. 2001, Tony Fernandes Bought AirAsia
• Throughout 2002, Increased Flight Destinations
• Oct. 2003, Launch Second Hub Johor Bahru
• Aug. 2004, AirAsia Credit Card

7
Important Events Cont.

• Nov. 2004, Went Public via Malaysia Stocks
  Exchange
• July 2005, Partnered with Manchester United
  Football Club (MUFC)
• Jan 2006, Agreement with Galileo
• Sept 2006, Partnered with Tourism Malaysia

8
Competitive Advantage

• Efficiency
• Quality
• Low Cost Leadership
• Management Style
• Capital Structure
• Ticketing Process

9
Efficiency

• Frequent Flights, with 25 Min. Turnaround
• Easy Payment Channels
• Credit or Cash
• Ticketless service
• Internet Booking
• SMS Booking

10
Quality

• Low Fares at Quality Service
• AirAsia Crew
• Friendly, Well Trained, Good Thinkers
• Improved Customer Service
• Increase Savings for Customers
• Multi-lingual Website, 7 Languages
• Many Reservation and Sales Offices
• High Level of Safety

11
Low Cost Leadership

• Cost Optimization Operations
• Low Cost Fares
• 0.25--20 one way
• No Frills Service
• Fast Turnaround Time
• Improved Aircraft Utilization and Crew Efficiency
  
• Reduced Training Costs for One Type of Aircraft

12
Management Style

• Focus on Power
• Distance Reduction
• Open Office Concept
• No Compartmentalization
• Informal, Dress Down First Name Basis.

13
Management Style Cont.

• Emphasis on Development of Human Capital
• E.g. Cadet Pilot Program
• Joins Frontline Employees
• Motivational and Data Mining

14
Capital Structure

• High Initial Debt to Equity Ratio
• Purchased Company for 0.25 with
• 16 Million Debt
• Strong Profit Generation during Growth
• Focus on 2 Types of Aircraft
• Specialization
• Cost Reduction

15
Ticketing Process

• Ticketless
• Earlier Bookings Cheaper Tickets
• No Extras
• Single Class
• Free Seating and Boarding
• Frequent Flyer
• AirAsia GoCorporate

16
Strengths

• Low Operating Costs
• Lowest Fares Available
• Timely Service
• Expansive Routes
• High Safety
• Friendly and Skilled Staff
• High Brand Recognition

17
Weaknesses

• No Extras
• Food
• Movies
• Other Services
• Small Seating Space
• Distance Terminals
• Easy Market Entrance
• Set Market Segment

18
Opportunities

• Expand Regional Markets
• Perth, Australia
• India
• Increase Domestic Flights
• Cambodia
• Philippines
• Singapore
• Vietnam

19
Possible Threats

• Me-Too Competitors
• Established Companies
• Government Policies
• Rising Gas Prices
• Changing Weather Patterns
• Security Threats

20
Thank You for Flying