Competitive Advantage of AirAsia a. However Air Asia’s existence as an independent private airlines company can be attributed to changes in the political environment of Malaysia privatization plan under the prevailing economic ideology of the time which saw a large number of public utility companies privatized and/or broken up into smaller and more efficient companies. AirAsia Case Executive Summary SMO 441 Submitted: March 8, 2011 Abi Sanni Aly Remtulla Kelsey Gamble Kendra Jocksch Nancy Moke Company background Tony Fernandes, as the Chief Executive Officer of AirAsia, decided to pursue his dream to start an airline with the following vision: “To be an airline that flies long-hauls with low fares with a corporate culture that is … AirAsia has implement a far leaner, functionalist approach on HRM which is not only minimization of the labour cost, but. According to Porter’s generic strategies (1985), cost leadership is one of them. They launched self check-in machines on February 2009, the technology introduce to eliminate long check-in queues in counter and minimize the manpower.   Privacy Find answers and explanations to over 1.2 million textbook exercises. W2) Limited human resources due to low costs W3) Non-central location of secondary airports W4) Heavy reliance on outsourcing (maintenance, repair). which have helped the brand grow. And most importantly, users’ perception that budget airlines may compromise safety to keep costs low may also affect them attracting more customers. As a factor of influence, Air Asia engaged in training programs for its employees and company wide in ensuring it meets these standards and possesses the knowledge and skills to do so in terms of its human resources. The implementation of AirAsia’s strategy is underpinned by a variety of unique business activities and performance management processes and systems. The strategy that they have formulated at the beginnings was a clever blend of proven strategies by other low cost airlines is US and Europe. Also, AirAsia have gradually received alot of complaints from customers on their services. A centrepiece in the human resource practice of the company is the promotion of employee empowerment. For example, Singapore’s Changi Airport charges S$20 for every person who departs from Singapore. However, with AirAsia’s strategy on keeping costs low and more people affording to fly, AirAsia still holds on to the upper hand. Hence Air Asia has to ensure that all it air plane was given the approval to operate. Course Hero, Inc. In the first case, he increasing oil price at the first glance may appear like a threat for AirAsia. We Will Write a Custom Case Study SpecificallyFor You For Only $13.90/page! Sociological Linked to the economic factors above social changes have significantly impacted Air Asia in relation to changing demographics in terms of the customers it targets. As a result, AirAsia get an award from Frost & Sullivan, a global. Course Hero is not sponsored or endorsed by any college or university. Human resource management strategy, systems and practices The HRM infrastructure of AirAsia is minimalist with a ‘hard’ focus on cost containment and reduction rather than resource … By being a cost leader in the budget airlines industry also make competition in AirAsia’s favour. However, AirAsia was establish an AirAsia Academy that for, pilot training propose on in June 2005. Would you like to get a custom case study? The IS are includes a computer simulation work force model, so that the simulation technique is use to evaluate alternative human resource plans. implied that it may not be paid in 2006 due to the rising prices of fuel. Legal Legal considerations are again more a concern directly for Air Asia in terms of the regulatory. AirAsia have a lean and mean HR department. This is clearly known as it has very strong links with the governements and airline industry leaders. An example would include Singapore Airlines which created Tiger Airways. They need to have a better assessment on the Airbus or Boeing capacities, taking consideration on how long it would take to deliver their order. Meanwhile, it will also reduce the cost for training development. Invest and enhance the AirAsia brand to increase investors' returns. Foundation of the corporation is based upon low cost, efficiency, … Lastly, the threat of new entrants is currently high at the moment, with. Technological Advancements 3. However, there will be also some reduction in overall travel especially by casual or budget travellers. Air itself was a spin off from a government run company HRB – Hicomm Berhad it was verge into liquidation when Tony Fernandez bought it and turnaround it into profit running company. Environmental AirAsia and it subsidiaries need to take cognisance of environmental factors. Also, with AirAsia’s profit margin of 30%, it has already attracted many competitors. Therefore, AirAsia have to ensure proper and continuous maintenance of the planes which will also help to keep the overall costs low. An example would be India, where the government would buy a share of certain cooperation and turn it state-owned, and driving potential investors out of the country. In addition to technical. Krisflyer, Jetstar and Tiger Airways makes competition very vigorous around the region. Green issues have also been a concern for Air Asia, it tow it aircraft to a general boarding area, saving the huge amount of electricity used to operate an aero bridge while minimizing taxiing time, which significantly reduces fuel burn.