Competitive Advantage

Competitive Advantage

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Low Cost Carriers which offer cheap flying costs have caused a positive turn on the air travel industry. AirAsia in Malaysia is a successful low cost carrier in the country. The airline is focused on ensuring all avoidable costs are lowered to continue providing low fares while at the same time remain profitable.

There are several measures that the airline put in place to ensure the cost it kept low. The company cuts flight operation costs by operating in the airports which have cheaper take-off as well as the landing fees. The passengers as well do not get the privilege of having food or entertainment which includes some amenities like blankets and pillows (Mamrina et al 2020).

The airline has designed the aircraft cabins in ways whereby wear and tear are minimized and the cleaning time as well is reduced hence the costs in these areas scale down effectively. These well designed cabins translated to reduced loading and unloading costs because operations in this area were done very fast hence a better turnaround time. Finally, as Shuk-Ching Poon & Waring, (2010) indicate, the airline chooses to have only a single type of air crafts so as to ensure low operation costs. When an airline has mixed jet fleets, the cost on the airline increases significantly. By maintaining one type of aircraft, the cost used for training the technical staffs is kept low and lesser units of spares are kept.

AirAsia’s cost advantage can be imitated by other companies. This is because they have laid down the steps they have taken to ensure they maintain low costs. Other companies that would wish to reduce on their costs and still maintain profitability can be able to emulate what AirAsia has put in place.

Given the nature of its strategy, it can be significantly difficult for AirAsia to compete in the long-haul air travel. This is because long-haul air travel needs a lot of maintenance and costs which are incurred to ensure that the clients are comfortable. For instance, there is need to carry out frequent maintenance because of the long flights, there is need for various classes in the flight and entertainment and food are as well necessary. These are the costs that AirAsia is trying to avoid. For them to compete in the long-haul air travel, they need to be flexible with some of the strategies they have set hence creation of AirAsia X which handles long flights and a bit of flexibility on the strategies.

In conclusion, we can note that AirAsia has impacted the air travel industry a great deal. The airline has made use of the low cost model to make itself one of the most profitable air companies in Asia. With the possibility of imitation, the air company is expected to face very stiff competition from other airlines entering the market using the same strategy. It thus needs to strategize on how it can maintain its market share. With the current strategies in place, it might be hard for them to venture into the long-haul air travel. There is need to consider restructuring their strategies with the anticipation of competition. This will make them diverse hence increase the chances of making more profits.

Reference

Mamrina, Y., Kee, D. M. H., Tursynbay, A., Athiyah, H. A. B. M., & Muhamach, R. (2020). A Case Study on Critical Success Factors of AirAsia. International journal of Tourism and hospitality in Asia Pasific, 3(1), 77-88.

Shuk-Ching Poon, T., & Waring, P. (2010). The lowest of low-cost carriers: the case of AirAsia. The International Journal of Human Resource Management, 21(2), 197-213.