Harvard Case Study


AirAsia

AirAsia was once a Malaysian government-controlled, full-service regional airline that offers slightly lower fares than Malaysia Airlines (“MAS”). In December 2001, it was taken over by Tony Fernandes with just only US$0.26. Fernandes restructured AirAsia in the first no-frills, low-cost carrier (“LCC”). Fernandes restructured AirAsia into LCC after witnessing the success of other LCC in the West.

Boarding Pass
AirAsia introduced the fully ticketless travel and free seating policy and also only one standard-class cabin plus no in flight entertainment or free meals. With saving all these, AirAsia is able to offer 40%-60% airfares than its rivals. AirAsia also set up a multilingual website which offered regular fare promotions and enable mobile phone booking via Short Messaging Services. 

In 2004, AirAsia formed Thai AirAsia to provide more regional flights to neighboring countries. Then in 2005, Indonesia AirAsia was established. From increasing flights and passenger, AirAsia had to move out from KLIA to nearby Low Cost Carrier Terminal. 

In 2006, it took over more than two-third of MAS’s loss-making domestic routes. In 2008, AirAsia also introduced checked-baggage handling fee to encourage customer to travel lighter that help to save on fuel and are pollutions free. After all the success, AirAsia launched long-haul regional Service to Australia then to northern China.

From just only three-aircraft operation in 2002 till now growing to 73 aircraft in 2008 and served over 100 routes in Asia-Pacific region. To be able to promote AirAsia more better, Fernandes make himself into a walking advertisement by sharing his time to be interview and also wearing AirAsia’s official red cap and T-shirt to almost every official function.

AirAsia continue to expand its routes and was awarded the best LCC in Asia region in 2007 by SkyTrax. AirAsia also signed on to become the official airline sponsor of the world-famous Manchester United football club and the AT&T Williams Formula One team, painting some of it’s  aircrafts with the club colors and sport stars.

AT&T Williams Formula One car with AirAsia Logo on it



AirAsia Airbus A320-200 aircraft painted with Manchester United football clubs logo and colors and sport stars