Can The Low Cost Model Go Long Haul - Air Asia X

First, the Air Asia X type is adaptable

It is renowned as a low-cost carrier. This means that it differs from other providers in that it does not provide free amenities such as snacks, beverages, and low-frills services like other low-cost carriers at its level; instead, it charges for them. All of their seats are economy class; there are no first-class differentials, allowing them to accommodate more passengers. They often have faster turnaround times because they mostly use secondary airports. Because they only operate one type of aircraft, maintenance costs and personnel training are reduced. The Air Asia X uses a point to point system as opposed to most airlines which tend to utilize the hub and spoke system (CAPA Centre for Aviation 2014).

Some of the strengths of the company

Low operational cost due to their congruent system of operation. They have fewer management levels and the management is very aggressive, focused and effective. They are of great assistance to the public since its one of the proven simple bossiness that offers the lowest fare rates. They have the potential to penetrate and hence stimulate the potential markets, a great advantage to the business world. Their work force is diverse and very effective. The dispatch time for the pilots and the operational cost is greatly minimized by the sing type of fleet. On the other side they never lack weaknesses. First they heavily rely on outsourcing which in turn limits their service resource. They also suffer from limitation in the human resource hence cannot appropriately take care of the irregular situations.

One big threat to the Air Asia X is the competition that comes from Southeast Asia

Which come pounding in equal measure to the ever-changing oil price menace. The competition finds the company at its weakest points and needs a lot of reinforcements to overcome (Barney & Hesterly 2014). However the company has opportunity which is china.as time elapses china has a growing need of airline services mostly the secondary airports services that the company offers. India is another opportunity they are on the verge of discovery of the air travel benefits by this they could be drawn to the services that the Air Asia X offers. This encompasses adopting the operational model of the company. These two countries offer very important insight for Air Asia X.

My strategic recommendations for the company

Put their investment in the future. That the only way of the impending mess. They should start by purchasing the newer aircrafts which are more fuel efficient. This is very important step for regaining their prowess. Secondly they should expand more of their routes to china and India. These two countries are some of the most densely populated in the globe. They therefore provide the company with a chance to attract business travelers. By expanding they would achieve adaptation to hub and spoke system enabling them to keep the cost lower for long distance flights (Barney & Hesterly 2014).

The executive team should also maintain the passenger relationship

To maintain market competitiveness. One of the options towards this is coming up with an X’s own loyalty program to overcome the passenger based segmentation and improve value based investment decisions to reward loyal customers. They could also meet the growing passenger demand by coming up with younger Air Asia X fleet which are fuel efficient which would come with strengthening of the marketing budget.

References

Barney, J. B. & Hesterly, W. (2014). Strategic management and Competitive Advantage (5th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.

CAPA Centre for Aviation. (2014). AirAsia X SWOT. Aviation Analysis. Retrieved from http://centreforaviation.com/analysis/airasia-x-swot-challenging-times-but-first-mover- advantage-and-fleet-flexibility-are-huge-strengths-188591