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Air Asia Macro-Environment Paper

Words: 859, Paragraphs: 8, Pages: 3

Paper type: Essay, Subject: Environment

This not only allows them to offer lower fares to further cost the country;?en’s tourism revenue, but it also helps to increase Eurasia?Was net income after tax. 2. 2 Government emphasis on socially responsible actions Due to the emerging trend in Corporate Social Responsibility (CARS) internationally, the Malaysian government implemented The Bursa CARS framework, since 2006, that requires all listed companies to disclose their CARS activities (Bursa Malaysia Bertha, 2011). It is designed to deliver sustainable value to society at large.

Despite being a listed company, corporate social responsibility is inherent in everything AAA does. The One Million Free Seats campaign that AAA hold every year since 2006 is one of their unique contributions to society, followed by offering rescue mission when Egypt struck with political turmoil, running blood donation campaigns for Tsunami victims, running a Donate Your Loose Change campaign for needy patient, and joining hands with EUNICE to raise funds for Haiti earthquake victims in 201 0 are among some of the CARS activities that have been done by AAA (Eurasia, 201 1).

Not only does it help create a positive brand image, charitable work also found to be able to foster loyalty among customers as the Ґ?goodwill would become an attribute or feature of the product or service provided?0 (Smith, 2008). 3. 0 Economical The recent economic recession affecting Malaysia was the global economy downturn in 2008/09. The contraction of real GAP growth at -1. And high unemployment rate has led to depreciation in the overall household income distribution (Department of Statistic, Malaysia, 2011 As a result, consumers tend to scale back their expenses in order to sustain their living. This has resulted in a very challenging and uncertain market to most organizations; however AAA took it as an opportunity by offering low fares with n increasing amount of high margin paid option to travelers for amenities (Malaysian Industrial Development Finance Bertha, 2011). Average fare drops are offset by higher ancillary income distribution (Eurasia, 2009).

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By taking advantage over the shift of consumer spending pattern from full service airlines to Low Cost Carriers (LLC), AAA saw a growth in terms of profitability and market share even in a negative economic condition. 4. 0 Social As the population becomes more educated, they tend to be more sensitive and consistent with how they respond to price (Dealer & Lindbergh, 2003). Educated customers know that they do not need to pay so much for brands or services. Their increased knowledge on the value of money leads to a growing demand towards LLC.

With the philosophy of ?Now Everyone Can Fly;?0, AAA has created a population of travelers by making traveling more affordable for everyone (Eurasia, 2010). The shift of culture among travelers provides opportunities to AAA which further encourages them to create even more attractive low fare packages. It can be said that AAA indirectly helps the development of the nation as traveling helps deliver the most outstanding intercultural experiences that benefit the nation;?alms development in the long run. 5. Technological practically, everyone has at least one or two mobile phones, hence making services available via mobile and smart phone crucial for a company?”g’s survival. For the past decade, Eurasia has always been very creative in utilizing technology for greater efficiency and cost saving. Eurasia is the first airline to launch SMS booking in 2003 and offer a total, comprehensive booking system targeting mobile phones and wireless devices in 2005 (Eurasia, 2005). Social media has also become an integral part of Eurasia?Ins business model Eurasia, 2010).

With the ;?catered among professional and young adults gravitating towards fast and efficient do-it-yourself electronic services;?n, AAA implemented the free, simple, and quick Self-check-Len service in January 2010 via AAA web and mobile that allows customers to enjoy a quicker and more convenient check-in experience (Eurasia, 2011 To encourage guests to utilities the Self-Check-Len service, ;?CAE fee of RMI O will apply at the airport for conventional counter check in for all booking made from 21st September 201 1?D.

This fee will also serve as an additional ancillary income and revises to counter the effect of jet fuel price hike (The Star Online, 20 January 2010). Not only does it help reduce AAAsees cost by leveraging technology, AAA also indirectly changes consumer behavior by educating and encouraging the use of technology for better efficiency and effectiveness among their guest. 6. 0 Natural Environment Oil is a non-renewable natural resource that will eventually run out. Due to the increasing oil demand and speculation, oil prices have been increasing drastically.

It cost $140/barrel in the 2nd quarter of 2011 compared to $23/ barrel in 2004 (Eurasia, 2011 Despite the fluctuation of average fuel prices, AAA turned this risk into opportunity by pushing ancillary income and services as a natural hedge over the oil price volatility (The Star Online, 25 February 2010). Every RMI spent by a guest on ancillary item will effectively act as a buffer against CUSS per barrel increase in the price of oil (Eurasia, 2008). Not only does Air Asia manage to increase the number of passengers carried every year, they also managed to increase the amount each guest spent on items.

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