SWOT analysis of AirAsia Berhad
Analysts Strengths Low cost operations Eurasia Bertha is the first airline company that offered a low cost flight in Asian market. By operating the low cost principle, Eurasia Bertha aim to maximize their sales and minimize their operating cost. Based on their slogan “Now Everyone Can Fly’ have fulfilled the wants for those passengers who choose to fly with low cost airlines especially students, those family with lower income and low income earners. Therefore, it can increase the demand of traveling.
Extensive of E-commerce Eurasia Bertha has the benefit for selling off their seats through internet network and telephone booking. Eurasia uses Navigator’s Open Skies computer reservation system (CARS) which is a web-based sales and inventory system linked to Raisin’s call centre and allow the customers to print out the boarding pass. This shows that they are efficient and effective towards their company. Since Eurasia has limiting the agents’ commission, so about 85 per cent of Eurasia flight ticket is sold through online booking .
Therefore, they can reduced the cost by promoting their organization hence t can be reduced the intermediary cost. Flexible Air Schedules Eurasia Bertha increases the frequency of their flight every year to fulfill the needs of passengers. The organization will give an incentive to those pilots who take for short flight which they can reduce the duration of flights. Therefore, it is suitable for business passengers who travel often. Strong Management Every staffs in Eurasia Bertha are the contributors. Everyone is focused on their work and concern about their organization.
To have a strong management, they must have an extensive set of skills by planning, making decisions, solving problems, electing and developing the right people, communicating and motivating their employees. 4 Economy of scale The advantage of the cost will increased the output of a product. It has an inverse relationship between the quantity produced and per unit fixed costs. Eurasia Bertha can employ more pilots and cabin crews into their organization. It is because that they use limited types of aircraft for their organization.
Therefore, they can reduce the cost of training. Weaknesses As a largest low cost-carrier in Asia region, Eurasia Bertha has performed well and succeed for winning various awards such as World’s Best Low-Cost Carrier by Ashtray, but the company still encounter some weaknesses as listed below. Limited services resources Due to their low cost business model they implement, Eurasia Bertha cannot provide SOOT analysis of Eurasia Bertha By Wanting-SAA does not include frill service such as complimentary drinks, snacks, pillow and entertainment.
Passengers may charge an additional fee for infilling services when meet the needs of it. Punctuality Passengers have to face some trouble by traveling on time to a destination. Passengers will loss the confidence towards Eurasia Bertha which can be affected the name of the organization. Some of the passengers will think that being delay is a disrespect of perspective. Delays occurred because Eurasia Bertha has scheduling more flight and increasing the number of aircraft, along with the capacity scarcity of airport, this may cause the congestion of air traffic in the airport.
Therefore, it can lead their business to drop. 5 Lack of maintenance, repair and overhaul (MR..) facility Eurasia Bertha has owned 123 aircrafts until today and about another 100 aircrafts to e received in this few years. Due to the increasing number of aircraft and routes, they also undergo high risk of malfunction of their aircraft. Their malfunction aircrafts cannot utilize since they have shortage of MR.. Facility to fast repair it. It will directly lessen their revenue.
So, the synergy to have its own MR.. Facility for continuous maintenance is closely related to reduction of operating cost. Opportunities Promote Malaysian tourism Eurasia Bertha will have the opportunity to promote Malaysian tourism because they have increased their routes and destinations all over the countries. Eurasia Bertha has created a sybarites of culture with many countries, since year 2012 they have flying to 81 destinations in 18 countries. The place of interest and culture in Malaysia would be spread out to all passengers who travel with Eurasia Bertha.
Therefore, this will increase the revenue of the organization. Passengers First Choice Of Traveling Abroad Eurasia Bertha will be chosen as the first choice of traveling during the economic slowdown. Some people like to travel no matter how is the economy goes on, since Eurasia Bertha offers an affordable airfares for everyone regardless of different income categories of people. Therefore, it able to fulfill everyone’s needs and achieve their dream of making flying possible for everyone.
Political connections Eurasia Bertha is Joining venture with Shin Corp.., where Shin Corp.. Is owned by the Eurasia Bertha to grow their organization. This is the reason why Eurasia Bertha grows up faster and easier in the airline market with the powerful politically. 6 Threats Competitors Nowadays, Eurasia Bertha is a leader in the world’s low cost carrier in airline industry but it is still a growing company. Many of the full service airlines are landing to create a low cost operation to compete directly to Eurasia Bertha.
For example, most Malaysian knew that Firefly is a subsidiary of Malaysia Airline which has the ability to compete with Eurasia for their benefits as these two airlines also considered as low cost airlines. Fluctuating Price of Fuel When the price of fuel is too high, this may causes Eurasia Bertha have the problem about the cost of fuel which will have a major dampening effect on earnings. Due to the high volatility in fuel price, the airline is adopting static hedged approach t current price level would involve taking excessive risks.
The company may have a huge problem on this change. Change in Weather Due to the bad weather, the flight might be delayed or the worst is cancel. If the flight is cancel, this may affect passengers not really enjoy their flight Journey. Therefore, Eurasia Bertha needs to put more effort to comfort the emotion of passengers. This will affect the operating of human resources in a company. Besides, Eurasia Bertha may receive less income because of the bad weather. Delayed of a flight may influence the airline need to reorganize the company flights. 7