4.0 SWOT analysis
4.1 Internal Strength
When Air Asia has operating flight scheduled in Indonesia, this country may provide an internal strength to Air Asia which is positive cash flow statement and have more growth upside (Zainul, 2014). By having a positive a cash flow statement, this company may be able to have more available cash for expansion plan purposes in order to improve the airline’s performance in the airline industry. Other internal strength on Air Asia is existing on distribution and sales network. Air Asia may distribute low fares and ancillary services through Travelport, which is global distribution channel in order to expand Air Asia’s offer to the travelers. At the same time, it exist on extensive network with 87 destinations
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In Indonesia, most of the different company airplane will be landing on Soekarno-Hatta International Airport which is located at Jakarta because it is the center town on this country. In this case, competitive market may exist as other airline competitor which is Garuda Indonesia, Malindo Air and others may create a different strategy to attract passenger to travel with these airline. Such as, they may offer at affordable ticket prices in order to serve better services to the customer. Additionally, there is also influence on Air Asia’s future profitability which is Air Asia may loses on company’s net profit. When Malaysia has a weak currencies, it was hit by Indonesia as Malaysia loses 406 million ringgit compared a net profit of 5.4 million ringgit year ago (Reuters, 2015). From this apart, it may allow high debt on Air Asia in Malaysia as they could not earn more profit to operate in the airline industry. Thus, competitor may provide a better services than Air Asia as soon and it also may faces a high debt to make Air Asia would not survive in the future operation …show more content…
Tax is the amount of money payment paid to government for income that included on product or services fee (Susson, 2013). When consumer are booking for cheap ticket prices on internet, there is not include airport tax fee on the ticket prices as they should pay for on check in desk. For example, domestic flight will increase about Rp75000 from Rp40000, whereas international flight tax will increase from Rp150000 to Rp200000 (Airport Tax Guide, 2014). In this case, we can see there is an increasing on taxation that may burden on consumer as they are more willing to pay more amount of taxes in order to travel with Air Asia. Additionally, some of the passenger may do not want to take flight on Air Asia as they think that the price of taxes is very sensitive and try to look for another transportation such as bus or ship to
Sales tax is income elastic; because of this fact, consumers have a higher tax incidence and carry the burden. From this, it has been evidenced that the tax burden is vertically unequitable and can be seen as unfair to the less fortunate. Sales tax is paid by retailers, which is dependent upon their sales revenue. However, since the demand of consumers is inelastic and can vary based on market and economic conditions, this burden is felt more by lower income individuals and families. However, it is important to note that the tax burden is independent of who physically pays the tax.
The competition between Air Canada, a traditional carrier, and West Jet, low cost carrier is rigorous in Canadian airline industry. Though Air Canada is Canada’s domestic and international airline and has dominant hold in the Canadian market, West jet is giving the airline tough competition with its effective price point, profitable routes with greater focus on domestic market. The rivalry competition is moderate to
The demand for travel by air depends on the price of the ticket and the income of the consumer. Both price and income elasticity are taken into consideration, while the price elasticity measures the effective change in the quantity demand and income elasticity deal with the demand of the product due to its change in the income of a consumer. As per the studies, the overall median price of elasticity is -1.1, indication that the demand for air travel is relatively sensitive to price changes (Elasticity of Demand for Air Travel, 2017). According to this article, traveling by air has become a trend.
Q1 : (Philip,2011) “Marketing environment is consists of the actors and forces outside the marketing department that affect marketing management’s ability to build and maintain successful relationships with target customers” . The marketing environment consists of micro and macro environment . Macro environment have larger societal forces that effect the microenvironment , it includes : demographic , economic , cultural and other forces. The demographic is the study of human populations like : gender , age, location , density and other statistics . The demographic trends have impacted the marketing includes : changing age , population growth and so on , for example , this changing will affect the united airlines decision because demographic
It has one of the fastest growing tourist destinations, with a safe environment in means of security. It is classified as a high income developing economy by the IMF (International Monetary Fund). The geographical location of the country itself, being located between Asia, Europe and Africa is a huge advantage to the investors. SWOT ANALYSIS To evaluate the company in ways of progress, success and the faults of the company, an analysis called the ‘SWOT ANALYSIS’ is used. It is a strategic planning tool that creates a response towards the strengths, weaknesses, opportunities and that the threats of the business.
It also has given Lufthansa the opportunity to reduce cost of resources, thus leading to higher market profits. It has also greatly reduced the barriers of market entry including
Decentralization and the expansion of a larger portfolio through its proposed partnership will improve branding awareness and customer satisfaction. Competition from various airlines offering less generous terms and conditions of employment will be a tough challenge as it may arouse with several negative reactions from employees. Green technology investment is another huge challenge due to current financial instability. The organization will need the execution of change to set aside budget to compete in technological investment. 2.2 Internal drivers of
This is what Nok Air can offer better than its competitors. However, the disadvantage is the current Nok Air’s operating cannot generate enough profit. Since Nok Air positions itself as “premium low-cost airline”, the firm is now facing the high cost. The costs include fuel engine price, the premium onboard service, foods and beverages, the cost of offering high weight of baggage, and so on. Also, as Nok Air has to hedge fuel engine from Thai Airways International Public Company Limited, it mainly drives Nok Air to have the higher cost, and it results in decreasing the profit (“Broken Wing Nok Air,” 2008).
Competitiveness Airports operate in a highly competitive environment and therefore encourage developments which make the airport sector more responsive to the needs of their passenger and airline customers. Competition in the airline sector has been a driver of innovation and cost reduction and has delivered major benefits for consumers in terms of increased choice and value. Effective competition between airports is clearly something to be encouraged for the same reasons. “Within the aviation industry, MRO, ground handling, catering, CRS and freight forwarding created economic profits, but these were much more than offset by economic losses by airlines and airports. Airlines were responsible for the large USD17 billion of economic losses globally.
The inauguration of Virgin Australia Airlines, by Sir Richard Branson, as a domestic carrier in 2000 basically aimed at the convenience of the budget travelers. The Airlines was inaugurated as relaxed informal airline. Sir Richard was open-minded, amiable, and generous with his management team, imaginative, audacious and exclusive in his thoughtfulness. Initially started as a low-cost carrier, the company improved its services to turn itself into a “new-world carrier” as described by themselves (Virgin Blue media release, 2011, para. 2).However all these faltered when Qantas’ past marketing manager took over during 2011.
Executive Summary JetBlue Airways is a company that applies innovative technologies to offer high quality travel services at a lower cost (Shrivastava, 2012). A SWOT analysis of JetBlue airlines shows that despite the numerous opportunities and strengths it has, it is exposed to threats and weaknesses that pose challenges in its operations. The threats include issues like strong competition from other airlines and the volatility of the fuel prices. JetBlue Airlines is relatively new to the market when compared to its major competitors such as the Southwest and Delta Airlines. Most of its strategies have worked to its benefit.
• Threat of substitute goods: Threat of substitute good is high in this industry. If a private company or government introduces any fast road transportation services in the United States, then traveling through airline can reduce. Air travel is somehow costlier than road transport. If the same kind of leisure will be provided in public transport with greater speed, then the share of airline industry can decline. This threat can be reduced if their products offer more value than other substitute
Objectives 3.1 Focus on airport resources and technology to improve on time flights, arrival, baggage handling. Caribbean Airlines objectives are to have a flowing routine, by allowing customers to check in their baggage at any time and remove the fixed time according to the customer’s flight. The customers can enjoy the freedom of having lunch with families without the hassle of dragging multiple bags behind them. Another objective would be to improvement of flights scheduled, meeting each and every customers boarding time and even arriving to their destinations before time 3.2 Continue to develop and deploy travel innovations Caribbean Airlines will focus on a more innovative aircraft interior, giving passengers more leg room and better
h Airways PLC. I. Introducing British Airways Plc ("British Airways", "BA") is the largest international airline in the UK and one of the hot premium lines. The company's main place of business is London, with a lively presence at Heathrow, Gatwick and London City airports. British Airways serves over 1,000 calls to over 150 countries.
For instance, with the global financial crisis and later the Eurozone crisis, the number of travellers has significantly reduced due to economic hardships. This has affected the profit levels of the airline as well as slowed down its growth prospects. The airline also faces intense competition from other low cost airlines forcing it to extensively invest in product differentiation to counter the competition. This is an expensive