Black book Graduation Project
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About This Presentation
COMPARATIVE STUDY OF LOW COST AIRLINES: AIR ASIA V/S NORWEGIAN AIR SHUTTLE
Slide Content
1
PROJECT ON:
“COMPARATIVE STUDY OF LOW COST AIRLINES: AIR ASIA V/S
NORWEGIAN AIR SHUTTLE”
SUBMITTED BY:
MS. RUCHITA R. SANGARE
ROLL NO.-47
T.Y.B.M.S. (SEM 6)
2017-2018
SUBMITTED TO:
S.N.D.T. College of Arts, commerce and science for women,
1, N. T. ROAD NEW MARINE LINES
MUMBAI- 400020.
UNDER THE GUIDANCE OF
MR.VIJAY KHANDARE
(Coordinator, Department of Management Studies)
PROJECT ON:
“COMPARATIVE STUDY OF LOW COST AIRLINES: AIR ASIA V/S
NORWEGIAN AIR SHUTTLE”
SUBMITTED BY:
MS. RUCHITA R. SANGARE
ROLL NO.-47
T.Y.B.M.S. (SEM 6)
2017-2018
SUBMITTED TO:
S.N.D.T. College of Arts, commerce and science for women,
1, N. T. ROAD NEW MARINE LINES
MUMBAI- 400020.
UNDER THE GUIDANCE OF
MR.VIJAY KHANDARE
(Coordinator, Department of Management Studies)
2
DECLARATION
I hereby declare that the project entitled “COMPARATIVE STUDY OF LOW COST
AIRLINES: AIR ASIA V/S NORWEGIAN AIR SHUTTLE” submitted for the
Bachelor of Management Studies Degree is my original work and the project report has
not formed the basis for the award of any degree, associate ship, fellowship or any other
similar title.
Place: Mumbai
Date:
(RUCHITA R. SANGARE)
DECLARATION
I hereby declare that the project entitled “COMPARATIVE STUDY OF LOW COST
AIRLINES: AIR ASIA V/S NORWEGIAN AIR SHUTTLE” submitted for the
Bachelor of Management Studies Degree is my original work and the project report has
not formed the basis for the award of any degree, associate ship, fellowship or any other
similar title.
Place: Mumbai
Date:
(RUCHITA R. SANGARE)
3
S.N.D.T College of Arts, Commerce and Science for women
1, N.T.ROAD NEW MAARINE LINES
MUMBAI -400020
CERTIFICATE
This is to certify that
Ms. RUCHITA SANGARE of TYB.M.S semester 6, Roll no -47, has undertaken &
completed the project work titled- “COMPARATIVE STUDY OF LOW COST
AIRLINES: AIR ASIA V/S NORWEGIAN AIR SHUTTLE” during the academic
year 2017-18, under guidance of MR.VIJAY KHANDARE , in the partial fulfillment of
the requirements for the award of the Degree of Bachelor of Management Studies.
This is a bonafide project work and the information presented is true & original to the
best of our knowledge & belief.
CO-ORDINATOR/GUIDE PRINCIPAL EXTERNAL EXAMINER
S.N.D.T College of Arts, Commerce and Science for women
1, N.T.ROAD NEW MAARINE LINES
MUMBAI -400020
CERTIFICATE
This is to certify that
Ms. RUCHITA SANGARE of TYB.M.S semester 6, Roll no -47, has undertaken &
completed the project work titled- “COMPARATIVE STUDY OF LOW COST
AIRLINES: AIR ASIA V/S NORWEGIAN AIR SHUTTLE” during the academic
year 2017-18, under guidance of MR.VIJAY KHANDARE , in the partial fulfillment of
the requirements for the award of the Degree of Bachelor of Management Studies.
This is a bonafide project work and the information presented is true & original to the
best of our knowledge & belief.
CO-ORDINATOR/GUIDE PRINCIPAL EXTERNAL EXAMINER
4
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide
Professor Vijay Khandare for his exemplary guidance, monitoring and constant
encouragement throughout the project. The blessing, help and guidance given by him
time to time shall carry me a long way in the journey of life on which I am about to
embark.
No serious and lasting achievement or success one ever achieves without the friendly
guidance and cooperation of so many people involved in work. I place my thanks to all
those who spared their time and made it convenient for me to complete the study. I
deeply acknowledge their concern for my study. Last but not the least, I also wish to red
cord my gratitude for any person, my memory has failed to recall, who rendered
his/her/their support and services.
Lastly, I thank almighty, my parents, friends for their constant encouragement without
which this project would not be possible.
ACKNOWLEDGEMENT
I take this opportunity to express my profound gratitude and deep regards to my guide
Professor Vijay Khandare for his exemplary guidance, monitoring and constant
encouragement throughout the project. The blessing, help and guidance given by him
time to time shall carry me a long way in the journey of life on which I am about to
embark.
No serious and lasting achievement or success one ever achieves without the friendly
guidance and cooperation of so many people involved in work. I place my thanks to all
those who spared their time and made it convenient for me to complete the study. I
deeply acknowledge their concern for my study. Last but not the least, I also wish to red
cord my gratitude for any person, my memory has failed to recall, who rendered
his/her/their support and services.
Lastly, I thank almighty, my parents, friends for their constant encouragement without
which this project would not be possible.
5
CONTENTS PAGE NO
1. INTRODUCTION 6 - 22
1.1. SERVICE INDUSTRY
1.2. INTRODUCTION TO AIRLINES INDUSTRY
1.3. OBJECTIVE OF THE STUDY
1.4. RESEARCH METHODOLOGY OF THE STUDY
1.5. LIMITATION OF THE STUDY
1.6. NATURE OF AIRLINE INDUSTRY
1.7. BUSINESS STRATEGY OF LCC
1.8. MARKETING STRATEGY OF LCC
1.9. PLAYER IN THE LCC
1.10. MARKET SHARE OF LCC
1.11. GROWTH IN INTERNATIONAL SCENARIO FOR LCC
1.12. PRICING POLICY OF LCC
2. PROFILE OF AIR ASIA 23 - 29
2.1. ABOUT AIR ASIA
2.2. THE AIR ASIA FAMILY
2.3. AIRLINE AFFILIATES
2.4. DIRECTORS
2.5. AIR ASIA MISSION, VISION & VALUES
2.6. SUBSTANTIAL SHAREHOLDERS
2.7. STRATEGY
3. PROFILE OF NORWEGIAN AIR SHUTTLE 30 - 33
3.1. ABOUT NORWEGIAN AIR
3.2. BOARD OF DIRECTORS
3.3. MANAGEMENT
3.4. CORPORATE STRUCTURE
3.5. VISION
3.6. OUR GOAL
4. COMPARISON OF AIR ASIA AND NORWEGIAN AIR SHUTTLE 34 - 47
4.1. S.W.O.T ANALYSIS
4.2. S.T.P ANALYSIS
4.3. TAGLINE / SLOGAN
4.4. PRICING STRATEGY
4.5. MARKETING STRATEGY
4.6. CORPORATE SOCIAL RESPONSIBILITY
4.7. ACHIEVEMENT
5. CONCLUSION 48
BIBLIOGRAPHY 49 - 51
CONTENTS PAGE NO
1. INTRODUCTION 6 - 22
1.1. SERVICE INDUSTRY
1.2. INTRODUCTION TO AIRLINES INDUSTRY
1.3. OBJECTIVE OF THE STUDY
1.4. RESEARCH METHODOLOGY OF THE STUDY
1.5. LIMITATION OF THE STUDY
1.6. NATURE OF AIRLINE INDUSTRY
1.7. BUSINESS STRATEGY OF LCC
1.8. MARKETING STRATEGY OF LCC
1.9. PLAYER IN THE LCC
1.10. MARKET SHARE OF LCC
1.11. GROWTH IN INTERNATIONAL SCENARIO FOR LCC
1.12. PRICING POLICY OF LCC
2. PROFILE OF AIR ASIA 23 - 29
2.1. ABOUT AIR ASIA
2.2. THE AIR ASIA FAMILY
2.3. AIRLINE AFFILIATES
2.4. DIRECTORS
2.5. AIR ASIA MISSION, VISION & VALUES
2.6. SUBSTANTIAL SHAREHOLDERS
2.7. STRATEGY
3. PROFILE OF NORWEGIAN AIR SHUTTLE 30 - 33
3.1. ABOUT NORWEGIAN AIR
3.2. BOARD OF DIRECTORS
3.3. MANAGEMENT
3.4. CORPORATE STRUCTURE
3.5. VISION
3.6. OUR GOAL
4. COMPARISON OF AIR ASIA AND NORWEGIAN AIR SHUTTLE 34 - 47
4.1. S.W.O.T ANALYSIS
4.2. S.T.P ANALYSIS
4.3. TAGLINE / SLOGAN
4.4. PRICING STRATEGY
4.5. MARKETING STRATEGY
4.6. CORPORATE SOCIAL RESPONSIBILITY
4.7. ACHIEVEMENT
5. CONCLUSION 48
BIBLIOGRAPHY 49 - 51
6
CHAPTER 1: INTRODUCTION
SERVICE INDUSTRY:
In economics, a service is an intangible commodity. That is, services are an example of
intangible economic goods.
Service provision is often an economic activity where the buyer does not generally,
except by exclusive contract, obtain exclusive ownership of the thing purchased. The
benefits of such a service, if priced, are held o be self-evident in the buyer’s willingness
to pay for it.
Service in the airline industry has made headlines for years, but rarely due to its
excellence. Traveling by air has traditionally been one of the more stressful modes of
transit, with long periods spent waiting, little personal space, mandatory security checks,
and the odd erratic scheduling change with little to no advance warning.
A firm should be able to increase customer satisfaction by improving its customer
service, ultimately leading to better firm performance.
The relationship between service and satisfaction has received considerable interest
among the customers. In between airline service quality and customer satisfaction
examined the link between customer service and customer satisfaction using data from
the airline industry. They found that three measures of customer service – mishandled
baggage, ticket over-sales, and on-time performance, were all positively related to
customer complaints, their measure for customer satisfaction. In particular, reducing
mishandled baggage and ticket over-sales ( leading to fewer bumped passengers ) and
increasing on time flight performance, all contributed to fewer customer.
HOSPITALITY:
Hospitality is the relationship between the great and the host, or the act or practice of
being hospitable. This includes the reception and entertainment of guests, visitors, or
strangers. These sectors include event planning, food & beverage, lodging and
recreational tourism. All of these separate yet interconnected segments of the hospitality
industry present opportunities to be part of a profession that delivers quality service.
INRODUCTION TO AIRLINES INDUSTRY:
An airline is a company that provides air transport services for
traveling passengers and freight. Airlines utilize aircraft to supply these services and may
form partnerships or alliances with other airlines for code share agreements. Generally,
airline companies are recognized with an air operating certificate or license issued by a
governmental aviation body.
CHAPTER 1: INTRODUCTION
SERVICE INDUSTRY:
In economics, a service is an intangible commodity. That is, services are an example of
intangible economic goods.
Service provision is often an economic activity where the buyer does not generally,
except by exclusive contract, obtain exclusive ownership of the thing purchased. The
benefits of such a service, if priced, are held o be self-evident in the buyer’s willingness
to pay for it.
Service in the airline industry has made headlines for years, but rarely due to its
excellence. Traveling by air has traditionally been one of the more stressful modes of
transit, with long periods spent waiting, little personal space, mandatory security checks,
and the odd erratic scheduling change with little to no advance warning.
A firm should be able to increase customer satisfaction by improving its customer
service, ultimately leading to better firm performance.
The relationship between service and satisfaction has received considerable interest
among the customers. In between airline service quality and customer satisfaction
examined the link between customer service and customer satisfaction using data from
the airline industry. They found that three measures of customer service – mishandled
baggage, ticket over-sales, and on-time performance, were all positively related to
customer complaints, their measure for customer satisfaction. In particular, reducing
mishandled baggage and ticket over-sales ( leading to fewer bumped passengers ) and
increasing on time flight performance, all contributed to fewer customer.
HOSPITALITY:
Hospitality is the relationship between the great and the host, or the act or practice of
being hospitable. This includes the reception and entertainment of guests, visitors, or
strangers. These sectors include event planning, food & beverage, lodging and
recreational tourism. All of these separate yet interconnected segments of the hospitality
industry present opportunities to be part of a profession that delivers quality service.
INRODUCTION TO AIRLINES INDUSTRY:
An airline is a company that provides air transport services for
traveling passengers and freight. Airlines utilize aircraft to supply these services and may
form partnerships or alliances with other airlines for code share agreements. Generally,
airline companies are recognized with an air operating certificate or license issued by a
governmental aviation body.
7
Airlines vary in size, from small domestic airlines to full-service international airlines.
Airline services can be categorized as being intercontinental, domestic, regional, or
international, and may be operated as scheduled services or charters.
The aviation industry is characterized by constant change. The ongoing liberalization of
markets, technological progress and the establishment of new business models are just a
few examples that illustrate the dynamic development of air transportation within the last
years. The fact that there are various fields of development indicates that the industry
development is not only influenced by the industry actors themselves, but also by its
structures and institutional surroundings. In turn, the development of the industry shapes
its actors and competition structures. The interdependencies among the different
stakeholders in aviation and the continuous industry development thereby constantly raise
new questions for both theory and practice.
When talking about the aviation industry, airline types can be identified by dividing them
into different groups. One method for example is to divide them into: cargo flights,
general aviation, regional carriers, charter airlines, full-service carriers, and low-cost
carriers. Cargo flights consist of freight carriers like FedEx and DHL. General-aviation
for example consists of private business jets. Both cargo flights and general-aviation are
not taken into account here any further. Regional carriers are more locally oriented and
traditionally act as commuter or feeder airlines, for larger carriers. Although charter
carriers also consist of freighter airline, we will focus on passenger charter airlines. These
charters traditionally offer flights for a certain period of time a year, mostly during
holiday seasons. Full-service carriers can be seen as the counterpart of low-cost carriers.
KLM-Air France and Lufthansa are examples of full-service carriers. Last but not least
are the low-cost carriers. The next section will be all about these special kind of carriers.
Discount airlines, No frills airlines, Prizefighters, Low-cost airlines, or low-cost carriers,
all are different names for the same phenomenon: airlines which offer cheaper tickets
compared to other carriers. But when is an airline a low-cost carrier? What exactly is the
definition of 'low-cost carriers'?
First of all, it’s not the carrier itself which makes it a low-cost carrier, but it is the
operating model that makes the difference. So in this way it would be better to speak of a
low-cost model, which is based on reducing all kind of complexity costs. By reducing
these complexity costs, it becomes possible to offer the same ticket for a much lower
price. Probably the most famous examples of low-cost carriers are EasyJet and Ryanair.
In recent years, there has been an industry-wide shakedown, which will have far-reaching
effects on the industry's trend towards expanding domestic and international services. In
the past, the airline industry was at least partly government owned. This is still true in
many countries, but in the U.S. all major airlines have come to be privately held.
The airline industry can be separated into four categories by the U.S. Department of
Transportation (DOT):
Airlines vary in size, from small domestic airlines to full-service international airlines.
Airline services can be categorized as being intercontinental, domestic, regional, or
international, and may be operated as scheduled services or charters.
The aviation industry is characterized by constant change. The ongoing liberalization of
markets, technological progress and the establishment of new business models are just a
few examples that illustrate the dynamic development of air transportation within the last
years. The fact that there are various fields of development indicates that the industry
development is not only influenced by the industry actors themselves, but also by its
structures and institutional surroundings. In turn, the development of the industry shapes
its actors and competition structures. The interdependencies among the different
stakeholders in aviation and the continuous industry development thereby constantly raise
new questions for both theory and practice.
When talking about the aviation industry, airline types can be identified by dividing them
into different groups. One method for example is to divide them into: cargo flights,
general aviation, regional carriers, charter airlines, full-service carriers, and low-cost
carriers. Cargo flights consist of freight carriers like FedEx and DHL. General-aviation
for example consists of private business jets. Both cargo flights and general-aviation are
not taken into account here any further. Regional carriers are more locally oriented and
traditionally act as commuter or feeder airlines, for larger carriers. Although charter
carriers also consist of freighter airline, we will focus on passenger charter airlines. These
charters traditionally offer flights for a certain period of time a year, mostly during
holiday seasons. Full-service carriers can be seen as the counterpart of low-cost carriers.
KLM-Air France and Lufthansa are examples of full-service carriers. Last but not least
are the low-cost carriers. The next section will be all about these special kind of carriers.
Discount airlines, No frills airlines, Prizefighters, Low-cost airlines, or low-cost carriers,
all are different names for the same phenomenon: airlines which offer cheaper tickets
compared to other carriers. But when is an airline a low-cost carrier? What exactly is the
definition of 'low-cost carriers'?
First of all, it’s not the carrier itself which makes it a low-cost carrier, but it is the
operating model that makes the difference. So in this way it would be better to speak of a
low-cost model, which is based on reducing all kind of complexity costs. By reducing
these complexity costs, it becomes possible to offer the same ticket for a much lower
price. Probably the most famous examples of low-cost carriers are EasyJet and Ryanair.
In recent years, there has been an industry-wide shakedown, which will have far-reaching
effects on the industry's trend towards expanding domestic and international services. In
the past, the airline industry was at least partly government owned. This is still true in
many countries, but in the U.S. all major airlines have come to be privately held.
The airline industry can be separated into four categories by the U.S. Department of
Transportation (DOT):
8
INTERNATIONAL - 130+ seat planes that have the ability to take passengers just
about anywhere in the world. Companies in this category typically have annual
revenue of $1 billion or more.
NATIONAL - Usually these airlines seat 100-150 people and have revenues
between $100 million and $1 billion.
REGIONAL - Companies with revenues less than $100 million that focus on
short-haul flights.
CARGO - These are airlines generally transport goods.
Airport capacity, route structures, technology and costs to lease or buy the physical
aircraft are significant in the airline industry. Other large issues are:
WEATHER - Weather is variable and unpredictable. Extreme heat, cold, fog and
snow can shut down airports and cancel flights, which costs an airline money.
FUEL COST - According to the Air Transportation Association (ATA), fuel is an
airline's second largest expense. Fuel makes up a significant portion of an airline's
total costs, although efficiency among different carriers can vary widely. Short
haul airlines typically get lower fuel efficiency because take-offs and landings
consume high amounts of jet fuel.
LABOR - According to the ATA, labor is the airline's No.1 cost; airlines must
pay pilots, flight attendants, baggage handlers, dispatchers, customer service and
others.
AIR TRAFFIC LIABILITY (ATL) - An estimate of the amount of money already
received for passenger ticket sales and cargo transportation that is yet to be
provided. It is important to find out this figure so you can remove it from quoted
revenue figures (unless they specifically state that ATL was excluded).
LOAD FACTOR - This indicator, compiled monthly by the Air Transport
Association (ATA), measures the percentage of available seating capacity that is
filled with passengers. Analysts state that once the airline load factor exceeds its
break-even point, then more and more revenue will trickle down to the bottom
line. Keep in mind that during holidays and summer vacations load factor can be
significantly higher, therefore, it is important to compare the figures against the
same period from the previous year.
THE FIRST AIRLINES:
DELAG; Deutsche Luftschiffahrts-Aktiengesellschaft was the world's first airline. It was
founded on November 16, 1909, with government assistance, and operated airships
manufactured by The Zeppelin Corporation. Its headquarters were in Frankfurt. The first
fixed wing scheduled air service was started on January 1, 1914, from St. Petersburg,
Florida, to Tampa, Florida. The four oldest non-dirigible airlines that still exist are
Netherlands' KLM (1919), Colombia's Avianca (1919), Australia's Qantas (1921), and
the Czech Republic's Czech Airlines (1923).
INTERNATIONAL - 130+ seat planes that have the ability to take passengers just
about anywhere in the world. Companies in this category typically have annual
revenue of $1 billion or more.
NATIONAL - Usually these airlines seat 100-150 people and have revenues
between $100 million and $1 billion.
REGIONAL - Companies with revenues less than $100 million that focus on
short-haul flights.
CARGO - These are airlines generally transport goods.
Airport capacity, route structures, technology and costs to lease or buy the physical
aircraft are significant in the airline industry. Other large issues are:
WEATHER - Weather is variable and unpredictable. Extreme heat, cold, fog and
snow can shut down airports and cancel flights, which costs an airline money.
FUEL COST - According to the Air Transportation Association (ATA), fuel is an
airline's second largest expense. Fuel makes up a significant portion of an airline's
total costs, although efficiency among different carriers can vary widely. Short
haul airlines typically get lower fuel efficiency because take-offs and landings
consume high amounts of jet fuel.
LABOR - According to the ATA, labor is the airline's No.1 cost; airlines must
pay pilots, flight attendants, baggage handlers, dispatchers, customer service and
others.
AIR TRAFFIC LIABILITY (ATL) - An estimate of the amount of money already
received for passenger ticket sales and cargo transportation that is yet to be
provided. It is important to find out this figure so you can remove it from quoted
revenue figures (unless they specifically state that ATL was excluded).
LOAD FACTOR - This indicator, compiled monthly by the Air Transport
Association (ATA), measures the percentage of available seating capacity that is
filled with passengers. Analysts state that once the airline load factor exceeds its
break-even point, then more and more revenue will trickle down to the bottom
line. Keep in mind that during holidays and summer vacations load factor can be
significantly higher, therefore, it is important to compare the figures against the
same period from the previous year.
THE FIRST AIRLINES:
DELAG; Deutsche Luftschiffahrts-Aktiengesellschaft was the world's first airline. It was
founded on November 16, 1909, with government assistance, and operated airships
manufactured by The Zeppelin Corporation. Its headquarters were in Frankfurt. The first
fixed wing scheduled air service was started on January 1, 1914, from St. Petersburg,
Florida, to Tampa, Florida. The four oldest non-dirigible airlines that still exist are
Netherlands' KLM (1919), Colombia's Avianca (1919), Australia's Qantas (1921), and
the Czech Republic's Czech Airlines (1923).
9
FACTS & FIGURES 2017:
781 million tones - Worldwide, flights produced 781 million tonnes of CO2 in
2015. Globally, humans produced over 36 billion tonnes of CO2.
3.57 billion - In 2015, nearly 3.6 billion passengers were carried by the world's
airlines.
62.7 million - Nearly 63 million jobs are supported worldwide in aviation and
related tourism. Of this, 9.9 million people work directly in the aviation industry.
ANALYST INSIGHT:
Airlines also earn revenue from transporting cargo, selling frequent flier miles to other
companies and up-selling in flight services. But the largest proportion of revenue is
derived from regular and business passengers. For this reason, it is important that you
take consumer and business confidence into account on top of the regular factors that one
should consider like earnings growth and debt load.
Business travelers are important to airlines because they are more likely to travel several
times throughout the year and they tend to purchase the upgraded services that have
higher margins for the airline. On the other hand, leisure travelers are less likely to
purchase these premium services and are typically very price sensitive. In times of
economic uncertainty or sharp decline in consumer confidence, you can expect the
number of leisure travelers to decline.
It is also important to look at the geographic areas that an airline targets. Obviously,
more market share is better for a particular market, but it is also important to
stay diversified. Try to find out the destination to which the majority of an airline's flights
are traveling. For example, an airline that sends a high number of flights to the Caribbean
might see a dramatic drop in profits if the outlook for leisure travelers looks poor.
A final key area to keep a close eye on is costs. The airline industry is extremely sensitive
to costs such as fuel, labor and borrowing costs. If you notice a trend of rising fuel costs,
you should factor that into your analysis of a company. Fuel prices tend to fluctuate on a
monthly basis, so paying close attention to these costs is crucial.
OBJECTIVE OF THE STUDY:
It is interesting how low cost carriers provide efficient services to their customers. This
study is conducted with purpose to make an analysis of low cost carriers. The comparison
is done through analysis of Air Asia and Norwegian Air. In addition, the study provides
an overview of the airline industry as a whole. It also shows the international
development of low cost carriers. The objective of the study is as follow:
To understand the airline industry.
To study the various services provide by low cost carriers.
FACTS & FIGURES 2017:
781 million tones - Worldwide, flights produced 781 million tonnes of CO2 in
2015. Globally, humans produced over 36 billion tonnes of CO2.
3.57 billion - In 2015, nearly 3.6 billion passengers were carried by the world's
airlines.
62.7 million - Nearly 63 million jobs are supported worldwide in aviation and
related tourism. Of this, 9.9 million people work directly in the aviation industry.
ANALYST INSIGHT:
Airlines also earn revenue from transporting cargo, selling frequent flier miles to other
companies and up-selling in flight services. But the largest proportion of revenue is
derived from regular and business passengers. For this reason, it is important that you
take consumer and business confidence into account on top of the regular factors that one
should consider like earnings growth and debt load.
Business travelers are important to airlines because they are more likely to travel several
times throughout the year and they tend to purchase the upgraded services that have
higher margins for the airline. On the other hand, leisure travelers are less likely to
purchase these premium services and are typically very price sensitive. In times of
economic uncertainty or sharp decline in consumer confidence, you can expect the
number of leisure travelers to decline.
It is also important to look at the geographic areas that an airline targets. Obviously,
more market share is better for a particular market, but it is also important to
stay diversified. Try to find out the destination to which the majority of an airline's flights
are traveling. For example, an airline that sends a high number of flights to the Caribbean
might see a dramatic drop in profits if the outlook for leisure travelers looks poor.
A final key area to keep a close eye on is costs. The airline industry is extremely sensitive
to costs such as fuel, labor and borrowing costs. If you notice a trend of rising fuel costs,
you should factor that into your analysis of a company. Fuel prices tend to fluctuate on a
monthly basis, so paying close attention to these costs is crucial.
OBJECTIVE OF THE STUDY:
It is interesting how low cost carriers provide efficient services to their customers. This
study is conducted with purpose to make an analysis of low cost carriers. The comparison
is done through analysis of Air Asia and Norwegian Air. In addition, the study provides
an overview of the airline industry as a whole. It also shows the international
development of low cost carriers. The objective of the study is as follow:
To understand the airline industry.
To study the various services provide by low cost carriers.
10
Growth of low cost carriers in the today’s world.
To analyze the strength and weakness of both the selected airlines.
To differentiate of the pricing strategies of both the selected airlines.
To study the reasons for selecting target market of both the selected airlines.
To understand how the marketing strategies of both the airlines vary.
To understand the positioning of both the airlines in market.
To analyze which airlines is the best low cost airlines.
RESEARCH METHODOLOGY OF THE STUDY:
All the information gathered in this study is collected from secondary source which
includes company’s website, internet blog about airlines industry, news related to airlines
industry and many more. As the company in this study are not originated in India, it is
difficult to collect primary data regarding the study. Therefore the data collected is
secondary data.
The comparison is done on the following parameters:
S.W.O.T Analysis.
S.T.P Analysis.
Pricing strategy.
Marketing strategy.
Corporate social responsibility.
Achievements.
LIMITATION OF THE STUDY:
Both the selected airlines are Non-Indian origin.
The data collected is from secondary source.
Both airlines do not disclose huge amount information on their websites.
The data for various strategies used by the airlines is determined by the activities,
program and news published publically.
NATURE OF AIRLINE INDUSTRY :
When it comes to flying, seat classes on a commercial airline can make a difference.
Generally three types of seat classes exist: first class, business class and economy class.
Business class is a step above economy class and a step below first class.
FEATURES:
Not all airlines offer business class. In fact, business class is mostly found on larger
airplanes or airbuses that take international flights. Features of business class include a
Growth of low cost carriers in the today’s world.
To analyze the strength and weakness of both the selected airlines.
To differentiate of the pricing strategies of both the selected airlines.
To study the reasons for selecting target market of both the selected airlines.
To understand how the marketing strategies of both the airlines vary.
To understand the positioning of both the airlines in market.
To analyze which airlines is the best low cost airlines.
RESEARCH METHODOLOGY OF THE STUDY:
All the information gathered in this study is collected from secondary source which
includes company’s website, internet blog about airlines industry, news related to airlines
industry and many more. As the company in this study are not originated in India, it is
difficult to collect primary data regarding the study. Therefore the data collected is
secondary data.
The comparison is done on the following parameters:
S.W.O.T Analysis.
S.T.P Analysis.
Pricing strategy.
Marketing strategy.
Corporate social responsibility.
Achievements.
LIMITATION OF THE STUDY:
Both the selected airlines are Non-Indian origin.
The data collected is from secondary source.
Both airlines do not disclose huge amount information on their websites.
The data for various strategies used by the airlines is determined by the activities,
program and news published publically.
NATURE OF AIRLINE INDUSTRY :
When it comes to flying, seat classes on a commercial airline can make a difference.
Generally three types of seat classes exist: first class, business class and economy class.
Business class is a step above economy class and a step below first class.
FEATURES:
Not all airlines offer business class. In fact, business class is mostly found on larger
airplanes or airbuses that take international flights. Features of business class include a
11
few moe inches of space than economy seating as well as individual laptop power ports
and personal TV screens. On most airlines, business class passenger, you are usually
offered special amenities such as higher class food and wine and sleep masks.
LUXURY V/S PRODUCTIVITY:
While first class and business class are very similar, the main difference is that first class
offers more luxury amenities whereas business lass is catered more toward providing
business travelers with a comfortable area to be productive. Complimentary champagne
and glassware is just one example of extras that are sometimes offered in first class and
not in business class.
CONSIDERATIONS:
While business class offers more benefits than economy seating, it is also more
expensive. At the same time, it is less expensive than first class. Another point to take
into consideration is that fewer business class and first class seats are available as
compared to economy class.
COMMERICAL AND CORPORATE AVIATION CONSULTANCY:
Atlantic Bridge Aviation offers its expertise in a number of key segments of the aviation
sector including airline start up, development and oversight, airport development and
management, aircraft sales, management and easing. Specific individual skill sets and
years of specialized industry experience are used to bring our clients real-world solutions
in an ever challenging environment.
LOW COST CARRIERS:
There is no standard business model or definition for an LCC. The term itself
incorporates a wide range of airlines with significant differences in the type of routes and
the level of passenger service offered. For example, Ryanair in Europe is a pure no-frills
airline, flying from secondary airports and targeting customers through ultra-low prices.
By contrast, JetBlue in the US offers some passenger services (e.g. in-flight TVs), flies
into major airports and promotes itself as offering the “best service at low prices”. Yet
both airlines are viewed as LCCs. The airline’s own strategy and value proposition will
determine whether it promotes itself to potential customers as an LCC. In general, an
LCC would include the following characteristics, at least to some degree:
• Primarily point-to-point operations.
• Serving short-haul routes, often to/from regional or secondary airports.
• A strong focus on price sensitive traffic, mostly leisure passengers.
• Typically one service class only, with no (or limited) customer loyalty programmes.
few moe inches of space than economy seating as well as individual laptop power ports
and personal TV screens. On most airlines, business class passenger, you are usually
offered special amenities such as higher class food and wine and sleep masks.
LUXURY V/S PRODUCTIVITY:
While first class and business class are very similar, the main difference is that first class
offers more luxury amenities whereas business lass is catered more toward providing
business travelers with a comfortable area to be productive. Complimentary champagne
and glassware is just one example of extras that are sometimes offered in first class and
not in business class.
CONSIDERATIONS:
While business class offers more benefits than economy seating, it is also more
expensive. At the same time, it is less expensive than first class. Another point to take
into consideration is that fewer business class and first class seats are available as
compared to economy class.
COMMERICAL AND CORPORATE AVIATION CONSULTANCY:
Atlantic Bridge Aviation offers its expertise in a number of key segments of the aviation
sector including airline start up, development and oversight, airport development and
management, aircraft sales, management and easing. Specific individual skill sets and
years of specialized industry experience are used to bring our clients real-world solutions
in an ever challenging environment.
LOW COST CARRIERS:
There is no standard business model or definition for an LCC. The term itself
incorporates a wide range of airlines with significant differences in the type of routes and
the level of passenger service offered. For example, Ryanair in Europe is a pure no-frills
airline, flying from secondary airports and targeting customers through ultra-low prices.
By contrast, JetBlue in the US offers some passenger services (e.g. in-flight TVs), flies
into major airports and promotes itself as offering the “best service at low prices”. Yet
both airlines are viewed as LCCs. The airline’s own strategy and value proposition will
determine whether it promotes itself to potential customers as an LCC. In general, an
LCC would include the following characteristics, at least to some degree:
• Primarily point-to-point operations.
• Serving short-haul routes, often to/from regional or secondary airports.
• A strong focus on price sensitive traffic, mostly leisure passengers.
• Typically one service class only, with no (or limited) customer loyalty programmes.
12
• Limited passenger services, with additional charges for some services (e.g. on-board
catering).
• Low average fares, with a strong focus on price competition.
• Different fares offered, related to aircraft load factors and/or length of time before
departure.
• A very high proportion of bookings made through the Internet.
• High aircraft utilization rates, with short turnaround times between operations.
• A fleet consisting of just one or two types of aircraft.
• Private-sector companies.
• A simple management and overhead structure with a lean strategic decision-making
process.
BUSINESS STRATEGY OF LCC:
Low cost airlines came into the public consciousness at the turn of the 21st century as
consumers were, for the first time, offered the chance to fly with no frills attached at a
reduced cost. There have been companies that have failed but some have profited
enormously from this new business strategy.
SIMPLE PRODUCT IDEA:
Their concept is a simple one. Low cost airlines cut out the segregation of passengers and
use very narrow seating which, in turn, creates more capacity. They do this with large
planes so every flight has plenty of seats. Usually, the passengers pay for the seat and
anything else is extra. Ryanair has even started charging customers to use the toilets on
short flights. These companies target leisure customers, not business passengers.
Flights are sold on a first come, first serve basis and therefore the cost of each flight rises
depending on the demand for seats. The routes are never too long, which takes away the
need to stop and refuel at other airports while increasing the frequency of the flights.
MARKETING:
The lost cost airlines that have survived and profited have done so through heavy use of
advertising and public relations. Ryanair once advertised that its flights cost as little as
one penny, before taxes, which was covered heavily by the media. Many low-cost
carriers have also embraced and exploited, for their benefit, some of their legal battles.
COST CUTTING:
• Limited passenger services, with additional charges for some services (e.g. on-board
catering).
• Low average fares, with a strong focus on price competition.
• Different fares offered, related to aircraft load factors and/or length of time before
departure.
• A very high proportion of bookings made through the Internet.
• High aircraft utilization rates, with short turnaround times between operations.
• A fleet consisting of just one or two types of aircraft.
• Private-sector companies.
• A simple management and overhead structure with a lean strategic decision-making
process.
BUSINESS STRATEGY OF LCC:
Low cost airlines came into the public consciousness at the turn of the 21st century as
consumers were, for the first time, offered the chance to fly with no frills attached at a
reduced cost. There have been companies that have failed but some have profited
enormously from this new business strategy.
SIMPLE PRODUCT IDEA:
Their concept is a simple one. Low cost airlines cut out the segregation of passengers and
use very narrow seating which, in turn, creates more capacity. They do this with large
planes so every flight has plenty of seats. Usually, the passengers pay for the seat and
anything else is extra. Ryanair has even started charging customers to use the toilets on
short flights. These companies target leisure customers, not business passengers.
Flights are sold on a first come, first serve basis and therefore the cost of each flight rises
depending on the demand for seats. The routes are never too long, which takes away the
need to stop and refuel at other airports while increasing the frequency of the flights.
MARKETING:
The lost cost airlines that have survived and profited have done so through heavy use of
advertising and public relations. Ryanair once advertised that its flights cost as little as
one penny, before taxes, which was covered heavily by the media. Many low-cost
carriers have also embraced and exploited, for their benefit, some of their legal battles.
COST CUTTING:
13
Costs are cut all over the board. Flights are booked over the phone or online which
eliminates commissions and cuts down on staff. Passengers are encouraged to check in
online or face a possible charge. Reductions in downtime and delays are made possible
by targeting small airports. Companies also cut back on wages by employing less senior
staff members, and reduce overtime by eliminating overnight stays in foreign countries.
Catering costs and handling costs are also reduced.
MARKETING STRATEGY OF LCC:
FREQUENT FLYER PROGRAM:
Frequent flyer program is one of the marketing strategies of Southwest Airline but it is
not adopting by most of the low cost airlines. This program gives out frequent flyer point
when customers purchase air ticket each time. By using the accumulate points, it could be
redeem for free ticket or upgrade class seat which depend on the company policy
(Lederman, M., 2003). As a marketing tool FFPs have proved highly successful (Bennett,
M.M., 1996).
POINT-TO-POINT:
Gutstafsson, L. (2005) says that point-to-point could be included as a cost leadership
strategy as well as a marketing strategy as well. Point-to-point refers to the air traffic
movement system where the flights fly directly to the final destination without going
through the hub. This would be able to help airline to save up cost. At the same time, it
could be able to attract customer where they do not need to waste time on transiting at the
hub. Customer could be able to have a flight directly to the final destination that they
wish to be just with a low fare air ticket.
BRANDING / IMAGE:
It is difficult for airlines to differentiate their product from other competitor as the basic
product of airlines are the same. Therefore, branding and build up good image or
reputation is another option to market their product to the public. Branding is do
marketing on a product externally to the public. There is another way round of branding
being practicing. As an example, Air Asia do brand their product internally to their staff
first before to brand it externally to the public (Marketing-interactive.com, 2008). This is
to let the staff of Air Asia knows well on the function and attractive of the product where
they could sell it more better externally to the public.
PRICING (LOW FARES):
Low cost airlines are marketing their products with low fare to compete with traditional
full service airlines. Low fare is the main attractiveness of low cost airline as compare to
full service airline.
PLAYER IN THE LCC:
Costs are cut all over the board. Flights are booked over the phone or online which
eliminates commissions and cuts down on staff. Passengers are encouraged to check in
online or face a possible charge. Reductions in downtime and delays are made possible
by targeting small airports. Companies also cut back on wages by employing less senior
staff members, and reduce overtime by eliminating overnight stays in foreign countries.
Catering costs and handling costs are also reduced.
MARKETING STRATEGY OF LCC:
FREQUENT FLYER PROGRAM:
Frequent flyer program is one of the marketing strategies of Southwest Airline but it is
not adopting by most of the low cost airlines. This program gives out frequent flyer point
when customers purchase air ticket each time. By using the accumulate points, it could be
redeem for free ticket or upgrade class seat which depend on the company policy
(Lederman, M., 2003). As a marketing tool FFPs have proved highly successful (Bennett,
M.M., 1996).
POINT-TO-POINT:
Gutstafsson, L. (2005) says that point-to-point could be included as a cost leadership
strategy as well as a marketing strategy as well. Point-to-point refers to the air traffic
movement system where the flights fly directly to the final destination without going
through the hub. This would be able to help airline to save up cost. At the same time, it
could be able to attract customer where they do not need to waste time on transiting at the
hub. Customer could be able to have a flight directly to the final destination that they
wish to be just with a low fare air ticket.
BRANDING / IMAGE:
It is difficult for airlines to differentiate their product from other competitor as the basic
product of airlines are the same. Therefore, branding and build up good image or
reputation is another option to market their product to the public. Branding is do
marketing on a product externally to the public. There is another way round of branding
being practicing. As an example, Air Asia do brand their product internally to their staff
first before to brand it externally to the public (Marketing-interactive.com, 2008). This is
to let the staff of Air Asia knows well on the function and attractive of the product where
they could sell it more better externally to the public.
PRICING (LOW FARES):
Low cost airlines are marketing their products with low fare to compete with traditional
full service airlines. Low fare is the main attractiveness of low cost airline as compare to
full service airline.
PLAYER IN THE LCC:
14
Leading consumer aviation rating agency Skytrax , named AirAsia the best low-cost
airline in the world for the ninth consecutive year.
The Sepang-based company was presented with the award at a ceremony during the 2017
Paris Airshow.
"We take the world champion title seriously and we will strive to continue to improve for
both our guests and shareholders," AirAsia CEO Tony Fernandes said in a statement.
"Over the last 15 years we have created a great brand and over the next 15, we want to
move towards One AirAsia, a truly (Southeast Asian) airline."
The Skytrax rankings are based on the impressions of 19.87 million travelers from 105
different countries. The survey, which covered more than 325 airlines, measured 49
parameters ranging from boarding procedures to seat comfort to the quality of service.
Here are the 10 best low-cost airlines in the world, according to the results of the Skytrax
survey.
1. AIRASIA:
Why it's awesome: For the ninth year in a row, AirAsia has earned the title of World's
Best Low-Cost Airline. CEO Tony Fernandes and his team have done a miraculous job
over the past 15 years to turn a small, failed, state-owned airline in one a multi-national
aviation juggernaut.
Reviews of AirAsia on Skytrax praise the airline for its responsive customer service,
friendly cabin crew, and efficient operation.
Leading consumer aviation rating agency Skytrax , named AirAsia the best low-cost
airline in the world for the ninth consecutive year.
The Sepang-based company was presented with the award at a ceremony during the 2017
Paris Airshow.
"We take the world champion title seriously and we will strive to continue to improve for
both our guests and shareholders," AirAsia CEO Tony Fernandes said in a statement.
"Over the last 15 years we have created a great brand and over the next 15, we want to
move towards One AirAsia, a truly (Southeast Asian) airline."
The Skytrax rankings are based on the impressions of 19.87 million travelers from 105
different countries. The survey, which covered more than 325 airlines, measured 49
parameters ranging from boarding procedures to seat comfort to the quality of service.
Here are the 10 best low-cost airlines in the world, according to the results of the Skytrax
survey.
1. AIRASIA:
Why it's awesome: For the ninth year in a row, AirAsia has earned the title of World's
Best Low-Cost Airline. CEO Tony Fernandes and his team have done a miraculous job
over the past 15 years to turn a small, failed, state-owned airline in one a multi-national
aviation juggernaut.
Reviews of AirAsia on Skytrax praise the airline for its responsive customer service,
friendly cabin crew, and efficient operation.
15
2. NORWEGIAN:
Why it's awesome: Norwegian Air is one of the most aggressive and controversial
airlines in the world. The low-cost carrier had drawn the ire of its US competitors by
proposing a plan to operate trans-Atlantic flights using an Ireland-based subsidiary. The
airline's critics claim that such a move would allow Norwegian to flaunt Norway's strict
labor laws and use Ireland as a flag of convenience. Norwegian has denied these
accusations. Regardless, Norwegian CEO Bjørn Kjos has won US government approval
to launch ultra-low-cost trans-Atlantic flights from smaller airports in the Northeastern
part of the country.
Controversy aside, the airline remains beloved by its customers. Norwegian has been
named Best Low-Cost Airline in Europe five years in a row. In addition, the company is
once again the World's Best Long Haul Low-Cost Airline.
3. JETBLUE AIRWAYS:
Why it's awesome: Since its inception in 1998, New York-based JetBlue has helped raise
the standard of service and amenities for low-cost carriers in the US. The airline's
signature mood lighting, friendly service, complimentary satellite TV along with free
2. NORWEGIAN:
Why it's awesome: Norwegian Air is one of the most aggressive and controversial
airlines in the world. The low-cost carrier had drawn the ire of its US competitors by
proposing a plan to operate trans-Atlantic flights using an Ireland-based subsidiary. The
airline's critics claim that such a move would allow Norwegian to flaunt Norway's strict
labor laws and use Ireland as a flag of convenience. Norwegian has denied these
accusations. Regardless, Norwegian CEO Bjørn Kjos has won US government approval
to launch ultra-low-cost trans-Atlantic flights from smaller airports in the Northeastern
part of the country.
Controversy aside, the airline remains beloved by its customers. Norwegian has been
named Best Low-Cost Airline in Europe five years in a row. In addition, the company is
once again the World's Best Long Haul Low-Cost Airline.
3. JETBLUE AIRWAYS:
Why it's awesome: Since its inception in 1998, New York-based JetBlue has helped raise
the standard of service and amenities for low-cost carriers in the US. The airline's
signature mood lighting, friendly service, complimentary satellite TV along with free
16
food and snacks make it an industry leader economy flying. In fact, at 34 inches of pitch,
JetBlue's Airbus A320 fleet has the roomiest economy seats in the US.
4. EASYJET:
Why it's awesome: Over the past two decades, easyJet and its no-frills, low-cost approach
has helped it become one of the world's leading budget airlines. The airline's fleet of
more than 230 Airbus jets fly to roughly 800 destinations throughout Europe.
Reviewers on Skytrax praised the airline for its solid service and low prices.
5. VIRGIN AMERICA:
Why it's awesome: Even though Virgin America is no longer the best low-cost airline in
North America, it remains one of most beloved carriers in the skies. The San Francisco-
food and snacks make it an industry leader economy flying. In fact, at 34 inches of pitch,
JetBlue's Airbus A320 fleet has the roomiest economy seats in the US.
4. EASYJET:
Why it's awesome: Over the past two decades, easyJet and its no-frills, low-cost approach
has helped it become one of the world's leading budget airlines. The airline's fleet of
more than 230 Airbus jets fly to roughly 800 destinations throughout Europe.
Reviewers on Skytrax praised the airline for its solid service and low prices.
5. VIRGIN AMERICA:
Why it's awesome: Even though Virgin America is no longer the best low-cost airline in
North America, it remains one of most beloved carriers in the skies. The San Francisco-
17
based boutique carrier offers the style and high-quality service expected from a Virgin-
branded company, but with the competitive prices of a low-cost carrier. In 2016, the
company was sold to Alaska Airlines for $2.6 billion.
6. JETSTAR AIRWAYS:
Why it's awesome: JetStar Airways the low-cost subsidiary of Australia's national airline
— Qantas. The Melbourne-based airline operates a fleet of Airbus A320 and Boeing 787
Dreamliners. Skytrax reviewers praised the airline for its quality cabin service and good
value for money.
For the sixth year in a row, Jetstar has been named Best Low-Cost Airline in Australia &
Pacific.
based boutique carrier offers the style and high-quality service expected from a Virgin-
branded company, but with the competitive prices of a low-cost carrier. In 2016, the
company was sold to Alaska Airlines for $2.6 billion.
6. JETSTAR AIRWAYS:
Why it's awesome: JetStar Airways the low-cost subsidiary of Australia's national airline
— Qantas. The Melbourne-based airline operates a fleet of Airbus A320 and Boeing 787
Dreamliners. Skytrax reviewers praised the airline for its quality cabin service and good
value for money.
For the sixth year in a row, Jetstar has been named Best Low-Cost Airline in Australia &
Pacific.
18
7. AIRASIA X:
Why it's awesome: AirAsia X is the long-haul subsidiary of Malaysia's low-cost mega
airline AirAsia. The airline's fleet of Airbus A330-300 jets are outfitted with both
premium and economy cabins and operates throughout Asia.
In fact, the low-cost airline's premium service garnered AirAsiaX with the Skytrax
awards for World's Best Low-Cost Airline Premium Cabin and World's Best Low-Cost
Airline Premium Seat for a second consecutive year.
8. AZUL BRAZILIAN AIRLINES:
Why it's awesome: Azul Brazilian Airlines is the latest brainchild of JetBlue and WestJet
co-founder David Neeleman. The Sao Paolo-based airline operates a fleet of new Airbus,
7. AIRASIA X:
Why it's awesome: AirAsia X is the long-haul subsidiary of Malaysia's low-cost mega
airline AirAsia. The airline's fleet of Airbus A330-300 jets are outfitted with both
premium and economy cabins and operates throughout Asia.
In fact, the low-cost airline's premium service garnered AirAsiaX with the Skytrax
awards for World's Best Low-Cost Airline Premium Cabin and World's Best Low-Cost
Airline Premium Seat for a second consecutive year.
8. AZUL BRAZILIAN AIRLINES:
Why it's awesome: Azul Brazilian Airlines is the latest brainchild of JetBlue and WestJet
co-founder David Neeleman. The Sao Paolo-based airline operates a fleet of new Airbus,
19
ATR, and Embraer airliners mainly on routes within Brazil. Its Airbus fleet now operates
to limited destinations in the US and Europe.
In addition to a top 10 finish, Azul also picked up the awards for Best Low-Cost Airline
in South America and Best Airline Staff in South America for the second year in a row.
9. SOUTHWEST AIRLINES:
Why it's awesome: With more than 700 Boeing 737 jets in its fleet, Southwest is one of
the largest airlines in the world. Over the past four decades, Southwest has earned a
reputation for delivering low-cost flights with a smile. More recently, the company's free
checked bag policy has earned it considerable praise from the flying public.
10. INDIGO:
Why it's awesome: The New Delhi-based airline burst on the scene in 2006 and quickly
became one of the best low-cost carriers in Asia. The airline operates a brand new fleet of
more than 100 Airbus A320 jets. With more than 400 Airbus jets on order, IndiGo is one
of the quickest growing airlines in the region. Reviewers on Skytrax praised the airline
for its great cabin service and good value for money.
ATR, and Embraer airliners mainly on routes within Brazil. Its Airbus fleet now operates
to limited destinations in the US and Europe.
In addition to a top 10 finish, Azul also picked up the awards for Best Low-Cost Airline
in South America and Best Airline Staff in South America for the second year in a row.
9. SOUTHWEST AIRLINES:
Why it's awesome: With more than 700 Boeing 737 jets in its fleet, Southwest is one of
the largest airlines in the world. Over the past four decades, Southwest has earned a
reputation for delivering low-cost flights with a smile. More recently, the company's free
checked bag policy has earned it considerable praise from the flying public.
10. INDIGO:
Why it's awesome: The New Delhi-based airline burst on the scene in 2006 and quickly
became one of the best low-cost carriers in Asia. The airline operates a brand new fleet of
more than 100 Airbus A320 jets. With more than 400 Airbus jets on order, IndiGo is one
of the quickest growing airlines in the region. Reviewers on Skytrax praised the airline
for its great cabin service and good value for money.
20
For the eighth consecutive year, IndiGo has been named Best Low-Cost Airline in
Central Asia / India.
MARKET SHARE OF LCC:
LCCs are increasingly gaining a foothold in the global aviation industry and their growth
is not driven only by leisure customers. Today, LCCs are also adding direct flights to
business destinations. For instance, Wizz Air and Ryanair run flights from London to
Vilnius, the economic hub of Lithuania and one of the biggest financial centers of the
Baltic States.
In terms of seat capacity, the global low cost carrier (LCC) industry is expanding.
According to the International Air Transport Association (IATA), LCCs hold 26% share
in Asia-Pacific, 54% in Southeast Asia, and 26% globally. More than 12 airlines started
operating in Asia-Pacific during the period 2005–2015. The fast growth in Asia-Pacific
can be attributed to the fact that it has some of the fastest-growing economies including
China and India.
The US is the largest market in the world in terms of revenues and seats sold. In 2015, its
revenues stood at US$31.6 billion and the number of passengers carried totaled 216.6
Million. Spain and the UK held second and third position in terms of seats sold, while
Japan was the fastest-growing market at a CAGR of 33.7% during the historic period
(2011–2015). Switzerland (90.6%) had the highest load factor in 2015, followed by
France (90.5%) and Mexico (89.9%). In terms of revenue per passenger, New Zealand
was the largest market while China was the fastest-growing market at a CAGR of 3.7%
during the historic period.
Europe’s two leading LCCs in terms of seats sold - Ryanair and Easyjet - are also making
profits. In 2015, Ryanair (101.4 Million) sold more seats than IAG (95 Million), which
owns Iberia, British Airways, V ueling, and Aer Lingus.
LCCs usually operate on short-haul routes and do not fly on long-haul networks because
of the additional expense incurred in flying over six hours. However, this is changing as
airlines such as Norwegian and Scoot are able to operate on long-haul routes as they are
using more fuel-efficient aircraft such as the Dreamliner 787 and running flights on
transatlantic routes.
LCCs in general do not add anything extra, which increases the cost; however, the trend
is changing. For instance, flydubai offers free meals on flights from Prague to Dubai.
GROWTH IN INTERNATIONAL SCENARIO FOR LCC:
The global low cost carrier (LCC) industry is expanding. According to the International
Air Transport Association (IATA), LCCs hold 26% share in Asia-Pacific, 54% in
Southeast Asia, and 26% globally. More than 12 airlines started operating in Asia-Pacific
For the eighth consecutive year, IndiGo has been named Best Low-Cost Airline in
Central Asia / India.
MARKET SHARE OF LCC:
LCCs are increasingly gaining a foothold in the global aviation industry and their growth
is not driven only by leisure customers. Today, LCCs are also adding direct flights to
business destinations. For instance, Wizz Air and Ryanair run flights from London to
Vilnius, the economic hub of Lithuania and one of the biggest financial centers of the
Baltic States.
In terms of seat capacity, the global low cost carrier (LCC) industry is expanding.
According to the International Air Transport Association (IATA), LCCs hold 26% share
in Asia-Pacific, 54% in Southeast Asia, and 26% globally. More than 12 airlines started
operating in Asia-Pacific during the period 2005–2015. The fast growth in Asia-Pacific
can be attributed to the fact that it has some of the fastest-growing economies including
China and India.
The US is the largest market in the world in terms of revenues and seats sold. In 2015, its
revenues stood at US$31.6 billion and the number of passengers carried totaled 216.6
Million. Spain and the UK held second and third position in terms of seats sold, while
Japan was the fastest-growing market at a CAGR of 33.7% during the historic period
(2011–2015). Switzerland (90.6%) had the highest load factor in 2015, followed by
France (90.5%) and Mexico (89.9%). In terms of revenue per passenger, New Zealand
was the largest market while China was the fastest-growing market at a CAGR of 3.7%
during the historic period.
Europe’s two leading LCCs in terms of seats sold - Ryanair and Easyjet - are also making
profits. In 2015, Ryanair (101.4 Million) sold more seats than IAG (95 Million), which
owns Iberia, British Airways, V ueling, and Aer Lingus.
LCCs usually operate on short-haul routes and do not fly on long-haul networks because
of the additional expense incurred in flying over six hours. However, this is changing as
airlines such as Norwegian and Scoot are able to operate on long-haul routes as they are
using more fuel-efficient aircraft such as the Dreamliner 787 and running flights on
transatlantic routes.
LCCs in general do not add anything extra, which increases the cost; however, the trend
is changing. For instance, flydubai offers free meals on flights from Prague to Dubai.
GROWTH IN INTERNATIONAL SCENARIO FOR LCC:
The global low cost carrier (LCC) industry is expanding. According to the International
Air Transport Association (IATA), LCCs hold 26% share in Asia-Pacific, 54% in
Southeast Asia, and 26% globally. More than 12 airlines started operating in Asia-Pacific
21
during the period 2005–2015. The fast growth in Asia-Pacific can be attributed to the fact
that it has some of the fastest-growing economies including China and India.
Over the last 10 years in the Southeast Asia region, the capacity of the LCCs had
increased by almost eight times from 25 million seats in 2004 to almost 200 million in
2014. During the same period, the capacity of Full Service Airlines (FSA) increased from
180 million seats in 2004 to 260 million seats in 2014
In the domestic US market, LCCs are considered to be the fastest growing business
segment. When the FSA reduce their flights on certain routes, the LCCs utilize the
opportunity by filling seats on those routes. In 2014, according to Canadean, the capacity
of the LCCs grew by 8%
The Eastern/Central Europe region is not much explored yet and there is scope for the
penetration of LCCs in the region. At present, only Wizz Air and RyanAir are the strong
players in LCC segment. According to the Official Airline guide (OAG), Wizz Air's
capacity grew by 25% in 2014 and Ryanair expanded by 22%
In the UAE, Ras Al Khaimah (RAK) airport is generally known for serving charter
airlines on routes from the UK, Germany, and Russia. on the company has entered the
LCCs segment, competing with other airports (Dubai and Sharjah), by offering cheap
fares. However, after failing twice with its own LCC, RAK partnered with Sharjah's LCC
Air Arabia in order to target its main markets - Saudi Arabia and India
PRICING POLICY OF LCC:
The pricing policy of the low-cost carriers is usually very dynamic, with discounts and
tickets in promotion. Like other carriers, even if the advertised price may be very low, it
often does not include charges and taxes. With some airlines, some flights are advertised
as free (plus applicable taxes, fees and charges). Depending on the airline, perhaps as
many (or as few) as ten percent of the seats on any flight are offered at the lowest price,
and are the first to sell. The prices steadily rise thereafter to a point where they can be
comparable or more expensive than a flight on a full-service carrier.
Most airlines charge additional taxes and fees on their tickets. Some low-cost airlines
have been known to charge fees for the seemingly ridiculous, such as levying a credit
card charge where credit card is the only payment method accepted. Many consumers and
governments consider this fraudulent, but some still allow this and similar practices.
Traditional perceptions of the "low-cost carrier" as a stripped-down, no-frills airline have
been changing as new entrants to the market offer passengers more options, as well as
premium amenities. JetBlue offers all passengers generous legroom, complementary
snacks, and live in-flight television. JetBlue also offers a first class cabin with lie-flat
seats on some flights. Southwest allows passengers to check two bags for free. Other
amenities found on low-cost airlines include premium cabins, in-flight Wifi, and rewards
programs.
during the period 2005–2015. The fast growth in Asia-Pacific can be attributed to the fact
that it has some of the fastest-growing economies including China and India.
Over the last 10 years in the Southeast Asia region, the capacity of the LCCs had
increased by almost eight times from 25 million seats in 2004 to almost 200 million in
2014. During the same period, the capacity of Full Service Airlines (FSA) increased from
180 million seats in 2004 to 260 million seats in 2014
In the domestic US market, LCCs are considered to be the fastest growing business
segment. When the FSA reduce their flights on certain routes, the LCCs utilize the
opportunity by filling seats on those routes. In 2014, according to Canadean, the capacity
of the LCCs grew by 8%
The Eastern/Central Europe region is not much explored yet and there is scope for the
penetration of LCCs in the region. At present, only Wizz Air and RyanAir are the strong
players in LCC segment. According to the Official Airline guide (OAG), Wizz Air's
capacity grew by 25% in 2014 and Ryanair expanded by 22%
In the UAE, Ras Al Khaimah (RAK) airport is generally known for serving charter
airlines on routes from the UK, Germany, and Russia. on the company has entered the
LCCs segment, competing with other airports (Dubai and Sharjah), by offering cheap
fares. However, after failing twice with its own LCC, RAK partnered with Sharjah's LCC
Air Arabia in order to target its main markets - Saudi Arabia and India
PRICING POLICY OF LCC:
The pricing policy of the low-cost carriers is usually very dynamic, with discounts and
tickets in promotion. Like other carriers, even if the advertised price may be very low, it
often does not include charges and taxes. With some airlines, some flights are advertised
as free (plus applicable taxes, fees and charges). Depending on the airline, perhaps as
many (or as few) as ten percent of the seats on any flight are offered at the lowest price,
and are the first to sell. The prices steadily rise thereafter to a point where they can be
comparable or more expensive than a flight on a full-service carrier.
Most airlines charge additional taxes and fees on their tickets. Some low-cost airlines
have been known to charge fees for the seemingly ridiculous, such as levying a credit
card charge where credit card is the only payment method accepted. Many consumers and
governments consider this fraudulent, but some still allow this and similar practices.
Traditional perceptions of the "low-cost carrier" as a stripped-down, no-frills airline have
been changing as new entrants to the market offer passengers more options, as well as
premium amenities. JetBlue offers all passengers generous legroom, complementary
snacks, and live in-flight television. JetBlue also offers a first class cabin with lie-flat
seats on some flights. Southwest allows passengers to check two bags for free. Other
amenities found on low-cost airlines include premium cabins, in-flight Wifi, and rewards
programs.
22
The higher efficiency and better fleet utilization of LCCs, coupled with lower overheads,
means that they can offer prices that are significantly discounted to the prices offered by
legacy airlines for the same route. As the vast majority of consumers want to reach their
destination in the most economical and fastest manner possible, and are willing to forego
in-flight food and entertainment in their goal to get the best price, ticket pricing is now
the biggest competitive factor for airlines. This drive for economy also extends to
business travelers, as companies increasingly clamp down on travel costs.
The higher efficiency and better fleet utilization of LCCs, coupled with lower overheads,
means that they can offer prices that are significantly discounted to the prices offered by
legacy airlines for the same route. As the vast majority of consumers want to reach their
destination in the most economical and fastest manner possible, and are willing to forego
in-flight food and entertainment in their goal to get the best price, ticket pricing is now
the biggest competitive factor for airlines. This drive for economy also extends to
business travelers, as companies increasingly clamp down on travel costs.
23
CHAPTER 2: PROFILE OF AIRASIA
ABOUT AIR ASIA:
They started in 2001 with 2 old aircraft, having bought the then loss making AirAsia
from its Malaysian owner DRB-Hicom, for a token of MYR1 (USD0.25 cents) and
MYR40 million (USD11 million) in debt. Its parent company is Tune group. The founder
of AirAsia is Tony Fernandes. The head quarters of AirAsia is Sepang District, Malaysia.
Born in the aftermath of 9/11 and coming through the global financial crisis, AirAsia has
faced some of the most turbulent times in the airline industry. With the successes today,
they stand as testimony to the power of great innovation, passion, teamwork and well-
executed ideas.
They provide following services:
1) Low Fares
a) Committed to low fares: Commitment to low fares lies in promise of “NOW
EVERYONE CAN FLY”. Service targets quests who can do without the frills of
full service airlines in exchange for low fares.
b) 25-Minute turnaround: Less-time on the ground and more time in the air means
they get the most of every flight. Through high aircraft utilization, low costs and
greater airline and staff productivity.
2) Low Cost Carrier Model
a) Self automation: The more customer DIY (self check-in), the more we save on
operational costs, that means lower fares for customers.
b) No frills: Pay only for what you want. If customer want additional inflight
comfort, just add-on.
c) Cost-saving innovations: Constantly on the lookout for the latest advancement in
savings. They are the first airlines to use the new Airbus A320 aircraft installed
with ‘Sharklet wing tips’ to lower wind drag and provide better fuel consumption.
3) Great value, amazing quality, safety first: Their cost optimization philosophy is in no
way at the expense of safety. The fleet of Airbus aircraft fully complies with the
conditions of the International Aviation Safety, and its regulated by the
internationally renowned Malaysian Department of Civil Aviation. They have
renowned international partners for aircraft and engine maintenance, and made
significant investment to ensure the safety of their planes. They adopt a zero tolerance
to unsafe practices and strive for zero accidents through proper training work
practices, risk management and adherence to safety regulations at all times.
THE AIR ASIA FAMILY:
At AirAsia, they see themselves as not so much an airline operator but more of a people
company that happens to be in the airline business. Understanding people enables them to
realize the true needs of discerning travellers and provide paramount services and
products to deliver utmost satisfaction to their guests, each and every one with unique
CHAPTER 2: PROFILE OF AIRASIA
ABOUT AIR ASIA:
They started in 2001 with 2 old aircraft, having bought the then loss making AirAsia
from its Malaysian owner DRB-Hicom, for a token of MYR1 (USD0.25 cents) and
MYR40 million (USD11 million) in debt. Its parent company is Tune group. The founder
of AirAsia is Tony Fernandes. The head quarters of AirAsia is Sepang District, Malaysia.
Born in the aftermath of 9/11 and coming through the global financial crisis, AirAsia has
faced some of the most turbulent times in the airline industry. With the successes today,
they stand as testimony to the power of great innovation, passion, teamwork and well-
executed ideas.
They provide following services:
1) Low Fares
a) Committed to low fares: Commitment to low fares lies in promise of “NOW
EVERYONE CAN FLY”. Service targets quests who can do without the frills of
full service airlines in exchange for low fares.
b) 25-Minute turnaround: Less-time on the ground and more time in the air means
they get the most of every flight. Through high aircraft utilization, low costs and
greater airline and staff productivity.
2) Low Cost Carrier Model
a) Self automation: The more customer DIY (self check-in), the more we save on
operational costs, that means lower fares for customers.
b) No frills: Pay only for what you want. If customer want additional inflight
comfort, just add-on.
c) Cost-saving innovations: Constantly on the lookout for the latest advancement in
savings. They are the first airlines to use the new Airbus A320 aircraft installed
with ‘Sharklet wing tips’ to lower wind drag and provide better fuel consumption.
3) Great value, amazing quality, safety first: Their cost optimization philosophy is in no
way at the expense of safety. The fleet of Airbus aircraft fully complies with the
conditions of the International Aviation Safety, and its regulated by the
internationally renowned Malaysian Department of Civil Aviation. They have
renowned international partners for aircraft and engine maintenance, and made
significant investment to ensure the safety of their planes. They adopt a zero tolerance
to unsafe practices and strive for zero accidents through proper training work
practices, risk management and adherence to safety regulations at all times.
THE AIR ASIA FAMILY:
At AirAsia, they see themselves as not so much an airline operator but more of a people
company that happens to be in the airline business. Understanding people enables them to
realize the true needs of discerning travellers and provide paramount services and
products to deliver utmost satisfaction to their guests, each and every one with unique
24
requisites and expectations.
AirAsia has sparked a revolution in air travel with more and more people around the
region choosing us as their preferred choice of air transport. As they continuously strive
to promote air travel, they also seek to create excitement amongst their guests with their
range of innovative and personalized services.
Their mission is to attain the lowest cost so that everyone can fly with AirAsia and
maintain the highest quality product, embracing technology to reduce cost and enhance
service levels.
The AirAsia Group services the most extensive network across Asia & Australia which
comprises of the following AIRLINE AFFILIATES:
AIRASIA BERHAD (MALAYSIA) - AIRLINE CODE: AK
Established in 2001 and listed on the Main Market of Bursa Malaysia Securities Berhad
in November 2004, with hubs in Kuala Lumpur, Kota Kinabalu, Penang, Johor Bahru and
Kuching.
AIRASIA INDONESIA - AIRLINE CODE: QZ
Established on December 8, 2004, through a joint venture between AirAsia International
Ltd. and PT. Awair International, with hubs in Jakarta, Bali, Surabaya and Medan.
THAI AIRASIA - AIRLINE CODE: FD
Established in 2004 as a joint venture between Asia Aviation and AirAsia Investment,
and was listed on the Stock Exchange of Thailand in May 2012. Thai AirAsia
commenced its inaugural commercial flight on 4 February 2004 from Bangkok to Hat
Yai, and now operating from hubs in Bangkok, Phuket, Chiang Mai, Krabi, U-Tapao and
Hat Yai.
PHILIPPINES AIRASIA - AIRLINE CODE: Z2
Philippines AirAsia (PAA) is a wholly owned subsidiary of AirAsia Inc., which is a joint
venture company between Filipino investors; Antonio O. Cojuango, former Ambassafor
Alfredo M. Yao, Michael L. Romero, Marianne B. Hontiveros, and Malaysia’s AirAsia
Berhad. PAA operates domestic and international flights out of Manila, Cebu and Kalibo
(gateway to Boracay). It is, by far, the only local carrier that services the most number of
international flights from China and South Korea to Kalibo International Airport, with
Fly-Thru services via Kuala Lumpur from Manila to various destinations in Asia,
Australia and beyond. Philippines AirAsia is part of the AirAsia Group that has been
requisites and expectations.
AirAsia has sparked a revolution in air travel with more and more people around the
region choosing us as their preferred choice of air transport. As they continuously strive
to promote air travel, they also seek to create excitement amongst their guests with their
range of innovative and personalized services.
Their mission is to attain the lowest cost so that everyone can fly with AirAsia and
maintain the highest quality product, embracing technology to reduce cost and enhance
service levels.
The AirAsia Group services the most extensive network across Asia & Australia which
comprises of the following AIRLINE AFFILIATES:
AIRASIA BERHAD (MALAYSIA) - AIRLINE CODE: AK
Established in 2001 and listed on the Main Market of Bursa Malaysia Securities Berhad
in November 2004, with hubs in Kuala Lumpur, Kota Kinabalu, Penang, Johor Bahru and
Kuching.
AIRASIA INDONESIA - AIRLINE CODE: QZ
Established on December 8, 2004, through a joint venture between AirAsia International
Ltd. and PT. Awair International, with hubs in Jakarta, Bali, Surabaya and Medan.
THAI AIRASIA - AIRLINE CODE: FD
Established in 2004 as a joint venture between Asia Aviation and AirAsia Investment,
and was listed on the Stock Exchange of Thailand in May 2012. Thai AirAsia
commenced its inaugural commercial flight on 4 February 2004 from Bangkok to Hat
Yai, and now operating from hubs in Bangkok, Phuket, Chiang Mai, Krabi, U-Tapao and
Hat Yai.
PHILIPPINES AIRASIA - AIRLINE CODE: Z2
Philippines AirAsia (PAA) is a wholly owned subsidiary of AirAsia Inc., which is a joint
venture company between Filipino investors; Antonio O. Cojuango, former Ambassafor
Alfredo M. Yao, Michael L. Romero, Marianne B. Hontiveros, and Malaysia’s AirAsia
Berhad. PAA operates domestic and international flights out of Manila, Cebu and Kalibo
(gateway to Boracay). It is, by far, the only local carrier that services the most number of
international flights from China and South Korea to Kalibo International Airport, with
Fly-Thru services via Kuala Lumpur from Manila to various destinations in Asia,
Australia and beyond. Philippines AirAsia is part of the AirAsia Group that has been
25
awarded the World’s Best Low-Cost Carrier for seven consecutive years, from 2009 to
2015, by Skytrax.
AIRASIA INDIA - AIRLINE CODE: I5
Established in 2013, AirAsia (India) Limited is a joint venture between Tata Sons
Limited & AirAsia Investment Limited. The airline currently operates flights from its
current base in Bengaluru and Delhi to Chandigarh, Goa, Guwahati, Hyderabad, Imphal,
Jaipur, Kochi, Pune and Visakhapatnam.
AIRASIA JAPAN - AIRLINE CODE: DJ
AirAsia Japan (AAJ) is a joint venture between AirAsia Investment Ltd, Rakuten Inc,
Noevir Holdings Co Ltd, Octave Japan Infrastructure Fund and Alpen Co Ltd. The airline
plans to operate from Nagoya.
AIRASIA X - AIRLINE CODE: D7
Established in 2007, it is the long-haul, low-cost affiliate carrier of the AirAsia Group
and currently flies to destinations in the Asia Pacific region. Operates from its hub in
Kuala Lumpur.
THAI AIRASIA X - AIRLINE CODE: XJ
Established in 2014, It is an extension of Asia’s leading low cost carrier, AirAsia, and
seeks to deliver everyday low fares to travellers seeking to travel to destinations greater
than four hours flight time from its hub, Bangkok Don Mueang International Airport.
INDONESIA AIRASIA X - AIRLINE CODE: XT
Indonesia AirAsia X is Indonesia’s first long-haul, low-cost carrier and an affiliate of the
AirAsia Group. Indonesia AirAsia X operates on Airbus A330-300s, with a seat
configuration of 12 Business Class seats and 365 Economy seats. Our vision is to solidify
our position as the national and global leader in long-haul, low-cost aviation and to build
a strong network along with other carriers of the AirAsia Group.
DIRECTORS:
Datuk Kamarudin Bin Meranun (Non-Independent Executive Director and Group
Chief Executive Officer).
awarded the World’s Best Low-Cost Carrier for seven consecutive years, from 2009 to
2015, by Skytrax.
AIRASIA INDIA - AIRLINE CODE: I5
Established in 2013, AirAsia (India) Limited is a joint venture between Tata Sons
Limited & AirAsia Investment Limited. The airline currently operates flights from its
current base in Bengaluru and Delhi to Chandigarh, Goa, Guwahati, Hyderabad, Imphal,
Jaipur, Kochi, Pune and Visakhapatnam.
AIRASIA JAPAN - AIRLINE CODE: DJ
AirAsia Japan (AAJ) is a joint venture between AirAsia Investment Ltd, Rakuten Inc,
Noevir Holdings Co Ltd, Octave Japan Infrastructure Fund and Alpen Co Ltd. The airline
plans to operate from Nagoya.
AIRASIA X - AIRLINE CODE: D7
Established in 2007, it is the long-haul, low-cost affiliate carrier of the AirAsia Group
and currently flies to destinations in the Asia Pacific region. Operates from its hub in
Kuala Lumpur.
THAI AIRASIA X - AIRLINE CODE: XJ
Established in 2014, It is an extension of Asia’s leading low cost carrier, AirAsia, and
seeks to deliver everyday low fares to travellers seeking to travel to destinations greater
than four hours flight time from its hub, Bangkok Don Mueang International Airport.
INDONESIA AIRASIA X - AIRLINE CODE: XT
Indonesia AirAsia X is Indonesia’s first long-haul, low-cost carrier and an affiliate of the
AirAsia Group. Indonesia AirAsia X operates on Airbus A330-300s, with a seat
configuration of 12 Business Class seats and 365 Economy seats. Our vision is to solidify
our position as the national and global leader in long-haul, low-cost aviation and to build
a strong network along with other carriers of the AirAsia Group.
DIRECTORS:
Datuk Kamarudin Bin Meranun (Non-Independent Executive Director and Group
Chief Executive Officer).
26
Tan Sri Dr. Tony Fernandes (Non-Independent Executive Director and Group
Chief Executive Officer).
Aireen Omar (Executive Director and Chief Executive Officer).
Dato’ Abdel Aziz @ Abdul Aziz Bin Abu Bakar (Non-Independent Non-
Executive Director).
Dato’ Mohamed Khadar (Independent Non-Executive Director and Director and
Chairman of Audit Committee).
Dato’ Fam Lee Ee (Independent Non-Executive Director).
Stuart L Dean (Independent Non-Executive Director).
AIR ASIA MISSION, VISION & VALUES:
BASIC PRINCIPLE OF AIRASIA:
The founding principle of AirAsia is to be aware at all times that they are engaged in a
business where the responsibility of peoples’ lives is in our hands. They safeguard that
responsibility through the safety and quality of their operations. They operate with the
highest level of integrity, striving to exceed industry standards in a proactive manner
while doing so with respect to others and the environment.
SAFETY VALUES OF AIRASIA:
The safety values of AirAsia are:
Provide a product with safety and quality as our first goals.
Do our job with the highest level of integrity.
Prepare our employees through first-class training.
Provide equipment that is well maintained.
Select contractors, vendors and suppliers who meet our values.
Value oversight from regulators and other organizations that enhance our system
through checks and balances.
Embed an ethical culture by maintaining openness with regard to safety and
quality.
Embed a continuous improvement ethos by learning from aviation industry
experiences.
Maintain a high level of environmental consideration in all of our activities.
VISION:
To be the largest low cost airline in Asia and serving the 3 billion people who are
currently underserved with poor connectivity and high fares.
Tan Sri Dr. Tony Fernandes (Non-Independent Executive Director and Group
Chief Executive Officer).
Aireen Omar (Executive Director and Chief Executive Officer).
Dato’ Abdel Aziz @ Abdul Aziz Bin Abu Bakar (Non-Independent Non-
Executive Director).
Dato’ Mohamed Khadar (Independent Non-Executive Director and Director and
Chairman of Audit Committee).
Dato’ Fam Lee Ee (Independent Non-Executive Director).
Stuart L Dean (Independent Non-Executive Director).
AIR ASIA MISSION, VISION & VALUES:
BASIC PRINCIPLE OF AIRASIA:
The founding principle of AirAsia is to be aware at all times that they are engaged in a
business where the responsibility of peoples’ lives is in our hands. They safeguard that
responsibility through the safety and quality of their operations. They operate with the
highest level of integrity, striving to exceed industry standards in a proactive manner
while doing so with respect to others and the environment.
SAFETY VALUES OF AIRASIA:
The safety values of AirAsia are:
Provide a product with safety and quality as our first goals.
Do our job with the highest level of integrity.
Prepare our employees through first-class training.
Provide equipment that is well maintained.
Select contractors, vendors and suppliers who meet our values.
Value oversight from regulators and other organizations that enhance our system
through checks and balances.
Embed an ethical culture by maintaining openness with regard to safety and
quality.
Embed a continuous improvement ethos by learning from aviation industry
experiences.
Maintain a high level of environmental consideration in all of our activities.
VISION:
To be the largest low cost airline in Asia and serving the 3 billion people who are
currently underserved with poor connectivity and high fares.
27
MISSION:
To be the best company to work for whereby employees are treated as part of a
big family
Create a globally recognized ASEAN brand
To attain the lowest cost so that everyone can fly with AirAsia
Maintain the highest quality product, embracing technology to reduce cost and
enhance service levels
VALUES:
We are Allstars and we are...
Safety conscious
A safe airline is a happy airline. Our guests' safety is our primary concern so we
do our jobs with care. Because where safety is concerned, every little thing
matters.
Caring
It's a warm and friendly feeling to have, so we take pleasure in caring for our
guests in ways that make them feel at home.
Passionate
Being passionate means going the extra mile to achieve a purpose much larger
than ourselves. They say passionate people can change the world and that's
something that's very close to our hearts.
Full of integrity
We believe everything that is worth doing, is worth doing right. It's about us
doing the right things at all times.
Hardworking
It means one team, working together towards a common goal. Whether it's
meeting our 25 minute turnaround time or making sure we keep you connected to
the best destinations at the lowest prices, we do it as a team. All for one. One for
all.
FUN:
Fun means we celebrate life. It means we laugh louder, our smiles are wider, and we can
be our own unique selves. We're a sociable bunch and we enjoy sharing ideas and
solutions to make things even better. After all, fun is meant to be shared.
SUBSTANTIAL SHAREHOLDERS:
The direct and indirect shareholdings of the shareholders holding more than 5% in
AirAsia Berhad based on the Register of Substantial Shareholders as of 28 February 2017
are as follows:-
MISSION:
To be the best company to work for whereby employees are treated as part of a
big family
Create a globally recognized ASEAN brand
To attain the lowest cost so that everyone can fly with AirAsia
Maintain the highest quality product, embracing technology to reduce cost and
enhance service levels
VALUES:
We are Allstars and we are...
Safety conscious
A safe airline is a happy airline. Our guests' safety is our primary concern so we
do our jobs with care. Because where safety is concerned, every little thing
matters.
Caring
It's a warm and friendly feeling to have, so we take pleasure in caring for our
guests in ways that make them feel at home.
Passionate
Being passionate means going the extra mile to achieve a purpose much larger
than ourselves. They say passionate people can change the world and that's
something that's very close to our hearts.
Full of integrity
We believe everything that is worth doing, is worth doing right. It's about us
doing the right things at all times.
Hardworking
It means one team, working together towards a common goal. Whether it's
meeting our 25 minute turnaround time or making sure we keep you connected to
the best destinations at the lowest prices, we do it as a team. All for one. One for
all.
FUN:
Fun means we celebrate life. It means we laugh louder, our smiles are wider, and we can
be our own unique selves. We're a sociable bunch and we enjoy sharing ideas and
solutions to make things even better. After all, fun is meant to be shared.
SUBSTANTIAL SHAREHOLDERS:
The direct and indirect shareholdings of the shareholders holding more than 5% in
AirAsia Berhad based on the Register of Substantial Shareholders as of 28 February 2017
are as follows:-
28
NAME
DIRECT INDIRECT
NO. OF
SHARES
HELD
% OF
ISSUED
SHARES
NO. OF
SHARES
HELD
% OF
ISSUED
SHARES
TUNE LIVE SDN. BHD.
559,000,000.
00
16.73 _ _
TUNE AIR SDN. BHD.
516,485,082.
00
15.45 _ _
TAN SRI (Dr.)
ANTHONY FRANCIS
FERNANDES
1,600,000.00
0.05
1,075,485,08
2.00
32.18
DATUK KAMARUDIN
BIN MERANUN
2,000,000.00
0.06
1,075,485,08
2.00
32.18
NOTES:
Shares held under HSBC Nominees (Tempatan) Sdn. Bhd. for Tune Live Sdn.
Bhd.
Shares held under Tune Air Sdn. Bhd.(“TASB”) inclusive of shares held by
HSBC Nominees (Tempatan) Sdn. Bhd., Cimsec Nominees (Tempatan) Sdn.
Bhd., Kenanga Capital Sdn. Bhd., MIDF Amanah Investment Nominees
(Tempatan) Sdn. Bhd., and RHB Nominees (Tempatan) Sdn. Bhd. for TASB.
Shares held under CIMB Group Nominees (Tempatan) Sdn. Bhd for Tan Sri Dr.
Anthony Francis Fernandes.
Shares held under CIMB Group Nominees (Tempatan) Sdn. Bhd. for Datuk
Kamarudin Bin Meranun.
Deemed interested by virtue of Section 8 of the Companies Act, 2016 through a
shareholding of more than 20% in Tune Live Sdn. Bhd. and Tune Air Sdn. Bhd.
NAME
DIRECT INDIRECT
NO. OF
SHARES
HELD
% OF
ISSUED
SHARES
NO. OF
SHARES
HELD
% OF
ISSUED
SHARES
TUNE LIVE SDN. BHD.
559,000,000.
00
16.73 _ _
TUNE AIR SDN. BHD.
516,485,082.
00
15.45 _ _
TAN SRI (Dr.)
ANTHONY FRANCIS
FERNANDES
1,600,000.00
0.05
1,075,485,08
2.00
32.18
DATUK KAMARUDIN
BIN MERANUN
2,000,000.00
0.06
1,075,485,08
2.00
32.18
NOTES:
Shares held under HSBC Nominees (Tempatan) Sdn. Bhd. for Tune Live Sdn.
Bhd.
Shares held under Tune Air Sdn. Bhd.(“TASB”) inclusive of shares held by
HSBC Nominees (Tempatan) Sdn. Bhd., Cimsec Nominees (Tempatan) Sdn.
Bhd., Kenanga Capital Sdn. Bhd., MIDF Amanah Investment Nominees
(Tempatan) Sdn. Bhd., and RHB Nominees (Tempatan) Sdn. Bhd. for TASB.
Shares held under CIMB Group Nominees (Tempatan) Sdn. Bhd for Tan Sri Dr.
Anthony Francis Fernandes.
Shares held under CIMB Group Nominees (Tempatan) Sdn. Bhd. for Datuk
Kamarudin Bin Meranun.
Deemed interested by virtue of Section 8 of the Companies Act, 2016 through a
shareholding of more than 20% in Tune Live Sdn. Bhd. and Tune Air Sdn. Bhd.
29
STRATEGY:
STRATEGY:
30
CHAPTER 3: PROFILE OF NORWEGIAN AIR SHUTTLE
ABOUT NORWEGIAN AIR:
This airlines was founded in 1993, but only began operating as a low-cost carrier with
bigger Boeing 737 aircraft in 2002. Today thet are one of the world’s fastest growing
airlines. We are constantly introducing brand new aircraft to our fleet, as well as
launching new routes and establishing new bases in Europe, Asia and the US.
Today, they have around 150 aircraft and boast one of the world’s youngest and greenest
fleets with an average age of just 3.6 years. New aircraft is a win-win for the customers,
the environment and the company’s costs and its key in order to maintain our vision of
offering affordable fares for all.
Hey also have around 250 aircraft on order, which means that in the coming years, we
will take delivery of brand new Boeing 737-800s, Boeing 787 Dreamliners, Boeing 737
MAX 8 and Airbus 321 Long Range aircraft.
Norwegian has one of the newest and greenest fleets in Europe, High fuel-efficieny is not
only good for the environment, but also for your wallet.
BOARD OF DIRECTORS:
Bjorn H. Kise (Chair).
Liv Berstad (Deputy Chair).
Ada Kjeseth (Director).
Christian Fredrik Stray (Director).
Geir Olav Oien (Director, Employee Representative).
Linda Olsen (Director, Employee Representative).
Marcus Hall (Director, Employee Representative).
MANAGEMENT:
Bjorn Kjos (Chief Executive Officer).
Tore Ostby (Acting Chief Financial Officer).
Aaqeir Nyseth (Chief Operating Officer).
Anne-Sissel Shanvik (Chief Communications Officer).
Thomas Ramdhal (Chief Commercial Officer).
Helga Bollmann Leknes (Chief Human Resources Officer).
Frode Berg (Chief Legal Officer).
Tore Jenssen (Chief Executive Officer – Norwegian Air International).
Edward Thorstad (Chief Customer Officer).
Ole Christian Melhus (CEO Norwegian Air Argentina).
CHAPTER 3: PROFILE OF NORWEGIAN AIR SHUTTLE
ABOUT NORWEGIAN AIR:
This airlines was founded in 1993, but only began operating as a low-cost carrier with
bigger Boeing 737 aircraft in 2002. Today thet are one of the world’s fastest growing
airlines. We are constantly introducing brand new aircraft to our fleet, as well as
launching new routes and establishing new bases in Europe, Asia and the US.
Today, they have around 150 aircraft and boast one of the world’s youngest and greenest
fleets with an average age of just 3.6 years. New aircraft is a win-win for the customers,
the environment and the company’s costs and its key in order to maintain our vision of
offering affordable fares for all.
Hey also have around 250 aircraft on order, which means that in the coming years, we
will take delivery of brand new Boeing 737-800s, Boeing 787 Dreamliners, Boeing 737
MAX 8 and Airbus 321 Long Range aircraft.
Norwegian has one of the newest and greenest fleets in Europe, High fuel-efficieny is not
only good for the environment, but also for your wallet.
BOARD OF DIRECTORS:
Bjorn H. Kise (Chair).
Liv Berstad (Deputy Chair).
Ada Kjeseth (Director).
Christian Fredrik Stray (Director).
Geir Olav Oien (Director, Employee Representative).
Linda Olsen (Director, Employee Representative).
Marcus Hall (Director, Employee Representative).
MANAGEMENT:
Bjorn Kjos (Chief Executive Officer).
Tore Ostby (Acting Chief Financial Officer).
Aaqeir Nyseth (Chief Operating Officer).
Anne-Sissel Shanvik (Chief Communications Officer).
Thomas Ramdhal (Chief Commercial Officer).
Helga Bollmann Leknes (Chief Human Resources Officer).
Frode Berg (Chief Legal Officer).
Tore Jenssen (Chief Executive Officer – Norwegian Air International).
Edward Thorstad (Chief Customer Officer).
Ole Christian Melhus (CEO Norwegian Air Argentina).
31
Bjorn Erik Barman – Jenssen (CEO – Norwegian Air Resources).
Lennart Ceder (Chief Executive Officer – Norwegian Air UK Ltd).
Brede Huser (Managing Director of Norwegian Reward).
CORPORATE STRUCTURE:
The Group has organized its operations and different functions into several entities to
ensure international growth and necessary traffic rights in line with the strategy. The goal
is to build an organizational structure that maintains Norwegian’s flexibility and
adaptability when growing and entering into new markets. The respective companies
offer permanent employment, and terms and conditions according to local markets, laws
and regulations. Norwegian has four main business areas: People and Services, Aircraft
Operations, which includes our various Air Operator’s Certificates (AOCs), Assets and
Financing, and Other activities (including Brand and Norwegian Reward).
PEOPLE AND SERVICES:
Norwegian Group’s crew, airline and crew support and administrative functions are
mainly organized within or through companies in the business area People and Services,
and provide services across the Group’s business areas.mpany of the group. The head
office is at Fornebu outside Oslo.
AIRCRAFT OPERATIONS:
The Group´s commercial airline activities are today organized in the parent company
Norwegian Air Shuttle ASA (NAS) based in Fornebu, Norway. The fully owned
subsidiaries, Norwegian Air International Ltd. (NAI) based in Dublin, Ireland,
Norwegian UK (NUK) based in London, United Kingdom and Norwegian Air Norway
AS (NAN) based in Fornebu, Norway, each hold an AOC in their respective locations.
Bjorn Erik Barman – Jenssen (CEO – Norwegian Air Resources).
Lennart Ceder (Chief Executive Officer – Norwegian Air UK Ltd).
Brede Huser (Managing Director of Norwegian Reward).
CORPORATE STRUCTURE:
The Group has organized its operations and different functions into several entities to
ensure international growth and necessary traffic rights in line with the strategy. The goal
is to build an organizational structure that maintains Norwegian’s flexibility and
adaptability when growing and entering into new markets. The respective companies
offer permanent employment, and terms and conditions according to local markets, laws
and regulations. Norwegian has four main business areas: People and Services, Aircraft
Operations, which includes our various Air Operator’s Certificates (AOCs), Assets and
Financing, and Other activities (including Brand and Norwegian Reward).
PEOPLE AND SERVICES:
Norwegian Group’s crew, airline and crew support and administrative functions are
mainly organized within or through companies in the business area People and Services,
and provide services across the Group’s business areas.mpany of the group. The head
office is at Fornebu outside Oslo.
AIRCRAFT OPERATIONS:
The Group´s commercial airline activities are today organized in the parent company
Norwegian Air Shuttle ASA (NAS) based in Fornebu, Norway. The fully owned
subsidiaries, Norwegian Air International Ltd. (NAI) based in Dublin, Ireland,
Norwegian UK (NUK) based in London, United Kingdom and Norwegian Air Norway
AS (NAN) based in Fornebu, Norway, each hold an AOC in their respective locations.
32
Norwegian's commercial airline activities are operated through 23 bases globally in the
following geographical locations: Norway, Sweden, Denmark, Finland, United Kingdom,
Spain, Thailand, United States, Italy
and French Caribbean.
ASSET AND FINANCING:
The Group´s asset companies are organized in a group of subsidiaries based in Dublin,
Ireland. Arctic Aviation Asset Ltd. is the parent company. The business area handles
aircraft financing, leases and ownership.
OTHER BUSINESS AREAS:
Norwegian Brand Ltd. (Dublin, Ireland) has the responsibility of developing and
maintaining the Norwegian Group’s brand across all business areas.
Norwegian Reward, Norwegian’s loyalty program, is a separate business unit with its
own management. Reward is growing rapidly – it surpassed five million members in
2016 – and has a presence in the airline’s major markets. Members earn CashPoints when
booking Norwegian flights and buying products or services from partner companies.
Reward members can then use those CashPoints as full or partial payment on all
Norwegian flights or other products and services without restrictions, such as seat
reservations.
Norwegian Cargo AS (Fornebu, Norway) is carrying out the Group’s commercial cargo
activities.
Norwegian Holidays AS (Fornebu, Norway) provides holiday packages to customers in
the end market through the Group’s web booking.
VISION:
“AFFORDABLE FARES FOR ALL”
To realise this vision, we offer quality flights at a low fare based on operational
excellence and helpful, friendly service.
VALUES AND OPERATIONAL PRIORITIES:
The way we conduct business at Norwegian is guided by our values and operational
priorities.
VALUES:
Directness.
Relevance.
Simplicity.
Norwegian's commercial airline activities are operated through 23 bases globally in the
following geographical locations: Norway, Sweden, Denmark, Finland, United Kingdom,
Spain, Thailand, United States, Italy
and French Caribbean.
ASSET AND FINANCING:
The Group´s asset companies are organized in a group of subsidiaries based in Dublin,
Ireland. Arctic Aviation Asset Ltd. is the parent company. The business area handles
aircraft financing, leases and ownership.
OTHER BUSINESS AREAS:
Norwegian Brand Ltd. (Dublin, Ireland) has the responsibility of developing and
maintaining the Norwegian Group’s brand across all business areas.
Norwegian Reward, Norwegian’s loyalty program, is a separate business unit with its
own management. Reward is growing rapidly – it surpassed five million members in
2016 – and has a presence in the airline’s major markets. Members earn CashPoints when
booking Norwegian flights and buying products or services from partner companies.
Reward members can then use those CashPoints as full or partial payment on all
Norwegian flights or other products and services without restrictions, such as seat
reservations.
Norwegian Cargo AS (Fornebu, Norway) is carrying out the Group’s commercial cargo
activities.
Norwegian Holidays AS (Fornebu, Norway) provides holiday packages to customers in
the end market through the Group’s web booking.
VISION:
“AFFORDABLE FARES FOR ALL”
To realise this vision, we offer quality flights at a low fare based on operational
excellence and helpful, friendly service.
VALUES AND OPERATIONAL PRIORITIES:
The way we conduct business at Norwegian is guided by our values and operational
priorities.
VALUES:
Directness.
Relevance.
Simplicity.
33
OPERATIONAL PRIORITIES:
Safety.
Service.
Simplicity.
OUR GOAL:
Norwegian aims to be the preferred airline in select markets and generate profitability
and return to its shareholders.
To get there we will
Adhere to our values.
Attract customers by offering competitive low fares and a quality travel
experience.
Maintain low operating costs, operational excellence and helpful, friendly
service.
Offer “Freedom to choose”: a core low-cost product as well as a more
comprehensive package for those who desire more.
Offer high-frequency business destinations to primary airports and a wide range
of destinations for leisure travelers.
Maximize revenues through state-of-the-art passenger revenue management.
Continue to develop high-quality and cost-efficient products and services.
Use our brand and efficient distribution channels to increase ancillary revenue.
Monitor and improve the cost base where possible.
Develop a lean and flat organization where decision-making is simple and direct.
Maintain an innovative “out-of-the-box” approach to the way we do business.
To live and breathe as a positive and entrepreneurial organization where everyone
can make a difference.
OPERATIONAL PRIORITIES:
Safety.
Service.
Simplicity.
OUR GOAL:
Norwegian aims to be the preferred airline in select markets and generate profitability
and return to its shareholders.
To get there we will
Adhere to our values.
Attract customers by offering competitive low fares and a quality travel
experience.
Maintain low operating costs, operational excellence and helpful, friendly
service.
Offer “Freedom to choose”: a core low-cost product as well as a more
comprehensive package for those who desire more.
Offer high-frequency business destinations to primary airports and a wide range
of destinations for leisure travelers.
Maximize revenues through state-of-the-art passenger revenue management.
Continue to develop high-quality and cost-efficient products and services.
Use our brand and efficient distribution channels to increase ancillary revenue.
Monitor and improve the cost base where possible.
Develop a lean and flat organization where decision-making is simple and direct.
Maintain an innovative “out-of-the-box” approach to the way we do business.
To live and breathe as a positive and entrepreneurial organization where everyone
can make a difference.
34
CHAPTER 4: COMPARISON OF AIR ASIA AND NORWEGIAN AIR
SHUTTLE.
S.W.O.T ANALYSIS:
SWOT analysis is a process that identifies an organization's strengths, weaknesses,
opportunities and threats. Specifically, SWOT is a basic, analytical framework that
assesses what an entity (usually a business, though it can be used for a place, industry or
product) can and cannot do, for factors both internal (the strengths and weaknesses) as
well as external (the potential opportunities and threats). Using environmental data to
evaluate the position of a company, a SWOT analysis determines what assists the firm in
accomplishing its objectives, and what obstacles must be overcome or minimized to
achieve desired results: where the organization is today, and where it may be positioned
in the future.
AIR ASIA:
SWOT
Strengths
1. Strong Promoter
2. Well established LCC operating out of South East Asia
3. It has operations in over 25 countries and over 400 international
and national destinations
4. It has subsidiaries in Indonesia, Thai, Phillipines, Japan
5.It has a fleet size of nearly 300 aircrafts
Weaknesses
1.Not on too many routes as compared to market leaders
2.Stiff competition in its sector
Opportunities
1. The increasing traffic from India and Indians prefer budget airlines
as they are cost conscious
2. Has Positioned itself as the major LCC in SE Asia
Threats
1. Rising Fuel Costs
2. Rising Labour Costs
3. Rise of Other LCCs in Market
NORWEGIAN AIR SHUTTLE:
SWOT
Strengths
1. It offers high frequency domestic flights and thus has a strong hold
CHAPTER 4: COMPARISON OF AIR ASIA AND NORWEGIAN AIR
SHUTTLE.
S.W.O.T ANALYSIS:
SWOT analysis is a process that identifies an organization's strengths, weaknesses,
opportunities and threats. Specifically, SWOT is a basic, analytical framework that
assesses what an entity (usually a business, though it can be used for a place, industry or
product) can and cannot do, for factors both internal (the strengths and weaknesses) as
well as external (the potential opportunities and threats). Using environmental data to
evaluate the position of a company, a SWOT analysis determines what assists the firm in
accomplishing its objectives, and what obstacles must be overcome or minimized to
achieve desired results: where the organization is today, and where it may be positioned
in the future.
AIR ASIA:
SWOT
Strengths
1. Strong Promoter
2. Well established LCC operating out of South East Asia
3. It has operations in over 25 countries and over 400 international
and national destinations
4. It has subsidiaries in Indonesia, Thai, Phillipines, Japan
5.It has a fleet size of nearly 300 aircrafts
Weaknesses
1.Not on too many routes as compared to market leaders
2.Stiff competition in its sector
Opportunities
1. The increasing traffic from India and Indians prefer budget airlines
as they are cost conscious
2. Has Positioned itself as the major LCC in SE Asia
Threats
1. Rising Fuel Costs
2. Rising Labour Costs
3. Rise of Other LCCs in Market
NORWEGIAN AIR SHUTTLE:
SWOT
Strengths
1. It offers high frequency domestic flights and thus has a strong hold
35
in the domestic market
2. Growth in market share and net revenue generated is positive and
better than its peers
3. Strong presence in the region it operates
4. The company has a good customer focus and good reputation
among the customers
Weaknesses
1. Not a member of any airline alliance
2. Frequency of flights to international destinations is low and this
affects customer loyalty
Opportunities
1. It has plans of becoming one of the first long-haul LCCs in the
world
2. Expand its reach by establishing new routes to international
destinations
3. Better services to the customers to increase loyalty
Threats
1. The government of Scandinavia financially supports SAS giving it
a competitive edge over Norwegian
2. Rising fuel cost
3. Better marketing campaigns undertaken by rivals may dilute brand
image
S.T.P ANALYSIS:
STP marketing is a three-step approach to building a targeted marketing plan. The "S"
stands for segmenting, the "T" for targeting and the "P" for positioning. Going through
this process allows to formulate a marketing strategy that ties company, brand and
product benefits to specific customer market segments.
AIRASIA:
STP
Segment Budget
Target
Group
Middle Class and Lower
Middle Class
Positioning Low Cost No Frills
in the domestic market
2. Growth in market share and net revenue generated is positive and
better than its peers
3. Strong presence in the region it operates
4. The company has a good customer focus and good reputation
among the customers
Weaknesses
1. Not a member of any airline alliance
2. Frequency of flights to international destinations is low and this
affects customer loyalty
Opportunities
1. It has plans of becoming one of the first long-haul LCCs in the
world
2. Expand its reach by establishing new routes to international
destinations
3. Better services to the customers to increase loyalty
Threats
1. The government of Scandinavia financially supports SAS giving it
a competitive edge over Norwegian
2. Rising fuel cost
3. Better marketing campaigns undertaken by rivals may dilute brand
image
S.T.P ANALYSIS:
STP marketing is a three-step approach to building a targeted marketing plan. The "S"
stands for segmenting, the "T" for targeting and the "P" for positioning. Going through
this process allows to formulate a marketing strategy that ties company, brand and
product benefits to specific customer market segments.
AIRASIA:
STP
Segment Budget
Target
Group
Middle Class and Lower
Middle Class
Positioning Low Cost No Frills
36
NORWEGIAN AIR SHUTTLE:
STP
Segment Leisure travelers / business men
Target Group Middle class / upper middle class
Positioning Low cost carrier
TAGLINE / SLOGAN:
AIR ASIA NORWEGIAN AIR SHUTTLE
NOW EVERYONE CAN FLY. FREEDOM TO CHOOSE.
PRICING STRATEGY:
Pricing strategy refers to method companies use to price their products or services.
Almost all companies, large or small, base the price of their products and services on
production, labor and advertising expenses and then add on a certain percentage so they
can make a profit.
AIRASIA:
Airasia might be using penetration pricing strategy which means to enter the market and
to gain market share. Some companies either provide a few services for free or they
keep a low price for their products for a limited period that is for a few months. This
strategy is used by the companies only in order to set up their customer base in a
particular market.
NORWEGIAN AIR SHUTTLE:
They might be using economy pricing strategy. The pricing Strategies of these
products are considered as no frill low prices where the promotion and the marketing
cost of a product are kept to a minimum. Economy pricing is set for a certain time
where the company does not spend more on promoting the product and service. This
strategy sees more economy sales during the time of recession. Economy pricing can
also be termed as or explained as budget pricing of a product or a service.
MARKETING STRATEGY:
The marketing strategy of a company contains the company’s value proposition, key
marketing messages, information on the target customer, and other high level elements.
AIR ASIA:
NORWEGIAN AIR SHUTTLE:
STP
Segment Leisure travelers / business men
Target Group Middle class / upper middle class
Positioning Low cost carrier
TAGLINE / SLOGAN:
AIR ASIA NORWEGIAN AIR SHUTTLE
NOW EVERYONE CAN FLY. FREEDOM TO CHOOSE.
PRICING STRATEGY:
Pricing strategy refers to method companies use to price their products or services.
Almost all companies, large or small, base the price of their products and services on
production, labor and advertising expenses and then add on a certain percentage so they
can make a profit.
AIRASIA:
Airasia might be using penetration pricing strategy which means to enter the market and
to gain market share. Some companies either provide a few services for free or they
keep a low price for their products for a limited period that is for a few months. This
strategy is used by the companies only in order to set up their customer base in a
particular market.
NORWEGIAN AIR SHUTTLE:
They might be using economy pricing strategy. The pricing Strategies of these
products are considered as no frill low prices where the promotion and the marketing
cost of a product are kept to a minimum. Economy pricing is set for a certain time
where the company does not spend more on promoting the product and service. This
strategy sees more economy sales during the time of recession. Economy pricing can
also be termed as or explained as budget pricing of a product or a service.
MARKETING STRATEGY:
The marketing strategy of a company contains the company’s value proposition, key
marketing messages, information on the target customer, and other high level elements.
AIR ASIA:
37
In order to accomplish its goals, AirAsia might be lead its marketing activities toward the
following strategies:
Target Market Strategy: AirAsia will continue to target its existing customer’s while
expanding its routes to more developing and developed countries.
Positioning Strategy: AirAsia will continue to position its brand as the lowest cost airline
by giving away incentives in order to attract customers from other airlines services.
Product Strategy: AirAsia will maintain its efficiency in providing services which are
convenient to customers as well as increasing its flight frequency to maximize its profits.
Pricing Strategy: AirAsia maintains its fares to be as low as possible and exercises its
‘pay only for what you want’ philosophy amongst its customers.
Promotion Strategy: AirAsia aims at generating positive customer feedback by giving
away tickets for free as well as venturing into hotel lines and endless promotional fares
and holiday packages to gain constant attention from its customers.
Place Strategy: AirAsia moves away from the traditional way of services placement. It
launches mobile facilities, call centres and much more to facilitate customers.
NORWEGIAN AIR SHUTTLE:
Following are the strategies might be followed by Norwegian air shuttle:
NETWORKING:
Networking, online and off, can be a powerful relationship marketing technique. This not
only helps your brand awareness, but also expands your potential customer base. It’s a
win-win.
CHERISH EACH CUSTOMER:
They make sure that every interaction you have with your customers shows them that
they are valued. Spontaneous recognition of your current customers can go a long way.
When people feel valued, they let others know. They delight their customers with the
unexpected (in a good way) and be there for them no matter what.
LISTEN TO CUSTOMERS:
They believe that listening and responding to compliments is beneficial. People love
knowing they’ve been heard. Even complaints can be a blessing in disguise. People often
just want someone to share their concerns with.
BRAND IDENTITY:
Customers will gravitate toward what they find that is memorable.
COMMUNICATE OFTEN
In order to accomplish its goals, AirAsia might be lead its marketing activities toward the
following strategies:
Target Market Strategy: AirAsia will continue to target its existing customer’s while
expanding its routes to more developing and developed countries.
Positioning Strategy: AirAsia will continue to position its brand as the lowest cost airline
by giving away incentives in order to attract customers from other airlines services.
Product Strategy: AirAsia will maintain its efficiency in providing services which are
convenient to customers as well as increasing its flight frequency to maximize its profits.
Pricing Strategy: AirAsia maintains its fares to be as low as possible and exercises its
‘pay only for what you want’ philosophy amongst its customers.
Promotion Strategy: AirAsia aims at generating positive customer feedback by giving
away tickets for free as well as venturing into hotel lines and endless promotional fares
and holiday packages to gain constant attention from its customers.
Place Strategy: AirAsia moves away from the traditional way of services placement. It
launches mobile facilities, call centres and much more to facilitate customers.
NORWEGIAN AIR SHUTTLE:
Following are the strategies might be followed by Norwegian air shuttle:
NETWORKING:
Networking, online and off, can be a powerful relationship marketing technique. This not
only helps your brand awareness, but also expands your potential customer base. It’s a
win-win.
CHERISH EACH CUSTOMER:
They make sure that every interaction you have with your customers shows them that
they are valued. Spontaneous recognition of your current customers can go a long way.
When people feel valued, they let others know. They delight their customers with the
unexpected (in a good way) and be there for them no matter what.
LISTEN TO CUSTOMERS:
They believe that listening and responding to compliments is beneficial. People love
knowing they’ve been heard. Even complaints can be a blessing in disguise. People often
just want someone to share their concerns with.
BRAND IDENTITY:
Customers will gravitate toward what they find that is memorable.
COMMUNICATE OFTEN
38
SPECIAL EVENTS
CORPORATE SOCIAL RESPONSIBILITY:
Corporate social responsibility (CSR) is a business approach that contributes to
sustainable development by delivering economic, social and environmental benefits for
all stakeholders.
AIR ASIA:
#GREEN24
#Green24 is a climate awareness movement to educate people and promote
climate action, as part of the airline’s Corporate Social Responsibility initiative
throughout the Asean region. They hope to create tangible impact by inspiring action
throughout communities across the region to promote climate action at home, at our
workplaces, in cities and countries.
This initiative will be carried out throughout all the countries which the AirAsia Group
serves, and the goals are to achieve an environmental outcome, educate the people
around us and generate awareness on climate change.
NORWEGIAN AIR SHUTTLE:
Norwegian strives to be a good corporate citizen in every area of operation. The
Company is committed to operate in accordance with responsible, ethical, sustainable and
sound business principles, with respect for people, the environment and the society.
Norwegian’s international business activities, powered by the vision of “affordable fares
for all”, brings people, cultures and economies together. Global expansion and new
routes boost local tourism, create new jobs, drive economic growth and social progress. A
growing population in an increasingly globalized world will lead to more mobility and
increased need for air transportation. Norwegian acknowledges its responsibilities as a
significant market player and takes action to reduce emissions per passenger and make
aviation more environmentally friendly.
The Company operates one of the world’s newest and most modern aircraft fleets. As a
global low-cost airline, Norwegian employs 6 285 people in Europe, North and South
America and Asia. Diversity makes the organization richer and better. Regardless of
location, workers’ rights, equality, non-discrimination, business ethics and anticorruption
are key priorities.
Since 2002, Norwegian has safely carried about 185 million passengers. Safety is the
number one priority and at the heart of the operation. It is essential for customers and
staff, as well as imperative for the sustainability of air transport. All of the Group’s
operations are subject to extensive safety controls and certification. They meet the
strictest standards and the highest level of regulations in the industry (The European
SPECIAL EVENTS
CORPORATE SOCIAL RESPONSIBILITY:
Corporate social responsibility (CSR) is a business approach that contributes to
sustainable development by delivering economic, social and environmental benefits for
all stakeholders.
AIR ASIA:
#GREEN24
#Green24 is a climate awareness movement to educate people and promote
climate action, as part of the airline’s Corporate Social Responsibility initiative
throughout the Asean region. They hope to create tangible impact by inspiring action
throughout communities across the region to promote climate action at home, at our
workplaces, in cities and countries.
This initiative will be carried out throughout all the countries which the AirAsia Group
serves, and the goals are to achieve an environmental outcome, educate the people
around us and generate awareness on climate change.
NORWEGIAN AIR SHUTTLE:
Norwegian strives to be a good corporate citizen in every area of operation. The
Company is committed to operate in accordance with responsible, ethical, sustainable and
sound business principles, with respect for people, the environment and the society.
Norwegian’s international business activities, powered by the vision of “affordable fares
for all”, brings people, cultures and economies together. Global expansion and new
routes boost local tourism, create new jobs, drive economic growth and social progress. A
growing population in an increasingly globalized world will lead to more mobility and
increased need for air transportation. Norwegian acknowledges its responsibilities as a
significant market player and takes action to reduce emissions per passenger and make
aviation more environmentally friendly.
The Company operates one of the world’s newest and most modern aircraft fleets. As a
global low-cost airline, Norwegian employs 6 285 people in Europe, North and South
America and Asia. Diversity makes the organization richer and better. Regardless of
location, workers’ rights, equality, non-discrimination, business ethics and anticorruption
are key priorities.
Since 2002, Norwegian has safely carried about 185 million passengers. Safety is the
number one priority and at the heart of the operation. It is essential for customers and
staff, as well as imperative for the sustainability of air transport. All of the Group’s
operations are subject to extensive safety controls and certification. They meet the
strictest standards and the highest level of regulations in the industry (The European
39
Aviation Safety Agency, EASA). The way they work with safety at Norwegian – both in
terms of systems and culture – are used as examples in the healthcare industry.
The three pillars of corporate responsibility at Norwegian:
ENVIRONMENT:
Norwegian is committed to actively engage in and support sustainable environmental
policy, and to continue to reduce emissions from aviation.
HUMAN WORTH:
Everyone at Norwegian has a joint responsibility to create a good working environment
and develop a sound corporate culture marked by openness and tolerance.
LOCAL DEVELOPMENT AND HUMANITARIAN ENGAGEMENT
PARTNERSHIP WITH UNICEF:
“The children are the future and we should do everything we can to make the world a
better place for the ones who need it the most,” says Norwegian’s CEO Bjørn Kjos. That
is why Norwegian has a collaboration with UNICEF, the United Nation’s Children Fund.
ACHIEVEMENT:
AIR ASIA:
Year 2015
by Skytrax
Year 2014
Aviation Safety Agency, EASA). The way they work with safety at Norwegian – both in
terms of systems and culture – are used as examples in the healthcare industry.
The three pillars of corporate responsibility at Norwegian:
ENVIRONMENT:
Norwegian is committed to actively engage in and support sustainable environmental
policy, and to continue to reduce emissions from aviation.
HUMAN WORTH:
Everyone at Norwegian has a joint responsibility to create a good working environment
and develop a sound corporate culture marked by openness and tolerance.
LOCAL DEVELOPMENT AND HUMANITARIAN ENGAGEMENT
PARTNERSHIP WITH UNICEF:
“The children are the future and we should do everything we can to make the world a
better place for the ones who need it the most,” says Norwegian’s CEO Bjørn Kjos. That
is why Norwegian has a collaboration with UNICEF, the United Nation’s Children Fund.
ACHIEVEMENT:
AIR ASIA:
Year 2015
by Skytrax
Year 2014
40
by Skytrax
Year 2013
Awards 2013
by Skytrax
Year 2012
by Skytrax
Year 2011
-Cost Carrier By TTG Travel Awards 2011
– Asia
by Skytrax
– Mid Cap
– Mid Cap by Malaysian
Investor Relations Association's (MIRA)
Awards Asia 2011
by Skytrax
Year 2013
Awards 2013
by Skytrax
Year 2012
by Skytrax
Year 2011
-Cost Carrier By TTG Travel Awards 2011
– Asia
by Skytrax
– Mid Cap
– Mid Cap by Malaysian
Investor Relations Association's (MIRA)
Awards Asia 2011
41
Foreign Airline for Cargo by Guangzhou
Baiyun International Airport
Year 2010
Dato' Tony Fernandes
by Skytrax
the ACW World Air Cargo Awards 2010
by Air Cargo Week
Year 2009
by Centre for Asia Pacific Aviation (CAPA)
Excellence in
Leadership Award
by Frost & Sullivan
-Cost Carrier
by TTG Travel Awards 2009
by Skytrax
Year 2008
Foreign Airline for Cargo by Guangzhou
Baiyun International Airport
Year 2010
Dato' Tony Fernandes
by Skytrax
the ACW World Air Cargo Awards 2010
by Air Cargo Week
Year 2009
by Centre for Asia Pacific Aviation (CAPA)
Excellence in
Leadership Award
by Frost & Sullivan
-Cost Carrier
by TTG Travel Awards 2009
by Skytrax
Year 2008
42
Transport from Aviation Week
Deputy Prime Minister YAB Dato' Seri Najib Tun Razak at
the Global Brand Forum Malaysia
- Malaysia's 30 Most Valuable Brands 2008 By
Malaysia's Most Valuable Brands (MMVB)
Organisation Excellence Award 2008 By
Association of the computer and multimedia industry
(PIKOM)
- Best New Airline Of The Year By Centre for
Asia Pacific Aviation (CAPA)
-Cost Carrier
by TTG Travel Awards 2008
Top CEO brand & 3rd Best Corporate Brand in
Malaysia
by Pulse Group Survey
by Budgie World Low Cost Airline Awards 2008
by Tourism Authority of Thailand
Top 1000 Brands 2008 Survey (AirAsia-
Top 5 Airline)
by Taylor Nelson Sofres
2008
by SmartTravelAsia.com
Category
by Airline Business
Companies In The World
by FastCompany.com
by Frost & Sullivan
Transport from Aviation Week
Deputy Prime Minister YAB Dato' Seri Najib Tun Razak at
the Global Brand Forum Malaysia
- Malaysia's 30 Most Valuable Brands 2008 By
Malaysia's Most Valuable Brands (MMVB)
Organisation Excellence Award 2008 By
Association of the computer and multimedia industry
(PIKOM)
- Best New Airline Of The Year By Centre for
Asia Pacific Aviation (CAPA)
-Cost Carrier
by TTG Travel Awards 2008
Top CEO brand & 3rd Best Corporate Brand in
Malaysia
by Pulse Group Survey
by Budgie World Low Cost Airline Awards 2008
by Tourism Authority of Thailand
Top 1000 Brands 2008 Survey (AirAsia-
Top 5 Airline)
by Taylor Nelson Sofres
2008
by SmartTravelAsia.com
Category
by Airline Business
Companies In The World
by FastCompany.com
by Frost & Sullivan
43
- The Next 10 Years
by Singapore Institute of International Affairs (SIIA) in
collaboration with AXN Asia
contribution in Macau
by Macau Special Administrative Region
Year 2007
Aviation (CAPA)
by SmartTravelAsia.com
Frost & Sullivan
Corporate Governance by The Asset
-07 for brand excellence in the
Airlines-Low Cost Carrier Category
Year 2006
awarded to YBhg. Dato' Tony Fernandes
Malaysia Airports Holdings Berhad
for Asia Pacific Aviation (CAPA)
- The Next 10 Years
by Singapore Institute of International Affairs (SIIA) in
collaboration with AXN Asia
contribution in Macau
by Macau Special Administrative Region
Year 2007
Aviation (CAPA)
by SmartTravelAsia.com
Frost & Sullivan
Corporate Governance by The Asset
-07 for brand excellence in the
Airlines-Low Cost Carrier Category
Year 2006
awarded to YBhg. Dato' Tony Fernandes
Malaysia Airports Holdings Berhad
for Asia Pacific Aviation (CAPA)
44
SmartTravelAsia.com
Investor Relations, and Most Committed to Strong Dividend
Policy under The Annual Investor Poll by FinanceAsia.com
Year 2005
awarded
to YBhg. Dato' Tony Fernandes
Startegy Awards 2005 by Airline Business - awarded to YBhg.
Dato' Tony Fernandes
(ATW)
Transport Company of Excellence Award by Ports World
Sdn. Bhd
Forbes Asia
Award 2005 by MasterCard
Year 2004
for Asia Pacific Aviation (CAPA)
to Tony Fernandes, Group CEO by Centre for Asia Pacific
Aviation (CAPA)
Pacific Low Cost Advertising Award for Best Asia
Pacific / Middle East Low Cost Airline Print Advertisement
2004 by Centre for Asia Pacific Aviation (CAPA)
Sector by Euromoney
Listed Company (3rd place) by Euromoney
The Asset Magazine
SmartTravelAsia.com
Investor Relations, and Most Committed to Strong Dividend
Policy under The Annual Investor Poll by FinanceAsia.com
Year 2005
awarded
to YBhg. Dato' Tony Fernandes
Startegy Awards 2005 by Airline Business - awarded to YBhg.
Dato' Tony Fernandes
(ATW)
Transport Company of Excellence Award by Ports World
Sdn. Bhd
Forbes Asia
Award 2005 by MasterCard
Year 2004
for Asia Pacific Aviation (CAPA)
to Tony Fernandes, Group CEO by Centre for Asia Pacific
Aviation (CAPA)
Pacific Low Cost Advertising Award for Best Asia
Pacific / Middle East Low Cost Airline Print Advertisement
2004 by Centre for Asia Pacific Aviation (CAPA)
Sector by Euromoney
Listed Company (3rd place) by Euromoney
The Asset Magazine
45
Business Week
Uniform' for Miss Airlines International Contest 2004
5th China Air Show, Zhuhai
Awards by Air Transport World Magazine
Year 2003
Journal
and American Express
deployment
International
most popular website for
online shopping in the 11th Malaysia Internet User Survey
conducted by AC Nielsen Consult
NORWEGIAN AIR SHUTTLE:
2017:
World’s Best Low-Cost, Long Haul Airline, Skytrax World Airline Awards.
Europe’s Best Low-Cost Airline, Skytrax World Airline Awards.
‘Outstanding Contribution to Aviation’ award the Irish Aviation Industry.
Airline Program of the Year, Europe & Africa, Freddie Awards.
Europe’s Best Low-Cost Airline, AirlineRatings.com
2016:
World’s Best Low-Cost Airline Website, World Travel Awards.
Europe’s Best Low-Cost Airline, AirlineRatings.com
World’s Best Low-Cost, Long Haul Airline, Skytrax World Airline Awards.
Business Week
Uniform' for Miss Airlines International Contest 2004
5th China Air Show, Zhuhai
Awards by Air Transport World Magazine
Year 2003
Journal
and American Express
deployment
International
most popular website for
online shopping in the 11th Malaysia Internet User Survey
conducted by AC Nielsen Consult
NORWEGIAN AIR SHUTTLE:
2017:
World’s Best Low-Cost, Long Haul Airline, Skytrax World Airline Awards.
Europe’s Best Low-Cost Airline, Skytrax World Airline Awards.
‘Outstanding Contribution to Aviation’ award the Irish Aviation Industry.
Airline Program of the Year, Europe & Africa, Freddie Awards.
Europe’s Best Low-Cost Airline, AirlineRatings.com
2016:
World’s Best Low-Cost Airline Website, World Travel Awards.
Europe’s Best Low-Cost Airline, AirlineRatings.com
World’s Best Low-Cost, Long Haul Airline, Skytrax World Airline Awards.
46
Europe’s Best Low-Cost Airline, Skytrax World Airline Awarads.
Best Up- and-Coming Loyalty Programme – Europe and Africa, Freddie Awards.
Best Airline in Europe, Grand Travel Award.
Best Domestic Airline in Norway, Grand Travel Award.
Europe’s Best Low-Cost Airline, World Travel Awards.
2015:
Most fuel-efficient airline on transatlantic routes, The International Council on
Clean Transportation (ICCT).
Europe’s Best Low-Cost Airline, AirlineRatings.com
World’s Best Low-Cost, Long Haul Airline, Skytrax World Airline Awards.
Europe’s Best Low-Cost Airline, Skytrax World Airline Awards.
Best in Region: Europe, Passenger Choice Awards.
2014:
Best in Region: Europe, Passenger Choice Awards.
Best Inflight Connectivity and Communications, Passenger Choice Awards.
Best Single Achievement Award, Passenger Choice Awards.
Europe’s Best Low-Cost Carrier of the Year, Skytrax World Airline Awards.
Airline With Most New Long-Haul Routes, Anna Aero.
Biggest New Airline in the US Market, Anna Aero.
Europe’s Best Low-Cost Airline, Airlineratings.com
Best Low-Cost Airline of the World, Air Transport News.
Best value for money, Skyscanner.
2013:
Europe’s Best Low-Cost Carrier of the Year, Skytrax World Airline Awards.
Best Inflight Connectivity and Communications, Passenger Choice Awards.
Highest Customer Satisfaction, Svensk Kvalitetsindex (Swedish Quality Index).
2012:
Best Inflight Connectivity and Communications, Passenger Choice Awards.
Second Best Low-Cost Airline in Europe, Skytrax World Airline Awards.
THE SKYTRAX AWARDS
The Skytrax World Airline Awards is described as the most prestigious award in the
airline industry. It is the passengers who give their verdict of 200 airlines worldwide.
Norwegian has won five Skytrax awards since 2012, including "Best Low-Cost Airline in
Europe" three years in a row and "World's Best Low-Cost Long-Haul Airline".
Europe’s Best Low-Cost Airline, Skytrax World Airline Awarads.
Best Up- and-Coming Loyalty Programme – Europe and Africa, Freddie Awards.
Best Airline in Europe, Grand Travel Award.
Best Domestic Airline in Norway, Grand Travel Award.
Europe’s Best Low-Cost Airline, World Travel Awards.
2015:
Most fuel-efficient airline on transatlantic routes, The International Council on
Clean Transportation (ICCT).
Europe’s Best Low-Cost Airline, AirlineRatings.com
World’s Best Low-Cost, Long Haul Airline, Skytrax World Airline Awards.
Europe’s Best Low-Cost Airline, Skytrax World Airline Awards.
Best in Region: Europe, Passenger Choice Awards.
2014:
Best in Region: Europe, Passenger Choice Awards.
Best Inflight Connectivity and Communications, Passenger Choice Awards.
Best Single Achievement Award, Passenger Choice Awards.
Europe’s Best Low-Cost Carrier of the Year, Skytrax World Airline Awards.
Airline With Most New Long-Haul Routes, Anna Aero.
Biggest New Airline in the US Market, Anna Aero.
Europe’s Best Low-Cost Airline, Airlineratings.com
Best Low-Cost Airline of the World, Air Transport News.
Best value for money, Skyscanner.
2013:
Europe’s Best Low-Cost Carrier of the Year, Skytrax World Airline Awards.
Best Inflight Connectivity and Communications, Passenger Choice Awards.
Highest Customer Satisfaction, Svensk Kvalitetsindex (Swedish Quality Index).
2012:
Best Inflight Connectivity and Communications, Passenger Choice Awards.
Second Best Low-Cost Airline in Europe, Skytrax World Airline Awards.
THE SKYTRAX AWARDS
The Skytrax World Airline Awards is described as the most prestigious award in the
airline industry. It is the passengers who give their verdict of 200 airlines worldwide.
Norwegian has won five Skytrax awards since 2012, including "Best Low-Cost Airline in
Europe" three years in a row and "World's Best Low-Cost Long-Haul Airline".
47
PASSENGER CHOICE AWARDS
Passenger Choice Awards has quickly become one of the industry's most renowned
awards, as winners are chosen based on customer feedback. Norwegian has won seven
Passenger Choice Awards since 2012.
PASSENGER CHOICE AWARDS
Passenger Choice Awards has quickly become one of the industry's most renowned
awards, as winners are chosen based on customer feedback. Norwegian has won seven
Passenger Choice Awards since 2012.
48
CHAPTER 5: CONCLUSION
Airline industry is a seasonal industry, where revenue of the airline can be affected
severely by instability of fuel prices or economic recessions. Thus, the competition amid
the airlines is vast. In order to resist the competition and be sustainable, the airline has to
take in account the cornerstones of the industry, apply appropriate strategy and develop
continuously models.
The success of some LCCs can provide important lessons for network airlines. There are
several areas, from distribution to aircraft utilization, where the network airlines can
move closer to an LCC approach in order to lower costs. Governments and suppliers also
have a role to play in allowing airlines to achieve greater cost efficiencies. Airports and
suppliers must proactively seek greater efficiency in their operations. Governments must
allow airlines greater freedom to restructure their operations and ownership on a
commercial basis.
Both the airlines have achieved efficiency in their services. However there are certain
difference between the various parameters studied in this comparison study. After
studying the parameters such as strengths, weakness, opportunity, threats, segment, target
market, positioning, pricing strategy, marketing strategy and achievement of both the
airlines.
The best low cost carrier is Airasia as it has wider market as compared to Norwegian air
shuttle. Airasia has been able to provide quality service with low fares to the customers.
Airasia also targets the lower middle class which is not target market for Norwegian air
shuttle. Airasia has expanded their market more than Norwegian Air Shuttle.
The future plans of the both the airlines is to expand their market and provide efficient
servies with safety.
CHAPTER 5: CONCLUSION
Airline industry is a seasonal industry, where revenue of the airline can be affected
severely by instability of fuel prices or economic recessions. Thus, the competition amid
the airlines is vast. In order to resist the competition and be sustainable, the airline has to
take in account the cornerstones of the industry, apply appropriate strategy and develop
continuously models.
The success of some LCCs can provide important lessons for network airlines. There are
several areas, from distribution to aircraft utilization, where the network airlines can
move closer to an LCC approach in order to lower costs. Governments and suppliers also
have a role to play in allowing airlines to achieve greater cost efficiencies. Airports and
suppliers must proactively seek greater efficiency in their operations. Governments must
allow airlines greater freedom to restructure their operations and ownership on a
commercial basis.
Both the airlines have achieved efficiency in their services. However there are certain
difference between the various parameters studied in this comparison study. After
studying the parameters such as strengths, weakness, opportunity, threats, segment, target
market, positioning, pricing strategy, marketing strategy and achievement of both the
airlines.
The best low cost carrier is Airasia as it has wider market as compared to Norwegian air
shuttle. Airasia has been able to provide quality service with low fares to the customers.
Airasia also targets the lower middle class which is not target market for Norwegian air
shuttle. Airasia has expanded their market more than Norwegian Air Shuttle.
The future plans of the both the airlines is to expand their market and provide efficient
servies with safety.
49
BIBLIOGRAPHY
WEBSITES:
https://www.ukessays.com/essays/commerce/an-introduction-to-the-airline-industry-
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https://www.investopedia.com/features/industryhandbook/airline.asp
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300207331.html
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https://www.airasia.com/in/en/about-us/hi-we-are-airasia.page
https://www.airasia.com/my/en/about-us/ir-directors-biography.page
https://www.airasia.com/my/en/about-us/airasia-mission-vision-values.page
https://www.airasia.com/my/en/about-us/corporate-profile.page
https://www.airasia.com/my/en/about-us/ir-major-share-holders.page
https://www.airasia.com/my/en/about-us/ir-organizational-structure.page
BIBLIOGRAPHY
WEBSITES:
https://www.ukessays.com/essays/commerce/an-introduction-to-the-airline-industry-
business-essay.php
http://www.atag.org/facts-and-figures.html
https://www.investopedia.com/features/industryhandbook/airline.asp
https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=13&cad=rja&ua
ct=8&ved=0ahUKEwi75ra7kIzYAhXJpY8KHXdODHQQFghfMAw&url=http%3A%2F
%2Fwww.springer.com%2Fcda%2Fcontent%2Fdocument%2Fcda_downloaddocument%
2F9783790820874-c1.pdf%3FSGWID%3D0-0-45-624215-
p173838321&usg=AOvVaw0PeK5dHFpVai4AUICqO0Fr
http://www.jvdz.net/index2.html?/lcc-def.html&frameMain
http://www.worldairlineawards.com/Awards/worlds_best_lowcost_airlines.html
https://www.ukessays.com/essays/management/marketing-strategy-that-implemented-by-
low-cost-airlines-management-essay.php
https://www.businessinsider.in/The-10-best-low-cost-airlines-in-the-world/10-
IndiGo/slideshow/59300267.cms
https://www.reportbuyer.com/product/4407892/the-global-low-cost-airline-market-to-
2020.html#tab-content
https://www.prnewswire.com/news-releases/the-global-low-cost-airline-market-to-2019-
300207331.html
https://en.wikipedia.org/wiki/Low-cost_carrier#Pricing_policy
https://www.investopedia.com/articles/investing/022916/economic-analysis-lowcost-
airline-industry-luvdal.asp
https://www.airasia.com/my/en/about-us/ir-strategy.page
https://www.airasia.com/in/en/about-us/hi-we-are-airasia.page
https://www.airasia.com/my/en/about-us/ir-directors-biography.page
https://www.airasia.com/my/en/about-us/airasia-mission-vision-values.page
https://www.airasia.com/my/en/about-us/corporate-profile.page
https://www.airasia.com/my/en/about-us/ir-major-share-holders.page
https://www.airasia.com/my/en/about-us/ir-organizational-structure.page
50
https://www.airasia.com/my/en/about-us/what-is-green24.page
https://www.thomaswhite.com/global-perspectives/tony-fernandes/
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https://www.norwegian.com/us/about/our-story/
https://www.norwegian.com/us/about/company/corporate-structure/
https://www.norwegian.com/us/about/
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its-marketing-.html
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Airasia/60286.html
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https://www.irishtimes.com/news/world/asia-pacific/profile-airasia-faces-biggest-
challenge-as-jet-goes-missing-1.2049748
https://www.airasia.com/my/en/about-us/what-is-green24.page
https://www.thomaswhite.com/global-perspectives/tony-fernandes/
https://www.norwegian.com/uk/about/our-story/vision-and-values/
https://www.norwegian.com/us/about/company/board-of-directors/
https://www.norwegian.com/us/about/company/management/
https://www.norwegian.com/us/about/company/corporate-responsibility/
https://www.norwegian.com/us/about/our-story/
https://www.norwegian.com/us/about/company/corporate-structure/
https://www.norwegian.com/us/about/
http://www.4-traders.com/NORWEGIAN-AIR-SHUTTLE-4004476/company/
https://www.ukessays.com/essays/management/swot-analysis-for-air-asia-strengths-
management-essay.php
https://www.mbaskool.com/brandguide/airlines/531-air-asia.html
https://www.mbaskool.com/brandguide/airlines/5074-norwegian-air-shuttle.html
https://www.scribd.com/doc/46577466/Pricing-Strategy-of-Air-Asia-assigment
http://www.marketingteacher.com/pricing-strategies/
http://www.businessdictionary.com/definition/economy-pricing.html
https://www.educba.com/pricing-strategies-in-marketing/
https://www.cnbc.com/video/2017/01/23/how-norwegian-air-shuttle-is-being-bold-with-
its-marketing-.html
http://www.marketing-schools.org/types-of-marketing/relationship-marketing.html
https://www.powerobjects.com/2015/07/16/9-relationship-marketing-strategies-and-tools/
https://www.ft.com/content/04c5b73e-b29d-11e4-a058-00144feab7de
https://www.otherpapers.com/Business/Problems-and-Challenges-Faced-by-
Airasia/60286.html
https://brandconsultantasia.com/2012/01/24/airasia-brand-hits-turbulence/
https://www.irishtimes.com/news/world/asia-pacific/profile-airasia-faces-biggest-
challenge-as-jet-goes-missing-1.2049748
51
https://www.thestar.com.my/business/business-news/2016/06/09/airlines-to-face-
challenges-in-2017/
https://centreforaviation.com/insights/analysis/airasia-faces-challenges-throughout-
southeast-asia-as-competition-continues-to-intensify-125261
https://www.ft.com/content/04c5b73e-b29d-11e4-a058-00144feab7de
https://www.lifeinnorway.net/is-the-fairytale-over-for-norwegian/
https://www.thetimes.co.uk/article/expanding-budget-airline-norwegian-flies-into-
trouble-mhzj3sxm0
https://leehamnews.com/2017/07/12/is-norwegian-in-trouble/
https://www.airasia.com/my/en/about-us/our-offerings.page
https://www.airasia.com/in/en/press-releases/airasia-launches-onboard-wifi-with-rm5-
introductory-price.page
https://www.norwegian.com/en/booking/booking-information/legal/customer-service-
plan/
https://www.norwegian.com/en/travel-info/on-board/food-and-drinks/
https://www.norwegian.com/en/travel-info/on-board/free-wifi/
https://www.norwegian.com/en/travel-info/on-board/in-flight-entertainment/
https://www.marketwatch.com/investing/stock/nwarf/financials/cash-flow
https://www.airasia.com/my/en/about-us/ir-5-year-financial-highlights.page
https://www.airasia.com/my/en/about-us/awards.page
https://www.norwegian.com/uk/about/our-story/awards-and-recognitions/
http://www.asiatraveltips.com/news13/281-AirAsia.shtml
https://www.ft.com/content/31f30f3c-c7a3-11e6-8f29-9445cac8966f
https://www.thestar.com.my/business/business-news/2016/06/09/airlines-to-face-
challenges-in-2017/
https://centreforaviation.com/insights/analysis/airasia-faces-challenges-throughout-
southeast-asia-as-competition-continues-to-intensify-125261
https://www.ft.com/content/04c5b73e-b29d-11e4-a058-00144feab7de
https://www.lifeinnorway.net/is-the-fairytale-over-for-norwegian/
https://www.thetimes.co.uk/article/expanding-budget-airline-norwegian-flies-into-
trouble-mhzj3sxm0
https://leehamnews.com/2017/07/12/is-norwegian-in-trouble/
https://www.airasia.com/my/en/about-us/our-offerings.page
https://www.airasia.com/in/en/press-releases/airasia-launches-onboard-wifi-with-rm5-
introductory-price.page
https://www.norwegian.com/en/booking/booking-information/legal/customer-service-
plan/
https://www.norwegian.com/en/travel-info/on-board/food-and-drinks/
https://www.norwegian.com/en/travel-info/on-board/free-wifi/
https://www.norwegian.com/en/travel-info/on-board/in-flight-entertainment/
https://www.marketwatch.com/investing/stock/nwarf/financials/cash-flow
https://www.airasia.com/my/en/about-us/ir-5-year-financial-highlights.page
https://www.airasia.com/my/en/about-us/awards.page
https://www.norwegian.com/uk/about/our-story/awards-and-recognitions/
http://www.asiatraveltips.com/news13/281-AirAsia.shtml
https://www.ft.com/content/31f30f3c-c7a3-11e6-8f29-9445cac8966f
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