Air Asia: Asia’s Leading Airline Essay

Company BackgroundAsias ahead(p) airline was established with the dream of making flying possible for every 1. Since 2001, AirAsia has swiftly blue travel norms around the globe and has risen to become the worlds best. With a route network that spans by dint of to over 20 countries, AirAsia continues to surface the way for low- constitute aviation through our innovative solutions, efficient shapees and a passionate approach to stemma. Together with our associate companies, AirAsia X, Thai AirAsia, Ind iodinsia AirAsia, Philippines AirAsia Inc and AirAsia Japan , AirAsia is association to take low-cost flying to an every last(predicate) new utmost with our belief, nowadays Every ace Can Fly. (2005, AirAsia)EstablishmentAirAsia was established in 1993 and began operations on 18 November 1996. It was originally founded by a government-owned conglomerate, DRB-Hicom. On 2 declination 2001 the heavily-indebted airline was bought by radiation patterner Time Warner executive Ton y Fernandess company Tune Air Sdn Bhd for the token sum of one ringgit (about USD 0.26 at the time) with USD 11 million (MYR 40 million) worth of debts. Fernandes the CEO, turned the company around, producing a realize in 2002 and launching new routes from its hub in Kuala Lumpur, undercutting former monopoly operator Malaysia Airlines with promotional f argons as low as MYR 1 (USD 0.27).International flightsIn 2003, AirAsia subject a second hub at Senai International Airport in Johor Bahru shape up capital of Singapore and launched its first international flight toBangkok. AirAsia has since started a Thai subsidiary, added Singapore itself to the destination jaw, and started flights to Indonesia. Flights to Macaubegan in June 2004, and flights to mainland China (Xiamen) and the Philippines (Manila) in April 2025. Flights to Vietnam and Cambodia followed later in 2005 and to Brunei and Myanmar in 2006, the latter by Thai AirAsia. On August 2006, AirAsia took over Malaysia Airli ness Rural Air go routes in Sabah and Sarawak, operating under the FlyAsianXpress brand.The routes were afterward returned to MASwings a year later, citing commercial reasons. AirAsias CEO Tony Fernandes subsequently unveil a five-year plan to further enhance its presence in Asia. chthonian the plan, AirAsia proposes to strengthen and enhance its route network by connecting all the actual cities in the region and expanding further into Vietnam, Indonesia, Southern China (Kun Ming, Xiamen, Shenzen) and India. The airline ordain accent on developing its hubs in Bangkok and Jakarta through its sister companies, Thai AirAsia and Indonesia AirAsia. With growth frequency and the addition of new routes, AirAsia expects rider volume to reach 18 million by the end of 2007. alley expansionOn 27 September 2008, the company had on its list 106 new routes to be added to its then-current list of 60. The number of old routes discontinued has non been publicly disclosed. On 2nd of April 201 2 Air Asia had their first flight from Sydney to Kuala Lumpur. Sebastian Tegan-Anderson was one of the lucky few to be on this historical flight.AirAsia-Malaysian Airlines AllianceIn August 2011, AirAsia agreed to forge an alliance with Malaysian Airlines by intend of a share swap. The alliance was struck prevail over by the Malaysian government, in effect voiding the agreement of both airlines.AirAsias surveyTo be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and amply fares. info locomotive engine room Management (Maintenance & Operation) study Technology way is the discipline whereby all of the technology resources of a firm are get awayd in accordance with its needfully and priorities. These resources may include tangible investitures interchange adequate computing machine hardware, software program, data, networks and data mettle facilities, as well as the staffs who are hired to corro borate them. Managing this indebtedness within a company entails many of the basic caution functions, like budgeting, staffing, and organizing and controlling, along with otherwise cycloramas that are unique to technology, like change management, software design, network planning, tech support etc. (2009, McNurlin)According to Bird, a uncomplicated focus of IT management is the look upon creation make possible by technology. This requires the alignment of technology and business strategies. While the value creation for an giving medication involves a network of relationships between internal and external environments, technology plays an all important(p) occasion in improving the overall value compass of an organization. However, this increase requires business and technology management to work as a creative, synergistic, and cooperative team instead of a purely mechanistic span of control. Technology Management is dear the same as any other management disciplines that a re out there. It is basically employing the pastime traits. supplyingOrganizingStaffingImplementingMonitoring evaluationHowever, for Technology Management to be effectively use, the Technology Factor has to be added to all the traits mentioned above. We all know that technology makes life a lot easier or much complicated based on how it is used or utilise, neverthe slight technology go forth form into everyones life. But technology was made and true primarily because there is a need to be fulfil and you want to make things much easier. Technology thereby becomes an imperative portion that you need to incorporate in the day by day carrying on of your professional lives. It is a very important tool, together with the values that go along with it innovation, creativity, expertness in the conduct of your business. Technology applies to all, from the securities industrying to communications, product development to process innovations and so on.Throughout instruction techno logy management, it will be able to show one the way to harness the technology developed and innovated in order to stool value for the company, giving AirAsia the edge to compete, providing the company with the matched advantage. A somewhatbody who would be in charge of this department in an organization would be the top dog Information Officer or CIO. Chief selective information Officer (CIO) is a attitude comm yet inclined to the person in an enterprise who supports the enterprise goals which are responsible for the computer arrangings and information technology (IT) applications. The splendour of information technology has created a trend whereby the position of the CIO has come to be viewed in many organizations as a distinguish contributor in formulating strategic goals (Qais International, n.d).According to a cited Meta Group study, leading CIOs are playing dramatically much than influential business roles than they establish at any time in past (Bernard.A, 2005). Besides that, whole meal flour Waller, senior vice president with Metas Executive Directions advisory avail is quoted as saying, Savvy CIOs wee-wee demonstrated their transformational value to senior management during the past three geezerhood, even while operating during a down economy. In recent years, an increasingly signifi deposet business role has developed from being a purely technical support functions toward a more commercially-focused part of the business. Currently CIOs are expected to create innovative solutions which could modify the succeeder of the organization such as increase profits, reduce be, and to afford in important managerial decisions (Hooshmand.A, 2008).In the past, CIOs were only responsible for the computer arrangings and information technology applications that supported enterprise objectives. In this case the regional Head for Innovation Commercial & Technology for AirAsia would be Mr. Lau Kin Choy. In order to transform the sight into reali ty for an organization such as AirAsia, requires more than a great dodge. It is essential that the organization make the dodging an integral part of its operation (Bradford, 2002). This statement, although made with reference to the business schema and operations, also holds true for business strategy and IT enterprisingness. When the business strategy and IT are aligned, the IT infrastructure put up continuously sense the changing business require and respond by provisioning or redeploying resources to match the demands of the business. (Pultorak, 2004).AirAsia being a inflict Cost Carrier or ,LCC, business strategy is that of focused leaders that requires continuous cost reductions in order to stay ahead of its tilt all along the value chain. The various Information Technology go throughations that devote been made by AirAsia and its benefit are as follows. The few system implementations that AirAsia constitute done in its marketing and sales activities (Yield Management constitution and Computer Reservation organization) as well as operation activeness (Enterprise Resource Planning System), The Computer Reservation System (CRS), a radio Delivery System (WDS), and the Enterprise Resource Planning System (ERP)AirAsia has agnise then change magnitude revenue from up to 3 to 4 portion for the same number of aircrafts by taking advantage of the forecast of the mellowed/low demand patterns, and effectively shifting the demand from low uttermost to high period and by charging a premium for late bookings. everyplace the past couple of years, AirAsia have actually lowered prices (essential for LCC) as the YMS has given them the window to increase their revenue by offering higher discounts, more frequently during off- crown times while raising prices only marginally for peak times. (Voneche, n.d).Computer Reservation System (CRS)AirAsias CRS (Open Skies by Navitaire) has helped it to grow at a dramatic pace in the past couple of years Navitaires Op en Skies technology has truly enabled Airasias growth from 2 million passengers to 7.7 million passengers in less than two years. Open Skies scaled easily to accommodate our growth. Tony Fernandes Source Navitaire (http//www.navitaire.com/res_and_dist/openskies.asp)It is an integrated web-based reservation and inventory system. It includes Internet, call center, airport departure control and more. It is a direct sales engine that effectively eliminates the middleman (travel agents) and the sales commissions that need to be paid to them. centralized customer data is also carryed by Open Skies and this helps AirAsia to frustrate booking and schedule flight activities with real-time, on-demand reporting feature. The vast booking information that is provided online to the customers acts as a force that brings more customers to use the website thus cut back the customer support costs. An important feature is that Open Skies seamlessly integrates with the already implemented YMS so that the systems can be used in unison for price and revenue maximization (by providing information on bookings, schedules and driving down the costs of operation at the same time.This CRS enabled AirAsia to introduce the first ticket less travel option and also provides features such as advanced boarding passes in addition to online booking that enabled the growth of AirAsia as these features attracted customers that did not have the time for purchasing tickets from counters and coming in 1 hour archean for securing a seat on the aircraft. AirAsia have proposed to implement a radio set Delivery System (WDS) to expand it reach via erratic phones. With this, potential customers will be able to book tickets via their mobile phones. This is a strategic sound for growth as the Asia-Pacific region has a larger population of mobile phone users rather than internet users. Enterprise Resource Planning System (ERP)AirAsia has, as in of May 2005, opted for a full fledged ERP system impl emented by Avanade consultants. By implementing this package AirAsia is looking to successfully maintain process impartiality, reduce financial month-end closing processing times, and speed up reporting and data retrieval processes. (Microsoft Malaysia)APS (Advanced planning and scheduling system)AirAsia has now implemented the Aps system, where it works as a decision support software application. This Advances Planning and Scheduling system aare usually implemented as an add-on software that complements a companys transaction software system by providing advances analyticl andd optimization functionality focusid on improving supply chain planning. There are different modules that come into play with the APS such as Demand Planning, mesh topology Optimization, Supply Planning, and Factory Schedule software that all work together to provide the APSs core functionality.IT Implementations and strategical junctionWith the above implementations, it is get to that the business strate gy and the IT strategy are aligned to for AirAsia to operate on a low-cost model. There are four models to Strategic Alignment Perspective (Henderson and Venkatraman, 1993). Namely Strategic Execution, Technology Transformation, Competitive Potential and Service Level. All the systems implemented act as enablers in achieving the business strategy of AirAsia by reducing the costs of operation (CRS, ERP) and maximizing revenue (YMS). These cost savings are directly transferred to the customer with reduced prices of traveling, discounts etc. The business strategy acts as the driver in this perspective (Technology Transformation).Figure 2 Technology TransformationSource Henderson and Venkatraman, IBM Systems Journal 1993With expansion as one of the main future direction as well as increased competition, APS system is recommended as a new way to break processes and accordingly achieving cost reductions along the value chain. The main difference of APS system compared to the precedent system implementations is that APS system focuses on internal operable processes perspective while the other systems such as YMS and CRS more focus on customer perspective. All systems provide cost advantages in different domains in the value chain. In relation to strategic alignment, APS system like other preceding(prenominal) systems fits smoothly in Technology Transformation perspective. Reduced costs in inbound logistics and operation activities will be the direct result of implementing APS change AirAsia in achieving its low cost business strategy.The operational environment of an airline industry is complex. Large network in the supply chain, continuous daily operation, and several external uncontrollable variables such as weather status and government regulations become factors affecting airlines carrying out. Given these complexities, operational planning and scheduling across the supply chain are important factors determining the success of any airline. In order to in crease the efficiency of operational performance and manage its supply chain, AirAsia had implemented the ERP system. It is a system focusing on capturing transactions in daily operations and helping AirAsia to save its operational costs as well as to increase the efficiency and integrity in its operation (Microsoft Press Pass, 2005).However, conventional ERP system implemented by AirAsia does not provide flexibility and intelligence required to analyze data for better supply chain management. APS system optimizes AirAsias supply chain management. It works as the brain of supply chain activities (Ahmed, 2004) by gear wheel activities in relation with customers and suppliers requirements. APS system clusters and classifies customer orders, forecasts future fulfilment requirements, checks resources availableness and sets order priorities. Moreover, APS system helps AirAsia in gaining competitive advantage as it provides visibleness across supply chain. APS system will improve AirAsi as strategic and operational performances particularly in the inbound and operational activities.Potential Ideas in the Information Technology AspectIn order to gain market share and sustain its competitive advantages to be the low cost flattop in the high demanding environment, AirAsia must develop new ways to manage both customer relationships and suppliers or partners to optimize customer loyalty, supplier relationships, and revenue. The following diagram shows the strategic forces of value proposition of the airline industry, showing that the focus on Supplier and Alliances and customers will drive positive values to AirAsia can achieve. Customer Relationship Management (CRM) application will be one of the area of strategic IT implementation that AirAsia can focus to achieve high values to both shareholders and customers. In long term, customer relationships should be fostered for AirAsia to maintain competitive advantage and profitability.When planning and implementing CRM appl ication, management is recommended the following approaches Customer segmentation is where mileage-based segmentation is inadequate, rather should focused on value-based and needfully-based approaches can guide investment decisions and drive greater insight into the needs of high value customers. Whereas CRM initiative development to differentiate from other competitors, AirAsia should not adopt the fast participator approach to CRM initiative development, i.e. learning from other competitors approach (e.g.installing kiosks for fast check-in). AirAsia should implement CRM program in favor of investing in initiatives with a high return, which respond to the needs and desires of their own customers and Organizational design and management is where AirAsia needs to train the employees, empowering them with a complete view of the customer and clearly articulating the employees role in the CRM strategy.ConclusionAirAsia as I thought was just a company that provided a low cost carryin g airline company. puff up that is true but after studying the information and technological aspect of the company, i have come to realize that there is so much more to the company than I realized. The systems in place are mere(a) and efficient and wouldnt look that impressive but the key of it was the collaborationism of all these systems put together is what makes AirAsia what it is. The position of managing the technology in AirAsia is gaining importance in todays world where technology is making a larger impact in organizations. Having the right person filling the role of the head of technology management can either make or break the company. In the case of Airasia, it is even more important and more difficult to find the right man.This is because Airasia has a set of policies and a vision that sets itself apart from other large corporations or organizations. At times, this flies in the face of conventional wisdom that is adopted at most other places, exemplified by Googles s trict insistence on maintaining employees immunity of choice. An organization like AirAsia which considers itself to be special and outstanding, needs a CIO or CTO who is even more special and outstanding. The researchers have outlined some qualities that are needed, and by using examples of situations that have and are continuing to overstep in AirAsia, make suggestions on how using these qualities, a CIO or CTO can address those issues.Service Level Agreements are basically agreements between those offering a service and those who are receiving or using that service.Basically it is a form of protection against the unexpected. In the business world, guarantees are very important, not only from the business and operational sense, but also in the sense of upholding a reputation. AirAsia have a fairly solid SLA in place, however it is not without shortcomings. A close examination reveals that there are a host of improvements that can be made. Better drafting of SLAs can help chang e work for the company and also allow it to focus more on the core operational issues.SLAs can also be advantageous in driving down costs and creating beneficial partnerships. With the importance of SLAs well established, the researchers have pointed out some areas that AirAsia would do well to consider to help improve its standing in this regard, and suggested some ways in which it could do so.All in all this has been a learning experience for the researchers, who have been able to affaire the theories learned in class to real world cases and scenarios which have helped create a better understanding of the issues that have been discussed during class.ReferencesMcNurlin, Barbara, et. al. (2009). Information Systems Management in Practice (8th ed.). Prentice HallBird, M. (2010). Modern Management Guide to Information Technology. Create SpaceAnon, 2004, About Us, AirAsia,http//www.airasia.com/my/en/corporate/corporateprofile.page, Accessed on the sixth of July 2012B.K. Sidhu, 2012, T ony fernandes speask to Star Biz on Airasias future plans, getable from http//biz.thestar.com.my/ intelligence operation/story.asp?file=/2012/6/15/business/11484860&sec=business, Accessed on the tenth of July 2012.Margaret Rouse, 2009, Advanced planning and scheduling http//searchmanufacturingerp.techtarget.com/definition/advanced-planning-and-scheduling-APS, Accessed on the 5th of July 2012.Charles Kho, 2005, Strategic IT Initiative, Available from, http//sandygarink.tripod.com/papers/AA_SITA.pdf, Accessed on the 7th of July 2012.Anon, 2002, Management in Technology, Available from,http//www.unido.org/fileadmin/user_media/Publications/Pub_free/Management_of_technology_selected_papers_at_Vienna_Global_Forum.pdf Accessed on the 7th of July 2012.WIT, 2011, Technology enhances AirAsias product and service delivery http//www.4hoteliers.com/4hots_nshw.php?mwi=9119, Accessed on the 7th of July 2012.Bernard.A, 2005, New Roles, New Responsibilities Todays CIO online,