Air Asia: the Sky's Is the Limit

In: Business and Management

Submitted By primrose
Words 1118
Pages 5
Case1- Air Asia: The sky is the limit

Paul Howell - 5 Nov 2009
Source – HRM Asia (2010)

It’s generally accepted throughout the world that now is not a good time to be in the airline business. The global financial crisis has put a squeeze on passenger numbers, while threats of terrorism and concerns over the environmental impact of air travel also dampen enthusiasm among consumers. Prices are falling; schedules are shrinking; and many airlines are accepting smaller and smaller – often negative – profit margins in order to maintain business through what they hope will be only a temporary shift in demand.

But some entrepreneurs simply refuse to give in to the bad trading environment. Bucking the downward trend is the Kuala Lumpur-based airline Air Asia. Tony Fernandes, CEO, says the budget provider is actually expanding at this time. It is buying more aircraft, offering more services, to more destinations; and still finding the budgetary scope for regular sales and promotions.

How does he do it? The enthusiastic manager says it is a combination of great people, managed by flexible HR strategies, and the inspiration of the Air Asia credo: “Believe the unbelievable; dream the impossible; never take no for an answer.”

From troubled beginnings

AirAsia started life in 1993 – but few would have heard of it outside of its native Malaysia. It was founded by a Government-owned conglomerate as an alternative to the then-monopoly service Malaysia Airlines. DRB-Hicom spent plenty of money on the venture, but failed to win much market share. By 2001, the heavily indebted business was all but bankrupt. Fernandes bought the airline – including all its debt – for the princely sum of one ringgit (6700 Dong). The former Time-Warner executive then presided over one of the fastest and most effective business turnarounds in corporate memory. He…...

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