5.1.2 AirAsia’s Success Factors
AirAsia’s critical internal success factors include application of low cost airline model, strong branding and marketing, and its corporate culture. Firstly, AirAsia manages to substantially lower its costs by strictly controlling operation costs, by adopting single aircraft type and by utilizing information technology. Secondly, AirAsia has been able to penetrate and stimulate potential markets through their aggressive branding and marketing activities. It has also achieved quick expansion by covering all major destinations in Southeast Asia. Thirdly, the highly collaborative work atmosphere in the flat organizational structure of AirAsia results in an open corporate culture, thus an effective and focused workforce.
External success factors mainly attribute to the increasing demand for low-cost flights, the relaxed regulatory restrictions and the openings of low-cost terminals. First, due to the Asian economic crisis in 1997, the demand of companies for cheaper flights increased. At the same time, low cost flights attracted a large number of people whose salaries fall in the middle or lower income in the region. Next, governments of many Asian countries have been opening up domestic and international air travel market to low-cost carriers, which leads to more opportunities for development in the industry. Then, the specifically designed low-cost terminals such as in Singapore save the cost of airlines by eliminating value-added services of major airports