StrengthsTheTfirstTstageTofTtheTswotTanalysisTisTtheTstrengthsTanalysisTforTAirTAsia.TThereTareTsomeTuniqueTstrengthsTofTAirTAsiaTthatTothersTcompanyTcouldTnotTdefeatTthem.TFirstTandTforemost,TAirTAsiaThasTaTveryTcooperativeTandTstrongTmanagementTteamTwithTstrongTconnectionsTwithTtheTgovernmentTandTtheTairlineTindustryTleaders.TThisTisTpartlyTcontributedTbyTtheTdiverseTbackgroundTofTtheTexecutiveTmanagementTteamsTwhichTconsistsTofTindustryTexpertsTandTex-topTgovernmentTofficials.TBesides,TcustomersTcanTeasilyTcheckToutTtheTtimeTofTflyTscheduleTofTAirTAsia.TWithTallTtheTconvenient,TAirTAsiaTbecomeTtheTmostTfavouriteTairlineTinTMalaysiaTforTtheTcustomers.TOnTtheTotherThand,TAirTAsiaTprovidesTcomfortableTseats,TsecureTsafetyTandTaTcleanlinessTenvironmentTforTtheTcustomerTsoTthoseTcustomersTfeelTcomfortableTduringTtheirTflyTtimesTwithTtheTlowTprice.Furthermore,TAirTAsiaThaveTaTveryTstrongTpromoterTandTmediaTofTadvertising.TAirTAsiaTalwaysThaveTpromotionsTthatTattractTcustomersTinterests.TBesidesTthat,TAirTAsiaThaveTgoodTmarketingTskillsTemployeesTandTtechnologyTofTadvertisingTwhichTcanTinfluenceTcustomersTattractionsTandTchoiceTofTpurchase.TMoreover,TAirTAsiaTisTaTwell-establishedTLCCToperatingToutTofTSouthTEastTAsiaandTitThasToperationsTinToverT25TcountriesTandToverT400TinternationalTandTnationalTdestinations,TandTtheTmostTfamousTdestinationTisTBali-TIndonesia,TThailandT–TBangkok,TKorea-Seoul,TJapan-TTokyoTandTNagasaki,TTaiwanTandTtheTother.TMeanwhile,TitThasTsubsidiariesTinTIndonesia,TThai,TPhilippines,TJapanTandTitThasTaTfleetTsizeTofTnearlyT300Taircrafts.WeaknessesAirTAsiaTdoesTnotThaveTitsTownTmaintenance,TrepairTandToverhaulT(MRO)Tfacility.TAlthoughTitTisTaTgoodTstrategyTwithTtheThubTandTfewTplanesTonlyTneedTtoTmaintainTwhenTAirTAsiaTgettingTtheirTfirstTjourneyTwhichTonlyTinTMalaysia.THowever,TwithTthoseTfewThubsTthatTonlyTsituatedTinTMalaysia,TThailandTandTIndonesiaTwithToverT100TplanesTthatTownedTbyTAirTAsiaTcurrentlyTandTanotherT100TplanesTwhichTintendedTtoTbeTreceivedTinTfutureTnextTfewTyears,TAirTAsiaThaveTtoTtakeTproperTactionsTofTconfirmationTsuchTasTcontinuousTofTmaintenanceTofTplanesTwithTmaintainingTtheToverallTcostsTlow.TThisTisTaTcompetitiveTdisadvantageTthatTAirTAsiaTdoTnotThaveTitsTownTbelongingTofTMROTfacilityTwhichTcauseTmanyTdifficulties.Meanwhile,TAirAsiaTreceivesTlotTcomplaintsTfromTcustomersTonTtheirTservice.TExamplesTofTcomplaintsTareTaroundTflightTdelays,TbeingTchargedTforTaTlotTofTthingsTandTnotTableTtoTchangeTflightTorTgetTaTrefundTifTcustomersTcouldTnotTmakeTit.TItTisTcrucialTforTAirTAsiaTtoThaveTaTgoodTcustomerTserviceTandTmanagementTwhenTtheTmarketTcompetitionTisTmoreTandTmoreTintense.TBesides,TthisTisTalsoTdueTtoTdoTnotThaveTtooTmanyTroutesTasTcomparedTtoTmarketTleader.TWhichTmeanTAirTAsiaTcan’tTprovideTmanyTflyTscheduleTcomparedTtoTtheTMASTforTexample.TAndTAirTAsiaThasTaTveryTstiffTcompetitionTinTitsTsector.PestelT2.1.1.TPoliticalTBudgetTairlinesTgrowsTrapidlyTinTtheTSoutheastTAsiaTregionTafterTtheTtheTliberalisationTofTtheTindustry.TCountriesTincludingTThailand,TMalaysia,TCambodia,TPhilippinesTandTSingaporeTunderwentTderegulationTofTtheTbudgetTairlineTindustry.TMoreover,TreciprocalTaccessTagreementTwereTimplementTamongTSoutheastTAsiaTcountriesTwithTtheTUnitedTStatesTtoTembraceTtheTliberalizationTofTtheTindustry.TThisTimpliesTtheTopenTskiesTservicesTagreementTencourageTmoreTairTtrafficTtoTenterTandTexitTtheTregionTdomesticallyTandTinternationally.TFinally,TgovernmentsTinTtheseTcountriesTallowTmoreTnewTprivateTbudgetTairlinesTwereTintroducedTtoTtheTindustryTtoTincreaseTcompetition.2.1.3.TSocialTTheTlargeTpopulationTbaseTofTtheTSoutheastTAsiaTregionTcreatesTaTlargeTmarketTforTaviationTtravel.TAmongTthose,TIndonesiaTthatTwithT235TmillionTpotentialTpassengersTfuelsTtheTgrowthTofTbudgetTairlineTindustry.THowever,TthereTisTanTperceptionTofTAsianTpassengersTvaluesTqualityTmoreTthanTprice.THence,TdespiteTtheTlowTpriceTstrategy,TcertainTinflightTqualityTstandardsTwillThaveTtoTmetTtheTexpectationsTofTAsianTpassengers.T2.1.4.TTechnologicalTInfrastructuresTsuchTasTinternationalTandTdomesticTairports,TpublicTtransportsTtoTtheTterminalTareTquiteTsophisticatedTinTtheTregion.TMalaysiaTforTexample,TeveryTstatesTatTleastThasTaTdomesticTairport,TwhileTbiggerTcitiesTmightThaveTaTcombinationTofTinternationalTandTdomesticTterminals.TInternetTcoverageTareTusuallyTadequateTforTtheTpurposeTofTpurchasingTonlineTticket,TwhichTlowerTtheToperatingTcostTinTbudgetTairline.2.1.5.TLegalTCompetitionTregulationTimplementedTinTseveralTcountriesTsuchTasTMalaysia,TmajorTmergerTorTacquisitionsTwereTmostlyTprohibitedTbyTtheTlocalTgovernmentTtoTensureTtheTindustry’sTcompetition.TForeignTdirectTinvestmentsTwereTalsoTlimitedTtoTjointTventuresTorTalliancesTbyTseveralTcountriesTinTtheTregion.TMoreover,TregulatoryTsystemsTinTsomeTofTtheseTcountriesTareTquiteTweak,TwhichTmightTaffectTtheTbusinessTplanningTinTthisTregion.T2.1.6.TEnvironmentalTEnvironmentTisTreallyTaTbigTadvantageTforTtheTairlineTindustry,TparticularlyTtoTbudgetTairlines.TThisTisTdueTtheTlackTofThighTspeedTcrossTcountriesTrailwaysTorThighways,TwhichTmakeTlandTtravellingTamongTcountriesTdifficult.TMoreover,TmostTtheTcountriesTareTseparatedTbyTseaTwhichTpaveTwaysTtoTtheTbudgetTairlinesTinTtheTregionTasTeitherTtravellingTinTbusinessTorTpleasureThaveTtoTtakeTaTflightTtoTanotherTcountry.TAdditionally,TtourismTindustriesTareTaTmajorTindustryTinTtheTSoutheastTAsiaTcountries.TTheTspilledToverTofTtheTgrowthTtourismTindustryTalsoTincreasesTtheTdemandTforTbudgetTairline,TasTmoreTpassengersTdemandTforTmoreTlowTcostTandTfastTtravelToptionsTwhileTtravellingTinTtheTregion.TFinally,TtheTcountriesTwereTlocatedTnearTtoTeachTother,TwithinT3ThoursTflight,TfewTcountriesTcanTbeTreachedTfromTMalaysiaTtoTSingapore,TIndonesia,TPhilippines,TBruneiTandTThailand.TWhichTbudgetTairlineTcanTachieveTaTcostTbenefitTfromTtheirTfuelTconsumption.PestelLegalMalaysianTgovernmentTdoesTnotThaveTaTclearlyTwrittenTpolicyTforTcommercialTairTtransport.TThereforeTinTtheTpastTyears,TmoreTemphasisTwasTplacedTonTdomesticTflightsTandTwithTAirAsia’sTapprovalTtoToperateTcheapTflightsTlocallyTandTinternationally,TtheTcompanyThasTmanagedTtoTstrikeTaTbalanceTinTitsTflights.DemographicTenvironmentPopulationTgrowthTaffectsTsalesTofTAirAsia.TIncreasingTpopulationTinTtheTcountryTincreasesTsalesTofTtheTairlineTbearingTinTmindTthatTmanyTclientsTpreferTaffordableTservices.TDemandTforTproductsTandTservicesThaveTalsoTincreased.THowever,TtheTcompanyTshouldTtakeTadvantageTofTthisTtoTexpandTitsToperations.AirAsiaTSWOTTanalysisStrengths,TWeaknesses,TOpportunitiesTandTThreatsTAnalysisTareToneTofTtheTimportantTthingsTinTaTcompany.TThisTSWOTTanalysisTisTforTidentifyingTtheTinternalT(strengthTandTweakness)TandTexternalT(opportunitiesTandTthreats)TfactorTforTAirAsiaTCompanyTtoTachieveTtheirTgoalsTandTobjectivesTtoTbeTlowTcostTcarrierTcompanyTinTairlineTindustry.TToTbeTsuccessfulTinTtheTcompanyTmanagement,TaTcompanyTneedsTtoTconsiderTtheTcompanyTabilityTandThowTtoTintegratingTitTwithTtheTasTwellTasTmainTfactorTinTtheTinternalTandTexternalTfactor.TTheTmainTfactorTinTtheTinternalTandTexternalTfactorTcanTbeTidentifiedTwithTSWOTTanalysis.TOnTthisTsection,TITwillTidentifyToneTbyToneTtheTstrength,Tweakness,TopportunitiesTandTthreatsTinTAirAsiaTCompany.TTheTpurposeTofTthisTanalysisTareTforTidentifyTtheTinternalTandTexternalTfactorTthatTAirAsiaTneedTtoTconsiderTtoTbeTlowTcostTcarrierTinTairplaneTindustry.TTheseTareTtheTstrength,Tweakness,Topportunities,TandTthreatTinTAirAsia.StrengthsAirTAsiaThasTaTveryTstrongTmanagementTteamTwithTstrongTlinksTwithgovernmentsTandTairlineTindustryTleaders.ThisTisTpartlyTcontributedTbyTtheTdiverseTbackgroundTofTtheTexecutiveTmanagementTteamsTthatTconsistsTofTindustryTexpertsTandTex-topTgovernmentTofficials.TAccordingTtoTJohnstonT(1996),TwithoutTtheTprotectionTofTnationalTairlinesTbroughtTaboutTbyTderegulation,TbuildingTalliancesTasTstrategyTbecameTnecessaryTforTmanyTairlinesTtoTstayTcompetitiveTandTgainTaccessTtoTaTglobalTmarketTtooThugeTforTanyTexistingTairlineTtoTdominate14.TTheTstrongTlinksTwithTtheTgovernmentTandTairlineTindustryTleadersTisToneTofTtheTstrengthTofTAirAsiaTCompany.ForTexample,TShinTCorpT(formerlyTownedTbyTtheTfamilyTofTformerTThaiTPrimeTMinisterT–TThaksinTShinawatra)TholdsTaT50%TstakeTinTThaiTAirAsia.TThisThasThelpedTAirAsiaTtoTopenTupTandTcaptureTaTsizeableTmarketTinTThailand.TAndTalso,TwithTtheirTstrongTworkingTrelationshipTwithTAirbus,TtheyTmanagedTtoTgetTbigTdiscountTforTaircraftTpurchaseTwhichTisTalsoTmoreTfuelTefficientTcomparedTtoTBoeingT737TplanesTwhichTisTbeingTusedTbyTmanyTotherTairlinesTheTmanagementTteamTisTalsoTveryTgoodTinTstrategyTformulationTandTexecution.`TTheTstrategyTthatTtheyThaveTformulatedTatTtheTbeginningsTwasTaTcleverTblendTofTprovenTstrategiesTbyTotherTlowTcostTairlinesTisTUSTandTEurope.TTheyTareTRyanair’sToperationalTstrategyT(noTfrills,TlandingTinTsecondaryTairport),TSouthwest’sTpeopleTstrategyT(employeeTcomesTfirst)TandTEasyjet’sTbrandingTstrategyT(linkingTwithTotherTserviceTprovidersTlikeThotels,TcarTrental).AirAsia’sTbrandTnameTisTwellTestablishedTinTAsiaTPacific.BesidesTtheTnormalTprintTmediaTadvertisingT;Tpromotions,TAirAsia’sTtopTmanagementTalsoTcapitalizedTonTpromotionsTthroughTnewsTbyTbeingTveryT”mediaTfriendly”TandTfreelyTsharingTtheTlatestTinformationTonTAirTAsiaTasTwellTasTtheTairlineTindustry.TTheirTpartnershipTwithTotherTserviceTprovidersTsuchTasThotelsTandThostels,TcarTrentalTfirms,ThospitalsT(medicalTtourism),TCitibankT(AirAsiaTCitibankTcard)ThasTcreatedTaTveryTuniqueTimageTamongTtravellers.TAllianceTwithTGalileoTGDST(GlobalTDistributionTSystem)TthatTenablesTtravelTagentsTfromTaroundTtheTworldTtoTcheckTflightTdetailsTandTmakesTbookingsThaveTalsoTcontributedTtoTtheirTstringTbrandTname.AirTAsia’sTlocalTpresenceTinTfewTcountriesTsuchTasTIndonesiaT(IndonesiaTAirAsia)TandTThailandT(ThaiTAirAsia)ThasTsuccessfullyT”elevated”TtheTbrandTtoTbecomeTaTregionalTbrandTbeyondTjustTMalaysia.TTheTlinksTwithTManchesterTUnitedT(oneTofTtheTworld’sTmostTfamousTfootballTteams)TandTAT&TTWilliamsTFormulaTOneTteamThaveTfurtherTboostedTtheirTimageTtoTaTgreaterTextendTbeyondTjustTtheTthisTregionAirAsiaTisTtheTlowTcostTleaderTinTAsia.WithTtheThelpTofTAirAsiaTAcademy,TAirAsiaThasTsuccessfullyTcreatedTaT”low-costTairlineTmentality”TamongTtheirTworkforce.TTheTworkforceTisTveryTflexibleTandThighTcommittedTandTveryTcriticalTinTmakingTAirAsiaTtheTlowestTcostTairlineTinTAsia.TheTexcellentTutilizationTofTITTheTexcellentTutilizationTofTITThaveTdirectlyTcontributedTtoTtheirTpromotionalTactivitiesT(emailTalertsTandTdesktopTwidgetTwhichTwasTjointlyTdevelopedTwithTMicrosoftTforTnewTpromotions),TbrandTbuildingTexerciseT(withToverT3TmillionThitsTperTmonthTandTonTtheTmostTwidelyTsurfedTbookingTenginesTinTtheTworld)TasTwellTkeepTtheTcostTlowTbyTenablingTdirectTpurchaseTofTticketsTbyTconsumerTthusTsavingTonTairlineTagentTfeesWeaknessesAirTAsiaTdoesTnotThaveTitsTownTmaintenance,TrepairTandToverhaulT(MRO)Tfacility.ItTmayTbeTaTgoodTstrategyTwhenTtheyTfirstTstartedTwithTonlyTMalaysiaTasTtheThubTandTfewTplanesTtoTmaintain.TButTnow,TwithTfewThubsT(Malaysia,TThailandTandTIndonesia)TandToverT100TplanesTcurrentlyTownedTandTaboutTanotherT100TplanesTtoTbeTreceivedTinTtheTnextTfewTyears,TAirAsiaThaveTtoTensureTproperTandTcontinuousTmaintenanceTofTtheTplanesTwhichTwillTalsoThelpTtoTkeepTtheToverallTcostsTlow.TItTisTaTcompetitiveTdisadvantageTnotTtoThaveTitsTownTMROTfacilityAirAsiaTreceivesTaTlotTcomplaintTfromTcustomersTonTtheirTservice.ExamplesTofTcomplaintsTareTaroundTflightTdelays,TbeingTchargedTforTaTlotTofTthingsTandTnotTableTtoTchangeTflightTorTgetTaTrefundTifTcustomersTcouldTnotTmakeTit.TGoodTcustomerTserviceTandTmanagementTisTcriticalTespeciallyTwhenTcompetitionTisTgettingTintense.OpportunitiesThereTareT2TmajorTeventsTthatTareTtakingTplaceTnowTorTgoingTtoTtakeTplaceTinTlessTthanT6TmonthsTfromTnow.First,TisTtheTever-increasingToilTprice.TSecond,TisTtheT”ASEANTOpenTSkies”TagreementTthatThasTbeenTreached.TTheTincreasingToilTpriceTatTtheTfirstTglanceTmayTappearTlikeTaTthreatTforTAirAsia.TButTbeingTaTlowTcostTleader,TAirAsiaTanTupperThandTbecauseTitsTcostTwillTbeTstillTtheTlowestTamongTallTtheTregionalTairlines.TThus,TAirAsiaThasTaTgreatTopportunityTtoTcaptureTsomeTofTtheTexistingTcustomersTofTfullTserviceTandTotherTlowTcostTairline’sTcustomers.THowever,TthereTwillTbeTalsoTsomeTreductionTinToverallTtravelTespeciallyTbyTcasualTorTbudgetTtravelers.Second,TisTtheT”ASEANTOpenTSkies”TallowsTunlimitedTflightsTamongTASEAN’sTregionalTairTcarriersTbeginningTDecemberT2008.TThisTwillTdefinitelyTincreaseTtheTcompetitionTamongTtheTregionalTairlines.THowever,TwithTtheT”firstTmover”TadvantageTasTwellTasTitsTstrengthsTinTmanagement,TstrategyTformulation,TstrategyTexecution,TstrongTbrandTandT”low-cost”TcultureTamongTitsTworkforce,TthisTagreementTcanTbeTseenTasTmoreTofTanTopportunity.ThereTisTalsoTsomeTopportunityTtoTpartnerTwithTotherTlowTcostTairlines.AsTVirginTtoTtapTintoTtheyTexistTstrengthsTorTcompetitiveTadvantagesTsuchTasTbrandTname,TlandingTrightsTandTlandingTslotsT(timeTtoTland).TheTpopulationTofTAsianTmiddleTclassTwillTbeTreachingTalmostT700TmillionTbyT2010.ThisTcreatesTaTlargerTmarketTandTaThugeTopportunityTforTallTlowTcostTairlinesTinTthisTregionTincludingTAirAsia.ThreatsCertainTratesTlikeTairportTdeparture,TsecurityTchargesTandTlandingTchargesTareTbeyondTtheTcontrolTofTairlineToperatorsThisTisTaTthreatTtoTallTairlinesTespeciallyTlowTcostTairlinesTthatTtriesTtoTkeepTtheirTcostTasTlowTasTpossible.TForTexample,TChangiTairportTinTSingaporeTchargesTSGD21TforTeveryTpersonTwhoTdepartsTfromTSingapore.AirAsia’sTprofitTmarginTisTaboutT30%TandTthisThasTalreadyTattractedTmanyTcompetitors.MostTofTtheTfullTserviceTairlinesThaveTorTplanningTtoTcreateTaTlowTcostTsubsidiaryTtoTcompeteTdirectlyTwithTAirAsia.TForTexample,TSingaporeTAirlinesThasTcreatedTaTlowTcostTcarrierTTigerTAirways.Users’TperceptionTthatTbudgetTairlinesTmayTcompromiseTsafetyTtoTkeepTcostsTlow.InTconclusion,TtheTSWOTTanalysisTthatTAirAsiaThaveTisTonTofTtheTmajorTcomponentTtoTmakeTAirAsiaTmoreTstrengthTinTtheirTbusinessTandTcanTmakeTtheyTareTableTtoTcompeteTwithTtheTsameTlowTcostTcarrierTairlineTindustry.AfterTI’mTdiscussedTaboutTtheTSWOTTanalysis,TITwouldTlikeTtoTdiscussTaboutTtheTAirAsiaTstrategyTtoTsolveTtheTcurrentTissues:THowTAirAsiaTcanTbeTaTleaderTinTtheTlowestTcostTcarrierTinTtheTairplaneTindustry.