Air Asia Macro-Environment
1.0 Introduction
AirAsia (AA) is a renowned low cost carrier that offers short and long haul flights based in Malaysia. AA has expanded rapidly since 2001 and has been awarded as the World’s Best Low-Cost Airline in 2008, 2009, and 2010. One of the reasons for their success is by their strategy formulation, implementation, and control over the macroenvironment, discussed in this report, in terms of political, economic, social, technological, and natural forces, by turning risks into opportunities that benefit the company as a whole.
2.0 Political Environment
2.1 Government Assistance
One of the major factors that assist in the growth of AirAsia would be the continuous support and assistance of the Malaysian government. Over the years, AA has noticeably boosted tourism in Malaysia and has helped transform KLIA into a major air travel hub (The Star Online, Saturday 15th July 2006). Hence, the Malaysian government offers many incentives to AirAsia in term of landing rights, lowering passenger service charges, tax benefits and exemptions (Malaysian Industrial Development Finance Berhad, 2011; The Star Online, 2006). This not only allows them to offer lower fares to further boost the country’s tourism revenue, but it also helps to increase AirAsia’s net income after tax.
2.2 Government emphasis on socially responsible actions
Due to the emerging trend in Corporate Social Responsibility (CSR) internationally, the Malaysian government implemented The Bursa CSR framework, since 2006, that requires all listed companies to disclose their CSR activities (Bursa Malaysia Berhad, 2011). It is designed to deliver sustainable value to society at large. Despite being a listed company, corporate social responsibility is inherent in everything AA does. The One Million Free Seats campaign that AA hold every year since 2006 is one of their unique contributions to society, followed by offering rescue mission when Egypt struck with political turmoil, running blood
AirAsia (AA) is a renowned low cost carrier that offers short and long haul flights based in Malaysia. AA has expanded rapidly since 2001 and has been awarded as the World’s Best Low-Cost Airline in 2008, 2009, and 2010. One of the reasons for their success is by their strategy formulation, implementation, and control over the macroenvironment, discussed in this report, in terms of political, economic, social, technological, and natural forces, by turning risks into opportunities that benefit the company as a whole.
2.0 Political Environment
2.1 Government Assistance
One of the major factors that assist in the growth of AirAsia would be the continuous support and assistance of the Malaysian government. Over the years, AA has noticeably boosted tourism in Malaysia and has helped transform KLIA into a major air travel hub (The Star Online, Saturday 15th July 2006). Hence, the Malaysian government offers many incentives to AirAsia in term of landing rights, lowering passenger service charges, tax benefits and exemptions (Malaysian Industrial Development Finance Berhad, 2011; The Star Online, 2006). This not only allows them to offer lower fares to further boost the country’s tourism revenue, but it also helps to increase AirAsia’s net income after tax.
2.2 Government emphasis on socially responsible actions
Due to the emerging trend in Corporate Social Responsibility (CSR) internationally, the Malaysian government implemented The Bursa CSR framework, since 2006, that requires all listed companies to disclose their CSR activities (Bursa Malaysia Berhad, 2011). It is designed to deliver sustainable value to society at large. Despite being a listed company, corporate social responsibility is inherent in everything AA does. The One Million Free Seats campaign that AA hold every year since 2006 is one of their unique contributions to society, followed by offering rescue mission when Egypt struck with political turmoil, running blood
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