Map
Case

AirAsia: the 2001 RM1 takeover and low-cost model (Malaysia)

According to AirAsia, Tony Fernandes and Kamarudin Meranun bought the airline for RM1 on 8 September 2001, when it was RM40 million in debt (AirAsia Newsroom); The Star puts its liabilities at RM190 million. The Star reports that from two aircraft in 2001 the airline had 216 A320s and 31 A330s by 2018, carried 65.7 million passengers in 2017 at an 88% load factor and made a net profit of RM1.59 billion on RM9.7 billion revenue; Fernandes says the strategy is ‘cost, cost, cost’. Illustrates a low-cost strategy.

Industry
Low-cost aviation (Malaysia)
Frameworks applied
Generic strategiesValue disciplines
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Frameworks applied

This case is read through the frameworks below.

  • Generic strategiesA small business owner watches a bigger rival cut prices: should the firm compete on lower cost or on differentiation, and across the whole market or in one narrow segment?
  • Value disciplinesWhen setting strategy for a firm trying to excel at everything, should the CEO choose to lead on operational excellence, product leadership or customer intimacy?

Sources

References

Listed A–Z by author surname, Harvard style. A source with a DOI links to https://doi.org/…; one without links to its page or says plainly that it has no DOI.

  1. AirAsia Newsroom (2022) Striving & thriving at 21: A heartfelt campaign to celebrate AirAsia’s milestone birthday and a look back on our journey. AirAsia Newsroom.No DOInewsroom.airasia.comCited in 1 article
  2. Sidhu, B.K. (2018) A Malaysian who’s flying high. The Star.No DOIthestar.com.myCited in 1 article