Moreover, air asia placed a large amount of order from airbus in order to expand its routes to international routes as a result, the power of suppliers may be reduced as airbus’s profit may be influenced by air asia. The lcc industry attractiveness and profitability will attract many full service airlines to launch its lcc version adding the degree of rivalry in this industry as the implication, airasia, current market leader of lcc in malaysia, thailand, and indonesia, will face competition from both existing and new players.
If customers of airasia do not have brand loyalty, then the threat of new entrants will be very high but the higher numbers of competitors in the industry also will decrease airasia’s customer loyalty due to most of the travelers prefer low cost new competitors which want to come in the industry need to spend a little to compete with airasia. Essay porter five forces of air asia porter’s five forces threat of new entrants threat of new entry is moderate, because it requires high capital to support and government barrier is high such as the air service agreement can build barriers to those new entrants. The aggressive competition inside the carrier business is exceptionally extraordinary, the same number of significant aircrafts are working the flights to similar goals, everywhere throughout the world air-india is confronting significant dangers from the business contestants like emirates, jet airways and air asia and so on (studymode, 2010.
Air asia offers flights with lower price that other companies, but there are some companies that also offer service by the same price such as malindo air and firefly and also these companies provide service with the same level of air asia so, in this case rivalry among existing competitor is high. Industry rivalry of air asia the strategic analysis of air asia, can be done with the help of michael porter’s five forces it describes the internal affection of the industry with elaborating competitive rivalry amongst the firms in the industry to the bargaining power of customers and suppliers it also explains the threats of new entrants and already existing firms.
2 rivalry among existing firms high numbers of competitor the competition will be fiercer if there is high number of competitor, this is a normal phenomenon airasia are now facing competition with approximately 59 low fares airline such as jal express, tiger airways, air arabia, jetstar airways, and etc.
Firm infrastructure: air asia focuses on their goal, they provides the lowest price for customers they expand service to different countries human resource management: hiring expert personnel is a important issue and it decreases cost for industryso airasia hires multiple skill personnel. Swot and porter five force analysis of air asia airline will help to analyze its present and future competitive state in the global market place swot analysis helps to analyze the strength, weakness, opportunity and threat of the airline as follows: competitive rivalry is high in the industry due to high cost of fixed assets and low.
Porter's 5 forces analysis on air asia threat of new entrants the high numbers of competitors in the industry also decrease air asia customer loyalty most of the travelers prefer low cost in doing that, constant price reduction is done by them to compete with others thus, the rivalry is strong. Aforementioned, air asia has been assessed with all these five forces competitive rivalry the demand function for air travel is affected by price, income, route and the availability of the flight time.
If consumers of air asia do not have brand loyalty, then the strength of the threat of new entrants is very high the high numbers of competitors in the industry also decrease air asia customer loyalty most of the travelers prefer low cost new competitors which want to come in the industry have to spend little to compete with air asia.