Falling in love with AirAsia

There is nothing exception about the news today, except there is something about Paula Abdul sexual scandal with ex-american idol contestant, which seems like it is opposite of what the news are intended for.

The main highlight was AirAsia's success as LCC (Low cost carrier) which alongside any other alternatives such as VOIP and etc proves to really gotten into people's head. Is really AirAsia that low cost ? I don't think so, people are just probably driven by its concept. According to the article in Star, AirAsia made its customers feel like kings. Yeah we could understand that, if you get to travel around in a plane at the price similar to a high class bus moving along the north-south highway, it is a bit of self-contentment, at least for first timer flier.

AirAsia success is despite the claims of being cost-efficient at all levels(of the management where everybody goes IT, VOIP and paperless environment and web site driven), the ability to capitalize market which hadn't have any flying experiences before. They are talking about 10% of the Indonesian population where majority are not so rich people. Never ever mentioned about corporate flights and etc where comfort and short-duration reservation notice is ever required and must be met without fail. To fly with AirAsia is like falling in love with the company. One needs to have long term plan for it (I never have direct experiences though), but from what I heard is that you have to make months-before reservations in order to gain a reservation. Otherwise, you got to be a retiree or students where time is a luxury to you, so that you can afford to board a flight whenever seats are available to you with no guaranteed.
The CEO claimed that they have multiple strategies to deal with rising fuel cost. That was the headline of the newspaper! I was really interested to find out how this marketing guru gonna deal with it, as if he got some financial magic wand or just something which we could never afford to know deal to lack of creativity in terms of business management. Nevertheless, the answer was unfolded at the following grave wording:

“There is elasticity in prices. We can pass on fuel costs to passengers, once a market become more mature, we have the ability to increase prices as well, it is not like we are stuck with the high oil prices. For every RM10, my revenue goes up about RM60Mil”

So yeah, we got strategies... which is to share the cost with the consumer! Haven't you thought about that? We all must learn how to answer questions with excitement. I learnt that quick-witted mind is essential to be CEO.

So has AirAsia succeeded in providing more options for the society ? I think the answer is yes but it ain't a great solution yet. Because if I am a low income earner with a need to travel low cost via airplane because I am rushing for emergency, AirAsia couldn't courier me over (probably not unless they have a emergency-service department to deal with such social service). In retrospect, if I am booking a flight to send back an important guess attending my company's meeting and etc, I wouldn't really want to go with AirAsia, I would still go on with the service-assured carrier because reputation is important for business. (Things could have been different now since I don't have direct experiences, I am just stretching my analytical skills here)

Similarly, many corporates wouldn't opt for cheap VOIP services because their clients might have negative opinion about them in case it is heard as “complement” when it meant “complain”.


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