Air Asia Strategic Management Recommendations Essay

IntroductionAn analysis of the External Environment would be through so as to facilitate a say comparison amidst the generic elements where AirAsia has been founded in. The report then would delve into an internal analysis whereby the porters beers 5 Forces would reiterate the direct forces that would affect the Air caudex industriousness and subsequently, AirAsia itself. The capabilities and core competencies of the firm would be explained in greater detail towards the last mentioned part of the report before a series of analysis would be through with(p) to segregate the to a greater extent influential ones from the rest. A series of strategies would be then recommended for AirAsia to under entertain so as to continue structure grade awargonness and pit faithfulness throughout the world as a minor- terms autorier.1.0 EXTERNAL ANALYSIS1.1 patience IdentificationAirAsia belongs to the air passage application. ch ei in that respectnger in the flight path business indus try is in truth intense and is growing rapidly together with the attach in motive for figure f ars across Asia. The diametrical air ducts atomic number 18 do use of several strategies to compete with one separate in the air duct industry and it is natural for flight path companies to identify their hawkish advantages so as to be able to achieve profits and set equity globally.1.2 External Environment Analysis organisational/LegalPolitical eventors much(prenominal) as changes in regulation and the global trend toward privatisation of government- consumeed or government-regulated firms control had implications on the general environment. Further to a greater extent(prenominal)(prenominal) than, taking reckon flights out of Malaysia mickle be quite a challenge. Many governments have been instrumental in dabbling in the success of air duct companies in Asia. Most airline companies in Asia have had full or substantial state ownership as easily as trouble and c ontrol.A prime example in Malaysia would be Malaysian Airlines System (MAS). Such companies ar often salutary-subsidized by their governments and do not face much disceptation. Instead of being profit-oriented, they argon more focused on fulfilling national objectives. As much(prenominal), privatization and de-regulation have paved the way for sensitive routes and airport deals via the use of open skies agreements between countries and consent of entry of private airlines (Dellit 2002) As much(prenominal), they would give new airlines that are humiliated-priced carriers such(prenominal) as AirAsia, Jetstar and Tiger Airways chances to access national routes and tapping into foodstuff shell out of the airline industry.However, in light of globalization, the airline industry has as well been cook by threats such as terrorism, accidents, attacks and disasters. A drop in c perchnt confidence in a particular airline political party would be detrimental to a high societys profits as well, therefore a pathetic monetary value carrier would be subjected to factors such as zephyr restrictions, consumer preferences and geographical al-Qaida of Asia (Steverman 2009). To combat such uncertainties, a budget airline beau monde would have to be meticulous in selecting approving routes in its day to day operations so as to avoid any form of possible contradict impacts. (Dellit 2002)Economic in spite of standard of living observed to be improving globally, there last variations deep down and between countries. Economic downturns in the recent historic design have toll companies to lose profits in the industry. However, this proved to be an probability for budget airlines. The result of the recent global economic downturn which lead to a worldwide stock commercialize plunge withal compositors racing shelld aircraft leasing exist to be reduced by 40%, and this guide to an environment that had lesser competition in the airline industry. This then enabled many budget airlines to study their aircraft at a cheaper rate, which resulted in cheaper ticket expenditures for their customers (AirAsia 2009).However, the possible impact of fluctuate oil prices in the economy would takings a toll on operation cost when fuel prices appreciate (Milmo 2011). Revenue and profitability of the troupe as a whole would fall if fuel prices become to a fault proud. As such economic factors are not within airline companies control and are unavoidable, the opportunities would outweigh the disadvantages, presenting further opportunities for them to continue in its working out across Asia. During economic downturns, there would be an evaluate demand for low-priced low airfares amongst budget-conscious buyers, especially for belonglers who are travelling on leisure (Ernst & new-made 2012).Social-CulturalThe changing societal attitudes and cultures such as growing environmental awareness has implications on the emphasis placed on incarn ate mixer responsibility. Furthermore, in order to stay globally competitive, firms now have to consider placing more imagings into ingesting competitiveadvantage with being environmental friendly at the equal fourth dimension. Rapid economic festering has also paved the way for a growing middle class within Asias large community, especially so in Malaysia (Ernst & Young 2012). Together with the constant and gradual growth in trade and journeyism activities within Asia, the demand for travel has also incr rilievod.People are now keener on exploring places far out-of-door from stem and are leading to fork out money for such experiences. In doing so, the idea of low cost airfares that would allow them to just more to swing at holiday destinations is appealing to them (Ernst & Young 2012). The attractiveness of budget airlines lie primarily with their low-ticket prices and thereof would present itself as a major opportunity to budget airlines. For an airline to order it self from its competitors, it has to be able to have value-added serve apart(predicate) from low fares to distinguish itself and outstand the rest. This works out to be a competitive advantage, which whitethorn present itself as an important factor for airline companies to have so as to succeed as a low cost carrier (DestinAsia 2012).TechnologicalBy utilizing information technology to abet companies in e-transactions and e-commerce activities, the traditional ticketing and travel agent placements were soon replaced by e-ticketing and cyberspace mental reservation systems (Mouawad 2010). This meant that alongside with globalization, even the process of booking tickets have departed through a massive restructuring. Airlines are now able to save the cost of issuing physical tickets and quite a little now do away with large and expensive booking systems as well as tour agency commissions (PRLOG 2010). However, an airline must ensure that it is not over-reliant on the profits s ystems as if it is not deal outd properly, the risk of system destruction and database overload bum affect online gross revenue heftily. The technological aspect of the airline business would pose to be a threat if systems are not properly support up and maintained on a regular basis (Mouawad 2010).environmentalGlobal warming has become an change magnitude issue facing businesses all nigh the world as there has been increasing number of picture of rising dangersfrom the ongoing buildup of human-related harmful greenhouse gases. Global emissions of carbon dioxide experienced a sharp increase peaking in 2010, hence having a greater impact on how almost businesses are carried out (The modern York propagation 2012). Considering the fact that air airplanes contribute to a large proportion of about 13% of transport-derived carbon dioxide emissions, is a cause for concern for the airline business (Whitelegg 2000).1.3 The Industry EnvironmentIn order to analyse the attractiveness of the airline industry, ushers five forces framework kitty be employed. This evaluation is crucial to determining the Air Asias best strategy later in the report.Bargaining Power of SuppliersIn the airline industry, the suppliers are happen up only when aircraft suppliers and airline employees such as the flight crew and pilots. Depending on the riffing be that are associated with changing airplanes, the bargaining world force out of the aircraft suppliers exit vary. The bargaining power of suppliers is advanceder when purchasing new airplanes while it is smaller for second-hand airplanes.Labour concretions specifically the pilots and mechanics unions have uplifted bargaining power as their skills are hard to replace. In addition, there has been an observed trend whereby successful union strikes in the airline industry have led to negative atypical returns (finance Department Faculty Publications University of Nebraska Lincoln 1991). Furthermore, wage rates accounts for a larger proportion of cost in the airline industries as compared to former(a)(a)(a) industries (Lehn 2000).Bargaining Power of BuyersThe main buyers in the airline industry are passengers consisting of Visiting Friends and Relatives (VFR) and small business travellers. As the legal age of airline customers are unable to organize and coordinate, their bargaining power is low. Furthermore, with the need for plaques to negotiate well in advance and that discounts are dependent on airline expected demand, offers, and decisions gauges and not so much on buyers, the corporate bargaining power stays low. Besides catering for passenger travel, there is also the commitment transportation whereby bargaining power is increasing with itbeing one of the advert drivers of revenue in the airline industry.Threat of New EntrantsAlthough there is deregulation and liberalization in the airline industry, there are still high operating costs and upfront costs that whitethorn deter entrants such as high fuel operating costs and purchasing price of airplanes (Mint 2012). However the trend of deregulation and liberalization in the airline industry has enabled for new entrants in the industry to enter easily despite the high costs associated with start-up and operating (Moorman 1993). Also, considering that there has been an increase in demand for low-budget air travel coupled with the deregulation, there is increased competition as a result. Hence, the threat of new entrants is moderately high despite the high barriers to entry.Rivalry amongst Existing FirmsAs seen from the case, there was a rapid offset of low cost carriers across Asia as well as the neighbouring divisions in a fierce competition to succeed alongside launch airlines (Lawton & ut 2008). Hence, the rivalry amongst firms is observed to be very intense. In the Asia region, opposite competitors that find the airline industry embarrass Scoot, Jetstar, Tiger Airways and in Malaysia itself, Malaysian Airline s (Wassener 2012). Firms provoke differentiate themselves based on factors such as differentiation and cost leading. Hence, the choice of providing better renovation or choosing to lower prices on a further and continual basis are examples of strategies that firms have employed to differentiate themselves from their fellow competitiors. This further reiterates that price competition makes rivalry amongst existing firms very high.Threat of SubstitutesThe threat of substitutes for the airline industry is medium as apart from transportation methods such as rail, ship and buses, there is no direct substitute for freight work. This is due to the geographical location of the Asiatic region in comparison to the United States and the United Kingdom that makes it time eat to make use of former(a) factor of transport (Lawton & do 2008). Hence, take customers via air would reiterate that the threat of substitutes for resource modes of transport is fairly low. However, there are many other substitutes within the airline industry for alternative low budget airlines that offer the same services with no frills and at a low cost for customers (Sreenivasan 2010). In the case of a low-cost leadership strategy that has been pick out by the industry leaders such as AirAsia, other airlines would follow suit in lowering costs to entice their competitors customers.Is the Airline Industry Attractive?Investors whitethorn find that the airline industry is a slightly volatile investment, however if the airline has a good establishment in the grocery place, and is cost effective and profit generating, this go away highly improve industry attractiveness.1.4 The Competitive EnvironmentThere is a current trend of customers who favour low cost airline hence there is an increasingly number of airlines that are offering the same way of services and products as AirAsia. This led to stiff competition in the airline industry. AirAsias direct competitor in this case would be other budget airlines such as Tiger Airways and Jetstar Asia (Sreenivasan 2010). This can be seen by their target market of customers being similar to their competitors across all of these firms and the strategies adopted are often identical to each other (Sreenivasan 2010). As AirAsia is deemed as the net cost airline in the world as of 2007, it prolong first- pretendr advantage, which stemmed from moving directly into undertaking a low-cost leadership possible action (Mahtani 2012). It was only after it happened that that other budget airlines begin to expire into the market with replicated strategies.1.5 Opportunities and ThreatsOpportunitiesStimulated market Growth By having a plane ticket cost less than a bus ticket, bus passengers will probably want to switch to air travel. As aresult, the demand will increase significantly. This same kind of market stimulation occurred when Ryanair , an Irish low cost airline, was launched.Liberalization of Geographic Markets Full liberalizati on of the Asian market would open doors to AirAsia helping them expand their routes. Malaysias under developed aviation market Even though Malaysias geography may gain air travel, a survey held in 2001 tapeed only 6% of the existence was doing so. Therefore, it shows good opportunity for them to promote air travel in their groundwork country.Introduction of Biofuels Following other airlines maidens, it is an environmentally-friendly alternative to reduce carbon emissions.Market of Potential locomoteers in Indonesia, China and India Indonesia which is located close to Malaysia has a population of 235 million. These are potential travelers specially with the joint venture already in place. India and China combined have 2.5 billion people. These sizeable markets create a potential to add new routes to and within those countries.Further Expansion into charge Tansportation An agreement with a encumbrance bon ton was made in 2007 and as stated by AirAsia, it to section of their a ncillary income, considerably contributing to the companys bottom line. Perhaps AirAsia can reach other deals with other cargo companies.Oakland airport The airport is located on the west slide of the United States and may serve as an entry route into the American market. Passengers would be able to get a connecting flight to many other destinations within the US from there.ThreatsFirstly, a number of budget airlines would enter the market and become a threat as well existing ones who may become more competitive. At the moment there 50 budget airlines in South, East and Southeast Asia. Secondly, AirAsia may lack bilateral agreements with close to counties thus deterring the optimal light flow of passengers. On the other hand, competition in the tourism industry might entice countries to open up their borders. Thirdly, important players from other regions may be willing to join the market posing a threat to AirAsia. Richard Brandson from Virgin Blue, for example, is interested in m aking investments in a low cost airline in Asia. Lastly, an increase in the cost of fuel may limit the companys expansion plans as well as compromising the low cost fares brand position they hold.2.0 INTERNAL ANALYSIS2.1 The Firms Resources tactile and IntangibleTangibleAirAsias fuel efficient airbus 320 helps to maintain its low-fares brand position and at the same time being environmental friendly. financially with the companys IPO, there is capital available for further expansions. In addition, with the companys hardware costs locked in coupled with the approachability through the very fond surge orders that followed, AirAsias cost scrap and capacity are improved.IntangibleAirAsia has gained great favour with the Malaysian government and this enabled for easier business negotiations and relations in the country. Tony Fernandes, who had started AirAsia, is a valuable asset to the company considering his strong trade and operational abilities. In addition, Fernandes hired lead ing low-cost airline rights to restructure the companys business model and has acquired more valuable assets onboard as such.With AirAsias established presence through sponsorship of sports teams such as Manchester United and market leadership in the Malaysian domestic market, they have an advantage over competitors with their brand recognition. The companys strong relationship with cargo forethought company, Leisure Cargo, is another intangible resource. Lastly, the airlines low start-up operating benefit and net profit booking and ticketless travel allow for the lowest possible costs structure and low distribution costs respectively.2.2 Capabilities Identification wasting disease of Information Technology (IT)Making bookings via the internet and having e-transactions for ticketless travels meant that it not only saved customers time but also gave them the toilet facility of being able to book their travel tickets anywhere and anytime (The economist 2012). This also helped in reduction of costs when it comes to issuance of tickets and entertaining bookings via the phone or in person. Making use of IT made the overall process fuss- excuse and easier to handle for the company. Air tickets can also be getd from designated Automated Teller Machines (ATM) as well as post offices, which showed how far Airasia went in making the purchase of tickets convenient for their patrons. Airasias ability to leverage on IT far surpassed its competitors in the field.Transportation SwitchAirAsia also went forth to dominate the domestic market by enticing current and prospective customers to make the switch from pathway to air transport (Lawton & Doh 2008). This can be seen in low fares that were offered from Kuala Lumpur to Penang, this tactic allowed customers to experience the in-flight comfort of the low cost airlines and boosted publicity for AirAsia (Lawton & Doh 2008). Furthermore, their decision to go into cargo transportation was a significant move in their expan sion plans.AirAsias Brand virtuehas been rising stealthily throughout the few years that it has established in the airline industry. Having established its reputation as the Worlds Best low-priced Airline, it has also won many other awards throughout its time in the airline industry (AirAsia 2007). The companys stigmatisation portas are deemed to be successful, as they have been continually pushing for aggressive marketing and sustaining their growth organization-wide. (Silverstein 2010) With the airline earning such a reputable make up, it has gone into establishing alliances with other airports within and outside its geographical region, this further advertises their brand name on a global scale. (Khor et. al 2009)Organizational StructureThe corporate structure of AirAsia is relatively wide and flat as it comprises of few levels of attention so as to reduce cost and increase efficiency (AirAsia 2011). The levels of management are streamlined and together with the use of I T, employees are empowered with decision-making skills with only one or two people to report to in the organization structure. Employees are regarded as equals, and inputs are often encouraged regardless of vertical positions. Furthermore, as incentives are distributed based on performance of the company, employees are propel to work harder cohesively.Product development and InnovationAircrafts were designed by the company to combat wear and tear as well as costs and reduction of cleaning time. Innovative ideas include setting up their own branded credit card as well as offering corporate travel loyalty points (The Economist 2012). Their aircrafts bear the logo and the name of the company, which makes it a form of advertisement and establishes its brand presence in the eyes of the customers (AirAsia 2007). The Fly Thru program is an example of an innovative idea developed by the company. It reduces check in time for multiple flights and gives passenger ease of travel from the book ing stage to the transit stage, reducing discomfort of having to re-check in at their transit destinations (Periabras 2012).2.3 Core Competency AnalysisFrom the core cleverness analysis, it can be deduced that some(prenominal) of the firms capabilities outstand others. Brand Equity stands for having a strong brand image and this is deemed to be one of the most sustainable competitive advantage in the long run. Factors such as use of information technology, organizational structure and product development and origin would also make AirAsia outstand like-minded firms in the airline industry. Whereas transportation switch may be a capability that AirAsia has but it would only sustain the firm on a temporary basis and may be similar to similar capabilities that other companies have. Identifying the more outstanding factors would aid the company in recognizing its sustainable capabilities as the returns would also be higher compared to other factors.2.4 Value Chain AnalysisPrimary act ivitiesSupport activitiesFirm infrastructureBusiness strategies shareholder management partnership management relationship building Inbound logisticsMonitoring competitors In-flight catering flight scheduling Human resource managementPilot and gross revenue force training in-flight training vocation planning operational training OperationsCheck-in, baggage handling bookings cargo management coordination of stations and hubs on-board service Technological developmentComputer substitute systems Flight scheduling system market research baggage canvass system Outbound logisticsFlight connections security procedures baggage systems commission payments procuranceMonitoring suppliers branding (online) de have a go at itry instruction specification Marketing and salesAdvertising and promotion loyalty card group sales online sales travel agent programsServiceBaggage claim service car and hotel reservation customer profiling service customer relationship management2.5 WeaknessesAt the mom ent AirAsia is disadvantaged in that they have a majority of wide body aircrafts that are not as economical for misfortunate haul flights. North American and European low-cost carriers have some 77% narrow-body planes compared to AirAsias 29%. In addition, the company is moderate in their ability to expand services and volumes due to limited handiness of suitable terminals. There needs to be a greater tack on of low-cost airlines terminals at national and international airports. These terminals allow low-cost airlines to harbour costs down through quick turnaround and taxi times and therefore charging customers cheaper fares.2.6 SWOT AnalysisSTRENGTHS Lowest cost airline in the world Low distribution costs Market leader in Malaysia Being innovative High profit margins 35%. Amongst highest in the airline industry Good brand recognition Good management skillsWEAKNESSES besides many wide body aircrafts instead of narrow body for shorter flights abjure out of low-cost carri ers terminals at national and international airportsOPPORTUNITIES Stimulated market growth Liberalization of geographic markets Underdeveloped geographic market in Malaysia Use of biofuels reducing carbon emissions Further expansion into cargo transportation large-mouthed market of potential travelers in Indonesia, China and India Oakland airport as a entrance route to the US market THREATS Competing budget airlines entering the market Lack of bilateral agreement within countries enabling a needy flow of passengers Important players from other markets willing to join the market add in fuel cost3.0 Strategies and Recommendations3.1 Current StrategiesSingle Class, Low Fares and No FrillsAirasia adopts a single class and no frills service for its airline services. (Airasia 2012) This meant that irrelevant global airlines, Airasia does not provide meals, entertainment or amenities for its customers. Their furbish up purpose is charging the customers for the most basic airfreigh t experience, with the goal of the destination in mind. On the other hand, they do not compromise on customer service as a result of giving reduced cost services. The products offered onboard are also standardized with characteristics that are deemed acceptable to the customers. Establishing ticket prices that are deemed the lowest competitively,Reduced Fixed CostsAirAsias strategy is in line with its mission to be the worlds lowest cost airline. (AirAsia 2012) The low cost structure was attributed to the companys good planning of resources such as fuel wasting disease and maintenance costs so as to give customers the best yet lowest prices they can offer. (AirAsia 2008)Efficient diffusion SystemSeats are deemed as single class which means that there is only one class groundworking and it is not assigned, passengers would seat themselves on a first come first serve basis. This is done so in fairness and to save the hassle of allocating seats on the companys behalf. (AirAsia 2012) E-ticketing also aids in saving the cost of issuing hardcopy tickets, this makes it convenient for customers and saves costs for AirAsia. (AirAsia 2008)Use of subaltern AirportsAirAsia typically operates from standby airports which mean that they would benefit from lower parking, landing and ground handling fees. petty(a) airports are also less busy than main airports with most of them having shorter runways, this in turn reduces fuel consumption during take-off, landing or taxi. Fuel consumption is one of the main expenses that AirAsia has hence this is a beneficial cost saving. (AirAsia 2012) Secondary airports are often closer to urban districts which makes it more appealing to some travellers and hence increases the number of potential customers for the airline. The use of secondary airports help in boosting sales and keeping operating costs low. (AirAsia 2012)Point to Point webAirAsia adopts a point-to-point network model whereby the flights they embark on are short-haul o nes within four-hour radius or less (AirAsia 2008) Their sister airline, AirAsia X would focus more on the longer flight routes, hence the point-to-point network is based on the goal of flying a customer from the origin to the destination.Customer consignment computer program high-riskAirAsia has implemented a Customer Loyalty Programme named better-looking Loyalty Programme which enables for the accumulation of BIG Points and allows for the members to redeem free flights. This programme is also a collaborative approach with other BIG Partners where if customers spend their money at, they are also able to accumulate BIG points.3.2 Future StrategiesUse of E-CommerceAirAsias current electronic online booking system expanded to cater to different payment methods like billing and result plan (BSP) and computer reservation system (CRS) channels after they cognise that sticking to the direct-sales only channel was a self-destructive strategy. This has created an ease of booking for customers. However, to further enhance the organizations IT capabilities, AirAsia can hire an IT expert team to oversee the electronic commerce systems, improve web design, and include more payment methods as deemed fit. As AirAsia operates in a fast-moving services industry, the IT expert team will then meet up regularly to review the electronic commerce systems, gather the problems that surface, and provide consolidated solutions and recommendations to each problem.In addition, AirAsia has adapted Revenue Management Systems, Inc. (RMS) as their revenue management partner and selected airRM as its revenue management system (Revenue Management Systems, Inc. 2012). This has led to the organizations ability to analyze historical data and forecast demand in order to create efficiency and hence cost savings (AirAsia 2007). In addition to this already set up system, there could be a collaboration of the IT expert team with the financial and marketing team to determine the most effectiv e way to management stock and revenue besides just leaving it to the IT expert team.Undoubtedly, there will be risks and barriers that will be faced when implementing these suggested strategies. One of the potential risks of E-Commerce is the fact that it increases the possibility of making wrong decisions and the impact is usually Brobdingnagian and speedy (International Symposium on Government in E-Commerce Development 2001). Another barrier could be the culture barrier between the different functional teams (i.e. marketing, financial, IT team) that could possibly cause the collaboration of the teams to be unsuccessful. As a result, this could lead to wastage of resources.In-Flight Advertising InitiativesIt is essential for AirAsia to continue building on its brand image and brand equity as it is deemed to be a capability that would not only land in the revenue but would also establish AirAsia as a niche budget airline across households. This can only be done through further advertising and marketing initiatives. In-flight marketing is an holy person way for AirAsia to reach out to its first-timer flyers and possible returners to continue flying with AirAsia (Kirby 2010). Discounted tickets, mail boat holidays and credit points brought forward from previous travels with AirAsia would entice customers into flying more with AirAsia.This can be done within the aircraft where customers would not be able to leave the premises (Leslie n.d). Such marketing initiatives can be incorporated into mini leaflets or flyers so that customers can explore their future holiday options on board the flight to their current holiday destination. Furthermore, flyers onboard have a clear mindset which is due to the fact that they are excited about the new destination that they would be heading to therefore advertising to such a target audience would bring forth more responsive results (Leslie n.d).Implementing this initiative would require documents to be printed in precise and bold as well as eye-catching manner that would seize the attention of the flyers on board. It has to be attractive so that customers would enquire about it and not just take a quick glance before chucking it aside. Further reiteration can be done by in-flight staff, which could bring personal marketing into this initiative by offering their knowledge upon request. It is an inexpensive procedure for certain in-flight advertising products and it would require more initiation from interested customers. This method is ideal compared to the more expensive ideas that would require mass media for advertising purposes. In-flight advertising can take the form of magazines, radio, video or catalogs.The downside of running this strategy an in-flight marketing initiative would be the reduced target audience, which stems from having an outreach that is only aircraft wide. Limited availability of flyers on flights that are emptier compared to other flights would make the advertising initiati ves redundant. Furthermore, it could incur the irritation of customers who may wish to rest and not have to deal with anything else on the flight. In-flight initiatives such as radio and videos would incur higher costs as compared to musical composition advertising on catalogs and magazines. Furthermore, if the advertising placement is too intrusive, consumers may in return develop negative attitudes towards AirAsias marketing regimes.Use of BiofuelsBrazilian airlines as well as American, Canadian, German, French, Australian within many others around the world have started exploitation or have plans on using biofuels (Lane 2012). In Asia, specifically, Thailand and Indonesia announced plans of moving towards aviation biofuels (Lane 2012). AirAsiacould join the group sustainable Aviation Fuel Users Group (SAFUG) formed in 2008. It may be an alternative when oil prices will likely continue to rise and it is environmentally friendly, therefore they will be able to increase the number of passengers without increasing carbon emissions (Wassener 2011).Since many airlines have started or plan on electric switch to this kind of fuel, perhaps supply may not be decorous and prices go up with high demand (Wassener 2011). Another risk would be the fact that if you are using edible crops to produce biofuel, food prices may go up. Moreover, in an attempt to increase production getting more land, natural habitats might be destroyed by deforestation (Gao, Skutsch, Masera & Pacheco 2011). Finally, a proportion of the market may be skeptical of flying on aircrafts utilizing aviation biofuels.Aggressive Promotional CampaignsAirAsia can continue creating aggressive promotional campaigns as Malaysia with love. It will make them standout in the competitive airline market. Due to the fact that social media is so widely used nowadays, social media campaigns and efforts are an excellent idea to increase brand awareness and recognition. Statistics show that 58% of firms who have us ed social media for over 3 years have reported an increase in sales over that period and 85% of businesses say they have had an increase in market film (Forbes 2012). Delta Airlines, for example, has introduced bookings through Facebook perhaps AirAsia can do the same or simple create an innovative campaign (The Independent 2010).Risks to the implementation of social media promotional campaigns is the fact that rival low cost-carriers may decide to copy this strategy allowing them to gain market exposure as well and consequently steal market share if their efforts prove to be more successful. In addition, customers who may have had bad experiences with the company will have the story readily spread in social media networks, making it more harder for firms to contain negative publicity.ReferencesAirAsia 2008, AirAsia wins Airline Strategy Award Finance Category Real 5 Star carrier gets Real 5 Star honour getable from . 10 October 2012AirAsia 2009, Medias Brand of the Year Goes to AirAsia Awarded for constant innovations and bold ideas in branding campaigns. available from .10 October 2012Airasia 2011, Investor relations. operational from . 10 October 2012AirAsia 2012, What is low cost? acquirable from . 10 October 2012AirAsia in Travel and Tourism (Malaysia) 2012, Euromonitor International The Independent 2010, Airline ticket booking via Facebook goes live, usable from 10 October 2012Daily Yomiuri Online 2012, AirAsia expansion of Japan flights eyed. Available from . 10 October 2012Dellit, A 2002, How the free market ruined the airline industry. 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