SERVICE SIMULATION - AirAsia-Latest
SERVICE SIMULATION - AirAsia-Latest
SERVICE SIMULATION - AirAsia-Latest
SIMULATION (CLO 2)
LECTURER NAME:
Introduction 1-2
i. Pre-purchase stage
a) Need awarenes 6
b) Information search 7
c) Evaluation of alternative 8
d) Purchase decision 9
i. People processing 10
i. High-contacts services 13
c) Service as a system
Summary 25
Appendix 26-28
Reference 29
Introduction
AirAsia is a Malaysian low-cost airline that operates extensive networks both domestically
and internationally. It pioneered low cost airfares in Asia and is now currently the largest low
fare, no-frills airline in Malaysia by fleet size and destinations. AirAsia Group operates scheduled
domestic and international flights to more than 165 destinations spanning 25 countries. Its main
hub is KLIA2, the low-cost carrier terminal at Kuala Lumpur International Airport (KLIA) in Sepang,
Selangor, Malaysia. Its head office is the Red Quarters (RedQ) which located at Kuala Lumpur
Vision
To be the largest low cost airline in Asia and serving the 3 billion people who are currently
underserved with poor connectivity and high fares (AirAsia Mission, Vision & Values, n.d.).
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Mission
1. To be the best company to work for whereby employees are treated as part of a big
family.
3. To attain the lowest cost so that everyone can fly with AirAsia.
4. Maintain the highest quality product, embracing technology to reduce cost and enhance
5. service levels.
1. Students are required to form a group, explain and develop your report based on the
following content:
the largest airline company based on the concept of the Low-Cost Carrier. The company
was established in 1993, and the official operation of the company was started on 18
November 1996. AirAsia offers transportation services to its passengers along with
several other services, which includes courier services and cargo services. AirAsia was
bought over by Tony Fernandes, the current chief executive officer of AirAsia from DRB-
Hicom on 2nd December, 2001 (Soon, 2017). AirAsia managed to become one of the most
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leadership and innovative business approach. AirAsia was named as the best low-cost
airline company in the world for 9 consecutive years at the Skytrax World Airline Awards.
aviation. The route network of AirAsia is one of the largest in the world, which covers
more than 20 countries all around the world. In 2002, AirAsia became the first airline
company in the region that allowed passengers with the facility to pay for their bookings
by using credit card. Furthermore, AirAsia adopted a fare structure, according to which,
the people who book tickets earlier will get a cheaper fare (AirAsia, 2018). The first main
hub of AirAsia was launched in Kuala Lumpur and Malaysia, and it was known as Low-Cost
Carrier Terminal (LCCT). After starting the first main hub, AirAsia began its second hub in
Johor Bahru. AirAsia has expanded its routes to different countries all around the world
including Indonesia, China, Singapore and the Philippines. AirAsia launched AirAsia
offers scheduled flights and chartered flights for passengers, and also provides air cargo
services (AirAsia, 2018). AirAsia Berhad also facilitates in operating businesses, related
AirAsia is one of the largest low fare airline companies in Asia, which has been
expanding its routes to different countries since 2001. It was started in 1993, and the
operations began in 1996. It has a fleet of over 70 aircrafts, which fly to over 120
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destinations and operates over 400 flights daily from its hubs situated in Thailand,
Malaysia and Indonesia (AirAsia, 2018). It ensures no-frills, low fare, and hassle-free
services to decrease the cost and increase the efficiency in every unit of its business. The
airline claims ‘No Admin Fee’, but all the services provided by AirAsia are not free, it has
some fees for some services. The company makes use of Yield Management System
(YMS), Customer Reservation System (CSR) and Enterprise Resource Planning (ERP)
system, which makes it more effective in providing its services, reduces overall cost, and
AirAsia is a Malaysian low cost and no-frills airline company, which has a unique
slogan stated as “Now Everyone Can Fly.” AirAsia adopted the Computer Reservation
System (CRS), which enabled it to introduce the first-ever ticket-less travel facility and
also provides features such as advanced boarding passes and online ticket booking.
AirAsia offers the cheapest flights to over 120 destinations across Asia and Australia
(AirAsia, 2018). The company makes use of robust enterprise resource planning system,
which allows it to successfully maintain process integrity, speeds up reporting, and data
retrieval process. AirAsia has the vision to be one of the best and largest airlines that
operates at a low cost. Furthermore, the company wants to serve the 3 billion people who
are currently out of connectivity and cannot afford high fares. It works towards providing
the highest quality products by making technological advancement to reduce cost and
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There are several companies associated with AirAsia including AirAsia X, Tun
Hotel, Tune Monkey, AirAsia Berhad, Thai AirAsia Co. Ltd., AirAsia Japan Co., Ltd., PT
Indonesia AirAsia (India) Limited. AirAsia’s mission is to be the best company, which
ensures good relations between its management and employees, to make everyone fly
with AirAsia by attaining the lowest cost, employ new technology to maintain highest
quality products and enhance service levels. It follows vital certain strategies, which
include safety first, high aircraft utilization, streaming operations, lean distribution system
and point-to-point network to amplify the working of its low-cost model. The company
has partnered with the world’s most famous maintenance providers to ensure its
passengers’ safety. It allows its customers to choose the services they want without
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b. Demonstrate the three-stage model of service consumption. (20 marks)
i. Pre-purchase stage
a) Need awareness
In this stage of need awareness, the new prospective buyer becomes aware of the
wants or needs for the product or service. That is, awareness of the need will lead to the
Customers are more likely to enter search terms in Google to understand more about
what they’re looking for. For example, if a user faces problems such as high ticket prices
and wants to book a flight ticket at a cheap price, they will search to get the information
they want. Thus, consumers’ problems about ticket prices can be solved by choosing Air
Asia which is the first low-cost airline in Asia available in Malaysia. This is because the
main purpose of AirAsia is to offer low fares to enable everyone to afford to board a plane
and not only the elite who can feel it. AirAsia offers cheaper ticket prices compared to
payment of flight tickets, where there are scams when booking flight tickets online.
Consumer problems can be solved by choosing this AirAsia airline as AirAsia offers ticket
proven payment solution by the millions of customers flown by AirAsia. AirAsia Megastore
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b) Information search
In Information search alert, where the user will make a study of a product or
service that can help solve the problem or need of the buyer. This is because excellent
information research will lead buyers to several alternative products and services. For
example, users can get more information about AirAsia through newspapers that may
have AirAsia advertising. In addition, users will get the information they want through
AirAsia's official website. By using AirAsia's official website, users can book flight tickets
as well as compare promotional prices on certain days. There are some tips when using
AirAsia's official website, the best time to booking a tickets is when others are asleep at 3
am, this is because on that time customer will get a promo prices and discounts. Avoid
booking flight tickets at 7a.m or 12 noon, where the AirAsia portal is more crowded as
many people use it and cause ticket prices to go up. As well as choosing flight schedules
previous user feedback where most users give opinions and some tips in using AirAsia's
airline services. For example, users can also make complaints and reviews on AirAsia's
official Facebook. Indirectly, users can find out the required information as well as
previous users' opinions about the services offered whether it is the best or otherwise.
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C) Evaluation of alternative
In the evaluation of alternatives stage, the consumer will evaluate all possible
alternatives or services available through a contrasting approach to the price, quality and
services offered in a way that can solve the needs or problems of the consumer. There
are many options for consumers in the airline market such as Malaysian Airlines who can
travel almost to all parts of the earth where consumers wishing to travel to the United
States will not benefit from services through AirAsia as AirAsia does not offer routes to
those countries. This will make consumers look for alternative solutions such as Malaysian
airlines.
problems that do not follow the set schedule. This situation has caused dissatisfaction
among passengers who use AirAsia's flight services. Due to the problem, AirAsia will lose
many customers who value punctuality. So AirAsia has taken remedial measures that can
reduce the problem of flight delays so that the quality of service can be improved from
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d) Purchase decision
While in the purchase decision stage, consumers decide to buy services from a
particular company after making an in-depth evaluation and comparison. For example,
consumers can buy AirAsia seat tickets by several methods such as through online
purchases where consumers can actually buy the tickets based on their wants and needs.
Users can also select tickets at the nearest AirAsia ticket center where users can actually
book tickets and also purchase them with the information and support provided by the
salesperson.
Apart from that, consumers will choose AirAsia services because AirAsia Berhad's
market focuses on the target group of low-income consumers. That is, providing low-cost
long-haul airline services around the world. So indirectly, consumers will choose AirAsia
as the main airline service compared to Malindo Air or Malaysia Airlines, where other
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ii. Service encounter stage
i. People processing
The processing of people involves tangible actions to the body of people. Examples
work. Customers need to be physically present throughout the delivery of the service to
receive the desired benefits. Services that involve real action. AirAsia is a service that
provides airline services, but it is impossible for customers to touch the flight because it
is a trip to a specific destination. So, customers must be physically present to receive flight
services such as they buy flight tickets or may be able to touch aircraft, but in the context
of services, customers do not have the physical tools or equipment used to deliver
services but are only entitled to services such as flight services to people’s bodies .
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ii. Possession processing
airfreight, lawn mowing, and cleaning services. In these instances, the object requiring
processing must be present, but the customer need not be. Tangible actions to goods and
other physical possessions belonging to customers. AirAsia has a service called FLY-THRU
which is an easy and convenient transfer process from one flight to another without the
baggage being checked in directly to the final destination. So passengers do not have to
pick up luggage at the transit hub and check in again instead passengers can go directly
to the departure hall. Once on board the flight, AirAsia also provides luggage storage for
passengers on board.
Consist of intangible actions directed at customer’s mind and thus require their
present mentally but can be located either in a specific service facility or in a remote location
peoples minds. AirAsia advertises their flight services through various platforms such as
television, social media, radio and billboards found on highways and others. When AirAsia
advertises their services such as notifying renewals or promotions, people who hear or see
attendants and flight attendants serve food to passengers, clean toilets for passenger use,
information on departure and arrival times are examples of mental stimulus processing as it
involves tangible actions that require the mental thinking. So this will shape the behavior and
the person who hears or sees it to receive the services provided by AirAsia.
consulting. In this category, little direct involvement with the customer may be needed
once the request for service has been initiated. AirAsia uses computers in its core
assists AirAsia in marketing and distribution. Information system links with departments
and external parties may be required for efficiency and cost-effectiveness. The booking
system, depending on the software can be used to generate forecasts about expected
departures, returns and bookings. For example, customers can book flight tickets online
without having to queue at the airport instead only showing the ticket booking that has
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b) The levels (15marks)
I. High-contact services
with salesforce trailhead, the same online platform it uses to start training all its
representatives, since it's easily accessible from anywhere, including home. Flight crews
quickly learned how to use salesforce service cloud, the central hub for managing all
customer communications, from wherever they were. After the Trailhead training, they
immersed themselves in AirAsia's own interactive learning program. Then, after two
weeks of intensive training, the reskilled employees were put to the test. AirAsia had
enough staff members to resolve customers' inquiries 24 hours a day. It worked out very
well, in just two weeks flight crews, engineers, and flight attendants mastered the
technical and communication skills to take care of customers' needs. Finally, the service
process is people processing which occurs when customers seek services where the
process consists of tangible actions aimed at their physical person and therefore requires
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ii. Medium-contact services
trend. Customers were increasingly contacting AirAsia through digital channels like
fast-paced. People want to book a flight while they're on a train or during a meeting or a
lunch break. In January 2019, the company embarked on an ambitious plan to end phone
service and consolidate all of its service centers and digital channels onto a single platform
in the Salesforce Service Cloud. The airline also created its own chatbot named AirAsia
Virtual Allstar (AVA), which is integrated with the Salesforce platform and handles 80% of
speakers, so it can route customers to the appropriate live agent. Finally, service process
service organization to provide tangible actions not to themselves but rather to some
physical possession. For example, customer need not themselves be involved throughout
service delivery
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Iii. Low-contact services
The low-contact services of AirAsia is Super App. The Self Check-in feature on the
AirAsia Super App now incorporates data from healthcare providers to help our guests
fulfill the travel requirements related to Covid-19 and upload test results certificate or
vaccination status from the comfort of their home. The AI-based digital system is also able
Malaysia) during self check-in. Guests may also use the website to check in. Besides,
Contactless kiosks is all AirAsia check-in kiosks at the airports have been upgraded with a
contactless system that allows guests to have their baggage tags printed out without
having to touch the kiosk screen. Lastly, the service process of low-contact services is
their intangible assets. Customers deal with service provider almost entirely at the arm’s
length.
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C) The service as a system (15 marks)
AirAsia has provided an information platform on AirAsia services for its customers
to facilitate anyone who wants to know information about it. Not only that, apart from
cargo and domestic flight services AirAsia has also provided complete hospitality for its
customers. The branding of AirAsia was well established in Asia Pacific. One of Asia
AirAsia uses the best operating service system to facilitate its customers and
employees. A well -organized operating system will facilitate all customers including staff.
Therefore, AirAsia has strategized and planned a more efficient and systematic operating
system. Customers will be satisfied with the operating system used by AirAsia as well as
faithfully continue to use the services with AirAsia. Not only that, customers will also
experience the best and most satisfying experience with AirAsia flights. They will also
provide good feedback and reviews on AirAsia. Thus, indirectly, AirAsia's rating will be
AirAsia creates values through the following vision is to be the largest low cost
airline in Asia and serving the 3 billion people who are currently underserved with poor
connectivity and high fares. Beside that, the AirAsia also creates the mission is to be the
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best company to work for whereby employees are treated as part of a big family, create
a globally recognized ASEAN brand, to attain the lowest cost so that everyone can fly with
AirAsia and the last is maintain the highest quality product, embracing technology to
Low Fare and No Frills are also is AirAsia’s key strategies, Low Fare and No Frills is
mean providing guests with the choice of customizing services without compromising on
quality and services. Another key strategies is Streamline Operation, this key strategies is
make sure that processes are as simple as possible. Beside that, Lean Distribution System
is offering a wide and innovative range of distribution channels to make booking and
traveling easier. The last of the AirAsia’s key strategies is point to point network is to
applying the point-to-point network keeps operation simple and lower costs.
Internet technology for its operational and strategic management, and provides an online
in its value chain provides powerful strategic and tactical tools for AirAsia, which if
properly applied and used, could bring great advantages in promoting and strengthening
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Moreover, AirAsia has currently adopted information technologies strategically to
integrate the operations and coordinate all the business and management functions. The
followings are few system implementations that AirAsia has done in its marketing and
sales activities as well as operation activity in the value chain. The lowest airlines like Air
Asia attending low cost require high efficiency in every part of the business and
maintaining simplicity. Therefore every system process must incorporate the best
industry practices.
secondary airports is cheaper than from the bigger major airports and they are also a lot
less congested and “turnaround times” for aircraft are a lot shorter. Point to point
network. LCC shuns the hub-and-spoke system and embraces the simple point-to-point
network. Almost all AirAsia flights are short-haul (3 hour flight or less). No arrangements
have been made with other airline companies on connecting flights, on possibilities of
flight transfers, nor on having the luggage labeled and assed through from one flight to
another. Distribution costs are something that FSC most often ignore. Very often, FSC
relies on travel agents and from their posh sales office. Furthermore, FSC always blows
the budget by complicating their distribution channels by integrating their systems with
multiple Global Distribution Systems. LCC will keep their distribution channel as simple as
possible and will cover the whole spectrum of the clientele profile. For example, AirAsia
can cater to the most sophisticated European traveler via internet and credit card sales.
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ii. Service delivery system
AirAsia has a good service delivery system available to customers such as food
delivery service that is 'AirAsia Food'. With just your smartphone, you can now order a
wide variety of food that can be delivered right to your doorstep, fast and fresh! As
Malaysia continues to face challenges from the epidemic, many have turned to food
delivery services as a way to get their daily food. AirAsia Food is one of the front-line
platforms that offers customers a wide selection of food from the various cuisines
available in the country. When customers order food online in KL on the AirAsia Super
App, they can choose from a selection of Chinese, Italian, Indonesian, Thai, French and
In addition, the grocery delivery service at AirAsia Super App was given a new lease
of life and is now known as AirAsia grocer (formerly AirAsia fresh). The new name is in
line with its mission to supply fresh produce and provide a holistic grocery shopping
experience. AirAsia aims to grow into a one -stop platform for daily necessities, especially
online. We have grown 45% of registered merchants since the launch of this service as
they can see the value of our platform where they can leverage AirAsia’s periodic
marketing efforts and campaigns, thereby driving more online traffic and increasing sales.
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Next, the latest service is the delivery of goods quickly, easily and at an affordable
price to consumers. The AirAsia Xpress service is powered by Teleport, the logistics arm
of AirAsia. Millions of AirAsia Super App users can now choose between instant delivery
service (under an hour) and same day delivery (within 4-6 hours) using motorcycles and
cars. As a comprehensive logistics service provider - AirAsia’s goal is not only to connect
city to city but also city to residential. Teleport’s mission is to provide services that are
not only affordable but fast, to meet market demand. As delivery speed is an important
aspect of e-commerce strategy, the addition of this new AirAsia Xpress service powered
by Teleport will be a catalyst in the industry and strengthen AirAsia's commitment to offer
Airlines industry has help the industry in economic growth hence changing the life
of people live and experience the world today Airlines operations interact among various
decision and actions This involved in relating the goals of the organization with the
AirAsia is one of the companies with a good strategic management and has
becoming a low cost carrier airline which received several awards and recognition in the
best low cost airlines in the world in year 2009. As of December 31, 2011, AirAsia Berhad
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has engaged in providing transportation services which operates at a fleet of 90 aircraft.
AirAsia operation flies over domestic and international destination with 108 routes and
operates over 400 different daily flights which are located from different hubs. Those
hubs are located in Malaysia, Thailand and Indonesia. AirAsia concept applies in no-frills,
hassle-free, low fare business concept and their corporate values are “Now Everyone Can
Fly”.
tool making it one of the kind that allows a AirAsia to sell product, advertise, purchase
supplies, bypass and track inventory, cutting down the paperwork and sharing
information over the e-portal. This system has improved productivity and higher
• Social
Has created a huge people awareness and exposure on traveling within a limited
budget in Asia countries. This motivation was created with the AirAsia slogan ” Now
everyone can fly” AirAsia has created different living environment and culture by
promoting different countries. AirAsia commit to “Safety First” has outcome the fear of
customer flying abroad due to the Outbreak of Several Acute Respiratory Syndrome
(SARS).
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• Technology
AirAsia has the state of the art in IT technology which offers E-commerce. In Aug
2003, AirAsia become the first to offer SMS booking where the online service allows
consumer to book ticket online, offer seat choosing and luggage check in. The website
also offers viewing in six different languages. GO holiday was also launch to introduce
• Economic
Due to the stiff competition from MAS, AirAsia tend to offer lower pricing in tickets
and a few flight routes to compete with the current economic. The rising of Asia middle
class population growth has encourage customer to enjoy flying with a cheaper rate of
tickets. Malaysia Tourism and hospitality has boost AirAsia economic by advertising the
brand name.
• Political
To fly outside Malaysia is not easy. Government political is one of the problem
that low cost airlines faces. Landing charge and parking charges are very expensive and
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Iii. Post-encounter stage (10 marks)
The service industry is a very delicate area to deal with, especially when it comes
to what the customer needs and whether those needs have been met. Needs and wants
of service customers where the service provider and the customer finds a common
ground that the services have been rendered according to the way the service provider
wanted at an optimal level, and the customer consuming the services and conceding to
the needs being met. The customer responsiveness of a service industry from the
perspective of the customer. When customers seek service providers and the services are
provider and the customer. Hence the service provider gains a competitive advantage
when the needs and wants for their customers are known, met and satisfied. The
relationship assists managers to understand how their customers assess their service
experiences. Essentially, three basic issues are addressed what are customers looking for
in a service set up, how do employees proffer services in the eyes of the customer
enhance customer satisfaction and expectation thus gain competitive advantage. These
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of service performance and customer satisfaction and expectation. Therefore, AirAsia
I’ve experienced a good service from AirAsia. I didn’t know how to purchased a ticket for
the first time. The staff guide me nicely even a lot of people are waiting.
Flight cancelled many times, they now didn't add customer service call. Even they have
AVA but its harder to some people to reach the staff, can't refund money unless you agree
Absolutely appalling customer service. My flight was cancelled and I was told I would get
a refund. Literally years later my case was closed with no explanation. Finally got hold a
human through live chat to be told my refund has been rejected. Again no explanation.
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Summary
Consumers hold the rights to take pleasure from perfect and quality services for
the price that they pay to companies. The services that are being made available from
AirAsia is solely for the satisfaction of the consumers and whenever there are some
dissatisfaction in the service, immediately AirAsia will try to make changes to guarantee
the consumers get what they need. The buying process of the consumers have a larger
influences on marketing such as product price place and promotion. They way the
consumers react to AirAsia company services make them to have the ability to make
changes and advertising in the manner that would ensure the consumers would like to
get information.
for more than the particular consumers pay. By understanding the consumer buying
process it will be in a position to reach AirAsia objective in future. Besides that AirAsia can
accomplish their goal and target by analyzing the buyer buying process that involves the
six phases and the impact which consist of personal, psychological and cultural. Each
Furthermore, by studying the trend and development AirAsia can be a benchmark among
the list of airlines industry. In addition Air Asia will have greater improvement in terms
with their weaknesses and concentrate on consumers' needs and requirements by fulfill
customer satisfactions.
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Appendix
26
Air Asia Online Booking
27
Air Asia Customer Service
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Reference
• https://web2-bschool.nus.edu.sg/wp
• https://extrudesign.com/a-case-study-on-airasia-impact-of-service-strategy-towards-
consumer-satisfaction-in-the-low-cost-carrier-industry-in-kuala-lumpur-malaysia/
• https://studentlifesaviour.com/samples/marketing-environment-analysis-of-air-asia
• https://www.ukessays.com/essays/information-technology/importance-of-information-
systems-on-air-asia-information-technology-essay.php
• https://newsroom.airasia.com/news/airasia-stringent-safety-measures-on-ground-and-
in-flight
• https://www.businessinsider.com/sc/how-airasia-responded-to-customer-service-
requests-during-a-crisis-2020-12
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