INTRODUCTION

AirAsia was established in 1993 and started procedures on 18 November 1996. It was
primarily founded by a government-belongs to conglomerate, DRB-Hicom. On 2 December
2001 the very powerfully indebted airline was came by previous time Warner boss Tony
Fernandes’s business melody air Sdn Bhd for the token supplement of one ringgit with 40
million Malaysian Ringgit worth of debts. Fernandes’s turned the business round making
earnings in 2002 and commencing new path from its hub in Kuala Lumpur by cutting
Malaysian Airlines with promotional fares as reduced as 1 RM. AirAsia is one of the award
winning and largest budget airlines in the Asia increasing rapidly since in 2001, they have
fleet of 72 aircrafts all airbus A320-200. AirAsia is recognized by its lowest fare, quality
services and their tagline “Now Everyone Can Fly”. AirAsia serves 51 national and
international destinations with 108 routes and operates 400 flights daily from hubs in
Malaysia, Thailand and Indonesia. Until now AirAsia has flown 51 million customers with
their believes in the no frills without hassle low fare business concepts and feels that keeping
cost. The vision and mission for AirAsia is:
Vision: To be the biggest reduced cost airline in Asia and assisting the 3 billion persons who
are actually underserved with poor connectivity and high fares.
Mission: To be the best business to work for whereby workers are treated as part of a large-
scale family, conceive a globally identified ASEAN emblem,
To attain the smallest cost in order that every individual can go by plane with AirAsia,
Maintain the largest value merchandise, adopting expertise to decrease cost and enhance
service levels.

CRM of AirAsia
In order to gain more market share and sustain its competitive advantages to be very low-cost
carrier in these days high demanding environment, Air Asia tries to develop new ways of
make the customers, suppliers loyal. Focus on supplier and alliances and the customer will
drive positive values to Air Asia can achieve. Customer relationship management application
will be one of the areas of strategic implementation that company can focus to achieve high
values to both Shareholders and Customers.
Customer Relationship Management (CRM)
In order to long term, customer relationship should be fostered for company to maintain
competitive advantage and profitability. When planning and implementing CRM application,
management is recommended the following approaches:
Customer segmentation-mileage- based segmentation is inadequate, rather should focused on
value-based and needs-based approaches can be guide investment decision and drive greater
insight into needs of high-value customer.
CRM initiative development-to different from the other competitors’ approach e.g., installing
kiosks for the fast check in. Air Asia should implement CRM program in favour of investing
in initiatives with a high return, which respond to the needs and desires of their own
customers.
Organizational design and management-Air Asia needs to train the employees’ empowerment
them with a complete view of the customer and clearly fluent the employees’ role in the
CRM strategy.
Advanced and classy CRM information system should include the key functions that are;
Travelling Planning:
Site personalization for on line customer to create travel plan, bundled services information,
flights notification systems, and gate information displays etc.
Reservation and Ticketing:
ITA search engines, roving agent check-in, kiosks, internet check-in, and phone check in
systems etc.
Frequently Flyer Program:
Membership based or point based rewarding scheme offering to the applicable customer.
Campaign Management:
Email campaigns and promotion system are used for marketing.
Customer Care:
Web based self-services such as e-ticket booking and reservation, online baggage tracing.
RFID baggage tags, internet lounge, and in air internet services.
Business intelligence:
Dynamic update and multidimensional reports that helps management to do analytics in
various areas, such as customer profile.
To justify the investment and implementation scope of the CRM program, Air Asia is
recommended to look into the ROI and financial impact to the shareholder value driven by
each of the CRM initiatives.
By taking the steps to implement a truly consumer-centric approach to relationship
management, Air Asia will be in better position to attain, develop, and hold on to high value
of the clients
Company wants to be the lowest short-haul airline in every market it goes, that why they are
using some strategies such as Lean cost structure, different ways of promotion, keeping
safety, satisfying guests and developing human resource very strongly these days. Air Asia
always tries to keep their operations as simple as they can.

E-CRM of Air Asia

This report written on the topic of “Critical Evaluation of AirAsia’s have four sections. First
section deals with analysis of AirAsia’s website (airasia.com) with respect to the implications
of certain information systems. Second section will contain information regarding the
company’s online value proposition and revenue model. Company’s electronic Customer
Relationship Management (e-CRM) will be analysed in the third section. In the fourth
section, some actions will be recommended to the company for strengthening the digital
business strategy adopted by the company.

A) Production Innovation

1. ONLINE VALUE PROPOSITION

AirAsia’s view point in regard to selling tickets online is to allow an opportunity to all people
to experience air travel at lowest possible fare. In this way, people having less money could
also undergo journey with them.
By reviewing company’s online value proposition, it has been determined that for attaining
the company’s value proposition, AirAsia’s has adopted four different strategies that have
been illustrated in the table below:
2. TARGET CUSTOMERS
It has been seemed that AirAsia’s target customers are passengers who are more concerned
about price. As a matter of this fact, AirAsia has adopted low-cost leadership strategy.
3. CAPABILITIES
Capabilities demonstrate repetition of company’s action for the purpose offering products or
services to their customers. In this regard, it has been seemed that AirAsia is successful in
utilizing its assets in an effective that is why the company has lowest turnaround time in Asia
Pacific region.

B) Infrastructure Management

1. RESOURCES
It is generally understood that a company always need resources for the purpose of creating
value. For this purpose, AirAsia owned certain resources that have been outlined below:
- Staff (Tangible)
- Airasia.com (Intangible)
- Airbus A320 (Tangible)
2. PARTNER NETWORK
This element examined that which component of company’s activity configuration is
associated with its partners. Evaluation of this element would reduce company’s transaction
cost by great extent. In accordance with partner network, it has been inclined that AirAsia has
manage to create long term-oriented partnership with its partners.
3. ACTIVITY CONFIGURATION
Main theme behind any sort of business is to create value in a context where customers are
willing to pay for it. With respect to this element, certain business processes (network
promotion, infrastructure operator, contract management and service provisioning) of
AirAsia are creating value for the company.

C) Financials

1. ONLINE REVENUE MODEL

Companys has pursued different models in regard to generate revenue through its website.
- Direct Sales: It has been examined that 85% of company’s tickets are sold through its
website (AirAsia, 2015). It meant that airasia.com is an integral part of company’s
infrastructure.
- Affiliate Model: AirAsia’s management has also made alliances with various partners in the
category of hotel booking, car rental services, fast food and fragrance. Because of this model,
company has managed to generate 17% of its revenue through selling ancillary products and
services online (RAGHUVANSHI, 2013).

D) Electronic Customer Relationship Management (e-CRM)

It has been discovered that e-CRM incorporates three factors: Information Strategy, Feel &
Serve and Trust & Loyalty. e-CRM is significant for AirAsia as 85% of its tickets are sold
through its website. Creating and maintaining effective e-CRM strategy would allow the
company’s management to acquire and retain customers for long term period (Sam, et al.,
2009).
1. Information Strategy
This element is more concerned about the collection of customers buying behaviour
information which would results in strengthening the company’s relationships with its
customers. It has been analysed that AirAsia management has linked their website with Poly
Vista Discovery Intelligence for the purpose of data mining and data warehousing. It has
been revealed that this system permits company to closely observe its customers’ buying
behaviours. Moreover, this system has made possible for the company’s tactical level
management to learn about their customers’ interaction. Due to this system, AirAsia has
managed to offsets many problematic features presented on its website. In this manner, a
company used to analyse its customers’ purchase behaviour with the intention of optimising
its adopted marketing mix elements.
2. Distribution Channel
It has been understood that AirAsia has been in customer centric e-business (CCEB) which
meant that selling tickets online is a prominent distribution channel for the company. In order
to boost the growth and scope of its business, company has allocated huge budget for
research & development in web and wireless technologies. Main aim behind this initiative is
to make ticketing buying process convenient and simple.