10.

3 International Strategy
Learning Objectives
1. Know the trade-offs being made in terms of local responsiveness and global efficiency in regard to international strategies. 2. Distinguish among multidomestic, global, and transnational strategies. 3. Understand how the local environment can impact a firms international strategy. At the corporate level, firms choose to use one of three international strategies: multidomestic, global, or transnational (transnational is a combination of multidomestic and global). These three strategies reflect trade-offs between local responsiveness and global efficiency For firms to gain a competitive advantage, they have to devise strategies that take best advantage of the firms core compentencies and that are difficult for competitors to copy.

Multidomestic Strategy
Multidomestic strategy maximizes local responsiveness by giving decentralizing decisionmaking authority to local business units in each country so that they can create products and services optimized to their local markets. A multidomestic strategy would be appropriate, for instance, where Thomas Friedmans flat-world thesis is not applicable. A multidomestic strategy focuses on competition within each country and maximizes local responsiveness. It assumes that the markets differ and, therefore, are segmented by country boundaries. In other words, consumer needs and desires, industry conditions (e.g., the number and type of competitors), political and legal structures, and social norms vary by country. Using a multidomestic strategy, the firm can customize its products to meet the specific preferences and needs of local customers. As a result, the firm can compete more effectively in each local market and increase its local market share. The disadvantage of a multidomestic strategy, however, is that the firm faces more uncertainty because of the tailored strategies in different countries. In addition, because the firm is pursuing different strategies in different locations, it cannot take advantage of economies of scale that could help decrease costs for the firm overall. The multidomestic strategy has been more commonly used by European multinational firms because of the variety of cultures and markets found in Europe. As mentioned earlier, Yum! Brands has a strong incentive to compete internationally with its restaurant concepts (i.e., KFC, Pizza Hut, Taco Bell, A&W Restaurants, and Long John Silvers). Yum! pursues a multidomestic strategy by trying to localize as much as possible. The firm doesnt open restaurants using only the US model. Wherever the company has locations, it consistently adapts to local tastes and negotiates well when cultural and political climates change: In Japan, for instance, KFC sells tempura crispy strips. In northern England, KFC stresses gravy and potatoes, while in Thailand, it offers fresh rice with soy or sweet chili sauce. In Holland, the company makes a potato-and-onion croquette. In France, it sells pastries alongside chicken. And in China, the chicken gets spicier the farther inland you travel. More and

more, if its only an American brand without a regional appeal, its going to be difficult to market.Brian OKeefe, What Do KFC and Pizza Hut Conjure Up Abroad?, Fortune, November 26, 2001, 10210. Recognizing this constraint, Yum! introduces its products in those foreign markets that are the shortest taste distance from its traditional home markets.Pankaj Ghemawat, Distance Still Matters, Harvard Business Review 79, no. 8 (2001): 147. So, it sticks to high-population areas in which American culture has some appeal as well.

Global Strategy
In contrast to a multidomestic strategy, a global strategy is centralized and controlled by the home office and seeks to maximize global efficiency Under this strategy, products are much more likely to be standardized rather than tailored to local markets. One way to think about global strategies is that if the world is flat, you can sell the same products and services in the same way in every country on the planet. The strategic business units operating in each country are assumed to be interdependent, and the home office attempts to achieve integration across these businesses. Therefore, a global strategy emphasizes economies of scale and offers greater opportunities to utilize innovations developed at the corporate level or in one country in other markets. Although pursuing a global strategy decreases risk for the firm, the firm may not be able to gain as high a market share in local markets because the global strategy isnt as responsive to local markets. Another disadvantage of the global strategy is that it is difficult to manage because of the need to coordinate strategies and operating decisions across country borders. Consequently, achieving efficient operations with a global strategy requires the sharing of resources as well as coordination and cooperation across country boundaries, which in turn require centralization and headquartered control. Whether the world is flat or flattening can often depend on the industry. In most cases, the world isnt flat, but in a few industries the market characteristics are fairly common. The cement and concrete industry is an example of an industry where the flatteners have taken effect. CEMEX, a Mexico-based cement and building materials company founded in 1906, pursued an international business strategy that led to its growth and position as one of the top building materials companies in the world today.Strategically Positioned, CEMEX, accessed January 1, 2011, http://www.cemex.com/tc/tc_gl.asp. CEMEX acquired companies to grow rapidly, took advantage of economies of scale, and used the Internet to lower its cost structure. Perhaps most crucial to its international expansion success was foreseeing the shifts in distribution technologies that would bring previously disparate regional markets closer together.Daniel F. Spulber, Global Competitive Strategy (Cambridge, UK: Cambridge University Press, 2007), 21718.

In 2009, CEMEX CEO Lorenzo H. Zambrano wrote a message to stakeholders regarding sustainable development: In 2009, as we coped with the worst crisis to hit the global economy, our industry, and our company in 75 years, we took important and decisive steps to strengthen not only our business model, but also our commitment to sustainable development. As a result, we are a stronger

company, well positioned to take advantage of the recovery of the global economy. That is testimony to the quality of our employees, to our companys core values of collaboration, integrity, and leadership, and to the disciplined execution of sound strategies. We made several difficult decisions during the year to adjust to a rapidly evolving and extraordinarily challenging market environment. For example, we sold assets, most notably our Australian operations, and reorganized our business to improve efficiency and productivity. Together, these measures brought about an unfortunate, but necessary, reduction in our workforce. However, these steps enabled us to weather the crisis and will position our company for long-term success. Even as the economic crisis unfolded, we deepened our commitment to our stakeholders. We continued our efforts to ensure the safety of our employees, and many of our country operations recorded solid improvements in their safety performance. However, despite our ongoing efforts, I am deeply saddened to report that 33 peopleincluding employees, contractors, and third partiesdied in incidents related to our operations during 2009. This is tragic and unacceptable. We are working harder than ever to identify and address the root causes of all fatalities and serious injuries in order to prevent their recurrence. For example, we are expanding and strengthening our efforts in key areas such as safety training for drivers and contractors. Above all, we remain committed to our global long-term goal of zero incidents. On the environmental front, we continued to reduce our carbon footprint by improving the energy efficiency of our operations and expanding our use of alternative fuels. As a result, in 2009 we increased our use of alternative fuels to 16.4 percent, exceeding our target for 2015 ahead of time. In addition, Eurus, the wind farm project developed by ACCIONA Energa, became fully operational during the year and can supply 25 percent of our plants electricity needs in Mexico. Finally, we engaged the communities in which we operate through open and ongoing dialogue, social initiatives, and volunteer efforts. We continued to find ways to promote access to housing and community infrastructure. For example, we launched our most successful low-income housing solution, Patrimonio Hoy, in the Dominican Republic. As a global company, we are deeply aware of our responsibility to address complex sustainability challenges. We are committed to further reducing our impact on the environment and recognize that we have many opportunities to improve. We reconfirm our commitment to address climate change and to the development of a low-carbon economy. We actively engage with our global panel of sustainability experts, who provide important and valuable advice. On a personal note, I thank them for their feedback and for continuously challenging us to make further progress. We present our 2009 sustainable development report within the framework of our overall sustainability website to better communicate our sustainability performance. We have provided an executive summary that highlights our performance on our key sustainability issues. We hope

that you find the report engaging, transparent, and comprehensive, and we welcome your feedback. Sincerely, Lorenzo H. Zambrano CEMEX Chairman of the Board and Chief Executive OfficerLorenzo H. Zambrano, Addressing Complex Sustainability Challenges, CEMEX, accessed June 7, 2010, http://www.cemex.com/su/Su_oc_me.aspx.

Transnational Strategy
Transnational strategy seeks to combine the best of multidomestic strategy and a global strategy to get both global efficiency and local responsiveness. For many industries, given the differences across markets and the similarties being fostered by the flatteners, this form of strategy is highly desirable and appropriate. The difficulty is that combining the multidomestic and global strategies is hard to do because it requires fulfililng the dual goals of flexibility and coordination. Firms must balance opposing local and global goals. On the positive side, firms that effectively implement a transnational strategy often outperform competitors who use either the multidomestic or global corporate-level strategies.John Child and Yanni Yan, National and Transnational Effects in International Business: Indications from Sino-Foreign Joint Ventures, Management International Review 41, no. 1 (January 2001): 5375. The Ford Motor Company and BMW are examples of firms pursuing a transnational strategy. Ford, for example, is focusing on the world car, building one core car that will be sold globally. This strategy lowers Fords development costs, because rather than developing different cars for different countries or regions, Ford will sell the same car to all markets. The world car strategy, however, poses a major hurdle: how to design a car that appeals to consumers in many different countries. To tackle the issue, Ford took a page from BMW, which uses the concept of fashion forward when designing its 3 Series cars for multiple markets. The secret, according to Verena Kloos, president of BMWs DesignworksUSA studio in California, is to show consumers what the next big thing is, not reflect what they think now. As James D. Farley, Fords global marketing chief, sees it, the global appeal of the 3 Series rests on trust and aspiration. People worldwide see the same design, which builds trust through ubiquity and familiarity and leads them to aspire to own the car themselves.David Kiley, Can Fords World Car Bet Pay Off?, BusinessWeek, accessed June 7, 2010, http://www.businessweek.com/magazine/content/09_24/b4135058974279.htm? campaign_id=rss_innovate.

International Strategy and the Local Environment

Sometimes, firms expanding into new geographic markets find that they must adapt certain components of their strategies to accommodate local environments. In the United States, for instance, Dell is famous for the business model that allows it to skip middlemen and go directly to suppliers and customers. In its early years, Dell experimented with a brick-and-mortar retail strategy but quickly retrenched. As it expanded into international markets, however, Dell has

found that it has to suspend its direct model, at least temporarily. Why? Basically because it needs local intermediaries to help develop both a base of business and acceptable levels of customer awareness and sophistication. Such has been the case first in India and then in China, which constitute huge markets for Dell. Figure 10.5 Dells Local Operations in Xiamen, China

Courtesy of Dell, Inc. While Dell provides a good example of adaptation, most global firms tend to approach corporate strategy from the perspective of their domestic market constraint, which can be problematic. Microsoft is a case in point. The United States and the European Union (EU) have very different traditions and models of competition, which in turn means that strategies must vary across these important markets. Had you not been aware of these differences, you might think that Microsoft followed an ideal resource-based corporate strategy in its diversification into Europe. It bundled its Windows operating system with the Internet Explorer browser and other software to increase the companys perceived value and, therefore, customers willingness to pay. It also used its extensive experience with home-computer software, operating systems, and applications to better penetrate the server market for software and operating systems, where customers are primarily businesses. Finally, Microsoft tried to lock out competitors by including its Windows Media Player as a standard feature in both its server and home PC operating systems. The EU, however, has made these Microsoft tactics illegal: the bundling strategy deters innovation and reduces consumer choice in any technologies which Microsoft could conceivably take an interest in and tie with Windows in the future.EU Lowers Boom on Microsoft, Wired, March 24, 2004, accessed November 10, 2010, http://www.wired.com/techbiz/media/news/2004/03/62789. The EU signaled its disapproval by imposing a fine of over $600 million and giving Microsoft ninety days to release versions of its Windows operating systems for home PCs and servers without the Windows Media Player and to begin providing rivals access to the details of the code underlying its proprietary server systems, used primarily in business settings. This is not the first time such differences in regulatory environments have been ignored or underestimated by global firms. Just a few years earlier, the European Commissions ruling dealt a fatal blow to the all-but-done merger between Honeywell and General Electric (GE), citing that the merger would reduce competition in the aerospace industry.Yusaf Akbar, Grabbing Victory from the Jaws of Defeat: Can the GE-Honeywell Merger Force International Competition Policy Cooperation?, World Competition 25, no. 4 (2002): 2631.

Key Takeaways

Multidomestic strategy maximizes local responsiveness by giving decentralizing decision-making authority to local business units in each country so that they can create products and services optimized to their local markets. This strategy allows firms to compete more effectively in the local market and increase their share in that market. The disadvantage of a multidomestic strategy, however, is that the firm faces more uncertainty because of the tailored strategies in different countries. In addition, because the firm is pursuing different strategies in different locations, it cannot take advantage of economies of scale that could help decrease costs for the firm overall. A global strategy is centralized and controlled by the home office and seeks to maximize global efficiency. Under this strategy, products are much more likely to be standardized rather than tailored to local markets. Although pursuing a global strategy decreases risk for the firm, the firm may not be able to gain as high a market share in local markets because the global strategy isnt as responsive to local markets.

A transnational strategy offers the advantages of both the multidomestic strategy (efficiency) and global strategy (responsiveness to local conditions) but has the disadvantage that it is difficult to simultaneously execute the dual goals of flexibility and coordination.

_____________________________________________________________________________________ Types of International Strategy: Multi-domestic vs. Global

Multi-domestic Strategy

Product customized for each market Decentralized control - local decision making Effective when large differences exist between countries Advantages: product differentiation, local responsiveness, minimized political risk, minimized exchange rate risk

Global Strategy

Product is the same in all countries. Centralized control - little decision-making authority on the local level Effective when differences between countries are small Advantages: cost, coordinated activities, faster product development

A fully multi-local value chain will have every function from R&D to distribution and service performed entirely at the local level in each country. At the other extreme, a fully global value chain will source each activity in a different country. Philips is a good example of a company that followed a multidomestic strategy. This strategy resulted in:

Innovation from local R&D Entrepreneurial spirit Products tailored to individual countries High quality due to backward integration

The multi-domestic strategy also presented Philips with many challenges:

High costs due to tailored products and duplication across countries The innovation from the local R&D groups resulted in products that were R&D driven instead of market driven.

Decentralized control meant that national buy-in was required before introducing a product - time to market was slow.

Matsushita is a good example of a company that followed a global strategy. This strategy resulted in:

Strong global distribution network Company-wide mission statement that was followed closely Financial control More applied R&D Ability to get to market quickly and force standards since individual country buy-in was not necessary.

The global strategy presented Matsushita with the following challenges:

Problem of strong yen Too much dependency on one product - the VCR Loss of non-Asian employees because of glass ceilings

A third strategy, which was appropriate to Whirlpool is one of mass customization, discussed below.
____________________________________________________________________________________

TELECOM ITALIA HAS NO INTERNATIONAL STRATEGY

Tuesday 14 July 1998 | 00:00 CET | News Telecom Italia (Italy), telecoms company, has been accused of having no international strategy after failing to acquire Cable & Wireless' (UK) 20% stake in Bouygues Telecom for GBP456 mil. As a result, Telecom Italia has now announced that it will present a 3-year strategic plan in September 1998, indirectly admitting its lack of an international strategy. Telecom Italia has also decided not to buy minority stakes from Cable & Wireless in a West Indies firm and in Cable & Wireless' US subsidiary. Telecom Italia has said that it will probably acquire a direct stake in Bouygues Telecom and is in discussions with Cable & Wireless over the creation of joint operations for worldwide services to multinational clients. International activities currently account for under 5% of Telecom Italia's revenue. There are also tensions between Telecom Italia and Telecom Italia Mobile (TIM), 60%-owned mobile telephony subsidiary, as well as between Gian Mario Rossignolo, chairman of

Telecom Italia, and Vito Gamberale, chairman of TIM. Article discusses the situation in further detail. _____________________________________________________________________________________

AirAsia
From Wikipedia, the free encyclopedia Jump to: navigation, search Not to be confused with Air Asia (Republic of China), a Taiwanese aircraft service company. AirAsia

IATA AK Founded

ICAO AXM 1993

Callsign ASIAN EXPRESS

Commenced operations Hubs

18 November 1996 Kuala Lumpur International Airport

Secondary hubs

Kota Kinabalu International Airport Penang International Airport

Kuching International Airport

FrequentBIG[1] flyer program

AirAsia X Thai AirAsia Indonesia AirAsia Philippines AirAsia AirAsia Japan AirAsia India

Subsidiaries

Fleet size Destinations Company slogan Parent company

141 88 inc.subsidiaries Now Everyone Can Fly Tune Group

Registered office: Petaling Jaya, Selangor Headquarters Head office: Kuala Lumpur International Airport Sepang, Selangor

Key people

Tony Fernandes, Cofounder and Director

Revenue Net income Website

Aireen Omar, CEO[2] RM 5.0 billion/US$ 1.62 billion(2012)[3] RM 1.88 billion/US$ 0.61 billion (2013) www.airasia.com

An AirAsia Boeing 737-300 in special livery denoting the Malaysian flag.

AirAsia Airbus A320 departing Kuala Lumpur International Airport

AirAsia Berhad (MYX: 5099) is a Malaysian low-cost airline headquartered in Kuala Lumpur. It has been named as the world's best low-cost airline,[4] and a pioneer of low-cost travel in Asia. [5] AirAsia group operates scheduled domestic and international flights to 78 destinations spanning 25 countries. Its main hub is the Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA). Its affiliate airlines Thai AirAsia, Indonesia AirAsia, Philippines AirAsia and AirAsia Japan have hubs in Don Mueang International Airport, SoekarnoHatta International Airport, Clark International Airport and Narita International Airport respectively. AirAsia's registered office is in Petaling Jaya, Selangor while its head office is at Kuala Lumpur International Airport.[6][7] AirAsia operates with the world's lowest unit cost of USD 0.023/ASK and a passenger breakeven load factor of 52%. It has hedged 100% of its fuel requirements for the next three years, achieves an aircraft turnaround time of 25 minutes, has a crew productivity level that is triple that of Malaysia Airlines, and achieves an average aircraft utilisation rate of 13 hours a day.[8] All scheduled AirAsia departures from Kuala Lumpur use the Low cost carrier terminal. AirAsia had abolished its fuel surcharges on November 2008,[9] but, due to rising oil prices, the fuel surcharge was re-introduced in May 2011.[10] During 2007, passengers from 'The Barrier-Free Environment and Accessible Transport Group' protested against the airline over its refusal to fly passengers who were completely immobile.[11]

They claimed that the disabled were discriminated against when booking tickets online; the CEO of the airline denied that it turned away wheelchair-using passengers.[12]

Contents

1 History 2 Subsidiaries
o o o o o o

2.1 AirAsia India 2.2 AirAsia Japan 2.3 AirAsia X 2.4 Indonesia AirAsia 2.5 Philippines AirAsia 2.6 Thai AirAsia

3 Destinations 4 Low On Time Performance 5 Criticism Of Uniforms 6 Fleet

o

6.1 Fleet renewal

7 Services
o o

7.1 On board 7.2 Frequent-flyer program

8 See also 9 References 10 External links

History
AirAsia was established in 1993 and began operations on 18 November 1996. It was originally founded by a government-owned conglomerate, DRB-Hicom. On 2 December 2001 the heavilyindebted airline was bought by former Time Warner executive Tony Fernandes's company Tune Air Sdn Bhd for the token sum of one ringgit (about USD 0.26 at the time) with USD 11 million (MYR 40 million) worth of debts. Fernandes turned the company around, producing a profit in 2002 and launching new routes from its hub in Kuala Lumpur, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as MYR 1 (USD 0.27). In 2003,

AirAsia opened a second hub at Senai International Airport in Johor Bahru near Singapore and launched its first international flight to Bangkok. AirAsia has since started a Thai subsidiary, added Singapore itself to the destination list, and started flights to Indonesia. Flights to Macau began in June 2004, and flights to mainland China (Xiamen) and the Philippines (Manila) in April 2005. Flights to Vietnam and Cambodia followed later in 2005 and to Brunei and Myanmar in 2006, the latter by Thai AirAsia. In August 2006, AirAsia took over Malaysia Airlines's Rural Air Service routes in Sabah and Sarawak, operating under the FlyAsianXpress brand. The routes were subsequently returned to MASwings a year later, citing commercial reasons. AirAsia's CEO Tony Fernandes subsequently unveiled a five-year plan to further enhance its presence in Asia.[13] Under the plan, AirAsia proposes to strengthen and enhance its route network by connecting all the existing cities in the region and expanding further into Vietnam, Indonesia, Southern China (Kunming, Xiamen, Shenzhen) and India. The airline will focus on developing its hubs in Bangkok and Jakarta through its sister companies, Thai AirAsia and Indonesia AirAsia. With increase frequency and the addition of new routes, AirAsia expects passenger volume to reach 18 million by the end of 2007.

An AirAsia Tail of the Malaysian flag with Cartoon drawings in the fuselage.

On 27 September 2008, the company had on its list 106 new routes to be added to its thencurrent list of 60. The number of old routes discontinued has not been publicly disclosed. On 2 April 2012 Air Asia had their first flight from Sydney to Kuala Lumpur.[14] In August 2011, AirAsia agreed to form an alliance with Malaysia Airlines by means of a share swap.[15] The alliance was struck down by the Malaysian government, in effect voiding the agreement of both airlines. By early 2013, AirAsia had seen a steep increase in its profitability. The year-on-year comparison had shown a 168% increase in profits as compared to 2012. For the quarter ending 31 December 2012, the airline's net profit stood at 350.65 million ringgit (US$114.08 million). Despite a 1% rise in the average fuel price, the airline had recorded profits of 1.88 billion ringgit for the full financial year 2012.[3] In February 2013, AirAsia submitted an application to the Indian Foreign Investment Promotion Board, through its investment arm, AirAsia Investment Limited, to seek approval for commencing its operations in India.[16] AirAsia wanted to take up a stake of 49% in the airline, which was the maximum allowed by the Indian government at that time.[17] AirAsia initially invested an amount of 50 million United States dollars in the airline. The airline wished to begin operations from Chennai and expand it's network in South India, to where AirAsia already operated flights from Malaysia and Thailand.[18]

Subsidiaries

AirAsia India
Main article: AirAsia India

The origins of the airline can be tracked back to October 2012, when the airline's management said that they were keen to have more presence in India if the aviation environment and tax structure were conducive and friendly for low-cost airline operations. With the Indian government allowing a foreign direct investment of upto 49%, the airline CEO tweeted "Fantastic news that India has opened up investments to foreign airlines." He said that it was now easier for him to set up an airline in India.[19] Tony Fernandes called the joint venture a marriage made in heaven. He said that that the Tatas know India very well and have a good reputation. A tie-up with the company would help AirAsia operate efficiently. Fernandes said that he would concentrate mainly on the one million south Indians who travel by rail.[20][21] AirAsia announced its Indian low-cost subsidiary on 19 February 2013. The airline would be operated as a joint venture between Tata Sons and AirAsia, with AirAsia holding 49% of the airline. Lakshmi Mittal's son in law Amit Bhatia will take up 21% and Tata Sons will take up a stake of 30% in the airline. The joint venture would also mark Tata Sons' return to aviation industry after 60 years.[22][23] AirAsia is also the first foreign airline to set up a subsidiary in India.[24]

AirAsia Japan
Main article: AirAsia Japan

AirAsia and Japanese network airline All Nippon Airways announced their joint venture at a press conference in Tokyo on 21 July 2011.[25] Following its formal establishment in August 2011, AirAsia Japan flew its first flight on August 2012.[25] AirAsia Japan is the first low-cost airline to be based at Narita. Its formation was announced only months after ANA had announced the formation of Peach, a low-cost airline based at Kansai International Airport in Osaka, and alongside a concurrent effort by Japan Airlines to set up a low-cost affiliate. ANA elected to partner with an existing low-cost airline for efficiency and strategic advantage.[26] It is the fifth subsidiary for AirAsia and the ninth for ANA. The airline is headquartered alongside ANA in Tokyo, with its main operating base at Narita International Airport, and initially serves domestic destinations with utilizing the brand and service model of AirAsia.[25] Future planned international destinations will include the Philippines South Korea and Taiwan.[27][28]

AirAsia X
Main article: AirAsia X

An AirAsia X Airbus A330-300 taking off at Perth Airport.

AirAsia X is the international operation of the brand AirAsia, which is Asia's largest low-cost carrier. The franchise is able to keep costs down by using a common ticketing system, aircraft livery, employee uniforms, and management style.[29] AirAsia X is also affiliated with Virgin Group[30] and Air Canada. On 17 May 2007, Tony Fernandes announced plans to commence flights from Malaysia to Australia. Fernandes said he would be avoiding Sydney Airport due to its high fees. Instead the airline would concentrate on cheaper alternatives such as Melbourne's Avalon Airport, Williamtown Airport in Newcastle, and Adelaide Airport. Sustained fares were predicted to be around MYR 800 (A$285) for a return fare, plus taxes.[31] Interest was also expressed in using Gold Coast Airport as another Australian destination.[32] On 14 May 2007, AirAsia confirmed that it had ordered 15 Airbus A330-300 aircraft, 5 more than originally announced. The aircraft are scheduled for delivery from the fourth quarter of 2008.[33] On 27 March 2008, AirAsia signed a firm contract for another 10 Airbus A330-300s bringing the airline's total order to 25.[34] AirAsia X received its first A330 on 31 October 2008 in Toulouse, France.[35] As of 14 February 2008, 48% of AirAsia X is owned by Aero Ventures; a venture of Tony Fernandes and other prominent Malaysians, as well as Air Canada's Robert Milton. Virgin Group own 16% and a further 16% is owned by AirAsia. Bahrain-based Manara Consortium, and Japan-based Orix Corp have taken a 20% stake in AirAsia X for RM250 million.[36]

Indonesia AirAsia
Main article: Indonesia AirAsia

Indonesia AirAsia operates scheduled domestic, international services and is an Indonesian associate carrier of Malaysian low-fare airline AirAsia. Its main base is Soekarno-Hatta International Airport, Jakarta.[37] Until July 2010, Indonesia Air Asia, along with many Indonesian airlines, was banned from flying to the EU due to safety concerns. However the ban was lifted on July 2010.[38] The airline was established as Awair in 1999 by Abdurrahman Wahid, former chairman of the Nahdlatul Ulama Muslim organisation. He had a 40% stake in the airline which he relinquished after being elected president of Indonesia in October 1999. On 1 December 2005, Awair changed its name to Indonesia AirAsia in line with the other AirAsia branded airlines in the region. AirAsia Berhad has a 49% share in the airline with Fersindo Nusaperkasa owning 51%. Indonesia's laws disallow majority foreign ownership on domestic civil aviation operations.

Philippines AirAsia
Main article: Philippines AirAsia

Philippines AirAsia is a joint venture between Filipino investors and AirAsia. The Filipino group include Antonio Cojuangco, Jr., former owner of Associated Broadcasting Company with flagship television station TV5, Micheal Romero, a real estate developer and port operator, and Marianne Hontiveros. The joint venture was approved on 7 December 2010 by the Board of Investments, an agency in the Philippines in charge of big ticket investments. Philippines AirAsia is on the list of air carriers banned in the European Union.[39] On 15 August 2011, Philippines AirAsia took delivery of its first brand-new aircraft, an Airbus A320 which arrived at Clark International Airport in Clark, Angeles City, Pampanga. On 8 November 2011, Philippines AirAsia took delivery of its second A320. On 7 February 2012, the airline received its Air Operator Certificate[40] from the Civil Aviation Authority of the Philippines which gives the airline permission to fly on Philippine airspace.

A Thai AirAsia Boeing 737-300 landing at Don Mueang International Airport

Thai AirAsia
Main article: Thai AirAsia

Thai AirAsia is a joint venture between AirAsia and Thailand's Asia Aviation. Thai AirAsia launched domestic operations on February 2004. It serves AirAsia's regularly scheduled domestic and international flights from Bangkok and other cities in Thailand. Thai AirAsia was the only low-cost airline operating both domestic and international flights from the Suvarnabhumi Airport.[41] The airline shifted all operations from Suvarnabhumi Airport to Don Mueang International Airport effective 1 October 2012. Today, Thai AirAsia is 55% owned by Asia Aviation, 45% owned by AirAsia International. The airline sponsors the Thai football teams Buriram United, SCG Muangthong United, Chonburi, Osotspa Saraburi, BEC Tero Sasana, Chiangrai UTD, Esan United, Chainat, Samut Prakan CUTD, Bangkok United, FC Phuket, Krabi, Air Force United, Nakhon Phanom, Loei City, Trang and The referee of FAT.

AirAsia diffusion as of 2013

Destinations
Main article: AirAsia Group destinations

AirAsia currently operates more than 142 routes[42] to 78 destinations,[43] with over 400 daily flights[44][45][46][47][48] covering Malaysia, Indonesia, Japan, the Philippines and Thailand and with domestic and international routes, primarily from Kuala Lumpur, to Australia, Brunei, Cambodia, People's Republic of China, India, Laos, Myanmar, Nepal, South Korea, Singapore, Sri Lanka, Taiwan and Vietnam.

Low On Time Performance

Many critics comes to Air Asia related to the frequent of flight delayed. Based on measurement performed by international agency of airline statistics Air Asia On Time Performance (OTP) is below 80% and in some Subsidiary as low as 69%.[49]

Criticism Of Uniforms
On 9 July, 2013, Malaysias transport ministry asked the airline to "reassess the uniforms to better reflect the Malaysian culture," and also noted that it would "reassess" the airlines license. The issue surfaced after Ikmal Hisham Abdul Azizmember, a member of parliament of the United Malays National Organisation made a parliamentary request stating that the uniforms "did not reflect the national identity".[50]

Fleet
The total AirAsia fleet (excluding AirAsia X) consists of the following aircraft (as of February 2013):

AirAsia had witnessed a continuous growth in the amount of revenue passenger kilometres. Click graph to enlarge. AirAsia fleet In Aircra Orde Passen fle ft rs gers et

Notes

Aircraft are distributed as follows:

AirAsia (Malaysia) - 66 Thai AirAsia - 29 Indonesia AirAsia - 22 AirAsia Japan - 4 Philippines AirAsia - 2

Airbus A320- 123 88 200

180

From 2013 onwards Airasia received A320-200 equipped with sharklets

Airbus A320n 0 eo Total 12 0 264 180 Entering into Service in 2016

355

Fleet renewal

AirAsia plane sporting the "Airline of the Year" livery, taxiing at Kuching

The interior of an AirAsia Airbus A320-200 aircraft.

AirAsia began a gradual conversion of its fleet from the Boeing 737300 to the Airbus A320200. The first order, for 40 Airbus A320 aircraft and 40 more on option, was made in a Memorandum of Understanding on 17 December 2004. When the contract was signed on 25 March 2005, the order was increased to 60 firm orders with 40 on option.[51] The first six Airbus A320s were delivered on 9 December 2005, the remaining 54 aircraft from the 2005 order to be delivered by June 2009.[52] On 19 July 2006, the airline exercised its options on 40 Airbus A320200s to increase its total firm orders to 100 aircraft, with another 30 on option.[53] It made a third firm order of 50 A320-200s and increased the options to 50 on 8 January 2007, for delivery by December 2013. The Airbus A320-200 was expected to completely replace the Boeing 737300 fleet at the Kuala Lumpur base by July 2007.[54] The airline made its latest order of 25 firm orders on 25 November 2007, bringing its total orders for Airbus aircraft to 175 with 50 on option.[55][56] In August 2009, AirAsia signed an amendment agreement with Airbus to defer the delivery dates for 8 of its A320s aircraft by four years to 2014 due to "infrastructural constraints" at the existing low-cost carrier terminal (LCCT) in Sepang as it cannot accommodate its fleet expansion. The rationale to scale down the delivery of aircraft in 2010 and possibly 2011 is to enable AirAsia to optimise its fleet and avoid the costs associated with leaving aircraft idle or under-used due to infrastructural limitations, avoiding having to incur depreciation, interest payments and other costs without earning revenue. The infrastructural constraints will continue at the current airport until the new low-cost carrier terminal is built.[57] Earlier, in February 2009, the Malaysian

government vetoed an ambitious plan by AirAsia to build a USD 460 million airport nearby as KLIA East @ Labu.[58] In June 2011 AirAsia ordered 200 Airbus A320neos at the Paris Air Show.[59][60] The planes are due to become available in 2015, and the deal is one of the largest ever for commercial aircraft in a single order.[59] The deal was worth USD 18 billion at list prices, although it is likely that AirAsia obtained a substantial discount from those prices.[60] Singapore-based analyst Shukor Yusof said the deal had the potential to rival American Southwest Airlines and make Air Asia the world's biggest low-cost airline.[60][61] The deal makes AirAsia Airbus' single biggest customer.[61] On 13 December 2012, AirAsia placed an order for additional 100 Airbus A320 jets, splitting it between 64 A320neo and 36 A320ceo.[62] With this, the total number of orders that AirAsia had placed for the Airbus A320 had gone up to 475.

Services
On board
AirAsia offers "Snack Attack," a buy on board programme offering food and drinks for purchase. [63] Air Asia is accredited by the KL Syariah Index, and in accordance with Shariah law it does not serve alcohol or pork. However, this applies only to the regional AirAsia group flights, and not to the AirAsia X flights, which do sell wine and beer on board.[64]

Frequent-flyer program
AirAsia is taking the first steps towards starting its own frequent-flyer programme. The airline has signed an agreement to start a joint venture with financial services firm Tune Money to launch a programme called "BIG". Under this programme it will issue loyalty points to AirAsia customers and third-party merchants. Points can then be used to redeem AirAsia flights.[65]