REFERENCES

http://en.wikipedia.org/wiki/AirAsia

http://sandygarink.tripod.com/papers/AA_SITA.pdf

http://www.freeonlineresearchpapers.com/airasia-business-analysis

http://itsaboutmymot.wordpress.com/2009/08/31/the-airasia-company-strategic-management-%E2%80%9C-how-airasia-can-be-a-leader-in-the-lowest-cost-carrier-in-the-airplane-industry%E2%80%9D/

http://www.navitaire.com/res_and_dist/openskies.asp

IMPORTANCE OF THE SYSTEM TO THE COMPANY

Improved customer service

         The deployment of a new IP network infrastructure for Air Asia is creating an immediate and significant improvement in the level of customer service provided to Air Asia’s global customer base. The improved call management functionality and a fully integrated IP network is creating a reduction in call waiting times and drop outs.

Lower costs

         Air Asia began seeing cost efficiencies as soon as Comscentre brought their Australian ports onto a central IP network. These cost reductions increase with each international port brought onto the expanding global Air Asia IP network. Even tho the fare is at the lower cost, AirAsia provide guests with the choices of customizing services without compromising on quality and services

Flexibility, scalability and control

         By centralising Air Asia’s network infrastructure into a fully supported and managed solution, Comscentre has empowered the airline with greater control over their entire network activity and development. The design of the network also creates a highly flexible and fully scalable solution, with the airline able to quickly and easily deploy or recall remote worker or small office solutions internationally with minimal capital outlay or lead time. The solution works perfectly as it allows the system to deploy a small and basic communications solution into a new market quickly and easily as AirAsia prepare to launch that destination, then scale up as necessary as soon as they commence the service.

Saftey

          Safety is another significant value to long-term success. As a new airline, the safety issue poses a big challenge. Given that low cost flying is a new concept in this region and that AirAsia is a new enterprise, the question that is uppermost in the mind of the public is, is it safe? Whilst people want to pay less, they would also like to be assured that the planes meet aviation standards and the pilots are trained and experienced. Measures to boost its credibility include the setting up of its own pilot training simulator facilities and the purchase of new aircrafts so that by year 2009, all its carriers flying out of Malaysia will be new.

TECHNOLOGY FEATURES

         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.

Computer Reservation System (CRS)

         An integrated web-enabled reservation and inventory system suite powered by Navitaire’s Open Skies Technology. It including all internet facility, call center and airport departure control functionally.

         One unique needs that is highly satisfying with a low cost business implementation model.Apart from that, this system has also help Air Asia airline grow with faster. for example was passenger volume growth from 2 million to 7.7 million in a period of time no more than 2 years.

Enterprise Resource Planning System (ERP)

         Enterprise Resource Planning was one of the systems that powered by Microsoft Business Solution (MBS) which executed by Avanade 's experts in Ma 2005.
     With this technology ERP, Air Asia capable of sustaining process integrity, reduce processing time and others. In other words, this technology helped layout Air Asia administrative system to achieve corporate goals.

INFORMATION SYSTEM USED BY THE ORGANIZATION

        Information system were widely applied within an organization in order to improve the effectiveness and efficiency of an organization. Information system influence the work system and the development of an organization to achieve the organization's aim. 

      Air Asia has carry out three type of information system such as yield management system (YMS), customer reservation system (CRS), and enterprise resource planning (ERP) system. This system makes Air Asia runs more effective and productive as well as  being capable of reducing the cost and eliminated inefficiency in their business.

MANAGEMENT

In order to gain market share and sustain its competitive advantages to be the low cost carrier in the high demanding environment, AirAsia must develop new ways to manage both customer relationships and suppliers or partners to optimize customer loyalty, supplier relationships, and revenue. AirAsia has fostered a dependency on Internet technology for its operational and strategic management, and provides an online ticket booking services to traveller online.

Customer Relationship Management (CRM)

         Application will be one of the areas of strategic IT implementation that AirAsia can focus to achieve high values to both shareholders and customers. And In long term, customer relationships should be fostered for AirAsia to maintain competitive advantage and profitability. When planning and implementing CRM application, management is recommended the following approaches:

1. Customer segmentation – mileage-based segmentation is inadequate, rather should focused on value-based and needs-based approaches can guide investment decisions and drive greater insight into the needs of high value customers. 

2. CRM initiative development – to differentiate from other competitors, AirAsia should not adopt the “fast follower” approach to CRM initiative development, i.e. learning from other competitors’ approach (e.g. installing kiosks for fast check-in). AirAsia 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.


3. Organizational design and management – AirAsia needs to train the employees, empowering them with a complete view of the customer and clearly articulating the employee’s role in the CRM strategy.

        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.

Yield Management System (YMS)

          Anticipates and reacts to the behaviour of customers to maximize the revenue - taking into account the operating cost and aids AirAsia to optimize prices and allocate capacity to maximize the expected revenues by 2 levels:

a) Seat – Seats are available at various prices in different points of time. A reservation done at a later date will be charged more than the one done earlier for the same seat 

b) Route – By adjusting prices for routes / destinations that have a higher demand when compared to others. 

         Results increased revenue (3-4%) by taking advantage of the forecast of the high / low demand patterns, lower prices as YMS has aided AirAsia to increase the revenue by offering higher discounts, more frequently during off-peak times while raising prices only marginally for peak times.

ORGANIZATION STRUCTURE

           AirAsia is one of the most successful airline company in the world that offers lowest fare airlines in Asia and expanding rapidly since 2001. Back in 2001, it was originally a government owned business. But,because of  heavy debt, it was bought by a former Time Warner executive Tony Fernandes.

          Their vision is "Now Everyone Can Fly" that now were used as their slogan and their mission is 'Affordable Airfares'. The pictures above shows the senior management and organizational structure of AirAsia.

OUTPUT

The output for Airline business includes;

Aircraft Utilization
Measuring the aircraft productivity by calculating the dividing of aircraft block hours by the number of aircraft days assigned to service on air carrier routes. Typically presented in block hours per day.

Available Seat Miles (ASMs)
A common industry measurement of airline output that refers to one aircraft seat flown one mile, whether occupied or not. An aircraft with 100 passenger seats, flown a distance of 100 miles, generates 10,000 available seat miles. 

Block Hour
Time from the moment the aircraft door closes at departure of a revenue flight until the moment the aircraft door opens at the arrival gate following its landing. Block hours are the industry standard measure of aircraft utilization.

Cost per Available Seat Mile (CASM)
Measure of unit cost in the airline industry. CASM is calculated by taking all of an airline’s operating expenses and dividing it by the total number of available seat miles produced.

Unit Cost per Unit of Output
A measurement that gauges total operating costs in relation to output/results. 

Dependability
This is the measure of an airline’s on-time performance. It includes the following measures:

• D + five (D+5): departures that push back from the gate within five minutes of the scheduled time.
• D + zero (D+0): departures that push back from the gate on time.
• A + 15: arrivals within 15 minutes of the published arrival time.

Form 41 Data
Information derived from airline filings with the Bureau of Transportation Statistics. Airline financial data is filed with the BTS quarterly; traffic and employment numbers are filed monthly.

Load Factor
The number of Revenue Passenger Miles (RPMs) expressed as a percentage of ASMs, either on a particular flight or for the entire system. Load factor represents the proportion of airline output that is actually consumed. To calculate this figure, divide RPMs by ASMs. Load factor for a single flight can also be calculated by dividing the number of passengers by the number of seats. 

Operating Revenue
Revenues received from total airline operations including scheduled and non-scheduled service. Sources of revenue include passenger, cargo, excess baggage and certain other transport related revenue.

Passenger Revenue
Revenue received by the airline from the carriage of passengers in scheduled operations.

Passenger Revenue per Available Seat Mile (PRASM)
Often referred to as a measure of passenger “unit revenue”. It is calculated by dividing passenger revenue by available seat miles. Typically the measure is presented in terms of cents per mile. This measure is equivalent to the product of load factor and yield.

Passenger Yield
Unlike PRASM, the measure of average fare paid per mile, per passenger, calculated by dividing passenger revenue by revenue passenger miles. Typically,  the measure is presented in cents per mile and is useful measure in assessing changes in fares over time. Yield is not useful for comparisons across markets and/or airlines, as it varies dramatically by stage length and does not incorporate load factor.