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The Treat of New Entrants
The unparallel success of AirAsia had stimulated many LCC to enter the market in its region, some of which are large full-service airlines' subsidiary companies. Knowing that the new-comers would copy its low cost strategy, AirAsia introduced a series of unique services. For example, it was the first airline in Malaysia to allow online check-in. What's more, it offered more choice for those who wanted to pay more for convenience, such as the Xpress boarding service and the Real Five Star service as well as economic choice for those who carried less baggage（Cite the HBS Case）, i.e. the introduction of checked baggage handling fees. In addition, Air Asia became a pioneer to launch the "on-time guarantee" feature among other LCCs, which enormously increase its credibility and reputation. Apart from that, AirAsia was also the few of its kind什么意思（第一次实行？） to operate long-haul service, including the flight to Australia Gold Coast and London. Other LCCs who intent to copy the strategy failed as can be seen the case of Jetstar due to the rising oil price. The reason why AirAsia successfully operates the long-haul service might be that it collaborated with many local LCCs to bring down the cost. While being exposed to fierce competition caused by more and more new entrants, AirAsia decided to move from a traditional LCC which simply sells flight tickets to an "integrated service provider" which provides travel related services. In order to keep its low price advantage confronting the surging oil price, AirAsia chose the "dynamic, layered-hedge strategy" to compensate its fuel cost. Its low cost advantage is so competitive that it can reach a break even with only 56% passenger load, which other companies found hard to catch. Consider one of the five forces raised by Porter, AirAsia enjoys an absolute cost advantage owed to the superior productivity of its staff, its fuel efficiency, the low overheads and its wise choice of the distribution channel,
The unparallel success of AirAsia had stimulated many LCC to enter the market in its region, some of which are large full-service airlines' subsidiary companies. Knowing that the new-comers would copy its low cost strategy, AirAsia introduced a series of unique services. For example, it was the first airline in Malaysia to allow online check-in. What's more, it offered more choice for those who wanted to pay more for convenience, such as the Xpress boarding service and the Real Five Star service as well as economic choice for those who carried less baggage（Cite the HBS Case）, i.e. the introduction of checked baggage handling fees. In addition, Air Asia became a pioneer to launch the "on-time guarantee" feature among other LCCs, which enormously increase its credibility and reputation. Apart from that, AirAsia was also the few of its kind什么意思（第一次实行？） to operate long-haul service, including the flight to Australia Gold Coast and London. Other LCCs who intent to copy the strategy failed as can be seen the case of Jetstar due to the rising oil price. The reason why AirAsia successfully operates the long-haul service might be that it collaborated with many local LCCs to bring down the cost. While being exposed to fierce competition caused by more and more new entrants, AirAsia decided to move from a traditional LCC which simply sells flight tickets to an "integrated service provider" which provides travel related services. In order to keep its low price advantage confronting the surging oil price, AirAsia chose the "dynamic, layered-hedge strategy" to compensate its fuel cost. Its low cost advantage is so competitive that it can reach a break even with only 56% passenger load, which other companies found hard to catch. Consider one of the five forces raised by Porter, AirAsia enjoys an absolute cost advantage owed to the superior productivity of its staff, its fuel efficiency, the low overheads and its wise choice of the distribution channel,