operation on 18 November 1996‚ AirAsia is a low cost carrier (LCC) airline in the aviation industry. On 2 December 2001‚ the heavily-indebted government-linked commercial airline was bought over by the current Chief Executive Officer (CEO) of AirAsia‚ Tony Fernandes. From then‚ AirAsia cleared its former debts which worthed USD 11 million and became a profit-making low cost carrier. The main hub of AirAsia is in Kuala Lumpur‚ namely the Low Cost Carrier Terminal (LCCT). In 2003‚ AirAsia launched
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non-stop cross country routes which were profitable. This caused operating costs to increase‚ narrowing the profit margins. During the mid 80 ’s‚ acquisition led to eight airlines capturing a disproportionate share of domestic traffic. Due to a recession and increasing fuel prices in the 90 ’s‚ bankruptcy and collapse were common to many carriers. As a direct result‚ new airlines were formed‚ and now position themselves as low fare‚ no frill airlines. As a culture‚ American consumers seem to follow
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which is well known for its low cost airline service across Europe. Christy Ryan‚ Liam Lonergan and note Irish businessman‚ Tony Ryan‚ founded the company in 1985 in Ireland (with a share capital of only £1 and 25 employees according to Business-market.com). Ryanair was restructured in 1991 by Michael O’Leary. He reported revenues of €3‚629 Billion for the fiscal year of 2011‚ bringing profits of €374‚6 Million‚ leading Ryanair as on the oldest and most successful low-cost airlines of Europe. The airline
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makes those airline companies to increase the debt by tapping their credit lines and/or issuing bonds. These actions were vital to help the carriers survive the dramatic decline in passenger levels and fares‚ and the sharp increase in losses‚ but left most of the major airlines burdened with huge debt loads . Moreover‚ there are some airline companies that offer low-fares services such as JetBlue and Southwest. They are the airline companies that still growth during 2001 and make the huge profit during
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should stay up to date on cost saving measures regarding the increasing use of online check-in. As Ryanair expands to the Balkan states and turkey the flights get longer therefore entertainment technology may be “taken on board” (Ancillary revenue). The video entertainment industry is heavily endorsed socially. Technological advances in the research and development of engines and airframe play an important role with respect to lowering an airlines’ major expense‚ fuel costs. Ryanairs’ decision to upgrade
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SUCCESS STORY OF AIRASIA The business world is a tough one. Unless one is lucky enough to establish itself in the market that has very few competitors‚ every business usually have a very rough time. And in today’s scenario‚ where there is high level of competition not only on the local‚ regional‚ and national front‚ but also from global enterprises‚ the business world has become a place where it is difficult to even get by. The airline industry too is one of the toughest and most challenging
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of flights to make profit. In order to cut costs for instance‚ they would use entertaining flight attendants opposed to electronic entertainment. The idea was that if cost structure can be streamlined and airfare lowered‚ more people would fly‚ this was a unique selling position at the time. By the 1980’s Southwest’s cost structure made it a force for other airlines to reckon with because it could charge much lower airfare than the rest. The lower cost structure derived itself from Southwest’s strategy
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Threat of New Entrants is low The airline industry is so saturated that there is hardly space for a newcomer even to squeeze its way in. The main concern for this is the cost of entry. The airline industry is one of the most expensive industries‚ due to the cost of buying and leasing aircrafts‚ safety and security measures‚ customer service and manpower. Another major barrier to entry is the brand name of existing airlines and it is really difficult to lure customers out of their existing brands
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Introduction Ryanair was founded in 1985 by the Ryan family‚ which was headed by Tony Ryan. It was the first budget airline in Europe‚ modeled after the successful US carrier‚ Southwest Airlines. It was founded to provide scheduled passenger airline services between Ireland and the UK‚ as an alternative to then state monopoly carrier‚ Aer Lingus. At the beginning‚ Ryanair was a full service conventional airline‚ with two classes of seating‚ leasing three different types of aircraft. Despite growth
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EXECUTIVE SUMMERY There are only two major airlines in the Australian domestic aviation market‚ Qantas and Virgin Blue. Qantas has introduced a subsidiary‚ Jetstar‚ to compete directly with Virgin Blue in the ‘low cost carrier’ market and Qantas still hold the majority of the market share with 65%. Virgin Blue continues to increase their presence in the market holding the remaining 35%. At the end of March 2003 Virgin Blue posted a profit before tax of $158 billion‚ $58 billion over their budget
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