Reason for Airasia Enter to United State and the Pest Analysis of Airasia and Related Example

2) Explain the reason for entering foreign country or market for the products and services distribution.

The main reason of Air Asia choose to enter United States of America is because Air Asia has be proven that it was one of the most successfully low-cost airlines in the world and Air Asia should fully utilize this ability that expand their business activities to United States. It can reliance on its existing market and also will helped Air Asia to increase the reputation in the world. The United States citizen also will know more about Air Asia, so that future they travel to Asia, they will choose Air Asia to travel with the low air ticket price. Especially for the citizen who like to travel with whole family in Asia or the citizen who always work abroad.

Besides that, the current United States airlines company just a few company who have low price air ticket. Air Asia is the company which provide the low fare airlines, which mean it will auto cut down the non-useable/ not necessary resources which are the service/product that not provided to all customer that can ensure the company to low down the cost and provide cheapest air ticket. Example for luggage service that cut down by Air Asia. Some of the customer doesn’t require for luggage service due to they just have hand carry luggage, so that they doesn’t have to pay more luggage service fees.

Furthermore, according to united states of department transportation statistics, in the past three years, United States low-cost airlines, the main five low-cost airlines average on-time arrival 75.6. According to the flight states, Air Asia also is one of the company who have the average on-time arrival 76.81 in the past three years. The main reason Air Asia can enter United States market is based on their higher performance of on-time arrival was fulfill the city people who was rushing time and require higher performance of on-time arrival Airlines Company. In a high individualist country, people was request accurate on-time arrival because people value their own time and wish to avoid delay, so that they can more utilize their own time to do their own stuff.        

PEST Analysis for Air Asia

Political

For the low cost strategies company in the airlines industry, Bilateral air transport agreement is the barrier that Air Asia facing to expand their business activities and increase the level of difficult to flying outside Malaysia. Besides that, some of the decision (landing rights, service to certain routes) was in charge by the government and Air Asia have to obey any decision made by the government. One of the case was In year 2004, Air Asia was applied Subang Airport as their hub, but government was reject Air Asia and appoint Air Asia move to LCCT. Another case was In year 2014, Air Asia has been move to new airport (KLIA2) which was called by government due to government decide to shut down LCCT.

Economic

The current economy has move towards to recession and will slow down the aviation business in the world. But this was the opportunity for Air Asia because more people will looking for the cheap tickets compare looking for expensive air tickets.

Besides that, nowadays, there have more new low-cost airlines such as Malindo and Firefly. It will increase the consumer choice. Consumer would compare the benefit, service and price that has been provided with different company and make the decision.

Furthermore, Oil prices is another factor for Air Asia to worry because it will affect their cost and revenue. If the oil prices has increase, it is not a good news for Air Asia because it will increase the level of difficult to control cost of operation. In this two year, oil prices has been decrease 40% compare to year 2013 and lead to Air Asia has been successfully to remain low cost of operation and provide low price of air ticket to ticket.

Social

Furthermore, according to the world population clock, the world's population has been increase yearly, and tourists and number of educated people has increase and help for the growth of aviation industry and demand for air travel has been increased. To increase the competitive advantage and the position in the marketplace, Air Asia has increase the operation or customer service with provide the full service with low fare. Example that Air Asia has increase their customer service was provision of in-flight food and drinks, and online sales of hotel, car, and holiday reservations, as well as travel insurance), and corporate travel services, with its own branded credit card; further increasing brand awareness and value for customers.