Air Asia Essay

2166 WordsNov 17, 20139 Pages
Introduction The purpose of this assignment is to apply the concept of microeconomics in analysis of the airlines industry. We are required to select one of the companies which is from the airlines industry. Besides that, we need to explain type of market structure that this company can be categorizes into and also explain the characteristics of that market structure. In Malaysia, where the AirAsia and MAS groups control about 80% of total capacity, the two companies have committed not to cut capacity. But reduced route competition will almost certainly be one outcome of their agreement. The tie-up will require competition authority approval and come under additional scrutiny from next year, when Malaysia’s new Competition Act is implemented, but is unlikely to be blocked as the two companies will at least for now remain independent. *Based on seats per week for last week of September. AirAsia figure includes flights operated by Malaysia AirAsia, AirAsia X, Thai AirAsia and Indonesia AirAsia. MAS figure includes flights operated by Malaysia Airlines, Firefly and MASwings. SIA figure includes flights operated by Singapore Airlines and SilkAir. Carriers with market shares of less than 1% are included as others. The company that we have selected is AirAsia Berhad. As we know Air Asia is one of the leading airline companies in Malaysia. AirAsia is a name synonymous with low fares, quality service and dependability. With over 110 routes across 13 countries, AirAsia is truly Asia’s leading airline with the widest route connectivity and largest customer base. With the unmistakable tagline, “Now Everyone Can Fly”, AirAsia has made flying affordable for more than 61million. As a largest and successful firm in the particular industries, it is suitable to be an example of the oligopoly competition because there are only small numbers of firms that joined or operates

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