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PROGRAMME : Executive Master in Business Management

STUDENT INTAKE :

MODULE : Organizational Behavior

DUE DATE : 12th February 2020

CLASS DATE : 12 th January 2020

DATE SUBMITTED : 12th February 2020

FACILITATORS NAME : Sir Deewasnari Muddat

STUDENT NAME : Jackylene Salleh

STUDENT NUMBER : WMPK18403

IC/NO : 860817125116

CENTRE : KOTA KINABALU

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Table of Contents Page

1.0 INTRODUCTION ............................................................................................................... 4

2.0 OVERVIEW OF AIRASIA BERHAD .............................................................................. 5
2.1 HISTORY OF AIR ASIA BERHAD .............................................................................. 6
2.2 AIRASIA AFFLIATE ..................................................................................................... 7
2.3 FLEET ............................................................................................................................. 9
2.4 DISTRIBUTION CHANNEL ......................................................................................... 9
2.5 MARKET SEGMENT ..................................................................................................10
2.6 CUSTOMER BEHAVIOR ..........................................................................................10
2.7 PRODUCT AND SERVICES.......................................................................................11
3.0 AIRASIA PERFORMANCE & ANALYSIS ...................................................................12
3.1 SWOT ANALYSIS FOR AIR ASIA BERHAD ...............................................................12
3.2 PESTLE ANALYSIS FOR AIR ASIA BERHAD .....................................................13
Politic ...................................................................................................................................13
Economic..............................................................................................................................13
Social....................................................................................................................................14
Technology ...........................................................................................................................14
Legal ....................................................................................................................................14
Environmental ......................................................................................................................14
4.0 ORGANIZATIONAL BEHAVIOR IN AIRASIA ................................................................15
Management style ....................................................................................................................15
The organization structures ..................................................................................................16
Teamwork within the organization ......................................................................................17
Reward system .....................................................................................................................17
Culture Matters! .......................................................................................................................18
5.0 CONCLUSION .................................................................................................................19
Reference......................................................................................................................................20

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 Organizational Behaviour

Jackylene Salleh
University Malaysia Pahang
UMP Advance

Abstract

The aim of this paper is to analyse and discuss in detail the “Organizational Behaviour” in
AirAsia Group and how the behaviour in at all level in the organization may have led the
results of phenomenal success for the Group.

Keywords: Organizational Behaviour, SWOT, PESTEL or BCG Matrix and Air Asia.

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1.0 INTRODUCTION

AirAsia Berhad is a Malaysian low-cost airline headquartered near Kuala Lumpur, Malaysia. It is
the largest airline in Malaysia by fleet size and destinations. AirAsia Group operates scheduled
domestic and international flights to more than 165 destinations spanning 25 countries.

Stock price: AIRASIA (KLSE) RM 2.96 +0.13 (+4.59%)

27 Dec, 5:00 pm MYT - Disclaimer
Bag information: In economy, prices vary by itinerary. More AirAsia bag information
Destinations: 74 (excluding subsidiaries)
CEO: Aireen Omar (Jul 1, 2012–), Tony Fernandes (Dec 2001–)

AirAsia Berhad provides air transportation throughout Asia. The airline operator focuses on
delivering lower fares without a host of other amenities. It does not provide frequent-flyer
miles or airport lounges, but looks to cater affordable transportation to all customers. In-flight
meals and drinks are additional purchases available to customers. All short and long-haul
flights are nonstop, and the company focuses on high frequency and high turnaround of
flights. Operating segments are grouped by geographic regions. Revenue derived from
Malaysia makes up the majority of revenue, but the company does hold material operations in
several Asian regions.

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2.0 OVERVIEW OF AIRASIA BERHAD
AirAsia Berhad is a Malaysian low-cost airline headquartered near Kuala Lumpur, Malaysia. It is
the largest airline in Malaysia by fleet size and destinations. AirAsia Group operates scheduled
domestic and international flights to more than 165 destinations spanning 25 countries. Its
main hub is klia2, the low-cost carrier terminal at Kuala Lumpur International Airport (KLIA) in
Sepang, Selangor, Malaysia. Its affiliate airlines Thai AirAsia, Indonesia AirAsia, Philippines
AirAsia, and AirAsia India have hubs in Don Mueang International Airport, Soekarno–Hatta
International Airport, Ninoy Aquino International Airport, and Kempegowda International
Airport respectively, while its sister airline, AirAsia X, focuses on long-haul routes. AirAsia's
registered office is in Petaling Jaya, Selangor while its head office is at Kuala Lumpur
International Airport.

AirAsia operates with the world's lowest unit cost of US$0.023 per available seat kilometre
(ASK) and a passenger breakeven load factor of 52%. It has hedged 100% of its fuel
requirements for the next three years, achieves an aircraft turnaround time of 25 minutes, has
a crew productivity level that is better than that of Malaysia Airlines and has an average
aircraft utilization rate of 13 hours a day.

AirAsia operates with the world's lowest unit cost of US$0.023 per available seat kilometre
(ASK) and a passenger breakeven load factor of 52%. In 2007, The New York Times described
the airline as a "pioneer" of low-cost travel in Asia. AirAsia has consistently been named as the
world's best low-cost carrier for 11 years in a row in international travel and airline awards,
including the latest award for 2019.

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2.1 HISTORY OF AIR ASIA BERHAD

AirAsia founded by a government-owned conglomerate, DRB-HICOM was established in 1993

and began operations on 18 November 1996. On 2 December 2001, the heavily indebted
airline with only two planes was bought by former Time Warner executive Tony Fernandes
under company Tune Air Sdn Bhd for the token sum of one-ringgit (about US$0.26 at the
time) with US$11 million (MYR 40 million) worth of debts.

Fernandes turned the company around, producing a profit in 2002 and launching new routes
from its hub in Kuala Lumpur, undercutting former monopoly operator Malaysia Airlines with
promotional fares as low as MYR 1 (US$0.27). In 2003, AirAsia opened a second hub at Senai
International Airport in Johor Bahru near Singapore and launched its first international flight to
Bangkok.

AirAsia subsequently started its Thai AirAsia affiliate, and began flights to Singapore and
Indonesia. Flights to Macau started in June 2004, and flights to mainland China (Xiamen) and
the Philippines (Manila) in April 2005. Flights to Vietnam and Cambodia followed in 2005 and
to Brunei and Myanmar in 2006, the latter by Thai AirAsia. In August 2006, AirAsia took over
Malaysia Airlines's Rural Air Service routes in Sabah and Sarawak, operating under the
FlyAsianXpress brand. The routes were returned to MASwings a year later.

At the end of 2006, Fernandes unveiled a five-year plan to further enhance AirAsia's presence
in Asia. Under the plan, AirAsia proposed enhancing its route network by connecting all of its
existing destinations throughout the region and expanding further into Vietnam, Indonesia,
Southern China (Kunming, Xiamen, Shenzhen) and India. Through its sister companies, Thai
AirAsia and Indonesia AirAsia, the plan called for a focus on developing its hub in Bangkok and
Jakarta. With increased frequency and the addition of new routes, AirAsia increased passenger
volume to 13.9 million in its 2007 fiscal year.

On 27 September 2008, the company announced 106 new routes to be added to its list of 60.
The number of old routes discontinued has not been disclosed. In August 2011, AirAsia agreed
to form an alliance with Malaysia Airlines by means of a share swap. The alliance was struck
down by the Malaysian government, in effect voiding the agreement of both airlines.

By early 2013, AirAsia's profits increased by 168% on a year-over-year basis compared to the
same period in 2012. For the quarter ending 31 December 2012, the airline's net profit stood
at 350.65 million ringgits (US$114.08 million). Despite a 1% rise in the average fuel price, the
airline recorded profits of 1.88 billion ringgit for its full 2012 fiscal year.

In February 2013, AirAsia submitted an application to the Indian Foreign Investment

Promotion Board, through its investment arm, AirAsia Investment Limited, to seek approval for
commencing its operations in India. AirAsia asked to take a 49% stake in the Indian sister
airline, which was the maximum allowed by the Indian government at that time. AirAsia
committed to invest up to US$50 million in the new airline. Operations would begin in Chennai,
expanding its network throughout South India, where AirAsia already operates flights from
Malaysia and Thailand.

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2.2 AIRASIA AFFLIATE

AirAsia Malaysia - Airline code: AK

Established in 2001, AirAsia Berhad (AirAsia Malaysia) was listed on the Main Market of Bursa
Malaysia Securities Berhad in November 2004, and operates from hubs in Kuala Lumpur, Kota
Kinabalu, Penang, Johor Bahru and Kuching. AirAsia Group Berhad (AAGB) has assumed the
listing status of AirAsia Berhad as of 16 April 2018 following the completion of an internal
reorganisation.

AirAsia Thailand - Airline code: FD

Established in 2004, Thai AirAsia (AirAsia Thailand) is a joint
venture between Asia Aviation and AirAsia Investment. Thai
AirAsia is a direct subsidiary of Asia Aviation PLC (AAV), a
public listed company on the Stock Exchange of Thailand. The
airline commenced its inaugural commercial flight on 4
February 2004 from Bangkok to Hat Yai, and now operates
from hubs in Bangkok Don Mueang, Phuket, Chiang Mai,
Krabi, U-Tapao and Hat Yai.

AirAsia Indonesia - Airline code: QZ

Established on 8 December 2004, PT Indonesia AirAsia (AirAsia Indonesia) is a joint venture
between AirAsia International Ltd and PT Awair International. PT Indonesia AirAsia is a direct
subsidiary of PT AirAsia Indonesia Tbk (AAID), a public listed company on the Indonesia Stock
Exchange (IDX). The airline currently operates flights from its hubs in Jakarta, Bali, Surabaya
and Medan.

AirAsia Philippines - Airline code: Z2

AirAsia Philippines is a wholly owned subsidiary of AirAsia Philippines
Inc, a joint venture between Filipino investors Antonio O Cojuangco,
former Ambassador Alfredo M Yao, Michael L Romero, Marianne B
Hontiveros, operations in 2012 in Clark, Pampanga and has since
expanded to include hubs in Manila, Cebu and Kalibo.

AirAsia India - Airline code: I5

Established in 2013, AirAsia (India) Limited (AirAsia India) is a joint venture between Tata
Sons Limited and AirAsia Investment Limited. The airline currently operates flights from its
hubs in Bengaluru, New Delhi and Kolkata.

AirAsia Japan - Airline code: DJ

AirAsia Japan Co Ltd (AirAsia Japan) was
established in 2014 as a joint venture
between AirAsia Investment Ltd, Rakuten
Inc, Noevir Holdings Co Ltd and Alpen Co
Ltd. The airline operates from its hub in
Nagoya.

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AirAsia X Malaysia - Airline code: D7
Established in 2007, AirAsia X Berhad (AirAsia X Malaysia) it is the long-haul, low-cost affiliate
carrier of the AirAsia Group and currently flies to destinations in Asia, Australia and New
Zealand, the Middle East and the US. The airline operates from its hub in Kuala Lumpur.

AirAsia X Thailand - Airline code: XJ

Established in 2014, AirAsia X Thailand delivers low fares to those seeking to travel to
destinations more than four hours flight time away from its hub in Bangkok Don Mueang.

AirAsia X Indonesia - Airline code: XT

Established in 2013, PT Indonesia AirAsia Extra (AirAsia X Indonesia) is a joint venture
between AirAsia X Berhad and PT Kirana Anugerah Perkasa. The airline currently operates
from its hubs in Jakarta and Bali.

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2.3 FLEET

Aircraft Type Current Future 2 Historic Avg. Age Total

Airbus A320 95 1 54 5.6 Years 150

Airbus A320-200 66 54 7.1 Years 120

Airbus A320neo 29 1 2.2 Years 30

Airbus A321 2 0.2 Years 2

Airbus A321neo 2 0.2 Years 2

Boeing 737 32 32

Boeing 737-300 32 32

Boeing 747 3 3

Boeing 747-200 3 3

McDonnell Douglas
MD-11 1 1

McDonnell Douglas
MD-11 1 1

Total 97 1 90 5.5 Years 188

https://www.planespotters.net/airline/AirAsia

2.4 DISTRIBUTION CHANNEL

Customers can buy AirAsia ticket from many distribution channels such as AirAsia website/apps
or airport sales counter, Airline Agency (online and offline), and travel online or offline
agencies, websites or apps. The most customers prefer to book from AirAsia website according
to low fare promotion, easy to booked, and easy to payment.

Distribution channel show below.

- www.airasia.com (AirAsia’s Computer Reservation System, https://booking.airasia.com)
- Airport sales counter
- Self counter/kiosk machine (available in airports)
- AirAsia sales office
- Call centre
- Airline Agency
- Travel agents –
- Travel and accommodation apps ie Expedia/booking.com/traveloka
- Skyscanner : Application, www.skyscanner.net

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2.5 MARKET SEGMENT

The main customers of AirAsia are people who have low salaries and budget. Most of them fly
for travel purpose. The second group is people who have middle salaries, they fly for business
reason. Nowadays customers who go for travel or business want to pay cheaper to secure a
seat on a flight.

AirAsia's target market is all individuals’ salaries' identity to fall in the middle or lower wage in
Malaysia. That is the motivation behind why the AirAsia dependably utilize the low value vital
to position it is constantly less expensive than their competitors. Furthermore, it additionally
focusses to the age who are young, adults or more can spend and might be constantly require
a flight to other far destination in shorter time. Third, behaviouristic of AirAsia’s target also is
the general people who are sensitive in price and none loyalty. In this way, they will attract
passenger by their promotion.

This type of target market will affect to other competitor who also serve the most reduced cost
or doing sale promotion. These types of target market are likely buying the service which is
economy, valuable and affordable.

2.6 CUSTOMER BEHAVIOR

Passengers are the main player who driven the aviation industry development. Today, low cost
carrier plays a significant role in the airline industry in term of modern strategic model and
good service offering. Low cost carrier had changed the passenger’s trend and made the great
impact to the customer market in many countries. AirAsia is considered as Asia's largest low-
fare, no-frills airline that operates scheduled domestic and international flights
(UKessays,2015). It is also the first airline in the region to implement fully ticketless travel.

One of the reasons that make AirAsia popular among the other airlines is cheaper ticket prices
than the full fare carrier. They cut off the value-added items that main airline is offering and
use the electronic ticket instead of using paper. Even the meals are not for free but available
at the prices which are affordable. That’s why they can attain their cost.

Moreover, AirAsia have the good strategic marketing planning and take the right action.
They began with using the social media such Facebook and Instagram to attract passenger
and continually sells the hot prices ticket and other attractive promotion.

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2.7 PRODUCT AND SERVICES

AirAsia Asean Pass

AirAsia Asean Pass is a travel pass which allows guests to lock down low base fares with credit,
and redeem flight with the credit to travel across 10 Asean countries - Malaysia, Brunei,
Singapore, Indonesia, Myanmar, Thailand, Vietnam, Laos, Cambodia, and Philippines.

AirAsia Premium Red Lounge

The AirAsia Premium Red Lounge provides a warm and inviting space, where passengers can
rest or chill, as well as catch up on unfinished business before continuing journey. The lounge
offers VIP Room, Newspaper & magazines, Food & beverage, Shower, Wi-Fi connectivity, Work
station area, charging area, Ladies dressing area, Air-conditioning, Flight information. The
lounge is located in International Departure, Kuala Lumpur International Airport 2, and
Malaysia.

AirAsia Red Tix

AirAsiaRedTix.com is the hottest, smartest new way to discover, discuss, review and book
tickets to an international line-up of concerts, sporting events, musicals, theatre performances
and more.

Cheap Flight
Cheap flights: The cheapest flights, airfare and air tickets online even for last minute flights!
AirAsia has the widest connection and frequencies across Asia and more as a tagline on
promoting AirAsia low fare.

Duty Free & Merchandise

Airasia offer the convenience of ordering duty free products via OURSHOP.com , AirAsia online
store where you can purchase up to 48 hours before flight departure and items will be
delivered to customer’s onboard or pick them up at the airport.

Red Carpet
Red Carpet service or vip treatment where customer can enjoy a speedier travelling process all
the way from check-in to landing. These privileges include a dedicated check-in area, access to

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 3.0 AIRASIA PERFORMANCE & ANALYSIS
3.1 SWOT ANALYSIS FOR AIR ASIA BERHAD
SWOT analysis is a strategic planning technique used to assist an organization to identify its
strengths, weaknesses, opportunities, and threats and how these issues can be utilized in
business strategy or project planning.
INTERNAL STRENGTHS
Steady and Consistent positioning: Air Asia has
been positioned as a low-cost airline the airline has
been successful in ensuring that they consistently
1 keep their operating costs as low as possible and
this means that the benefits of this trickle into the
pricing.
Low operating cost due to being No Frill, online
2 reservations system, quick check in etc.
There is huge untapped market in the region,
3 especially for business travelers and “for-the-first-
time-flying” segment.
4 Strong overall financial performance.
Strong partnership with third parties for new
5 income revenue.
EXTERNAL OPPORTUNITIES
Surge in overseas travel: In Asia where Air Asia
is based out of there has been a surge in business
travel. Destinations like Singapore, Malaysia, and
1 Bangkok are popular in the world tourist map and
vacation seasons also see a surge in pleasure travel.
These are opportunities that the airline can
capitalize on.
2 2
3 3
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INTERNAL WEAKNESSSES
Sustaining costs: Air Asia is a low-cost airline and
thus it is critical that the airlines keep its operating
costs as low as possible. With fluctuations in fuel
1 costs and increase in service costs, the airlines find it
immensely challenging to keep their costs as low as
possible.
Low Profits: In order to keep their positioning of a
low-cost carrier Air Asia keeps their pricing as low as
possible and thus rely completely on volumes for
2 their profits which in turn has resulted in lowering
the profits as well as reduced continuous revenue
inflows.
Challenges in balancing service quality with
pricing: The USP of Air Asia is the low-cost carrier
image it carries. However, some customers are not
willing to compromise on quality just because they
3 charge low and satisfaction is based on the quality
of services. The airline thus finds it challenging to
balance the quality with pricing and it has been
alleged that compromise on quality.
Huge investment to purchase air planes and
4 implementing latest technologies there is high
amount of operational cost.
5
[42]
EXTERNAL THREATS
Management of costs: Air Asia is finding it
immensely difficult to manage the fluctuations in
1 costs of fuel and also to maintain its vast fleet of
aircraft. The management of costs across time is the
most critical challenge that the airline faces.
Competition: The company faces a lot of
competition from local and overseas airline brands
such as Malaysia Airlines, Singapore Airlines, Virgin
Airlines etc
Safety concern and the risk of accident in aviation.
3.2 PESTLE ANALYSIS FOR AIR ASIA BERHAD

PEST Analysis (Political, Economic, Social and Technological) is a management method

whereby an organization can assess major external factors that influence its operation in order
to become more competitive in the market.

Politic
✓ Flying outside Malaysia has been a challenge to AirAsia airline. Bilateral agreement is
one of the main obstacles in the way of low-cost carriers esp Pan-Asia budget carriers.
Landing and navigation charges are expensive in major destinations like Beijing, Hong
Kong, Singapore and Bangkok. There are also no cheaper secondary airports hence, a
crisis for the airline. This is worsened by the fact that the airline market is regulated by
bilateral air rights agreements. Apart from that, Malaysian government relationship
with that particular country state government also may implicate the business.

✓ Any changes in Malaysian political scene can also affect Air Asia as government may
take a different set of rules for aviation companies.

Economic

✓ AirAsia is a low-cost airline and it faces stiff competition from Malaysian Airline. The
good thing is that AirAsia offers cheap flight services and highly affordable tickets that
attract many clients in the region. Asia in theory has the most attractive ingredients
making a budget airline successful. This is enhanced by the fact that the region is wide
and densely populated. Additionally, economic growth in the region and improved cost
of living has empowered many Asians to board flights to different destinations hence,
an advantage to AirAsia airline.

✓ Slowdown in china will impact tourism sector in south-east Asia.

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Social

✓ Many passengers in Malaysia are very reluctant to board no frill flights for long hours.
The longer the route, the fewer prices conscious the clients become. They do not want
to be on long flights especially with limited or no inflight services. AirAsia wanted to be
an airline that operates on average man basis in the street of being in a position to pay
for flights. Individuals who couldn’t think of flying are therefore attracted to AirAsia.

✓ Additionally, AirAsia strongly commits to Safety First following past previous cases of
Severe Acute Respiratory Syndrome that scared many people from flying. AirAsia
therefore complies with all regulatory measures set and consistently adhere to high
standards. This ensures safety for all passengers and airline staff.

✓ AirAsia also operates in countries wide diverse cultural aspects and languages. This is
because its staff embraces cultural diversity making it easier for the company to thrive
in Thai- Malaysian border and in Indonesia.

Technology

✓ AirAsia offers airline online service that combines air ticketing with car hire, hotel
bookings and travel insurance for enhanced AirAsia Travel Protection. To keep all costs
in check, the company has further pushed its online or internet services. This makes it
easier for individuals served by poor rail and road infrastructure to board flights.

✓ AirAsia in 2003 became one of the first and best airlines to introduce SMS booking and
guests can easily book for their flights, check schedules and get latest updates on
AirAsia promotions at their comfort. The airline also introduced GO Holiday and clients
can book for holiday making it a reliable, better performance and reliable airline.

Legal
✓ Malaysian government does not have a clearly written policy for commercial air
transport. The good thing is, in the past years, more emphasis was placed on domestic
flights and for AirAsia’s to operate cheap flights locally and internationally, the company
has managed to strike a balance in its flights.

Environmental
✓ Population growth affects sales of AirAsia. Increasing population in the country
increases sales of the airline bearing in mind that many clients prefer affordable
services. Demand for products and services have also increased. However, the
company should take advantage of this to expand its operations.

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4.0 ORGANIZATIONAL BEHAVIOR IN AIRASIA
Since 2001, Air Asia success has been exponentially expanding, taking it into new territories,
and developing new subsidiaries and ventures. AirAsia’s management attributes this
phenomenal success to its people, culture and way of work.

Amazingly too, the structure of the organization still somewhat resembles that of a small
startup, albeit now having transformed into an ever-growing giant. The company is fluid and
dynamic, changing its structure continuously to suit and adapt to the needs of the business.

AirAsia’s workforce covers the areas of operations (pilots, engineers and technicians, ramp
services, operational control, operational training), hospitality and services (guest counter
services, flight attendants, call centers, catering), commercial (marketing, merchandising,
route revenues, ancillary income, social media, corporate and government sales, cargo) as well
as other corporate services supporting these activities. These include route networking and
regulation, IT, finance, people, quality, strategy, business development and more.

Individuals behave differently in different situations as every individual is different on basis of

variables like age, background, knowledge and skill etc.

There are a few factors which AirAsia adopt to influence individual’s behavior is what their
success has been built on;

Management style

Charismatic Leadership

Tony Fernandes also constantly carries a vibefull of passion and charisma such that he can
influence his team members and have them carry the same attitude to their fellow colleagues
and eventually the customers.

Walk around"

Tony Fernandes adopts a “walk around” management style. “If you sit up in your ivory tower
and just look at financial reports, you’re doing to make some big mistakes.” For a few days
every month he works on ground or in the cabin crew and he made important decisions by
getting the feedback from the crew;

Democratic Leadership

Tony Fernandes's leadership style is most likely democratic when considering the overall
situation. Tony Fernandes’s idea is to link the three continents of Australia, Asia and Europe at
fares that are a fraction of that charged by traditional legacy carriers.

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Relation-oriented Leadership

Tony Fernandes also have been saying that “employees come 1st before his customers”. He
tries his level best to mix around with his employees, whereby he has worked on the ground or
in the cabin crew at AirAsia

To keep employees motivated Tony Fernandes believes that managers should be approachable
every time as he quotes - “We are a flat organisation and our culture is extremely strong. More
importantly, everyone in the company knows what we are all about – ‘Now Everyone Can Fly’.

The organization structures

Job rotation

Staff member of AirAsia able to perform job rotation among their employee. From that,
employee in AirAsia can reduce border among employee and increase motivation.

Job enrichment

AirAsia can gain more satisfaction if they use this job enrichment because from this AirAsia
company will understand the entire department well. So, job will be easier and completely
done. The company can improve the organization structure.

Technology department

AirAsia can use many types of technology to minimize cost and make operation easier and
efficient.

Job sharing

The AirAsia use functional structure. This type of structure really suitable for job sharing
because the employee can share information altogether from their department

Human Resource Management

AirAsia hires the competent workers and assign multi-skilled people so that AirAsia can
overcome the price in term of HR. This can sustain company mission and recompense
employees in term of performance.

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Teamwork within the organization

Problem-solving

AirAsia concerned the teamwork with problem-solving. The problem-solving have been use
because all managers from different department have authorities to get involved in their
department.

Cross functional

For AirAsia, make teamwork with their affiliate airlines to achieve more in performance for
AirAsia Company

Safety 1st

The company really concerned about their crew and passenger safety. For example, AirAsia do
partnership with the world most renowned maintenance provider and complying with the world
airlines operation.

Self-managed

Self-managed is formed team but not fully involved the manager. The members in the team
work according their knowledge (decentralization).

Virtual

AirAsia use virtual teamwork among their affiliate airlines to communicate. These can show
AirAsia concern their company regarding teamwork.

SWOT Analysis

SWOT analysis is a tool to identify strength, weakness, opportunities and threat of an

organizational. AirAsia use this to improve their teamwork.

Reward system
In AirAsia a handsome salary is offered to retain its best employees and the offered salary is
higher than other its competitors. Also, AirAsia use to give bonuses to employees according to
their contribution for the organization.

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Culture Matters!
Tony Fernandes believes that his employees are his greatest assets and encourages a culture
that emits positive vibes to ensure that every player in the team is committed and unified to
set about achieving their shared goals. He once said in an interview, “We do every bit we can
to succeed, including making sure that we have the right atmosphere at work. Keeping our
culture intact entails a lot. We have to make sure that we stay true to winning values and
traits: industry, appreciation for diversity, discipline, flexibility, honesty, friendliness, passion
for learning and excellence, and a genuine concern for the welfare of all.” This shows that he
began by setting the right foundation on which his company operates on. Maintaining the
AirAsia culture is a lot of work, but it does not mean all work and no fun for the employees.
According to Tony Fernandes, the AirAsia staffs are all quite happy to contribute towards
keeping what they call “Culture All Stars”.

It is a normal procedure to have an induction organized by the Human Resource Management

team to welcome new employees into the AirAsia corporation. A corporate culture department
in AirAsia was set up in August 2004 to promote the AirAsia spirit and family atmosphere
through close communication and exciting activities designed especially for AirAsia employees.
This act supports the statements made by Tony Fernandes; that his employees are the driving
force behind the brand’s success. The objective is to ensure that the AirAsia employees across
the world uphold the culture of ONE PEOPLE, ONE CULTURE, ONE AIR ASIA and ONE FAMILY
to reach the goal of ensuring the best experience at ONE AirAsia wherever they fly. The people
of AirAsia are their asset, and their dedication, determination and patience have made AirAsia
a success story. They have built conducive and positive AirAsia culture that permeates all the
line of operation.

There are five published list of values at AirAsia that are inculcated in the employees – safety,
passion, integrity, caring and fun. These values provide a frame of reference for AirAsia
experience and a corporate culture in which they live and deliver peak performance. Tony
Fernandes’ usual style of dressing at work also reflects the culture at AirAsia. He goes to work
wearing his trade mark red AirAsia cap, short sleeved t-shirts and a pair of jeans which are
sometimes older than his employees. By doing so, he is able to break the psychological barrier
of communication between himself and his employees and get everybody to talk and give
invaluable ideas.

As mentioned earlier, “People are AirAsia’s best asset.” Tony Fernandes would like to create a
flat structure, where everyone has access to the big boss and that allows him to get the best
people and discover their potential and talent. A fine example of such discovery of talent would
be Azmir Hashim, a former Guest Service staff who successfully graduated from AirAsia’s cadet
pilot program. This proves that Tony provides support that fulfils the dreams of his employees.
In this way, Tony Fernandes has created a friendly and approachable working environment
within his company.

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Apart from that, there is a great sense of empowerment of AirAsia enhanced by an open office
layout which encourages easy interaction between everyone and flat hierarchy that breaks
down psychological and cultural barriers. All staff (All Star) can approach any member of the
management team to voice out an opinion or share an idea. Good ideas, proposed by anyone,
can be implemented quickly because there is little bureaucracy. At the same time, bad ideas
can be scrapped just as fast.

The AirAsia staff members understand that generating ideas is not limited to the directors and
executives of the company and that everyone can contribute ideas regardless of their rank in
the company. This informal structure means not only that there are more than 8,000 brains (of
All Star) contributing to the company performance as opposed to just 20 or so at management
level. It also helps to keep costs down by tapping on internal resources as opposed to paying
for outsourced external help.

Human capital development at AirAsia is about providing opportunities to their people (All
Star); opportunities such as fulfilling the dreams of the cabin crew and ground officers to
become pilots. This helps to develop talents within the company and saves cost on hiring a
brand new employee who needs to be trained from scratch. With the basic assumption of ‘Now
Everyone Can Fly’, AirAsia is operating in a cost optimization philosophy to make flying
affordable for everyone

5.0 CONCLUSION
With the foundation that Tony Fernandes has created, the AirAsia staff members are currently
in a friendly workplace with a flat hierarchy. This creates a conducive working environment
where everyone can perform at their best. With the low cost implementations in place, AirAsia
has continued to deliver its promise of affordable airfares with reliable services.

As a company once’s with almost RM40 millions in debt, AirAsia has made tremendous
progressive steps to where it is today, thanks to the leadership of CEO Tony Fernandes. With
the growth that sees AirAsia currently in 18 countries, it has potential to progress even more.
Continued success creates strongly held shared assumptions, and thus a strong corporate
culture core. If the internal and external environments remain stable, this continues to be an
advantage.

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 Reference
Books/Article writing

Airasia Organizational Culture Essay. (2016, Oct 27). Retrieved from

https://graduateway.com/airasia-organizational-culture/ Retrieved 29 January 2020

Eva Christodoulou, November 16, 2013 . AirAsia turns dreams into reality by offering great
opportunities.
http://mystarjob.com/articles/story.aspx?file=/2013/11/16/mystarjob_careerguide/138
94934&sec=mystarjob_careerguide Retrieved 29 January 2020

Hitesh Bhasin, February 2, 2019 By SWOT analysis of Air Asia

https://www.marketing91.com/swot-analysis-of-air-asia/ Retrieved 29 January 2020

Kurlantzick, Joshua (23 December 2007). "Does Low Cost Mean High Risk?". The New York
Times. Retrieved 29 January 2020

Nad Lulu, May 12, 2015. THE AIRASIA COMPANY ORGANIZATIONAL BEHAVIOR
https://padlet.com/nadiahmusir/4x7k2qrcyugy . Retrieved 29 January 2020

routsonline.com. 7 October 2016."AirAsia, the leading and largest low-cost carrier in Asia,
services the most extensive network with over 165 routes covering destinations in and
around Asia". Retrieved 29 January 2020.

Scribd 2019 ‘Pest Analysis (AirAsia)| Airlines| Low Cost Carrier',

<https://www.scribd.com/document/84916644/Pest-Analysis-Air-Asia> Retrieved 29
January 2020

"Tony Fernandes". Bloomberg Businessweek. 11 July 2004. Retrieved 29 January 2020.

Websites

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1. en.wikipedia.org/wiki/AirAsia

2. ir.airasia.com/misc/press_release_20171231.pdf

3. newsroom.airasia.com/news/2018/5/24/airasia-group-berhad-first-quarter-2018-financial-
results

4. www.nst.com.my/business/2018/02/339613/airasias-2017-profits-marginally-hindered-
higher-cost-and-tax-charges

5. www.planespotters.net/airline/AirAsia

6. www.ukessays.com/essays/marketing/pest-and-swot-analysis-of-airasias-international-
business-operations-marketing-essay.php

7. www.scribd.com/doc/133445489/Analysis-of-AirAsia-Malaysian-Airlines-and-Singapore-
Airlines

8. www.swotandpestle.com/air-asia/

9.www.thestar.com.my/business/business-news/2018/05/24/airasia-delivers-best-quarterly-
net-profit/

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