EXECUTIVE SUMMARY

In this report, we have studied the operation of AirAsia. AirAsia was awarded as the Worlds Best Low Cost Airlines for three consecutive years 2009, 2010, and 2011 respectively. The report has been divided into 4 phases. In the 1st phase, we had done the external analysis, mainly Industry analysis. In this part, we have identified the industry in which AirAsia is operating. After then, we have done analysis of the industry through various tools namely Porters competitive advantage analysis, Pest analysis. Furthermore, we had analyzed industry trend, industry life cycle and industry profitability. In the phase 2, we had internal analysis of AirAsia. Here, we identified SWOT (Strengths, Weaknesses, Opportunities, and Threats) of AirAsia. In the 3rd phase, we discovered the Business model of AirAsia. Moreover, we had identified corporate level and Functional level Strategies. For Air Asia, Corporate and Business level strategies are synonymous as it has single line of operation. Moreover, we had conducted SWOT analysis in this face and identified that strategies of AirAsia are aligned with its Strengths and based on minimizing weaknesses, threats. Here, we found that AirAsia is following the cost leadership business strategy in the low cost carrier (LCC) airline industry. In the 4th and final phase, we worked on organization structure and control system of AirAsia. Finally, we placed few recommendations for AirAsia in order to maintain its competitive advantage of cost leadership in the long run.