Saturday, April 13, 2013

All About Air Asia related to E-commerce

Introduction

In my assignment, I
e-commerce company
popular website for
the first airline
Malaysia

use Air Asia as an example of an

where it was voted as the most
online shopping that makes it as
company applying e-commerce in

Air Asia Berhad is a Malaysian-based low-cost

airline where it was the largest low-fare, no-frills
airline and a pioneer of low-cost travel in Asia.
Air Asia group operates scheduled domestic and
international flights to over 400 destinations
spanning 25 countries. Its main hub is the Low-Cost
Carrier Terminal (LCCT) at the Kuala Lumpur
International Airport (KLIA). Air Asia is using ecommerce to promote and sales ticket through online.
Passengers can make booking directly and buy tickets
through online and just use a booking number to
check in. The website also available in seven
different languages, including four on its Malaysian
site and registered members also receive promotions
online though e-mails.
Background of Air Asia
Air Asia was established in 1993, but began
operations on 18 November 1996. It was originally
founded by a government organization known as DRB-

Hicom. On 2 December 2001 the heavily-indebted

airline was bought by former Time Warner executive
Tony Fernandez company Tune Air SDN BHD for the
token sum of RM 1 with 40 million worth of debts.
However, Fernandez 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 RM 1.
In 2003, Air Asia opened another new hub at Senai
International Airport in Johor Bahru and launched
its first international flight to Bangkok, Thailand.
After that, it also added Singapore itself to the
destination list, and started flights to Indonesia.
In addition, flights to Macau began in June 2004,
and flights to Xiamen, China and the Manila,
Philippines in April 2005. The flights to Vietnam
and Cambodia followed later in 2005 and to Brunei
and Myanmar on 2006.
Air Asia took over Malaysia Airlines Rural Air
Service routes in Sabah and Sarawak in August 2006,
but it is operating under the Fly Asian Xpress
brand. After a year, the routes were returned to MAS
Wings
because
of
commercial
reasons.
Tony Fernandez subsequently established a five year
plan to further enhance its awareness in Asia
countries. Under the plan, Air Asia wanted to
strengthen and enhance its route network by

connecting all the existing cities in the region and

expanding further into Vietnam, Indonesia, Southern
China and India. In addition, Air Asia will focus on
developing its hubs in Bangkok and Jakarta through
its sister companies, Thai Air Asia. With increase
frequency and the addition of new routes, Air Asia
expects passenger volume to reach 18 million by the
end of 2007.
Functions of Air Asia
Air Asia is the first airline which introduced
online booking system in Malaysia. Online booking
system refers to making online, real time, internet
bookings for such things as flight, hotel rooms or
even theater ticket. The number passenger of Air
Asia has increased from 200,000 to 350,000 after Air
Asia was introduced the online booking system to
their clients. Furthermore, Air Asia also became the
second largest airline in Asia to go completely
ticket less after Sky mark Airline in Japan.
One of the advantages of buying airline tickets
online is the convenience of doing it inside your
house without having to drive all the way to a
travel agency office in the city. Within a few
clicks, you are already taking out your credit card
and preparing to confirm your booking. After few
minutes, the ticket confirmation is already arrived
in your mailbox. In addition, the airline websites

have the facility to compare airline ticket prices

across many different days. You just simply specify
your date and time of travel and the search engine
will do the rest. This saves your time of having to
visit each and every date in order to get a best
deal of flight ticket.

Air Asia also provides web check-in service to their

customer. Web check-in is refers to the service that
used internet to check-in and print the boarding
pass through the website or download it to the
mobile. Use the web check-in and save the time you
would spend in queues at the airport because web
check-in allows you to check in between 23 hours and
1 hour prior your departure. There is another

benefit of web check-in which you can drop off your

baggage quickly at the separate counter.

Process on how Air Asia do their online transactions

online
If you have been thinking of where to go for your
vacation in Malaysia, allow us to give you all the
best suggestion for Online Ticket Booking according
to research. That is the Air Asia Online Booking
because Air Asia.com is the Malaysian worlds best
Low-Cost Airline, which offers flight, planes,
corporate information and Online Booking. Air Asia
is a regional airline that is serving in Malaysia
and south-east Asian destinations. At AirAsia.com,
online booking process is easy & fast and within a 6
minute simple steps you can confirm your flight
ticket

In the Asia, AirAsia is founded as low cost

travelling. There is number of things to choose your
travelling destination with AirAsia, including
country, where you want to visit and language.
AirAsia is the first airline in Malaysia which has
implemented fully ticket less travel and unassigned
seats.

How to do Air Asia Online Booking?

Go to the AirAsia.com website where you will find 5
easy steps to learn how to book your flight(s)

online. If you want to book the ticket at Air Asia,

you can go online at the Air Asia website and
require following a few easy steps to complete the
ticket booking process.
AirAsia Online Booking is done in five easy Steps as
mentioned below.
1. Search: Click on the search button to choose
your trip type like Return Trip or One Way trip the
corresponding text boxes.
2. Select: Your second step is you have to choose a
Departing Flight Date or Return Date with the chosen
fare & time.
3. Guest & Contact: Then click on this option to
choose your Number of Guests or Infant in the
matching text boxes.
4. Payment: Now, you will come on the most
important step number 4. With the Air Asia Go Insure
Premium amount, the name of guest(s) will be
displayed.
5. Itinerary:
Your
Flight
Itinerary
will
be
displayed on the screen and sent to your email after
once the payment has been processed.
Advantages and Disadvantages of e-commerce relate to
Air Asia
E-Commerce is the process of buying and selling
supported by the electronic means, primarily the

internet (Anonymous, 2005). In others word, ecommerce is the process of buying, selling and
distributing over internet. E-Commerce also has
advantages and disadvantages when using it.
Advantages of e-commerce relate to Air Asia
Convenient and save time
Air Asia has provided an online service where it
allows customer to book air ticket without needing
the customer buy through the third-party or through
agent anymore (Sxuan, 2012). Through this service
Air Asia has provide their customer with an easy way
to book air ticket through online and this has
resulted in helping the customers to save more time
because they does not need to travel to the airline
counter, to queue and aisles for the parking space
to buy ticket at the counter. It is very convenient
for the customer from everywhere in Asian countries
to book air ticket online whenever they wanted to
access to the webpage.
Other from that, Air Asia website also provide a
search engine on their website for the customer who
wanted to book their ticket online with the help of
this search engine they only need to fill up their
travel destination, numbers of people go to travel,
either is one way trip or return and the result will
come out with a click on search which this has

bring a differentiation from others airline company

(Sxuan, 2012).
Save cost
Air Asia is mainly concentrate on online bookings
and ticketless travel which allows it to have a
lower distribution cost (Wong, 2009). They try to
maximize their profit and offer quality service at
low prices. By operating a faster turnaround time to
improve the utilization of aircraft and the crew
efficiency, by providing no frills service, by
using only one type of aircraft to save the training
costs, which it has help the airlines company to
minimize their costs by benefit their customer with
a lower fare when travel with them (Dusamo, 2003).
From the seller point of view, it is more save cost
for Air Asia to practice the direct sales model as
compared to go through the travel agents or thirdparty. Because using e-ticket is cheaper than
printed tickets and it helps the airlines to collect
a higher sales percentage over the internet. In
order, to operate a low-cost airline they have to
avoid from travel agency commissions and ticket
production costs (Dusamo, 2003). In addition, the
airlines have to concentrate their product sales
through internet their operation cost will be lower.
As they no need to pay additional wages because most
of the operation is done through online (WONG &

Cary, 2009). The benefit that e-commerce bring to

the airline is helps to lower down their airport
fees, maintenance, cockpit training and standby
crews due to homogeneous fleet. From the customer
point of view, they no need to hassle and have long
queue to collect their ticket at the counter anymore
as they only need to access to the website to book
their ticket by clicking on through the pages.
This has resulted more save cost as compared with
traditional way to travel using other alternatives
such as by bus or ferry. This has offer the customer
lower cost option rather than buying a printed
ticket at the counter (Dusamo, 2003).

Reach a wider customer base

Air Asia has operating their business using online
services which they allow their consumer to book
their
ticket
over
the
internet
without
intermediaries or third party such as travel agent
to book ticket. As the airline operate under the
online services they can reach a wider customer base
at any countries only through internet where most of
the consumers can book their ticket through online
without through a third-party.
As Air Asia is an online travel company that offer
air tickets, holiday packages and hotel bookings in
Asian countries (Lam, 2011). It provides flight,

planes, corporate information and internet booking

for both domestic (Malaysia) and international
countries (Matt, 2010). It allows consumers to book
their flights through their website (Airasia.com)
(HubPages Inc., 2012). Although, their website only
provides travel booking either a one way trip or
return only. But, the customer who wish to travel to
more than one place they also can make multiple
separate bookings to reach the destination of their
choice (www.lcct.com.my., 2012).
Reduction of Marketing and Advertising Costs
With the changes on the new digital technology in
this world has helping the world moves from the
traditional advertising and through technology it
can help us to reduce our advertising cost. Which
now Air Asia has opened up a unique and effective
way to reach the wide range of customer bases called
the Airspace advertising with this space they can
post any offering or promotion on the pages also or
any offering that they wanted to offer to the public
without paying any advertisement cost on it. Air
Asia can post any advertisement on their website
homepage (Airasia.com). For example, the promotion
on the ticket fare. Consumers that visit the webpage
can easy to see the advertising and click on the
advertisement to know more about it. The consumer
might get attracted by the promotion that posted on

the Air Asia webpage and book the ticket to vacation

(Sxuan, 2012).
Through E-commerce Air Asia can reduce their
advertisement cost because their consumers can
connect
directly
with
the
company
website
(WordPress.com., 2009). Since, Air Asia posted their
promotional activities directly over the online. For
example, through the email alerts and desktop widget
that jointly developed with the Microsoft for new
promotions (WordPress.com., 2009).
Disadvantages of e-commerce relate to Air Asia
Privacy and security
When the customer makes an online purchase, there
need to provide personal information such as an
address, telephone number and banking or credit card
account information to purchase. Unfortunately, some
of e-commerce websites are not able to harvest other
information about the customer online behavior and
preferences. This could lead to credit card fraud,
or worse, identity theft. Moreover, it causes many
people feel making an online purchase does not
compromise their personal information, there still
prefer not to take a possibility of having their
account information accessed by a third party, and
will only make their purchases at a store rather
than online purchase.

For example, in Air Asia, security continues to be a

problem where the privacy policy is not a contract
and does not create any legal rights that make some
of the customer doesn't feel confident about the
integrity of their personal information and the
payment process from online. Air Asia is well known
with the cheap, no-frills flight service with the
brilliant slogan now everybody can fly. However,
some of the Air Asia customers complain that Air
Asia has violated the law of privacy by sharing
personal information to third parties where has
complaint pertaining that about some of user
personal information such as I.C. no. and full name
was
obtained
by
anonymous
company
(KambingBujang.com, 2008).
Payment services
E-commerce is often performed using bank account,
PayPal and credit card facilities as a payment
method for every transaction that be performed in
online. According to Tyler Lacoma (1999), online
payment systems are new and global in their
perception, problems can occur when it comes to
applying them to all e-commerce company. Some types
of payment that userused to pay may not be available
in other countries, even when purchasing online from
those countries is an option. The e-commerce company
can also struggle to match up the values of

different currencies or different

accounts that user are using.

types

of

bank

For example, in Air Asia some of American credit

cards cannot be used by the user to make payments
for booking the ticket flight. According to
Cassandra James (2006), the Air Asia new payment
system causes some of the American credit card
cannot be used and take a long time for booking the
ticket. She says that last time she has no problem
using debit card and credit card to make payment
until the new payment system come out, all her
payment using it being declined and she has to take
a long time to check to her bank and she attempts on
Air Asia's website later, the payment finally went
through.
Insecure Password
According to Wong (2009), some of the e-commerce
website company was recently being hacked, with all
user passwords stored in plain text was stolen above
32 million accounts. This is an awful security
lapse, not just because it compromises user account,
but because many users use the same password across
multiple sites, so a file containing emails and
plain text passwords means that the attacker can
compromise a great many of these accounts for all
those people across the web.

For example, it has problem on Air Asia systems

where they're used plain text password. They're
using the same password with same high security
password, like email or bank account login.
According to Juzhax (2011), the password that has
plain text and no encryption is insecure where the
password can easily be read from the hacker. One
there gets the user password, they may try to access
user email or other sites what the user login,
because they can search username in Google. Inside
the Air Asia system, they do allow used to store the
credit card number inside, where the user credit
card number maybe leak out to by the hacker.
E-commerce is not free
According to Emily Lonigro, (2011), every e-commerce
site has these three pieces such as gateway,
shopping cart, and fulfillment. Build a shopping
cart to a client's specification is very expensive.
Most carts are third-party and charge a monthly fee;
therefore it has varying levels of difficulty and
customization. In Gateway, it is the payment
processor where it takes payments and puts them into
a bank account. It connects the shopping cart with a
processing network which checks for the necessary
funds and either authorizes or denies payment where
the fee is usually a percentage of the sale, around
3%. In the Shopping Cart, it is the site utility
that collects items, deals with shipping, and

handles other custom items like gift cards and

custom messages. This utility sends the orders to
fulfillment and the credit card details to the
gateway. It's usually a monthly fee. In Fulfillment,
it is the place that processes and ships the orders.
This will cost of time, money, or sometimes can be
both.
For example, Air Asia is known the cheapest airline
industry compare to another airline. The Air Asia
uses e-commerce to promote their sales promotion on
ticket prices, where it is more expensive way to
promote. Therefore, Air Asia has to spend more money
to pay for e-commerce business to promote their
ticket promotion where they also need to pay worker
salary,
government
tax,
supplier,
equipment,
services, and facility. If their ticket sales drop
in future, it will affect them where there has
problem to pay all the payment include the ecommerce fee.

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