China Southern Airlines

China Southern Airlines was founded in 1995 and is based in Guangzhou

It is China’s largest airline in terms of fleet size, with 309 aircraft. The airline employees over 45,500 full time employees. Its main hubs include Guangzhou and Beijing, but it operates in over 150 cities throughout China.

Furthermore, China Southern operates 616 domestic 82 routes, including 90 international routes and 25 routes in Hong Kong and Macau. As China’s only company that is in world top ten passenger airlines, China Southern Airlines is committed to building the core values of “CSAIR” consists of ‘customer first, (staff) respecting talent, (advantage) striving for excellence, continuous innovation and (return)contributing to society’ while incorporating social responsibility into the company’s development strategy. It is all to fulfill CSA’s vision and mission that to be the airline of “first choice” for our customers and employees.

Internal Analysis
In the value chain analysis. There are primary activities and support activities by China Southern Airlines (CSA). In the Primary Activities, first is inbound logistics. As CSA is a service oriented the logistic is the airplane itself and the staffs. As currently, China Southern Airlines operates more than 500 passenger and cargo transport aircraft, including Boeing 787, 777, 747, 757 ; 737 and Airbus A380, 330, 321, 320, 319.

Moreover CSA has earned an award for engine performance monitoring system by Natural Science ; technology progress Awards. Also CSA boasts for their 5,260 experienced pilots, and is the only Chinese carrier that has the independent capability to train its own pilots through its dedicated flight-training centre. Also CSA constructed a massive air cargo station, which covers more than 280,000 m2 with an annual capacity of managing 800,000 tons of mail and commerce. In addition, the Nanland Air Catering Co., Ltd., a holding subsidiary of China Southern, produce 8 30 million packed meals per annum.

Read also “American Airline Marketing Strategy”

Second of the primary activity is the operations, CSA handle more than 2,000 daily flights to 193 destinations in 35 countries and regions across the world. Through close cooperation with its SkyTeam member airlines, China Southern Airlines’ global route network ps 1000 destinations to 187 countries and regions and nearly every major world metropolis. China Southern transported more than 86 million passengers in 2012, ranking the carrier first in Asia and the fifth among the 240 Airlines in IATA , topping all Chinese airlines for 34 years. Third is the outbound logistics, CSA done it very well as they are equipped with special online and mobile check in services. Fourth is the Marketing and Sales, CSA made a Social Responsibility Management to fulfill it’s mission to provide responsible service to the Party, the people and the nation at large.

In June 6, 2013, China Southern Airlines opened the Guangzhou-Moscow route, adding to the existing routes from Guangzhou to Paris, Amsterdam and London . China Southern also operate routes from Guangzhou to Sydney, Melbourne, Auckland, Brisbane, Perth etc. in Oceania, which form two beautiful fans. The China Southern Airlines’ European fan route network and Oceania network joins at Guangzhou Hub, cooperating with each other to create “Canton Route”.

By December, 2012, China Southern Airlines have kept a safe record of 10.37 million flying hours and carried close to 600 million passengers without incident. The airline’s safety commitment has – and continues to be – unwavering both throughout China and globally. On September 28, 2012, China Southern Airlines was honored with the Diamond Flight Safety Award by the Civil Aviation Administration of China (CAAC), becoming the leading Chinese carrier to maintain the highest safety records in China.

China Southern Airlines has been honored as the “Best Airline in China” by several international media organizations and was honored with the “Five Star Diamond Award” by The American Academy of the Hospitality Sciences in January 2004. In 2011, China Southern Airlines earned its Four-Star status from SKYTRAX, the world’s most prestigious airline performance evaluation organization. That same year, China Southern Airlines also won the “SKYTRAX 2011 World Most Improved Airline”.

Parent Company
China Southern Airlines Co., Ltd.

Tagline/ Slogan
Always Cheaper Than On The Ground

USP
One of Asia’s largest airline in terms of both fleet size and passengers carried

STP
Segment
Customers looking for punctuality and efficiency

Target Group
Middle class / Upper middle class

Positioning
Smooth and efficient operations

SWOT Analysis
Strength

1. Largest air transport network in China with access to over 150 cities and over 600 domestic routes.

2. Centrally located in Guangdong for easy access to the rapid industrial growth of the Pearl River Delta.

3. Culturally, politically, linguistically, and historically synchronized with the Chinese market and the changes occurring within Chinese air transport.

4. Largest domestic cargo carrier

5. History as State Owned Entity and residual access and political access with the Civil Aviation Administration of China.

Weakness
1. Small air cargo business segment and limited experience in air cargo freight and overnight transport logistics. 2. Undergoing continuous business reorganization and cultural change due to Chinese air transport deregulation, recent acquisitions, and alliances.

Opportunity
1. Utilize first-to-market advantage to build customer loyalty and to “lock-in” air cargo customers via contract and real-time technology before competitors commence expanded services in Chinese domestic market.

2. Utilize cultural background to implement Chinese air cargo information technology that reduces costs for independent shippers/forwarders in China through real time shipment communication.

3. Establish communication centres to accurately predict package/cargo volume and to reduce wasted belly space on domestic routes.

Threats

1. Increased domestic Chinese competition and resultant decreases in scale economies.

2. Inadequate grants of slot space and access to international hubs to compete internationally in the absence of further follow-through with alliances.

3. Increased competition from substitutes as Chinese surface transport infrastructure develops.

4. Jet Fuel price increases causing slowing of Chinese economy and overcapacity of air cargo carriers.

Competitors

1. AMR
2. Air China Limited
3. Air India

EXTERNAL ANALYSIS
Current Rivalry
As China Airlines have several competitors worldwide like EVA Airways becauseIf you’ve ever flown into (or out of) Taiwan then chances are good you were either on EVA Air or China Airlines, the two largest airlines native to the Republic of China.Between them, the two carriers handle approximately 64% of passengers visiting or departing Taiwan.

http://www.mbaskool.com/brandguide/airlines/5076-china-southern-airways.html

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Ethical Issues in the Aviation Industries

Ethics refer to the general rules and policies that govern people’s behavior. Ethics ensure that all human beings in any given social setting behave in a similar manner reason being, they share the same beliefs systems that will help them become better human beings. For any organization to offer quality standard services and products, they have to be governed by a set of ethical principles that will be applicable to everyone. This will make the employees as well as the employers can work to achieve the goals that they have set for themselves.

Ethics will therefore ensure that the organizations fulfill their social responsibilities not only to their clients but also the general public. Ethics in aviation and culture When ethics are made, they are made putting into consideration that they are meant to serve people with different cultures or ethnic backgrounds. The ethics that are formulated therefore are in line with various principles that are shared by most societies and therefore enhance the values that the society has instilled in people as good so as to mold them to become better persons as well as leaders.

The aviation industry just like all other industries strives to offer the best services and please its customers. To fulfill this important aspect, they will need to have a code of ethics which they will follow that will enable then to solve various problems that face the aviation industry. “Ethical principles provide a guide for organizations to use in decision making (Patankar, Brown & Treadwell, 2005). ” Some of the ethical principles that are relevant in the aviation industry include: o Respect Everyone is supposed to respect others just as they would like to be respected.

Respecting others should be done without discrimination. People should therefore be treated equally without basing their feelings on other people’s culture, religious affiliations, race or even gender. Respect enhances other things like autonomy which requires people to make decisions that are based of facts so that a person would treat others just as they would like to be treated. o Non-maleficence Non-maleficence refers to the duty that professionals in any field especially have to wards their clients. They should not harm then in any way or put their lives at risk.

This will make them aware of the decisions they make so that they make sure when they do anything, they have the best interests of their clients at heart. o Beneficence Beneficence refers to promoting the good of others. This will be done if employees understand the business practices of the organization so that they can be able to offer the best services to customers. o Justice Justice is refers to giving others what they rightfully deserve. His is the provision of services that are worth what the customer has paid. People will be very disappointed if they spend huge sums of money only to be given substandard goods and services. o Honesty

Employees should always tell the truth at all times both to the people they serve, those they work with and their superiors. They should not intentionally deceive as they will mislead people and when the truth comes out as it will eventually do, such persons stand losing their jobs and the company will progress slowly as they will lose clients to their competitors. o Promise Promise entails honoring what people said they would accomplish that is honoring contracts. If and organization said that they would improve their services after a certain period, then when the time comes, the clients will be need to see the change being implemented.

In the aviation industry, all the mentioned principles are taken very seriously as they lay they basis for the codes of conduct that govern the diverse professionals in this field. For example, Aviation maintenance technicians, pilots, administrative staff, air hostesses, flight and ground instructors, examiners and inspectors, flight doctors among other people. The following are some of the ethical rules applicable to some of the personnel in the aviation industry to illustrate how the ethical principles apply to specific professions.

Aviation maintenance technicians Aviation maintenance technicians have a duty to ensure the safety of the public. They are supposed to act with integrity that is they should never put their personal gain above the people whom they have a professional responsibility over. Trust is a virtue that they should strongly uphold in the way they do their work so that to ensure that only the best services are given to the people. Since they are skilled in this area, they should exercise good judgment and not subject others to risk.

In addition to this, when they face challenges in their work, especially in areas that they do not know, they are not supposed to make rush decisions and should seek guidance from other qualified personnel. They are not supposed to give in to any superior requests to approve that a pane is fit for take off when they have doubt. In addition, they should not engage in any form of corruption. Pilot The passengers are every pilot’s first priority. Since they are in charge, they should always be sound and of good judgment so that they make proper decisions.

The way the pilot behaves both on and off work will reflect the perception and reputation of his profession and the organization they work for. For this reason, they should always engage in good social activities and they should have good interpersonal relationship. Moreover, they should work harder and continue to be knowledgeable as the profession requires of them. Without forgetting, “pilots must ensure that they are medically fit both physically and mentally when they report for duty therefore should hence should not engage in activities that will diminish the efficiency (Patankar, Brown & Treadwell, 2005)” Violating Ethics

The ethics also apply to the rules followed by carriers and operators and what aviation companies should do to prevent the entry of hazardous things within the airport facilities. If owners of such companies do not prevent the entry of such material, this will be seen as negligence therefore they will not have fulfilled their duty if safe guarding the passengers. “The law requires people in responsible positions to take care of others (Eichenberger, 1996). ” Negligence therefore is one of the consequences of breaking the ethics in place in the industry and when people are found neglecting their duties, they will be penalized.

Pilots can neglect some of their duties and pose a risk to people’s lives, the same goes for maintenance operators and other personnel when they assume they assume things in the line of duty. This is a result of not following the ethical guidelines therefore will be termed as a breach of duty towards their clients. Ethics in the aviation industry do not only apply to the personnel employed there but also to the people who teach aviation courses and the general industrial environment. The Federal Aviation Administration (FAA) in the United States is the body that makes the policies that are applicable in the aviation industry.

It also works in conjunction with other aviation bodies to come up with regulatory measures that create an enabling environment for the people in the Aviation industry. They offer advisory and guidance services to persons who want to engage in business so that they are aware of the risks that they will face. They give orders and notices on air traffic, the environment and airports and also publish the policies in handbooks and manuals so that people are constantly reminded of what is expected of them.

“Monitoring is a quality control program that enables FAA and other civil aviation authorities to access the performance of companies (Spence, 2006). ” The Aviation industry has not been left behind when it come to the usage of quality management systems to improve the services offered. For instance, FAA 8900. 1 FSIMS (Flight Standards Information Management System) sets the quality standards that companies in the business should strive to achieve so that they are considered the best in the business. Having such a quality standard boosts the image of the company and attracts new clients and investors.

In order to achieve this quality standard, employees need to follow the ethics of the industry and also in their organizations so that the rules set to acquire the standards can be achieved faster and efficiently. Conclusion Ethics have played very vital role in the aviation industry by shaping peoples behavior thus creating an environment where the customers needs are attended to and their concerns are addressed. Ethics have made the managers of such organizations easier as they provide the necessary steps and guidelines that are used to solve problems as well as make decisions in ways that are approved by everyone.

This makes it easier for organizations to deal with other firms within the country and also internationally. “Regulators aside from being enforcers also serve as collaborators (Patankar, Brown & Treadwell, 2005). ” The work of regulators and inspectors has also been enhanced as they have a base on which to justify the actions they take. To conclude, the responsibility of making sure the ethical principles work does not lie in the hands of the governing bodies but also the employees as well as the general public.

If everyone is committed to this course, then the aviation industry will uphold high ethical standards and everyone will be happy.

Reference:

Eichenberger J. A. (1996). General Aviation Law 2nd ed. McGraw-Hill Professional, 1996 p. 129, Patankar, S. M. , Brown, P. J. & Treadwell, D. M. (2005). Safety Ethics: Cases from Aviation, Healthcare, and Occupational and Environmental Health. Ashgate Publishing, Ltd, p. 3, 63-7 Spence C. F. (2006). AIM/FAR 2007: Aeronautical Information Manual, Federal Aviation Regulations. 7th Ed. McGraw-Hill Professional p. 149

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Case study: Ryan Air

What is the industry structure that Ryanair entered?

Ryanair entered the industry with a competition with two airlines to the route of Dublin-London. Ryanair came up with 4 round trips on daily British Airways with a 44-seat turboprop. Moreover, they are planning to expand with permission for fly larger jet aircraft on this route.
Ryanair’s main goal is to become Europe’s greatest scheduled passenger airline by using more offerings and improvement at low fares.

Ryanair aims to offer low-fares which would develop more passenger numbers and at the same time concentrate on the quality and cost of the operation in the challenging environment.

In 2016, Ryanair was the largest European airline by scheduled passengers flown and carried more international passengers than any other airline. In this time the government of Britain, France, Germany and other countries began to amalgamate the first, small airlines in to national Flag Carriers. Predecessor of British airways, Air France, Lufthansa and others gradually become owned by and subsidized by their national governments.

What is your assessment of Ryanair’s launch strategy?

In 1986, the Ryan siblings are getting ready to start competing against British Airways and Aer Lingus on the Dublin-London route. This route was one of the most travelled air routes in Europe, which meant that Ryanair was taking a big risk by deciding to enter this market. At the moment the airline passenger market was a complex one, since the governments would highly control it.

Additionally, the airline industry has high fixed costs, which was something that Ryanair needed to consider if the company wanted to face its already experienced competitors. However, the Ryan brothers knew that it was important to fly this route, and so they decided to follow an aggressive strategy: sell cheaper Dublin-London tickets (PRICE).

The problem with this strategy was that they did not highly differentiate from their competitors, and as a result a “price war” took place. By 1989 prices were as low as 70 pounds, and even though Ryanair started flying other routes, by 1991 it seemed that bankruptcy was around the corner for the airline.

The main problem that led Ryanair to this poor performance was that the company’s strategy focused on competing on operating efficiency, without altering its cost structure against experienced and somehow protected companies by some of their stakeholders. The strategy followed by the airline could hardly enhance the “competitive advantage” Ryanair had (operational efficiency), because at that moment the airline did not have a good number of customers; and additionally, it did not realize that its competitors could easily reduce their price to the marginal cost, which they were already able to cover.

The strategy was not sustainable by any means. Another problem that arise thanks to the poor strategy chosen by the company, was that it did not gave the client a certain level of added value that would be attractive for him/her. Therefore, Ryanair lacked a clear competitive positioning, which enabled a quick retaliation from BA and AL. And as a result, if Ryanair wanted to continue in business, it had to completely change its strategy and revise is goals by figuring out a way in which the perceived added value they could give to the customers was good enough to, later, capture value from them.

How do you expect Aer Lingus and British Airways to respond? Why?

Aer Lingus and British Airways were already well-established in the Dublin-London route and this route provided a high-volume of business and return on capital, especially for Aer Lingus. But then…Ryanair appeared and, as we know, the entry of a new competitor represents an entry price below the market’s price. So now what? What should these two companies do? Aer Lingus and British Airways have two options: either they maintain their current level of prices or start a price war.

In order to decide which way to go, they have to think how costly it would be for them to retaliate against Ryanair’s launch rather than accommodate it. Both companies have a significant disadvantage, they have a cost structure very difficult to cut (staff + accommodation, ground…+ selling + handling and catering represents more than 45% of the costs per passenger, approximately 90£ and they need to add landing fees and oil).

As if this wasn’t enough, it is also very difficult to start a strategy based in differentiation because Ryanair, at that time, was trying to offer a service of a similar quality to these companies (first-rate customer service.) Both Aer Lingus and British Airways are supported and hence policies are also controlled by respective governments. Offering low cost airfare requires whole systemic change which is not practically possible just for the reason of retaliating Ryanair.

However, these two companies are competitors with deep pockets and there’s a possibility of them driving Ryanair out of business by reducing price to their marginal cost, even if that marginal cost would be higher than marginal benefits. So, considering all of this plus the fact that Ryanair is a very nascent to fully fledged airline service and the very volatile revenues of Airline industry, we think that Aer Lingus and British Airways will not retaliate on Ryanair’s price strategy.

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Emirates Sky Cargo

Emirates SkyCargo is based in Dubai and it began its operations in 1985 and is one of the divisions of the Emirates Airline and Group. It is one of the leading air freight cargos and carriers in the United Arab Emirates. Emirates SkyCargo offers the best cargo solutions in terms of quality and efficiency and flies in over 100 destinations across the globe. The company’s priority is to ensure customer satisfaction and to achieve this, it has embraced technological advancements to improve on its cargo logistics system so as to enhance its operations and provide their clients with tools that they can track their consignments.

On top of this, it has the latest airplanes such as the Boeing and the Airbus. Emirates SkyCargo also follows the international cargo quality management standards (MGMT 420) in their operations thus ensuring that their customers can trust the airline to handle and deliver their property in safe environs. By providing quality services, Emirates SkyCargo has won several awards. It was named the best airline to the Middle East for the 20th year. It has also won an award being the best air Cargo Carrier, the best Airline to Africa in 2007 and the best cargo airline in the Far East and in the Indian Subcontinent (Al-Abed, 2006) among many awards.

? Managerial Aspects o Corporate culture/philosophy Emirates Sky Cargo’s philosophy is the commitment of the employees as well as the top managers to ensure that they provide quality services and that they perfect their services through understanding the needs of the people so that they can improve on the areas that do not meet the customers’ expectations. The leaders ensure that team work is enhanced among the employees, the organization is in good terms with its partners and that they are committed to ensuring that they help the community by improving the lives of the people. o Organizational chart

For businesses to perform well they need to work with competent people who are able to take their companies to the next higher levels. Emirates SkyCargo is no exception as it has a variety of experienced staff working in various units who ensure that the company is propelled in the right direction. Emirates SkyCargo is a subsidiary of the Emirates Airlines and Group Company therefore the appointments for the people to head the top offices are made by the group and airline board. Being a large corporate organization, Emirates SkyCargo follows a formal multinational organizational structure.

Positions are given in a hierarchical manner. The top managers are the ones who govern and control all the activities in the workplace as well as manage the other employees. There is a board of directors, a CEO, vice chairman, executive directors, regional directors, technical directors as well as managers. Sheikh Ahmed bin Saeed Al Maktoum is the Chairman as well as the Chief Executive Officer (CEO) and is assisted by the executive Vice-Chairman of the Emirates Airline and Group Maurice Flanagan. Ram Menen is the senior Vice President of Emirates SkyCargo.

The positions are given according to the various departments in place and the needs of the company so as to ensure that every important thing has someone in charge to ensure that it is run well; for example, the president and chief operation officer Yng Ming. The board of directors and the managers also play a vital role in decision making. Mission Statement o Missions Statement Emirates SkyCargo’s mission is to offer the best of services to its worldwide clientele and to focus on constantly improving their standards so as they are in line with the global changing needs so that they can also gain in the process.

They achieve this by supporting business logistics within the airline industry and refine their services. ? Resources For any business to prosper, they must be willing to invest in good products and services that will enable them to complete their tasks so that they can reap from where they have sown. Emirates SkyCargo through the Emirates group has invested funds in the purchase of the necessary equipment as well as hiring staff so that they can meet their set targets and goals.

o Key facilities and equipment The company has a fleet of aircrafts mainly the Boeing 777 and the airbus A380 & 310. It also uses the cargo facility of the passenger fleet especially in dealing with light weight. They have the best of facilities on the ground that is run using the latest technology in the industry. The operations are conducted at the Cargo Mega Terminal which was opened in 2008 thus creating a spacious facility that can handle the increasing number of consignment to the port.

This has also made it easier to handle the different types of cargo in one central location. The automated handling systems and improved tracking and computerized systems linking the different divisions and units have made it easier for the personnel to conduct their activities faster and easily. In addition, it has made it easier for business people as well as sender and recipients to track their commodities faster (Emirates SkyCargo). The storage facilities have also been improved thus making the facility more reliable and appealing to the clients.

The storage facilities are designed such that they deal with specific needs of the cargo for instance, when transporting animals, the temperatures are regulated among other things so that they are comfortable and also perishables are given extra care. Training the personnel is very important as they are a key factor in ensuring the provision of quality services. Certain regulatory and inspection institutions have branches located at the facility; for example, the Ministries of Information, Agriculture and Fisheries and Environment, Dubai Police, Dubai Customs and the Department of Aviation.

This has saved on time that would have been used to go to the actual offices and wait in long queues. o Main airports served Emirates Sky Cargo conducts its operations from Dubai International Airport and because of its expanding network as well as partners and clients; it flies to and from many airports in over 100 destinations across the globe. The major airports served by Emirates SkyCargo include; Pudong International Airport in Shanghai, China which is a fast growing city is producing various commodities for export.

Moreover, China has opened three weekly flights thus boosting its activities, Rajiv Gandhi International in India is another airport that deals with Emirates SkyCargo, the Amsterdam Airport in Netherlands, Guarulhos International Airport in Sao Paulo, Brazil is another major destination as it transports most of the consignment from the South American States to the Middle Eastern countries. Domodedovo International airport in Moscow, Russia is a destination where the company benefits from the regular importation of flowers by Russia from Africa, medicinal products from India and meat from Australia they will arrive within 24 hours.

Australia is another frequent destination and the airports that are dealt with are Toll Dnata International Freight Terminal in Brisbane, Melbourne and Sydney and also through the Perth international Airport. o Number and type of aircraft Emirates SkyCargo deals with the latest Boeing and Airbus aircrafts and currently has a fleet of 129 aircrafts. This year; 2009, the company is planning to increase the number of aircrafts by 17% so that they can cater with the growing business. To this effect, the company is going to bring in two new air freighters Boeing 777 within the coming year.

On top of this, 18 passenger aircrafts will be widened so that they can carry cargo. This initiative is geared towards catering for the increasing routes and flight schedules. The company has targeted to increase its cargo capacity by 700 tonnes and has projected that they will increase the weekly cargo capacity by 17% in the Middle East,15 % to Africa, 10 % in Europe and those to Australia will increase by 4% (Eye for Transport, 2008). With this new increase in flights, it will be able to open up new operations in destinations like Lagos, Nigeria and Durban, South Africa. ? Operations

Successful ways of operating have ensured the success of Emirates SkyCargo and that is why it is the best in the industry especially in the Middle East region and this is reflected in the over 100 international awards in a p of 24 years since it began its operations. o Operational philosophies The main operational philosophy that the company has is ensuring that their customers receive the best of services using the best techniques in modern logistics management. On top of this, they work with experts in the field and rely on them for advice so that they can improve themselves (Emirates SkyCargo, 2009).

To make sure that the company achieves its goals, the top mangers lead by example such that they act and instill the necessary ethical principles of the company as well as the industry to the employees. Thy have invested money in training the personnel on handling the various equipments in place especially the new technologies and through the constant interaction of the staff and the employees, they workers are performing well at their various duties. Emirates SkyCargo philosophy is to ensure that there is fair competition in the industry.

That is why their services are affordable and they engage in constant talks with other air freight cargos within the region so that they can see the areas that need to be improved on. Such initiative builds better corporate relationships such that encourage people to learn from each other as well as provide a proper platform where disputes can be handled in rational ways. This has made the organization more respectable as it values the ideas presented by other organizations and individuals such that they in turn treat them well.

In the provision of better services, the Emirates SkyCargo has embraced the improvements in information technology and that is why it has introduced the most advanced IT system; the new generation cargo system, in its operations. Though acquiring this was expensive, it will be a worthy investment as it will enable them to enhance their competitive advantage over other players in the industry. Moreover, it the rapidly changing business environment, flexibility and speed are important in the success of a business.

The system is engaging its customers, management and partners in the company’s procedures and is both environmentally and user friendly (AME info, 2009). The IT department is thus doing a good job in innovation and invention which are among the principles the organization strives to attain. o Markets served The markets that Emirates SkyCargo are distributed across all the continents and they include: Australia, they fly to four cities Perth, Brisbane, Melbourne and Sydney, this is because they link the country to the Middle Eastern countries thus enabling effective international trade to occur.

The Australian cities produce fresh vegetables and a variety of fruits and industrial parts that are needed by European as well as the Middle East countries to facilitate trade and the companies operations, flights are slowly being increased to facilitate trade and business growth. India is another growing market and since it conducts trade with different countries and reachable by are from Dubai, it has become one of the places that Emirates SkyCargo relies on. Passenger destinations such as Frankfurt, Hong Kong, Dhaka in Bangladesh and Istanbul are regions where freights are frequent.

European Cities such as Amsterdam and Liege also conduct frequent cargo transactions with other countries and they rely on Emirates SkyCargo to facilitate their transportation activities. New York City in the United States is also a growing market that the cargo airline deals with. o Types of cargo There are different types of cargo are handled at the airline. Bulky, heavy and light cargos are handled. This can be in the form agricultural produce such as textiles or technological parts and equipment.

There are limitations on the amount of cargo that a specific aircraft can handle and all this needs to be observed to ensure the safety of people as well as goods. For instance, the Boeing 747 can handle approximately 120 tonnes. “In the financial year 2004-05, Emirates Sky Cargo set a new record by carrying approximately 840 000 tonnes thus increasing the divisions revenues by about 43% from the previous year. Since then, it has continued to expand tapping into new regions (Al-Abed, 2006). ” Dangerous goods are transported.

Dangerous here does not mean that they can necessarily cause harm but refers to those goods that need extra care since they most probably need to be handled delicately so that they reach the final destination just as they were sent by the sender. They may include goods such as live animals which may include kangaroos, dogs and some air transportable wild animals. Perishable goods are another category and this constitutes mostly agricultural products including food and horticultural produce like flowers.

Other forms of cargo are valuables products such as confidential documents and jewelry and vulnerables such as mobile phones. The staff is trained on the way they should handle these products in accordance with the IATA and international standards regulations. “They ensure that the products are closely monitored and that they are stored safely. In addition to this, postal mail is also transported but in accordance to the local and international standards (Emirates SkyCargo). ” Emirates SkyCargo mail system is in place to ensure that the mail sent reaches its destination.

Courier products in form boxes and documents are also dealt with in the courier section. o Operational Limitations As much as the business is successful, it has several challenges that slow done operations. One of the limitations is that with the implementation of the new technologies, some workers find it difficult to cope with the changes as the systems have to be continually improved and this confuses them such that they end up taking long to know how they are applied in their work. This usually takes up a lot of time which would have been used in productive activities that will yield the company profits.

Technological hitches can affect the entire system because it is interconnected and this disrupts services for the entire period up to the time when the system is adjusted. Another limitation is that the company has spent a lot of money in expansion processes and they have not adequately rewarded the employees who do most of the work. In addition, at times it feels as if they have concentrated more on the expansion and not on the business. Another limitation arises through their interaction with many countries.

This is because they have to adhere to the specific countries aviation, trade and transportation regulations and sometimes some take long or is complex. They may then rush to sign the deals only to find later that there are some specifications that do not go well with them hence creating a problem that needs to be addressed. Another problem is in the handling of many commodities. When there are a lot of cargos to handle, this can cause delays once in a while and sometimes there arises storage issues during the business peak periods. ? Business Relationships

Business relationships are very important for businesses that want to grow especially in the international market. o Principle customers Emirates SkyCargo principle customers include business corporations that are dealing with the documents, industrial companies and manufacturers, banks in different countries when they are sending bank drafts to other businesses or banks in other countries, individuals sending certain goods, postal organizations sending letters and parcels to other countries and the government when they are ordering supplies from other regions so that they can equip themselves.

o Partners, alliances or pacts Emirates SkyCargo has formed various strategic partners so that they can develop new business opportunities as well as enhance strengthen their name in the global market. It has a network of interline partners in the various destinations where they land and take off. Some of the partners include Brazil. Brazilian exports transported by air to Arab countries have increased by approximately 60% since Emirates SkyCargo entered the market.

This showed that Brazil was a potential market and both countries could gain from the various business operations. That is why Gollog; the Brazilian air cargo company, and Emirates Sky Cargo have signed a partnership deal such that Emirates SkyCargo will transport cargo operated by two companies under it transportes Aereos and Linhas. Emirates SkyCargo is also looking for a suitable partner in Hong Kong so that they can handle local deliveries.

“They already have a company that handles ground operations; Jardines Air Cargo Services Ltd, and a warehouse (Shippers Today). ” This will diversify its operations in the region and ease cargo handling. Emirates SkyChain is another partner as they assist them in managerial issues and help in forecasting and planning the business operations. o Code-sharing and joint ventures Emirates SkyCargo has a joint venture with China West Airport so that they can cost share on the responsibilities as well as the cost in handling cargo on the ground.

There is a group Joint venture with Dnata; part of Emirates Group and PWC logistics so that they can share the same code with Air Malta. ? Future Plans The future of Emirates SkyCargo is bright as they look to make sure that they are linked to the rest of the world. They are also planning on making it their goal to Conclusion Emirates SkyCargo is doing well because it has experts in all fields of the aviation industry as well as in the cargo handling industry working for them.

The company in its efforts to enhance proper service delivery to its customers, they have used the latest technologies and they are taking the customers preferences seriously because they use the feedback to create better designs to meet their needs. In enhancing ensuring that they become a multinational cooperation as well as promote international trade, they have formed strategic partners all over the world who are helping them achieve their mission and vision.

The combination of good leadership and proper infrastructure has therefore enabled them to offer quality air cargo services in terms of flexibility and reliability. References Al-Abed I. et al. (2006). United Arab Emirates Yearbook: Annual, Trident Press Ltd, 2006 p. 209 AME Info.

Emirates SkyCargo unveils plans for the world’s most advanced IT system United Arab Emirates: Wednesday, December 17 – 2003. Retrieved on March 28, 2009 http://www. ameinfo. com/32500. html Emirates SkyCargo expands capacity by 17% Feb. 2009 http://www.eyefortransport. com/content/emirates-skycargo-expands-capacity-17 Retrieved on March 28, 2009

Emirates SkyCargo retrieved on March 28, 2009 http://www. skycargo. com/ourservices/mail/mail. asp# Eye for transport. Gollog and Emirates SkyCargo sign partnership agreement July 2008 http://www. eyefortransport. com/content/gollog-and-emirates-skycargo-sign-partnership-agreement. Retrieved on March 28, 2009 Shippers Today. Emirates SkyCargo’s remarkable growth http://info. hktdc. com/shippers/vol26_6/vol26_6_airfr02. htm retrieved on March 28, 2009

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Adam Air Case

MINISTRY OF TRANSPORTATION National Transportation Safety Committee Gedung Karya Lt. 7 Departemen Perhubungan Jl. Medan Merdeka Barat No. 8 JKT 10110 INDONESIA Phone : (6221) 3517606, (6221) 3811308 Ext. 1497 TOKA : 19811 Fax : (6221) 3847601 Website : www. dephub. go. id/knkt Email : knkt@dephub. go. id PUBLIC RELEASE OF FINAL REPORT – PK-KKW – FL DHI 574 Today the National Transportation Safety Committee is releasing its final report into the accident involving AdamAir PK-KKW Flight DHI 574 on 1 January 2007.

We extend our prayers and condolences to the families of the passengers and crew. The NTSC has reviewed the comments on the draft final report from the related parties in accordance with ICAO Annex 13. Now I am able to report to you that as of today, strong and appropriate safety action had been taken during the course of the investigation by the DGCA and AdamAir and Angkasa Pura I, on eight of the eleven recommendations in the report. The last three recommendations are only being issued today.

The Boeing 737, registered PK-KKW, departed from Djuanda Airport, Surabaya at 05:59 Coordinated Universal Time (UTC) under the instrument flight rules (IFR), with an estimated time of arrival (ETA) at Sam Ratulangi Airport, Manado of 08:14. There were 102 people on board; two pilots, 4 cabin crew, and 96 passengers comprised of 85 adults, 7 children and 4 infants. The aircraft disappeared from radar while cruising at 35,000 feet. Following an extensive land, air, and sea search, wreckage was found in the water and on the shore along the coast near Pare-Pare, Sulawesi 9 days after the aircraft disappeared.

Locator beacon signals from the flight recorders were heard on 21 January 2007 and their positions logged. The search was suspended when it was determined that the wreckage was located in the ocean at a depth of about 2,000 meters, requiring specialized recovery equipment not available in the Region. The salvage operation to recover the flight recorders commenced on 24 August 2007 and the Digital Flight Data Recorder and Cockpit Voice Recorder were recovered on 27 and 28 August 2007 respectively.

The CVR revealed that both pilots were concerned about navigation problems and subsequently became engrossed with trouble shooting Inertial Reference System (IRS) anomalies for at least the last 13 minutes of the flight, with minimal regard to other flight requirements. This included identification and attempts at corrective actions. The DFDR analysis showed that the aircraft was in cruise at FL 350 with the autopilot engaged. The autopilot was holding 5 degrees left aileron wheel in order to maintain wings-level.

Following the crew’s selection of the number-2 (right) IRS Mode Selector Unit to ATT (Attitude) mode, the autopilot disengaged. The control wheel (aileron) then centered and the aircraft began a slow roll to the right. The aural alert, BANK ANGLE, sounded as the aircraft passed 35 degrees right bank. The DFDR data showed that even after the aircraft had reached a bank angle of 100 degrees, with the pitch attitude approaching 60 degrees aircraft nose down, the pilot did not roll the aircraft wings level before attempting pitch recovery in accordance with standard procedures. The aircraft reached 3. g, as the speed reached Mach 0. 926 during sustained noseup elevator control input while still in a right bank. The recorded airspeed exceeded Vdive (400 kcas), and reached a maximum of approximately 490 kcas just prior to the end of recording. Flight recorder data indicated that a significant structural failure occurred when the aircraft was at a speed of Mach 0. 926 and the flight load suddenly and rapidly reversed from 3. 5g to negative 2. 8 g. This g force and airspeed are beyond the design limitations of the aircraft. The aircraft was in a critically uncontrollable state at that time.

There was no evidence that the pilots were appropriately controlling the aircraft, even after the BANK ANGLE alert sounded as the aircraft’s roll exceeded 35 degrees right bank. This accident resulted from a combination of factors including the failure of the pilots to adequately monitor the flight instruments, particularly during the final 2 minutes of the flight. Preoccupation with a malfunction of the Inertial Reference System (IRS) diverted both pilots’ attention from the flight instruments and allowed the increasing descent and bank angle to go unnoticed.

The pilots did not detect and appropriately arrest the descent soon enough to prevent loss of control. Technical log (pilot reports) and maintenance records showed that between October and December 2006, there were 154 recurring defects, directly and indirectly related to the aircraft’s Inertial Reference System (IRS), mostly the left (number-1) system. There was no evidence that AdamAir included component reliability in their Reliability Control Program (RCP) to ensure the effectiveness of the airworthiness of the aircraft components for the fleet at the time of the accident.

During the investigation the NTSC issued a number of recommendations to the Directorate General Civil Aviation (DGCA) and AdamAir relating to IRS maintenance and training of flight crews in IRS and aircraft upset recovery. I am pleased to announce the following strong positive safety actions. AdamAir advised the NTSC and DGCA that it has taken safety action to address the IRS defect troubleshooting procedures and maintenance oversight supervision.

It issued Engineering Orders with instructions and procedures for the evaluation and rectification of repetitive IRS problems, and from November 2007 has had extensive liaison with the IRU manufacturer. The safety action taken to date by AdamAir includes ground school and aircraft simulator training for pilots to ensure proficiency in upset recovery from 14 January 2008. The DGCA advised the NTSC that on 23 November 2007 it issued a Safety Circular, to all airline operators, requiring specific action to address deficiencies noted by the NTSC, in particular the IRS maintenance and pilot training deficiencies.

The DGCA requires operators to conduct continuing analysis and surveillance of repetitive defects and ensure immediate follow up corrective action. The DGCA has also informed operators that it is actively monitoring aircraft defects, in particular repetitive defects, and when the on-condition basis of maintenance is deemed to be insufficient to eliminate repetitive defects, DGCA will require component replacement on a hard-time basis.

On 10 March 2008, the DGCA informed the NTSC that in addition to requiring upset recovery training from 8 January 2008, the DGCA requires operators to include spatial disorientation and its effects in their syllabus of initial and recurrency training. The DGCA plans to ensure, through routine flying operations inspections, that operators and flying schools are complying with this requirement. The report will be available on the NTSC web site after the media conference: http://www. dephub. go. id/knkt/ntsc_aviation/aaic. htm JAKARTA, 25 MARCH 2008

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Fundaments Operations of Aircraft Propellers

Table of contents

This text outlines the fundaments operations and aspects of aircraft propellers. It details the components, forces and workings of a propeller as well as discussing the difference between the different propeller types.

Introduction

Propeller types are defined by blade pitch as being fixed or variable which will be further detailed later in the text. To fully appreciate the differences and understand the advantages of different pitched propellers we must first consider the fundamental characteristics of propellers. Usually propellers have two, three, or four blades; for high-speed or high-powered airplanes, six or more blades are used. In some cases these propellers have an equal number of opposite rotating blades on the same shaft, and are known as dual-rotation propellers. Small single engine aircraft have the propeller mounted on the front as multi-engine aircraft have them set on the wings.

Pitch

What is pitch? Pitch is important as it is the main differential from propeller type to propeller type. Essentially pitch relates to the angle of the blade in respects to a flat plane. It is the helical blade path or simpler the distance the propeller blade covers during a full rotation and the cut it has on the air. Pitch is referred to in two ways, fine and coarse. A fine pitch propeller has a low blade angle, will try to move forward a small distance through the air with each rotation, and will take a ‘small’ bite of the air.

It requires relatively low power to rotate, allowing high propeller speed to be developed, but achieving only limited airspeed. This is like having a low gear in your automobile. (Brandon 2008) A coarse pitch propeller has a high blade angle, will try to advance a long distance through the air with each rotation, and will take a big ‘bite’ of the air. It requires greater power to rotate, limiting the propeller speed that can be developed, but achieving high airspeeds. This is like having a high gear in your automobile. (Brandon 2008)

The Blades

The propeller blades are in fact aerofoils producing lift and drag. As the propeller spins the leading edge of the blade cut through the atmosphere and accelerates a tube of air or relative airflow  the diameter of the propeller moving the aircraft forward. This rotation is able to work because the propeller blades are designed slightly different to wing aerofoils as they have a small twist in them so that the greatest angle is at the blade root and the smallest at the top, due to the different angle and speed that each section of the blade travels.

These blade elements are in place at different angles because the linear velocity increase towards the tip of the blade as it has a greater distance to travel, the angles prevent bending making each section advance through the air at the same rate. The blade angles combined with the forward motion and the circular rotation of the propeller keep constant the best angle of attack (AOA). The twist causes the blade path to follow an approximate helical path easiest seen in a linear form. This action is similar to a screw being turned in a solid surface, except that in the case of the propeller a slippage occurs because air is a fluid.

Forces Acting on the Propeller

Aircraft that are not jet powered use a propeller which converts the rotational power from an aircrafts engine into aerodynamic forces; thrust power moving the aircraft forward through the atmosphere and propeller torque which acts in the plane of rotation. The plane of rotation is perpendicular to the propeller shaft. Propellers are conventionally placed in front of the engine on the engine drive shaft. During cruising flight the propeller torque balances the engine torque and the thrust balances the aircrafts drag force.

The propeller rotates clock wise and when the forces are not balance the torque reaction increases a rolling friction on the aircraft. As the blades produce a thrust force, the thrust force pulls on the thinnest section of the blade attempting to bend the tips. For single engine aircraft with the propeller mounted on the front the clockwise rotation creates a vortex of air or slipstream that flows around and down the fuselage to the rudder which affects the lateral movement of the aircraft or a slight yaw to the left during cruising flight Variable-pitched propellers can have their blade angles/pitch altered and will be further explained.

Two different forces experienced in these propellers can affect the blade angle. Centrifugal twisting moment (CTM) Aerodynamic twisting moment (ATM) CTM causes pulling stress at the base of the blade and a twisting force at the pitch change axis produce a finer pitch angle. The blade will want to align itself with the plane of rotation. The relative airflow over the blades produces a total reaction, an ATM where the total reaction is ahead of the pitch change axis, tempting the blade to twist, increasing the blade angle producing a coarser pitch. Occurs when the propeller drives the engine. Caused by; steep dive with no power, sudden reduction in power, engine failure, causing the blades to twist to a finer pitch.

Propeller Types

As stated earlier pitch is a main component between propeller functions. Under the classification of fixed and variable pitch propellers there are four common types, fixed-pitch, ground-adjustable, variable-pitch and constant-speed propeller. The first two are fixed propellers as the other two are variable.

There are a few versions of variable-pitch propellers that may be seen in the aviation industry, two-position propeller, in flight-adjustable propeller, automatic propeller and the constant-speed propeller. The most commonly used at present will be concentrated on, elaborating on fixed through to the variable propellers and the enhancements of pitch control.

Fixed-Pitch Propeller

The cheapest and crudest propulsion aero-device is the fixed-pitch propeller. Although it has been superseded many a time it is the most common type of propeller used in sport aviation.

The fix-pitch means that the pitch of the propeller is decided by the manufacture, there is only one setting and the performance of the aircraft is confined by the constraint of that one setting. This means to reach the optimum RPM/airspeed the propeller has to function through inefficient speeds. Normally there are two versions, a climb propeller with a fine pitch setting or a cruise propeller with a coarse pitch setting. Ground-adjustable propeller: The pitch for a ground-adjustable propeller is able to be set for the condition of flying the aircraft will be doing but only before the flight.

However it is still a fixed propeller as once the pitch is set in cannot be changed during the operation of the aircraft. These propellers are mainly installed on ultra light and experimental aircraft. More usually they are used as a low cost way to try out various pitches to determine the propeller pitch that best suits an aircraft.

Variable-Pitch Propeller

A variable-pitch propeller is exactly what the name implies; the pitch can be controlled and adjusted in flight to the most efficient setting for a certain phases of flight. Simply during take-off the propeller would be set to a fine pitch allowing the engine to develop reasonable revs and then to a coarser pitch during cruising flight speed. The engine will be ticking over comfortable while the propeller cuts through more air. Combine this with throttle control a wide variety of power settings can be achieved maintaining airspeeds with the limits of the aircrafts engine speeds. This feature of a variable-pitch propeller will provide you with performance advantages, including: Reduced take-off roll and improved climb erformance. Fine pitch allows the engine to reach maximum speed and hence maximum power at low airspeeds. Vital for take-off, climb, and for a go-around on landing. (Brandon, 2008) Improved fuel efficiency and greater range. Coarse pitch allows the desired aircraft speed to be maintained with a lower throttle setting and slower propeller speed, so maintaining efficiency and improving range. (Brandon, 2008) Higher top speed.

Coarse pitch will ensure your engine does not over speed while the propeller absorbs high power, producing a higher top speed. (Brandon, 2008) Steeper descent and shorter landing roll. With a fine pitch and low throttle setting, a slow turning propeller is able to add to the aircraft’s drag, so slowing the aircraft quicker on landing. (Brandon, 2008)

Constant-Speed Propeller

The constant-speed propeller is a special case of variable pitch, which is considered in a family of its own, and offers particular operating benefits.

A constant-speed propeller allows the pilot to control the power just by the throttle once the propeller/engine speed has been optimally selected (actually controlling the absolute pressure of the fuel/air mix in the intake manifold MAP which then determines power output). This is controlled by a governor or constant speed unit (CSU) which detects the propeller speed and acts to keep it at the selected engine/propeller speed selected by the pilot and vice versa. If the propeller speed increases then the CSU will increase the pitch a little to bring the speed back within the limits.

Thus creating vastly efficient running components during phases of flight (The governor or constant speed unit CSU may be an electronic device that detects the rotational speed of a slip-ring incorporated in the propeller hub, and controls operation of a servomotor/leadscrew pitch change actuator in the hub assembly. Or, it may be an hydraulic fly-ball governor attached to the engine, using engine oil to operate a hydraulic pitch change piston in the hub assembly. In the first case, the cockpit control device is likely to be knobs and switches. In the hydraulic system, the governor is likely to be cable operated from a cockpit lever — JB.

While allowing the pilot to ignore the propeller for most of the time, the pilot must still choose the most appropriate engine/propeller speed for the different phases of flight. Take-off, go-around and landing. A high speed setting is used when maximum power is needed for a short time such as on take-off. The high speed setting may also be used to keep the propeller pitch low during approach and landing, to provide the desired drag and be ready for a go-around should it be required. (Brandon, 2008) Climb and high speed cruise.

A medium speed setting is used when high power is needed on a continuous basis, such as during an extended climb, or high speed cruise. (Brandon, 2008) Economic cruise. A low speed setting is used for a comfortable cruise with a low engine speed. This operation produces low fuel consumption and longer range, while the advantages of low noise and low engine wear are also enjoyed. (Brandon, 2008) Edge of the airfoil is the cutting edge that slices into the air. As the leading edge cuts the air, air flows over the blade face and the camber side.

Blade Face is the surface of the propeller blade that corresponds to the lower surface of an airfoil or flat side, we called Blade Face. Blade Shank (Root) is the section of the blade nearest the hub. Blade Tip is the outer end of the blade farthest from the hub. Plane of Rotation is an imaginary plane perpendicular to the shaft. It is the plane that contains the circle in which the blades rotate.  Blade Angle is formed between the face of an element and the plane of rotation. The blade angle throughout the length of the blade is not the same.

The reason for placing the blade element sections at different angles is because the various sections of the blade travel at different speed. Each element must be designed as part of the blade to operate at its own best angle of attack to create thrust when revolving at its best design speed. Blade Elements are the airfoil sections joined side by side to form the blade airfoil. These elements are placed at different angles in rotation of the plane of rotation. The reason for placing the blade element sections at different angles is because the various sections of the blade travel at different speeds.

The inner part of the blade section travels slower than the outer part near the tip of the blade. If all the elements along a blade is at the same blade angle, the relative wind will not strike the elements at the same angle of attack. This is because of the different in velocity of the blade element due to distance from the centre of rotation.  Relative Wind is the air that strikes and passes over the airfoil as the airfoil is driven through the air. Angle of Attack is the angle between the chord of the element and the relative wind. The best efficiency of the propeller is obtained at an angle of attack around 2 to 4 degrees.

Blade Path is the path of the direction of the blade element moves. Pitch refers to the distance a spiral threaded object moves forward in one revolution. As a wood screw moves forward when turned in wood, same with the propeller move forward when turn in the air. Geometric Pitch is the theoretical distance a propeller would advance in one revolution. Effective Pitch is the actual distance a propeller advances in one revolution in the air. The effective pitch is always shorter than geometric pitch due to the fact that air is a fluid and always slips.

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Air Asia- Porter’s Five Forces

Porter’s five forces Michael E. Porter claimed that there are five competitive forces which can shape every industry by identify and analysis those five forces(appendix) and thus determine strengths and weaknesses of the industry. Those five forces are now used to determined Air Asia’s strengths and weaknesses which are shown as below: Threat of Entry There is a high barrier entering airlines industry since it requires high capital to set up everything such as purchase or lease air craft, set up office, hire staffs, and etc. Thus, this has reduced the treat to Air Asia.

Moreover, brand awareness is quite important in this industry. Thus, to enter this industry not only required high capital but also have to take some time to create brand awareness. Consumers always choose the product or service they really trust. Thus, instead of creating brand awareness, new entry has to create so called brand loyalty. Hence, this is reducing treat to Air Asia too. ( Roy L. Simerly) However, the government legislation is one of the barriers for entering airlines industry. For example, MAS has been protected by Malaysia government on the route to Sydney and Seoul Incheon.

Therefore Air Asia find itself very difficult getting a new route from government. This not only affects the timeline set by Air Asia but also influence their profit. Power of suppliers Every industry has someone to play the role as suppliers. Power of the suppliers is important as it will affect the industry. In airline industry, the power of suppliers is quite high since there are only two major suppliers which are Airbus and Boeing hence there are not many choices to airline industry. Nevertheless, the global economic crisis has limited the new entrant and also reducing the upgrade of planes in the immediate future.

However, both suppliers provide almost same standard aircrafts and hence the switching to Air Asia is low. Moreover, Air Asia placed a large amount of order from Airbus in order to expand its routes to international routes. As a result, the power of suppliers may be reduced as Airbus’s profit may be influenced by Air Asia. ( Roy L. Simerly) Power of buyers Buyers are one of the factors which will give influence the industry whether making profit or loss. Nowadays, those buyers are much more knowledgeable and high educated. Thus, they are very sensitive to the price no matter in what product or service.

In this case, even Air Asia always provide lowest price to customers, but they still will make comparison between airlines. Secondly, to switch to other service is very simple because Air Asia is not the only one who provides airline service. I. e. customers still can choose MAS, Tiger Airway, Firefly and etc. ( Roy L. Simerly) Moreover, Air Asia always leaves customers an image as they always delay the flight. Hence, as an investor or business man, they will choose more reliable airlines instead of Air Asia. Threat of substitutes

Substitutes are products or services which can replace the original products or services and give almost same satisfaction to the consumers. In airline industry, there are two types of substitutes, indirect and direct substitutes. Indirect substitutes include train, bus, cruise and etc. On the other hand, direct substitutes indicate the other airline. Consumers usually prefer low cost. For example, from Kuala Lumpur to Singapore, there are few transports that consumers can choose such as bus, train and air travel. If the customer is going to a budgeted trip, definitely he will choose bus which is the lowest price among the three.

Moreover, the technology is now make information much more easily to assess. Customers can easily compare the price among few airlines just by assessing internet as internet make information more transparency. Nevertheless, the archipelago geographical structure in Malaysia make air travel is the most viable, efficient and convenient mode of transportation. For example, travel from Kuala Lumpur to Bangkok, the customer may choose to take bus or air flight. However, air plane are much more convenient and also lesser time consuming compare with taking bus to Bangkok. Rivalry among existing competitors

In every industry, there is positive or negative trend to industry growth rate. If there is positive trend, then the firms have not to steal the market share among them. However, in airline industry, the growth rate is really low due to limited customers. Thus, in order to expand, Air Asia has to steal the market share from its competitors. ( Roy L. Simerly) Secondly, Air Asia leads the main battlefield in price among competitors due to its low operating costs. However, there are more competitors enter to airline industry who have major carriers as their backers or owners may lead to ‘unreasonable’ price war in the future.

Moreover, Air Asia is not the only one who provides airline service. There are few low cost carriers such as Firefly, Tiger Airway and etc which makes their services provided weak differentiation. Thus, it becomes a threat to Air Asia. Biblography Roy L. Simerly, Strategic Management Case Analysis,http://www. westga. edu/~bquest/2002/strategic1. htm, assess date: 10th may 2010 Investopedia, Industry Handbook: Porter’s 5 Forces Analysis, http://www. investopedia. com/features/industryhandbook/porter. asp, assessed date: 8th may 2010

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