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To become a successful low cost carrier in the business, we would like to focus on how AirAsia:

 
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Nowadays, E-commerce is becoming a business tool. E-commerce also has become a vital
strategic management and allows a company to sell products, advertise, purchase supplies,
bypass intermediaries, track inventory, eliminate paperwork, and share information. In total,
electronic commerce is minimizing the expense and cumbersomeness, improved products, and
higher profitability. According to this statement, E-commerce can change the way of doing
business nowadays. E-commerce becomes a major success to Airplane Company to make
effectively and efficiency in their business.

AirAsia is one of the airplane companies, which is implementing E-commerce and maximized
their information technology usage to make the efficiency and effectively in their company and
make possible low cost carrier in their business. According to Pultorak (2004), when the
business strategy and IT are aligned, the IT infrastructure can continuously sense the changing
business needs and respond by provisioning or redeploying resources to match the demands of
the business.

Moreover, to maximize their IT,        c
       

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Lets we discuss the current IT that AirAsia implemented one by one.

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| 4ield management system as revenue management system it understands, anticipates,

and reacts to the behavior of customer to maximize revenues for the organization.
| In this system, AirAsia used it to takes into account the operating costs and aids AirAsia
to optimizes price and allocate capacity to maximize expected revenues.
| The optimization is done on two levels in AirAsia:
p| Keat (Every seat is considered an opportunity to maximize revenue.Keats are
available at various prices in different points of time. A reservation done at a
later date will be charged more than the one done earlier ʹ for the same seat)
p| Êoute (By adjusting prices for routes/destinations that have a higher demand
when compared to others).
| The effective method however is to combine these two levels for all flights, all routes so
that both the seat and the route are effectively priced for all the flights.
| As a result, by using this yield management system, AirAsia can understand the behavior
of their customer and offering the effectives and efficiency strategy and also can
allocate capacity to maximize the expected revenue.
| By this system, AirAsia can make efficiency to know their customer using IT technology
with lowest cost.


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ͻ From the view of managers in a company, the emphasis is on the word planning; EÊP
represents a comprehensive software approach to support decisions concurrent with planning
and controlling the business.

ͻ Based on the definition, EÊP is the system that integrated comprehensive software to
make the IT system is more effectively and efficiently. By implementing this package AirAsia is
looking to successfully maintain process integrity, reduce financial month-end closing
processing times, and speed up reporting and data retrieval processes, (Microsoft Malaysia).

ͻ In addition, it is a system focusing on capturing transactions in daily operations and

helping AirAsia to save its operational costs as well as to increase the efficiency and integrity in
its operation.

Furthermore, the other system that AirAsia implemented is customer reservation system (CÊK);


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| it is an integrated web-based reservation and inventory system.

| It includes Internet; call center, airport departure control and more.
| It is a direct sales engine that effectively eliminates the middleman (travel agents) and
the sales commissions that need to be paid to them.
| By using this system, AirAsia can reduce the cost and eliminates the middleman (travel
agents) and the sales commission to pay them.
| After that, this system are very customer friendly because the entire customer if want to
buy or make a reservation a ticket directly via online, and no need to come to the ticket
counter.
| In conclusion, by using this system effectively, efficiency, customer satisfaction, fast and
secure in buying a ticket already met. It means the lowest cost can possibly achieve.

And than, the last system that AirAsia used in maximized IT to meet the lowest cost during their
business activities is the implementation of enterprise resource system (EÊP).

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| ICTs play a critical role in the strategic and operational management of airlines
| Contribute to marketing mix, determine the strategic directions, partnerships and
ownership of airlines, facilitate and support the successful airlines of the future.
| Instrumental in re-arranging airline alliances and concentration and motivate merger
and collaborations.
| ‰ey recipe to success: effectively implementing a lower cost structure business model
without giving up the critical service and coverage attributes prized by high-value
customers.
p| Êeconfigure the product or service so that structural barriers to efficient
operations are eliminated.
p| The ͞product architecture͟
p| Tailor business streams to the needs of each customer segment.

Operation effectiveness and outstanding efficiency

One of the AirAsia strategies to solve the current issues/problem in the lowest carries
competition among the LCC airline industry is to make operation effectiveness and outstanding
efficiency. How AirAsia implemented this strategy to make operation ))   
  )) ü To make this strategy successfully implemented:

| AirAsia move from the traditional business into modern business by implementing E-
commerce and maximize the information technology (IT) in their business.
 | The implementation of E-commerce can reduce the cost of travel agents, and less of
ticketing paper cost.
| AirAsia also choose the route by adjusting prices for routes/destinations that have a
higher demand when compared to others.
| And than AirAsia also trying to reduce by using better maintenance management.
| According to Gloker (2002), by using the better maintenance management, AirAsia can
save large proportion of its maintenance cost contributes approximately 9% to the
overall cost of an airline.

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| The competition among airplane industries is very tough. Each trying to conduct some
strategies to compete with another competitor in their industry.
| To compete with their competitor in the business environment, a company needs to
make a strategy to achieve their long terms objective and can be successful for doing
their business.
| Thus operations management becomes important due to the following reason such as
globalization to survival their business, and than e-commerce become the critical
success to the company nowadays. A company needs to consider the company ability
and how to integrating it with the as well as main factor in the internal and external
factor.
| Over the years, advances in technology have transformed key aspects of operations
management. New tools and technologies have been incorporated into the design and
operation of service and production systems. (e.g. 4MK, CÊK, EÊP, CÊM, APK)
| LCC like AirAsia adheres to the containment of operating cost.
| ICT is important to assist AirAsia to simplify operation, efficiency, productivity and high
utilization of assets to offer low fares-> leads to sustainable competitive advantage
| AirAsia always put customer in mind first
| Bear in mind that technology solutions is just a tool, but understanding the mind of the
customer goes far beyond technology, and it is a challenge yet to be widely met.
| In conclusion, How AirAsia can continue to be a leader in the low cost carrier in the
airline industryü Firstly, AirAsia needs to consider about their operations management
strategy. The reason why need to consider OM because the first reason is because the
airline industry is a unique and complex industry and cost is very critical to be manage in
any form of operations. Kecond, the strategy that AirAsia need is not just how to reduce
cost and make the operational activities running effectively but AirAsia needs to come
out with the strategy that can differentiate themselves in the market and create a
competitive advantage and this can be achieve identifying and analyze its K OT.
| Finally, the system that AirAsia has implemented- strategic ICT implementation that
involves the yield management system (4MK), computer reservation system (CÊK), and
enterprise resource planning (EÊP) system, APK and Ecommerce can be a great strategy
to make AirAsia more effective and efficiency and possibly able to reduce the cost and
eliminated inefficiency in their business. This we believe is part of AirAsia͛s strategy for
success.