This is an honor and great opportunity for our team to take further study about Sun Tzu Art of War as it has been an intelligent influence on Western and also Eastern military practices, business strategy, internal/external management and beyond for decades. Sun Tzu Art of War had held in high esteem by our team, we respect the concept of Art of War and it is such a great learning experience for our team by discussing how Sun Tzu Art of War has implemented into the Malaysia Airline giant AirAsia.
Chapter one of Sun Tzu Art of War describe that conducting a business is just like starting a war, there shall be many factors to be considered up from the uncontrollable dusk or dawn to the deep down feeling of individual before starting a war/business. It also mention that conducting a war is so important which will determine the survival or death of a country. War not only brings death to the soldier but also risking the life of innocent people of both countries, thus it must be well planned, studied and examined thoroughly before starting a war with enemy. A country with thorough and detailed planned consider itself have the chance to win the war, but if a country starting a war without/with less thorough and detailed planned, he shall not win the war according to Sun Tzu Art of War. Market observation and analysis is vital important, if a business/market’s stock has reach the peak without any further growth, investor should not start/invest in that particular business. In other words, if a business/market’s stock has plenty of room leave to be developed and growth, investor should start/invest as early as possible in that business.
In the wisdom of Sun Tzu Art of War, foreknowledge or intelligence shall not be obtained from the spirit nor gods. It should not be predicted by comparing similar past event or experiences, but all the intelligence must be obtained by man that have knowledge about the enemy situation.
Referring to Sun Tzu (6th century B.C./1983), “the art of war is governed by five constant factors, all of which need to be taken into account. They are the Moral Law, Weather, Terrain, the Commander, and Method and Discipline” (p. 9). The five factors can also be categorized into internal and external factor. These five constant factors should always be planned and considered in order to achieve greater advantage from competitors in the battle field.
2.1 Background of the company
AirAsia Berhad is a Malaysia low fare airline company and had the largest low fare, no-frills airline and a discoverer of low cost travel in Asia. AirAsia group was operated through domestic and also international flights to over 400 destinations and connecting to 25 countries in worldwide. AirAsia Berhad mainly emphasizes on the low fare air ticket, on the other hand customer can enjoy with high quality of services and technology. Its main center is the Low-Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA), had been commenced on 23th March 2006. LCCT can carried estimated around 10 million passenger per year. While the secondary hub located at Senai International Airport, Kota Kinabalu International Airport, and also Penang International Airport.
AirAsia has three of the affiliates airlines in Asia countries are as following:
• Thai AirAsia (Suvarnabhumi Airport)
• Philippines AirAsia (Clark International Airport)
• Indonesia AirAsia (Soekarno-Hatta International Airport)
AirAsia established in year 1993, but the group had just commenced their business’s operations on 18 October 1996. AirAsia was originally discovered by a government-owned combination, HI COM Holdings Berhad (now DRB-HICOM Berhad), but the group was suffering in heavy debt since year 1997 until year 2000 with about USD 11 million, around RM 40 million.
On 2nd December 2001, Dato’ Sri Dr. Tony Fernandes (Tune Air Sdn Bhd) and partners bought over AirAsia. They take on the losses, heavy debt of AirAsia for a token sum of RM1. The enterprising group quickly made decisions and settled the airline’s debts and set about relaunching and rebranding AirAsia as a low-fare carrier.
From 27 October 2008, the company had increased the new 108 routes into its current list of 50. On 2nd of April, year 2012, Air Asia had their first flight from Kuala Lumpur to Australia (Sydney). AirAsia Berhad did not publicly disclosed the exact number of old routes which had been discontinued. In August 2011, AirAsia agreed to build up an alliance with the Malaysian Airlines by using the method of share swap.
AirAsia Berhad had implemented three systems in order to increase the efficiency and effectiveness of the company which included the yield management system (YMS), computer reservation system (CRS) and enterprise resource planning system (ERP). YMS is also known as the revenue management system and basically react to the customer behaviour and maximizes the wealth or revenue of the company. By using this system, it also can optimize the pricing and also manage the operating costs together in the most effective way. Moreover, the CRS included the internet, call centre and airport departure control functionality. The centralized customer data is used to follow the schedule and booking flight with real-time, while for the ERP system, it helps AirAsia to stable the process honesty, closing processing time, speeds up reporting and also data retrieval process.
Last but not least we would like to discuss about the Airline reservation system (ARS), also known as manufacturing management process. It needs helps from ERP system about the information of the planning and scheduling operations. However, while the ERP system did not had a better supply chain management system and therefore AirAsia used ARS system to improves the performance of the company and provide a better service for customer. For example, it can provide customer a faster way to check the availability of the air flight. After that, the ARS system had been improved to computer reservation system (CRS) and then to global distribution system (GDS), which provides travel agencies and other channels in making reservations for the air flights in a single system.