Question

opose specific strategies for Air asia to be implemented in a country or region while taking into account the ongoing pandemic and the slowdown in the economy,

1. Justifications for the strategies (current situations/issues and how these can be addressed with the proposed strategies).

2. How the MNC would implement the strategies.

3. Risk assessments of the strategies.

4. Possible outcomes of the strategies.

Answer 1

In the unprecedented times of this pandemic hit economy among the sectors of the economy suffering the most , aviation and airlines companies are also badly hit in the post pandemic period a. As such specialized strategies needs to be implemented at all the levels in order to sustain the operations of the company/.

For Air Asia we can devise a group of strategies that can be implemented in both Operational and Financial levels .

Part I

1, 2

Financial Strategies

No	Strategy	Implementation
1	Using Dynamic pricing for sale	· The implementation of dynamic pricing in sales , will help in preventing too much cancellations and sales return · As Such the gross revenues adjustment by sales return would not be affected
2	Opting for long term debt instruments	· Even at the cost interest , in the unpreceded times , the company chose the source financing for along term , in order to not to default with the regular payments · This will help in maintain the payback obligations of the firm
3	Efficient working capital management	· The working capital management for the airlines needs to be effectively managed. · The use of too high Current Assets to be avoided in order to obtain higher return from the assets and shareholders’ equity

2

Operational Strategies

No	Strategy	Implementation
1	Increasing Internetwork Operability	· While the global operations are restricted, the network of operability can be expanded into co operators
2	Compulsory Web based check-in	· In order to reduce the manpower management and 3the effective lead time, the web based check in to be made mandatory
3	Optimizing the major routes of operations	· While the travel demand has subsided due to the ongoing pandemic , it is crucial for the airline to optimise the routes of importance in order to Break-even the costs of operations and increase the profitability

3

Possible Risk areas include

· Higher Out-Sourcing and Inter network operability y cost

· Govt. Restrictions on operations in global major routes.

· Lower demand due to flexible and dynamic sales pricing

· Higher Delays and lead times in layover areas

· Customer dissatisfaction

4.

The outcomes are still expected to be beneficial for the company. While a minimum level of operational risk needs to be undertaken in order to normalise the situations , the following can be expected

· Rise in operating revenue

· Lower sales returns and revenue adjustments

· Lower costs of operations

· Higher probability to achieve Break even and cover costs quickly in order to increase the profits

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