All About Air Asia related to E-commerce

Introduction

In my assignment, I use Air Asia as an example of an e-commerce company where it was voted as the most popular website for online shopping that makes it as the first airline company applying e-commerce in Malaysia

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 e-commerce 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 Airline’s 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 world’s 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, e-commerce 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 third-party. 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 types of bank accounts that user are using. 

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 e-commerce fee. 

References: 

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