Pricing Strategy by Air Asia

Pricing Strategy by Air Asia

Air Asia depends so much on their hassle-free, no-frills, as well as low fare airline services for their target market and the management perceives that keeping costs low needs high efficiency in every level of the business. In this regard, efficiency creates savings which are then passed to the passengers and travellers so that low-cost, affordable and most importantly high quality air travel will become a reality. With their philosophy ‘Now Everyone Can Fly’, this industry has enabled to spark a revolution in air travel with more and more passengers across the region prefer Air Asia as their number one choice for transportation. As this business strive continuously to promote air travel, the airline industry also never stops to establish excitement amongst their passengers with the range of innovative and personalized airline services offered.

Since AirAsia is positioned as low-cost carrier and fares are kept bare minimum, passengers would understand the services quality compared to a full-service carrier. Like any other services industry, capacity management role of price is also important in an airline business. Many services business use off-peak pricing. This is psychological prising, whereby Air Asia will consider the psychology of price and the positioning of price within the seasonal and event. As what Air Asia did, they also offer off peak pricing strategy which allows charging different prices during different times of the day, days of the week or during different season of the year. For example, during big event such as school holiday or festive season the ticket will be expensive. But they will give a range of time by offering lower price ticket to attract early birds who purchase the ticket. Air Asia is leading far ahead with its competitors in term of prices they charge. The two main success factors for its pricing strategy is its low cost positioning along with special interest in cost cutting.

In terms of pricing,...