AirAsia X

AirAsia X Case Instructions and Questions

A good approach to analyzing cases is found in the “Analyzing Cases Appendix” on page 343. Additionally, I have included a series of questions for your review. The purpose of these questions is to help focus and guide your thoughts while analyzing the case. You want to address these questions; however, don’t stop there. That approach will earn you, at best, a B for the assignment. Use the questions to spur even further analysis and recommendations.

You will be more successful if your write-up takes the perspective of executives who must arrive at a definite conclusion and specific recommendations. Your recommendations should be based on information & resources available at the time of the case. Don’t base recommendations on technological breakthroughs or developments that have happened since the time of the case.

Your final write-up should take the form of a business report that includes an executive summary, analysis section, alternative(s) identification, and recommendation(s).

Your executive summary should be no more than 2 pages and the analysis, alternatives and recommendation sections should not exceed 8 pages. The maximum length of your write-up is 10 pages, not including a cover page and illustrations. You may add as many charts, graphs or illustrations as you need to reinforce your analysis.

1. Please use a font size of 11 or 12 and single space your paper.

2. You must submit your case in the appropriate drop box class on the day it is due. Not having a case to turn by the due date in will result in the team receiving a zero (0) for the assignment.

Guiding Questions to Consider

1. How would you describe the AirAsia X model? What elements of its business model are the same or different from a traditional airline? What elements are the same or different from a traditional airline?

2. What is your assessment of the strengths and weaknesses of the X model?

3. What are the greatest threats to X? Where are its best opportunities?

4. What strategic recommendations would you make to X’s executive team?

5. How does X manage to achieve a cost structure that is less than one-fourth the cost per mile of a U.S. budget airline?  How are they really different from other budget airlines?

6.  Think about what drives their cost advantage.  Cost drivers mentioned in our text were economies of scale, diseconomies of scale, learning curve economies, technological hardware, policy choices, differential access to low-cost inputs and technological software.

7. What are risks of an ultra-lean model?

8. How sustainable are X’s advantages?  In other words, how easy will it be for other airlines to imitate what X is doing?