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06/04/2012

Sample Thesis Chapter 4 & 5 on Change Management in Air Asia


4.0 Chapter 4 Presentation and Discussion

This chapter presents the data gathered from the literature review conducted by the researcher. Various sources were consulted for this study so that the results and findings will be in-depth and substantial.

 

1) What are the commonly implemented changes within Air Asia?

            Basically, information and communication technology had allowed Air Asia to reduce its operating costs while also providing fast and efficient service in areas that include check flight schedules, book seats, electronic check-in and pre-order meals. Thus, Air Asia is the leading the way when it comes to innovative endeavours, integrating technological advances into its business model. For one, the utilisation of Internet services had significantly reduced the operating costs. The airline is a ticketless company which issues e-tickets, lowering distribution costs in the process. With this, the key capability of Air Asia is that it is a leader in ICT. Air Asia fully understands that there is a need to either adapt or be proactive hence technological enhancements is prioritised. Air Asia is recognised as one of the most innovative companies worldwide as according to Fast Company magazine. Proudly, Air Asia is the only ASEAN brand and the only airline company to be included in this coveted list.

            Further, Air Asia has credible IT systems, allowing it to gain the competitive edge over other airline service providers. Two of the most widely celebrated IT implementations are the Yield Management System (YMS) and the Computer Reservation System (CRS). YMS is also called as the Revenue Management System. In maximising the revenue stream of Air Asia, YMS is utilised to understand, predict and respond to the travellers’ behaviour. This can be done through analysing the seat and route systems. In the former, Air Asia consider the seat price as a clear opportunity in increasing revenue by providing seats at different prices and at different points in time. Reservation of seats, for instance, differs when made earlier vis-à-vis when done at a later point in time.

            In the latter, destination prices are adjusted considering the demand. Nevertheless, the prices are arrived at with conjunction to the prices of seats. Seats and flights thereby should be effectively priced at all time if Air Asia means to profit from both of them.    

            CRS had had a huge impact to the operations of Air Asia when implemented in 2002. From 2 million passengers, Air Asia was able to generate 7.7 million passengers after just two years of implementation. What CRS had done to Air Asia was that it enabled the company to by-pass the middlemen through a series of Internet applications, call centre and airport departure control among others. Air Asia is dealing directly with the customers since then and with customer data that is centralised. The company was able to respond in real-time particularly when it comes to tracking bookings and scheduling flight activities. CRS also tied up with YMS to maximise the pricing and revenue activities basically through providing information about schedules and bookings while also lowering operational costs at the same time.  

 2) What are the processes involved in the changes occurring within Air Asia?

            While there is no particular person who had driven the IT changes, the impetus for the implementation of ticketless airline service lies on the necessity to handle robust booking efficiently and in the way that the customers will not change minds when it comes to doing business with Air Asia. Delays on flight and unavailability of limited customer hot lines were two of the reasons why Air Asia is not an airline of choice before. Air Asia realises that to accommodate smarter operational practices, there is a need for a fully-integrated IT-based facilities.

            Air Asia too like any other business considers IT as a cost but since the company wanted to be an innovative catalyst, IT changes had pushed through. There was a strong reason why the IT changes are needed – Air Asia is at the verge of collapsing and optimising customer base would be the only solution to this problem if Air Asia wants to stay in the business. Then IT systems only produces duplication and inefficiencies hence a new IT platform that is scalable, flexible and easy-to-use is urgently needed.

            Air Asia then created partnerships with IT providers such as Navitaire and Amadeus. Navitaire provided Air Asia with Open Skies technology which is an integrated web-enabled reservation and inventory system. Same goes with Amadeus which provide the company with the Amadeus Global Distribution System (GDS) which is also a reservation system that makes use of 102,200 travel agencies worldwide.

3) How does the company address the tradeoffs of the changes implemented within Air Asia?

When it comes to YMS and CRM, Air Asia had implemented these innovative ideas ahead of the competitors thus the company had strategically used the first-mover approach. While these applications had given the company the platform to recognise the IT industry, these applications are also well-appreciated by the customers. YMS and CRM had allowed the very first ticketless travel option in Asia. Air Asia’s online bookings account for 70% of the total booking of the company. These IT solutions allowed Air Asia to acquire a reputation as an innovative company. However, this is not without difficulties. 

While technology was seen as a response to the requirement of escalating airline services, deciding on IT solutions to be integrated in the then current system would exhaust the financial resources of the company. Air Asia would have to invest in IT providers that can cater to the requirements of the company, and this meant to invest on high technological equipments as well as technical professionals prior to the IT implementation and even during and after the implementation. This will generate a huge sum of amount and also some operational losses while in the implementation stages. After the IT implementation, there had been the “technological threats” wherein the security of networks is at stake. Understandably, the Internet is a public domain and is considered as vulnerable to hackers and viruses. Other than this, IT implementation at Air Asia may not necessarily coincide with the needs of the travellers, and this might be the biggest difficulty that Air Asia had faced when it comes to the IT-related changes within the company and this is aside from the acceptance of the internal stakeholders. Public acceptance could only be tested after the customer is able to experience the newly integrated systems first hand.  The IT changes may backfire once it was proven that these were unacceptable to the users who are also the customers.

What YMS and CRM as well as the e-tickets have provided Air Asia is the global exposition that the company is enjoying today. As Air Asia ventured into online bookings and ticketless travelling, the company had exposed itself to electronic commerce solutions. These solutions are widely recognised that Air Asia is able to solve different problems that are related to network, communication and information.

4) How does the company prepare for the impending changes within Air Asia?

            Air Asia was able to comprehend the episodic changes as one IT change that is successful is followed by another IT change that will complement the current IT systems, that is, YMS followed by CRM with a gap of 4 years in implementation. The changes are embedded on the principle of competence-enhancing change. The changes are internally driven and the perspective is the micro environment but the emphasis is on short-term to long-term IT adaptation.

            Air Asia is an all user-centric airline company that strives to focus on satisfying the customers and developing airline services that are truly innovative. Basically, when the IT changes are decided, Air Asia then decides to tailor target architecture to end-users by truly understanding their traveling needs and that which starts on choosing a destination. There had been the need to produce reports based on the real inputs of customers and employees.  

 

5.0 Chapter 5 Conclusion

            As an airline company who wants to satisfy travelers by providing effective airline services, Air Asia seizes every opportunity that came its way especially in placing emphasis on the role of technology. Expanding technical capacity lessened the duplication and inefficiency though IT is considered to be a cost. In optimizing the business, Air Asia shifted its culture from a technology-based to solutions-based company.

 

References

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