Should Airasia Expand Its Long Haul Business?

...

value.

Nonetheless, I have some hesitations regarding the market they should expand into. Indeed, in my opinion, Europe won’t be a profitable market for AirAsia X. Regulations are really high since few years, and European Union put in place a lot of taxes that impact airlines companies, such as the carbon tax or the airports taxes which are the most expensive in the world.

This implies that AirAsia X won’t be able to propose low cost prices in Europe, which means they would lost their competitive advantage. Moreover, they won’t be able to compete big airlines companies which are installed into the European market since a long time and very appreciated by the customers.

According to me, AirAsia X should expand its long haul flights business in Asia, with China and India which are extremely increasing in demand. On those markets, they will be able to propose their cost advantage strategy as they will avoid the huge taxes and fares, which will make them very profitable.

Furthermore, I think that they should expand their business with African countries. In my opinion, Africa represents a huge emerging market with only few competitors. This is a promising market.

To conclude, I will say that AirAsia X has all the knowledge and skills to be a successful long haul flight company. Their cost advantage strategy could make them very profitable, however not on every market. As we saw before, Europe seems to be a complicated market to apply their strategy, so they should expand their business in Asia and Africa in my opinion.

...