For business people today, air travel and communication have been reclassified as basic needs. Technically, recessions mean slowdown in economies and business which triggers cost management in every industries but the demand for the products and services continues to remain high. The trick is being able to deliver the demanded products and services at affordable prices even during a recession. This has been the area where Air Asia have focused their attention in recent years allowing them to prosper even during the economic downturn. They have been able to deliver affordable air travel to the public during the recession ensuring business travel continues despite of the slowdown (Succeed, 2014). Nevertheless, to deliver affordable air travel companies like Air Asia have adopted several radical measures that have helped make economical air travel possible. In addition to affordability and demand, factors such as the economic stability, socio-cultural views, global trends, technological advancement, political/legal stability, and demographics also contribute towards the success of the businesses ventures. Each has had to be carefully analysed and addressed to ensure the consumers’ needs are addressed.
Economic affordability and buyer power are important elements to take into consideration since demand is likely to remain high only when the consumer can afford to purchase the product or services. This makes geographical location an important element linked to the businesses success where the location must be carefully chosen (Rodiek, 2006). While Europe and the USA where traditionally investor hot spots, the past two decades have seen an increasing interest turning towards developing economies like India and China. This is due to them offering affordable labour which affects the manufacturing costs directly. The high population and large proportion of economically stable citizens also means many can spend during economic instability.
The large population on the Asian continent also means that there are ample demands and customers which have resulted in budget airlines to be established in the past 2 decades. Today, Air Asia is a preferred airline as it delivers almost the same services at considerably lower cost. Air Asia and many others are today registering considerable gains and expansion during the global recession since they took advantage of the recession to expand and set their requirement. Each will also target a specific consumer group which results in reducing the threat of new entrants entering and taking an existing companies business.
With regard to substituting products and income, many offer food and duty-free products for sale on the aircraft and practice staff multitasking which helps reduce the cost incurred by the company. It’s all about reducing costs and Air Asia has mastered the skill of cutting costs to deliver more affordable air travel.