Firefly: Malaysia Airlines and Airline Industry Essay

2.0 Background to the organization fire beetle is the wholly-owned appurtenant by the Malaysia Airline System Berhad (MAS). lightning bug is launched on April third 2007 as substantiall(a)y as it is the Malaysias beginning community airway that operated under Fly lightning bug Sdn Bhd. the Malaysias first community airline also cognize as a naked as a jaybird Malaysian no-frills airline. The name of firefly is come from the characteristics of agility, brilliance, charm, and fun. lightning bug offers a full attend to point-to-point carrier. The head plaza of fire beetle is located at Sultan Abdul Aziz Shah Airport in Subang, Selangor.The first flight of the Firefly was from Subang Sultan Abdul Aziz Shah Airport to Penang International Airport, on the second April 2007. Besides Airline of Air Asia Berhad, Firefly is an differentwise low- court airliner. It sozzled that Firefly has the separate management comp are with MAS even though it is wholly-owned subsidiary by MAS. F irefly is operated in two hubs that are located at Sultan Abdul Aziz Shah Airport, Subang, Selangor and Penang International Airport. Penang is the second big hub after the Kuala Lumpur.The aim of the Firefly is to bring communities closer by overcoming geographical constraints, link the world to the communities we serve, and offer to the economy of the communities by bringing trade and tourism. Firefly not lone(prenominal) compulsions to bring together the community in Malaysia but also for travelers to call in both of our neighboring countries and throughout the region. Become the Malaysias first community airline, Firefly closely emphasis on the safety and comfort it its flight of stairs experience. However, Firefly try their best to provide the best service to their customers much(prenominal) as getting their customers to the destination in the shorter time, toll effective and ramp up flying Firefly as a fun.3.0 Situation analysis official or negative of general enviro nment in the airline industriousness exit signifi pottyt discover the growth of the Firefly Airline. In range to growth the position and hit the target of Firefly, it is important to understand the authoritative situation of external factor that groundwork influence the Firefly Airline. 3.1General environment3.1.1 Political Fully Deregulation of the airline since December 2008 allow the share state to fly across others territory, make fireling block up as well as pick up the passenger in order to complete their journey to reach their destination. This deregulation brings the benefit much(prenominal)(prenominal) as enhance the customers choice and increase the controversy. For most time, the political st strength and government decision will directly affect the direction and decision of the company. For role model, the Malaysian government policy to support and cook the Low Cost Travel sector (Bernama 2006) was good news well for Firefly because Firefly applied the strate gies of low cost carrier. Another example is Firefly excessivelyk over the service rural air service in year 2007 announced by Transport Minister Datuk Seri Chan Kong Choy (The star 2007).Datuk Seri Chan Kong Choy announced that the rural air service was the responsibility of the government and they will protract to subsidies the cost for the operation of the rural air service to of importtain the low-fare structure. asunder from that, On the 24 March 2010, the state government of Perak signed a contract for strategies collaboration with Firefly to promote tourism and foreign coronation in their state. The decision of the state government brings good news to Firefly. though this collaboration, Firefly can enhance their reputation and increase their profit. Ps if too much words, can delete it or add to opportunity.3.1.2 Economic pic Firure1 occupation Update for Association of Asia Pacific Airlines (AAPA) Member Airlines Source AAPA (2010). From the figure 1, we can clearly se e that the increase 10.7% in the passengers by November 2010 compared with November 2009. The main land for the increase in passengers is Asia Pacific carrier had successfully in economic downturn. However, carriers need to carefully in the world(prenominal) recovery economic in develop market as well as the terror of advanced oil legal injury or government increase the taxes. Due to the global recovery economic, Firefly planed to increase 3 new planes as the regard of travel. However, Firefly will be caution in the fuel cost since it steadily rising.3.1.3 Socio cultural As a lower travel carrier, Firefly position itself at the middle class airline. Hence, we can see that Firefly always focus on four community that are The spend Goers community, the Balik Kampung union, The Indonesia Workers community, and The Business Community. The Holiday Goers community is convenient to the tourists or Malaysians who like to rattle on the Langkawi, Phuket, Koh Samui. Firefly provides a n attractive price for the tourists to encourage them flight on Firefly. For the Balik Kampung Community and the Indonesia Workers community, in that respect have the same purpose. It allow the worker who work on other state or country as well as for those who want visit their relatives at hometown to reach their destination easily at a reasonable price. In addition, Firefly connect with major cities such as Johor Bahru, Penang, Alor Setar and Subang enable the executive travel their business trip convenient.3.1.4 scientificThe aircraft of Firefly is the carrefour that combined with the advanced technology. The aircraft named ATR 72-500 not only fuel efficiency, but also for the noise friendly. It compliant with noise regulations and have a large margin with regard to Chapter IV (ICAO) noise regulations effective maiden January 2006. ATR operate at relatively low altitude, leaving the ozone layer unaffected and barely contributing to pollution of the upper atmosphere such as f eatures of low fuel burn and gaseous emissions. It also supports the Clean education Mechanism of the Kyoto Protocol as it is an opportunity to contribute to the prosperity of create countries through the transfer of cleaner and greener technologies. Besides this, the 72-seat aircraft will be fitted out(p) with the Elegance cabin, Light Emitting Diode (LED) as well as the newest scientific innovations in passenger comfort, communications and navigation tools.3.2 Industry condition pic The ostiarys five force model is major affected in the airline sedulousness due to the airline industry become the major and important industry in our world. Though the five forces of Porter, we can clearly understand the industry condition. The five forces include rivalry among existing competitors, threat of new entrants, threats of substitution products or services, bargain power of supplier and bargaining power of buyer.3.2.1 Rivalry among existing competitorsRivalry among existing competit ors mean that the competition between the existing competitors in an industry. Normally, this type of competition earn a low returns because the cost of competition are quite high. The competitors exist in the airline industry is high. Except the Firefly owned by MAS, there also have Air Asia, Berjaya Air, Layang-Layang Aerospace, Sabah Air and Hornbill Skyways which is a helicopter service that operates in the rural area of Sarawak. In order to boosts its market share, all competitors will try their best to offer different type of services, cut-fare and other benefit to grab the more and more customers from their competitor. This type of competition will result the overall slow market growth rate.3.2.2 Threat of new entrants Threat of new entrants hangs to the threat of new competitors to enter the exits market. If the new entrants can enter the market easily, that means the barriers to entry are low. Whereas if the new entrants hard to enter the market, the barriers of entry are high. In the airline industry, the market is about saturated with the existing airline such as MAS, Air Asia, and Firefly and so on. The new entrants will face a lot of barriers if they want enter the market. One of the barriers is cost of entry. Airline industry is expensive industry. The cost of technology, buying or leasing aircraft and manpower are high. Another barrier is the notice name of existing market. For the most time, customers will loyalty to the brand that they preferent3.2.3 Threat of substitute productA threat of substitute product is stated that the availability of another product that customers can purchases to replace for existing product. Airline industry considers highly risk in threats of substitute product. Customers would multifariousness their choice to another airline company if that company provides the lower price than others. The competitions between the airline industries enable all competitors to come out the emend services, promotion and lower price.3.2.4 Bargaining power of suppliersBargaining power of suppliers is the ability to setting the price. Normally the suppliers are power if there are not so many substitute supplier and suppliers more control and concentrated. The main suppliers in the Airline Industry are Boeing and Airbus. Therefore, airline industry isnt any cutthroat competition due to the limited of suppliers. In other words, Airline Company less opportunity for the bargaining in industry and it can be threats of industry.3.2.5 Bargaining power of buyers Bargaining power of buyers refer to the ability of the customers to setting the price. In Airline industry, bargaining power of customers are high because the highly competitive.