AirAsia: The Business Maestro

Anyone out there who doesn’t know about AirAsia? I will be surprised!! If you are a traveler continuously updating yourself with packages offered by various different travel agencies, than all such travel enthusiasts at least for once visited AirAsia website and checked out there offers. And once checked, the entire community started looking for international credit cards just to grab one ticket to Malaysia and why not, when a 370 USD air fare is discounted to 123 USD, even those who never thought of travelling to Malaysia will jump for a move.



Now the big Q, by offering such a low rate, how does AirAsia manage their business? Here are few strategies worth pondering.

1. AirAsia sold tickets for entire one year within 2 weeks.
2. They will earn interest. A ticket sold in February scheduled for November, earns them interest for 9 months. This is additional buck to the pockets.
3. Not only air tickets, they also had cheap hotels to offer. So not only a buyer bought the air tickets, also booked hotels through AirAsia.
4. To add more, you also had cheap offers to other regions. So now a buyer bought air tickets not only for Kuala Lumpur (KL), but from KL to Langkawi.
5. And guess what, who wants to travel alone. So a buyer influenced his/her friends to tag in along as well. So one interested person ended up influencing few more.
6. Did you notice that rates where higher especially on weekends. So AirAsia had a slot, different rates on different days as per demand. Maybe a buyer hoped he/she will be able to buy return tickets for 123 USD, but on his/her chosen day, the total price was 170 USD. Still, why miss the chance just for 3,500 Taka only, the offer still is very cheap. So many such buyers paid little more than the cheapest offer.
7. Other additional services also had a price, like choosing your seat, price for luggage, and bus tickets to the City Central. All these ads up another 20-30 USD.

So just one buyer seeing one discounted offer ended up providing the followings to AirAsia:-
1. Buying return Tickets to KL, either at the cheapest rate or higher.
2. Buying return tickets from KL to other regions (Langkawi).
3. Booking and paying for hotels.
4. Buying additional services
5. And most importantly, influenced others to buy and thus acting as a sales person.

Now the reality, exactly how many people who bought a ticket in February scheduled to travel in November will actually be able to make it? There is a very high chance that many will not make it, and sad but true, if you want to re-schedule your flight, than you almost end up paying a fee equal to your original ticket price. So a customer who misses his flight either ends up paying another 150+ USD to reschedule the flight, or misses the flight completely, no refund by the way. Many such buyers will actually not make it which in return reduces Air weight saving AirAsia’s fuel cost and leaving paid hotel rooms empty which can be resold.

So all in all, many sources of income for AirAsia which makes up for their reduced ticket price. If you are a Bangladeshi businessman having big dreams, why not learn the all round the year discount concept, you not only generate entire one year sales in a week time, you also make your buyers sale for you. In current recession period, discount stores are bound to hit big in the market. Just go grab it.

Mahboob Hossain

Mahboob Hossain is working in World’s number one Market research company and is actively involved in writing, teaching and business counseling.

The [ B I M A N ] Ethics

Biman Bangladesh Airlines, Your Home In The Sky! My post will illustrate some of the works of that home you fly in. Before we dive into the stories, I’d like to come clean that the information provided in the article has no evidence. My friend who is a son of a Biman pilot, and a Biman official helped me a lot in getting this post ready. Therefore, much of the credit goes to him.

Now, what to start with? How about Biman's purchasing of one US $28 equipment with US $4,500? They bought more than 100 pieces of the same equipment with the same price. What can we draw from it? It becomes very easy to say why Biman has suffered substantial losses over the years. No organization can make profit out of these circumstances. An important question may be raised, where did the money go then? Who were actually involved? Who got the shares of the money? I know you are thinking about the involvement of the political leaders in these cases. But it’s not always like that. Most of the times, in fact, the insiders are more enthusiastic in these issues over the externals. In the ladder of the hierarchy the management seems more passionate in the field while playing.

The Biman Aircraft Scanner was worth a million US dollars. It became invisible right after the purchase was made. How come such a monstrous piece of thing can get lost. The ultimate answer we reach to is- it was either sold or in point of fact Biman did not buy it but showed in papers. Interestingly, nobody in Biman took much interest in finding that machine out. How could an organization survive when its own people kill it cutting through its veins? There are more. The only way Biman earns revenues is from the sales of tickets to the passengers. But Biman officials do awesome practices here as well. Most of the times normal passengers (without confirmation) do not get tickets, since the tickets are provided for free to the Biman officials’ kith and keen or to the cabin crew’s family members.

Now, some information regarding the cabin crews. The way they smile at you (well, they don’t actually do so unless you look posh in your manners and dresses or you are someone important to them), they way they behave with you might make you at home at times. Do you have any idea what’s their first job while boarding the plane? As soon as they board the plane they fill their bags with the food that was intended to serve you with. In addition, they take the spoons, tissue papers, lights . . . and what not? Did you know, the cabin crew's luggage are never checked or scanned? Often the buy goodies form other airports and sale them at different shops at Uttara, Gulshan, Banani and so on. Will you believe if I say Biman's security officer's home's light, hand wash is from Biman (with Biman’s official logo)? These goods are strictly prohibited to use outside.

I’m quite sure that most of you haven’t heard about BFCC, the Biman Flight Catering Centre. They provide the food for the passengers of the planes. They have started a cool business of producing cash. The food that are not taken into the planes or somehow labeled as waste, are regularly sold by the BFCC people at different hotels and fast food shops at Uttara, Gulshan & Banani. In most of the cases, they sell rotten pieces of chickens in those shops. The shops getting them for lower prices do not want to lose a chance!

What else can be written? Ah! The immigration officers! Biman always recruits cows and goats (in some cases lambs!!) as immigration officers so that they can be easily fooled. I bet, none of them are familiar with the rules and regulations of the Airport and immigration. I strongly believe none of them is good with computers, and some of them are too old for PCs. They just know how to click the mouse and press the keys of the keyboard while checking the papers of the passengers. No brain at all, No creativity as well.

The Biman ethics seems too pushy, don't they? I think nothing can be done to the people running the business. We should know they are not the members of the team; they are behind the wheel!