This BMC analysis of AirAsia X will discuss the company’s business model using the Business Model Canvas (BMC) framework. Also, see the BMC of AirAsia that we discussed previously.

Background

AirAsia X is a long-haul low-cost airline based in Malaysia. It is a subsidiary of AirAsia, a well-known low-cost airline in Southeast Asia. AirAsia X was established to meet the demand for long-haul travel with lower fares.

History

• 2007: AirAsia X was founded and began its first operations on November 2, 2007, with flights from Kuala Lumpur to Gold Coast, Australia.
• 2008-2009: Expanded to new destinations including Hangzhou, China, and London, UK, demonstrating AirAsia X’s ability to compete in the long-haul flight market.
• 2013: AirAsia X was listed on Bursa Malaysia.
• 2014-2016: Faced financial challenges and underwent restructuring to stabilize operations.
• 2020: Severely affected by the COVID-19 pandemic, leading to a massive reduction in flights.

Business Model Canvas (BMC) Analysis

The Business Model Canvas (BMC) is a tool used to describe, assess, and change a business model. It consists of nine key blocks:

1. Customer Segments

   • Budget Travelers: Individuals seeking affordable flights for long-haul travel. They are typically price-sensitive and look for the best deals.
   • Business Travelers: Professionals who need to travel for business and prioritize cost savings to optimize company budgets. They may require flexibility in booking and schedule changes.
   • Expat Community: Foreign nationals living in other countries who frequently return to their home country for vacations or family visits. They need affordable flights for frequent travel.

2. Value Propositions

   • Low Fares: AirAsia X offers flight tickets at lower prices compared to conventional airlines, making international travel more accessible.
   • Flexible Booking Options: Provides flexible booking options, such as adding luggage or in-flight meals, and various seating choices to accommodate customers’ needs and budgets.
   • In-Flight Experience: Despite low fares, AirAsia X offers adequate in-flight services such as in-flight entertainment, purchasable food and beverages, and premium seating with extra legroom.

3. Channels

   • Website and Mobile App: Customers can book and manage their flights through AirAsia X’s official website or mobile app, providing convenience and accessibility.
   • Travel Agents: Partnering with travel agents to reach a broader market and assist customers who may need help with bookings.
   • Social Media and Digital Advertising: Utilizing platforms like Facebook, Instagram, and Google Ads to promote offers and special promotions, and engage with customers directly.

4. Customer Relationships

   • Loyalty Program: AirAsia X offers the AirAsia BIG program, where customers can earn reward points with each flight and redeem them for discounts or free flights.
   • Online Customer Support: Provides support through call centers, live chat, and email to assist customers with inquiries or issues.
   • Social Media Engagement: Actively interacting with customers on social media platforms, answering questions, addressing complaints, and sharing updates and promotions.

5. Revenue Streams

   • Ticket Sales: The primary revenue comes from selling long-haul flight tickets.
   • Ancillary Services: Revenue from additional services such as fees for extra luggage, premium seating options, in-flight food and beverages, and in-flight entertainment.
   • Sponsorships and Advertising: Offering advertising space on aircraft, website, and apps for other brands looking to target AirAsia X’s customers.

6. Key Resources

   • Aircraft: Long-haul aircraft such as Airbus A330 used for international flights.
   • Technology: Online booking systems and mobile apps that enable customers to book and manage their travel easily.
   • Staff: Trained and experienced pilots, cabin crew, and support staff to ensure safe and efficient flight operations.
   • Landing Rights: Landing slots at major airports worldwide that allow them to operate flights to desired destinations.

7. Key Activities

   • Flight Operations: Managing and executing flights including scheduling, aircraft handling, and flight safety monitoring.
   • Aircraft Maintenance: Maintaining and repairing aircraft to ensure they are in good condition and safe to fly.
   • Marketing and Promotion: Marketing activities to promote flights and special offers, and enhance brand awareness.
   • Supply Chain Management: Managing supplies such as food, beverages, and other necessities needed on flights.

8. Key Partnerships

   • Food Suppliers: Companies providing food and beverages for in-flight sale.
   • Airport Management: Collaborating with airport management companies to ensure smooth flight operations.
   • Oil Companies: Suppliers of fuel for aircraft.
   • Travel Agencies: Partners that help promote and sell flight tickets to customers.

9. Cost Structure

   • Aircraft Purchase or Leasing: Costs associated with buying or leasing aircraft used for flights.
   • Fuel Costs: Expenses for aircraft fuel, one of the largest operational costs.
   • Maintenance and Repairs: Costs to ensure aircraft are always in good and safe condition.
   • Staff Salaries: Payments to pilots, cabin crew, and support staff.
   • Marketing: Costs involved in marketing and promotion activities to attract customers.

Conclusion

By analyzing the Business Model Canvas (BMC) in detail, we can see how each block plays a crucial role in shaping AirAsia X’s business model. This includes targeting specific customer segments, offering unique value, managing key resources and partnerships, and handling cost structures to ensure the company’s success and competitiveness in the long-haul flight market.

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