ORGANISATION STRUCTURE AND CULTURE
Organisation structure is the overview of tasks and roles of employees. It also shows their work scope of contribution to achieve the organisation goals. Tony Fernandes has set the right base for his company culture. AirAsia staff are happy and work towards the organisation goals. AirAsia stands for the culture of “One for One” which means One People, One Culture, One AirAsia and One Family. Tony Fernandes practices flat structure where everyone can reach their big boss. This allows Tony to see who has the capability and flair. A good example can be shown when Azmir Hashim’s talent was discovered by Tony Fernandes. He was a Guest Service staff and now graduated from AirAsia’s cadet pilot programme with flying colours. In other word, Tony drives his employees to fulfil their dreams at the same time he created an easy going working environs. Another culture by AirAsia is they improve the quality for a better customers’ experience. AirAsia offers the ticketless concept by using mobile phone apps which makes booking-on-the-go more efficient. Passenger can also check-in using kiosks provided by the terminal airport to secure a boarding pass without having to stand in a long queue at a counter.
ISSUES FACED BY AIRASIA
Despite all the success and fame gained by Air Asia, they still faced some challenges and problems where it placed AirAsia in a declining state. Incident of flight QZ8501 crashed into the Java Sea off Borneo shortly after take-off on 28 December 2014 with zero survivors. This issue was reported as the first major crisis that involving AirAsia plane. The Airbus A320-200 was carrying 162 passenger from Surabaya, Indonesia to Singapore was only approximately forty-minutes over its flight when was announced lost contact with the air-traffic controllers. The airbus went missing from radar screens afterwards and it never issue a distress signal. Wreckage and dead bodies were found floating around 16km from the airbus’s last detected coordination. A total of 106 bodies were found and the rest is still missing. AirAsia’s flight was temporarily prevent from using the route due to the tragedy for further investigation by the Indonesian authorities. A day after this tragedy, AirAsia experienced decrement in share price. The Kuala Lumpur-traded shares had fallen 7.8%. This is their highest daily drop since September 22, 2011. It also brought in speculations where some travellers are now alert about AirAsia’s flight safety. AirAsia needs to maintain the trust from passengers about flying with them.
Another issue faced by AirAsia is the competition of the cost among an airplane industry. All airlines in the low cost carrier (LCC) industry are competing on giving the lowest price, AirAsia needs to come out with the lowest possible charge to win in the ongoing markets. AirAsia also faced several issues regarding their luggage. One recent issue happened in the month of March 2018 went viral in a form of video where the ramp staff was seen poorly handled a bicycle. Other than that, AirAsia occasionally have flight cancellations and delays. Whenever there is flight delay, hundreds of AirAsia passengers will be left fuming. Passengers will express their dissatisfaction using social media such as Twitter and Facebook so they will be notified by the higher-ups.
AirAsia, a business based on our own country which started in 2001, when Malaysian entrepreneur known as Tony Fernandes, a former music executive, obtained a small state-owned airline out of bankruptcy and re-established it as privately owned budget carrier. Back in 2001, the company was only worth RM1.00 as well as burdened with a debt of RM40 million, having only two Boeing 737-300 aircraft, with only one flying destination, carrying 250,000 passengers per year with only 250 employees. After 9 years, AirAsia valued at almost RM4 billion, posted a profit of RM549 million, owning more than 85 Airbus A320 and A330 aircraft, flying over 130 travel routes to 70 destinations worldwide, flying over 20 million passengers per year and now has more than 8000 employees in Malaysia, Thailand and Indonesia. Today, AirAsia has develop beyond Malaysia to officially connect with Thailand and Indonesia and Philippines and has a fleet of 158 Airbus A320s. The Indonesian unit is possessed by the Malaysian parent. They also have over 15,000 employees whom they call ‘All Stars’.
A company must take on the four crucial functions of planning, organizing, leading and controlling in sequence to achieve the goals of an organisation. AirAsia has started their strategic management which led to the success they have now. AirAsia’s mission is to be the great company with employees are treated as a part of a big family. They also want to create a globally recognized ASEAN brand as well as attain the lowest cost so everyone can fly using AirAsia. AirAsia invests in technology to obtain the highest quality product and to reduce cost and improve service levels. In over 20 countries, their philosophy is consistent to their vision to serve 3 billion people across the globe who are underserved with poor service and high fares.
Tony Fernandes, the CEO of AirAsia group once said that “Employees come number one, customers come number two. If you have a happy workforce, they will look after your customers anyway”. AirAsia key factor that contributes to its success is the role played by its employees. From AirAsia website, they proudly say that “Our people are our greatest asset. They make all the differences in the world. Our driving force has always been our people. From our humble beginnings to the present family size of 8,000 people, we stand united and share one common culture.” To create and effective work force, AirAsia not only provides training to its employees, but AirAsia takes the initiative to set up a unit called as Corporate Culture Unit that is responsible to apply value and corporate practices to all employees. Other than that, new technologies were introduced by AirAsia to improve the service levels. The most recent technology launched on February 10, 2018. Tony Fernandes shared a video in his Instagram account. It is called as biometric boarding system was launched at the great Senai Airport in Johor. Guests need to scan their faces in AirAsia’s application. This new boarding system making travel much easier for boarding, paying and clearing immigration.
Anyone who works with AirAsia are called as “Allstars”. AirAsia has always appreciate their staff. AirAsia takes on a flat organisational structure where Tony Fernandes gave his contact number to all his employees starting from the errand boys until the higher ups. Employees are allowed to directly discuss any matter rapidly without having to go through layers of protocol. AirAsia has an effective functional organizational structure which consists of Group Chief Executive Officer, Co-Group Chief Executive Officer, Chief Executive Officer, Chief Financial Officer, Senior Director CEO Office as the higher-ups followed by Flight Operations Director, Group Head of Commercial, Group Head of Route Revenue, Head of Network and Regulatory, Safety Director, Head of Internal Audit, Head of Corporate Quality and Assurance, Head of Investor Relations and Corporate Finance, Head of Ground Operations, Head of Cabin Crew, Head of Marketing, Head of Sales and Distribution, Senior Legal Counsel, Line Operations Manager and lastly Ramp Manager. In AirAsia, there is no communication barriers between employers and employees. AirAsia practice a dynamic environment between employees. Other than that, AirAsia made an investment by providing Academy and Training to improve the employees’ skills. As for safety issues, AirAsia created a Safety Management System where the department responsible to train employees to follow the safe working practices while Customer Relationship Management will observe the reservation and check-ins, baggage handling, boarding and in-flight purposes. The staff are deliberately placed at airports to give on the spot help for customers.
Tony Fernandes practice a ‘walk around’ management style. He believes that if one just stand behind the halls of ivy, and go through financial report every time, he is most likely has the high chance to make some big mistakes. Tony Fernandes has been seen few times to work with the staff. His believes is that a good leader must at least experience on how the job goes with and without employees. He would not have been a good leader like how he is now if he did not do this. The fact that he learn from ground experience, the staff can be appreciative towards their leader and be motivated to do their best. Tony broke down the hierarchy by sharing his personal contact and email ID to all level employees and he allowed any employees to meet him at any time. He often encourages his employees to pursue their dreams and lead them to move toward the goals. He wore AirAsia’s official T-shirt and office red cap in almost every official function to motivate employees to achieve the goals.
Other than that, Tony’s intelligence has led to varied business ideas. His knowledge and innovation has brought changes to the business. He create, coordinate, drive and make necessary changes to achieve his company’s objectives and goals. His leadership not only seen at good times but also at bad times that happen to his organization. Tony stand strong with his organization whenever bad things happen. For example, from the incident of flight QZ8051 crashed at Java Sea. He fully utilized Twitter to send consistent stream of inspiring and sensitive tweets to both his staff and customers. His care was shown when he immediately flew to Indonesia to be with his staff and passengers’ family. General public were impressed with his commitment throughout the crisis. He always remain accountable for his team’s actions. He quoted in an interview saying “The passengers were on my aircraft and I have to take responsibility for that”. He was looked up by everyone when he did not just glue himself to his seat instead he got his hands dirty and faced the crisis professionally like how a leader supposed to act. He spent a lot of time with the passengers’ family as well his staff families to continue to be a support for them. He is a leader with honesty and integrity when he realized that employees want to know that their leader has their backs when bad issue came so he never fail to praise the performance and attitude of his staff throughout the crisis. He also only keep the facts to public by saying he did not want to jump to any conclusion and let the investigation run. There was no rash statement given unless there is evidence to back them up. From this incident, he gain more respects from all sides by being firm in all decision taken during crisis and kept his words. Tony Fernandes does not plan to explain what had happened, his main concerns are for his customers. This helps to sustain and increase trust from customers that has been strengthened over the past 20 years of operating. For AirAsia, they need to continue to have their client base in a time when customers might lost confidence about flying with them in the near future.
AirAsia managed to give low fare and zero frill services for customers as other airlines are not able to give this to their customers. AirAsia successfully retain their low operating cost while giving the high resource efficiency. AirAsia has such a proud achievement when AirAsia is awarded with “World’s Best Low-Cost Airline” by Skytrax World Airline Award for ninth time in a row. In order to retain their low fare, AirAsia has been partnership with several firms which help them in certain field such as marketing strategy to vitalizing the flight sales market and to make sure constant supply for maintenance matter. AirAsia’s partnership network is International Society of Transport Aircraft Trading (ISTAT), Avitas and Airfax which act as the consulting firm for AirAsia. ISTAT gives authorization to all aircraft valuator. Avitas gives consultation regarding airlines, maintenance facilities, financial institution, producer, government agencies and law firms while Airfax is a flight market letter which gives recent, exact and complete information on the global obtainability of commercial transport aircraft. In other context, AirAsia also affiliated with Jetstar, Australia low-cost airline. This association will allow both companies to get resources and proficiency, buy new aircraft and revenue-sharing deals which could contribute to remarkable cost savings. From this association, they can also invest in fuel in bulk for necessitate of both transporter in market as to cut cost. AirAsia partner up with Tune Talks Sdn Bhd with the objective of gain more earnings and further uplift AirAsia Brand. Other than the partnerships, AirAsia prepare insurance in case of any possible accidents and negative incident such as flight cancelations and flight delays. Not only that, AirAsia also gives compensation for luggage delay and luggage damage.