How AirAsia Brands Itself in India

Wednesday, 24th April 2013 at 10:55am

AirAsia succumbed to bankruptcy in 2001 and was about to fold up when Tony Fernandes rescued it, bought the crippled airline from Malaysian government, who owned it, for a token of 1 ringgit (US$0.26). The business acumen of Tony Fernandes turned the debt-laden airline into Asia's largest and fastest-growing budget carrier to date.

Now, its biggest challenge in the country where low-cost carriers dominate the domestic market, is to replicate its success by attracting a substantial share in the local market in a short time. Indian skies are already crowded with many budget airline such as Jet Aireways, JetLite, IndiGo, Go Air and SpiceJet.

AirAsia has been very successful in adopting its business model by offering lower-than-usual ticket prices to travelers and give them options to pay for checked baggage or preferred seats. The AirAsia brand works its way up by adopting the business model that is pioneering in the low-cost travel industry.

However, Indian market can be a totally different story where airlines are prohibited to charge a baggage fee as well as preferred seats.

AirAsia needs to do away with that strategy in India and it has to comply with the rule. To compensate for the absence of the ancillary-revenue generating strategy, it has to devise other ways to keep the local subsidiary a feasible investment in the long term.

According to a brand consultancy firm, AirAsia has to work doubly hard to keep its identity in a country where peculiar restrictions on almost any sort of business abound. To draw customers, the budget airline needs to recreate its image in India. It has to redraw its plans in the challenging Indian market if it wants to keep its brand successful in the country.

AirAsia would definitely find the Indian domestic market way different from the rest of the region. Not only because it is still a young market, it is also culturally diverse. The consultancy firm suggested that the airline could exploit its partnership with the Tata group to build its identity in India as the Indian conglomerate is a successful global brand, ranked 50th in 2011 global survey. The credibility rating of Tata brand has been acknowledged in the global community.

The Malaysia-based airline can use the Tata name integrated in its corporate identity and marketing effort, to differentiate itself from the rest of its subsidiaries in other countries. Not that it is not effective in its branding strategy in those countries but because Indian market is different.

What AirAsia needs to strengthen its brand identity in India is come up with a very smart and effective branding strategy that encompasses the cultures of the whole of Asia, not just Southeast Asia, where the airline originates.

By: Pete Lee.