AirAsia started under its Malaysian owner DRB-Hicom in 2001. Back then AirAsia operated two Boeing 737s and later started to use Airbus A320 aircraft consisting of 180 seats, and focused on generating profits within a year's time. The Airbus A320 aircraft has been identified to be the world's most technologically advanced and reliable passenger aircraft. AirAsia is committed to the promise of 'Now Everyone Can Fly' and AirAsia's business success is largely attributed to its continuous ability and ongoing commitment to being adaptive, flexible, agile and innovative. Since its establishment in 2001, AirAsia focused on strengthening its vision statement 'to be the largest low cost airline in Asia and serving the 3 billion people who are currently underserved with poor connectivity and high fares'. The vision and mission statements of an organisation need to address key issues related to the business operation, customer needs and market segments, and to align with the long-term business success (Wensveen & Leick, 2009). AirAsia's mission statements are well-thought-out in promptly identifying their customers and outlining the core value that the business offers to the target customers. The corporate culture of AirAsia allows for direct communication between staff and operations with information sharing, and its open plan office spaces encourage creativity and innovation. AirAsia conformed to the core vision of the low-cost carrier by committing to low fares, emphasising 25-minute turnaround, promoting NO frills, introducing automation, using innovative solutions and offering greater customer value. Low-cost carriers pose significant challenges to the global airline industry. AirAsia's commitment to offering low fares focused on capturing on its service promise and attracting customers from different segments. The 25-minute turnaround time capitalises on the productivity and efficiency of the staff and airlines, thus reducing the amount of time spent on the ground by the airline. 'No frills' sets out to provide options to customers thus allowing them to pay for the facilities that they want. Automation allows customers to have control over their check-in, baggage booking and selection of in-flight facilities, thus reducing operational costs. The lean distribution system allows for a large percentage of sales to be made through online bookings and administrative costs are not imposed for loyalty programs and frequent flyer schemes. AirAsia's A320 aircrafts have sharklet wing tips that reduce wind drag and enhance fuel efficiency. AirAsia places a greater emphasis on customer safety by educating customers about the aircraft's compliance with the requirements of International Aviation Safety and the Malaysian Department of Civil Aviation. Additionally AirAsia adheres to positive work ethics, training and risk management practices. AirAsia operates to more than 65 destinations, serves over 25 million passengers per year, boasts a fleet of over 85 aircraft, employs over 3000 employees and has annual revenue of over 70 million dollars. AirAsia since its inception focused on connecting various regional networks within Malaysia by establishing three major hubs in Kuala Lumpur, Penang and Johar Baru. AirAsia focused on expansion strategies outside Malaysia, however with a strategic orientation of concentrating on routes within three to four hours' flying distance. Thus AirAsia expanded to extend short-haul services to Indonesia, Thailand, South China, Philippines and India. AirAsia's expansion into other South East Asian countries occurred through strategic franchising operations and holding onto the local investment options. AirAsia's short- haul service offerings and expansion strategies can be attributed to its identification of the internal and external opportunities and the need to serve customers through low- cost carriers that were largely neglected by the full-service airlines. Factors such as urbanisation, the emerging middle class and increase in the proportion of discretionary income levels also contributed to AirAsia's success in South East Asia.

AIRASIA STRATEGIC DECISIONS AirAsia stretched its expansion strategies to the low-cost long-haul segment and established AirAsia X in 2007 with Virgin's Sir Richard Branson acquiring a 20 per cent strategic shareholding. AirAsia X's operations meet the regulatory and compliance standards set out by the international and Malaysian aviation regulatory authorities. The key strategic focus of AirAsia X is to focus on high frequency and point-to-point networks without promoting any complexities associated with the code sharing and legacy overheads. AirAsia X as a subsidiary to AirAsia established a franchise and started to offer non-stop long-haul services from Kuala Lumpur to Gold Coast, Australia using a leased Airbus A330. In 2010 AirAsia X started to offer long-haul services from Kuala Lumpur to Perth and Melbourne, observing an increase in demand and traffic by 15 per cent. In 2011, AirAsia X started offering a long-haul. service from Kuala Lumpur to Christchurch, New Zealand. In 2012, AirAsia X acquired landing rights to Sydney Airport after being prevented by Malaysian Airlines for a long time due to its perception of direct competition. The major impediments associated with international expansion relate to the airline bilateral agreements and the amount of government control of the international aviation authorities. AirAsia X offered services from Kuala Lumpur to Abu Dhabi in order to create a new hub in the Middle East, but had to suspend the long-haul service due to resonses. AirAsia X in 2010 entered into a non-equity alliance agreement with Jetstar in order to achieve cost efficiencies (Easdown, 2010). Similarly AirAsia X entered into a strategic agreement with Malaysian Airlines in order to strengthen the positioning of both these airlines on long-haul routes against Singapore Airlines. AirAsia X opines that their business model supports flights up to eight hours rather than 12-hour-long flights (AirAsia, 2012).

1.Using the Alternative Corporate Growth quadrant, map out where the short haul flight and long haul flight businesses fit as Airasia internationalise. Be detailed to state the type of diversification and the specific strategies they adopt.

2.Based on the information in the article, map where the short haul and long haul businessesfitintheBCGquadrant.WhatstrategiesarebeingadoptedbyAirasia for the two distinct businesses? Assess Airasia's performance based on recommended outcome prescribed by theBCGstrategies.