Abstract

In February 2009, Tony Fernandez, the founder of AirAsia was not bothered by the company’s mass order of 175 new aircraft for its AirAsia-X long-haul services. He could not resist the concern over the aircraft deferment to Thailand and Indonesia in 2011 because of the relocation of the low-cost carrier terminal in Sepang before AirAsia was forced to move to KLIA2. Such a situation would surely increase its operating costs exponentially. He also knew he was facing an economic downturn and the high competition, particularly for his AirAsia-X business. Major rivals of AirAsia-X in the region were Singapore Tiger Airways, Cebu Pacific Air of the Philippines and a global competitor was EasyJet in Europe had just launched aggressive campaigns and promotions which would affect its long-haul business. He was certain that the company would achieve his dream to spread its wings all over the world. However, he realized that the company’s operating costs and competition with other airliners that joined the club of no-frills airlines based on a national and international level presently had escalated. He knew he had to act now. If you were Tony Fernandez, what would you do in this scenario was a question that needs an answer? This is an issue of strategic choice of divesting or integration as the strategic options are limited in the short as well as long run. The AirAsia case study has the main objective of sharing impact of the covid-19 pandemic devastating impact on the airliners. It is a significant study in terms of impact on economy, tourism and hospitality industry in general and Malaysia in particular.