This paper examines how AirAsia, Malaysia's budget airline, has strategically implemented business information systems to support its rapid growth and competitive positioning. The paper covers AirAsia's use of a Computer Reservation System (CRS) for seamless booking and check-in, a Yield Management System (YMS) for real-time revenue optimization, and an Enterprise Resource Planning (ERP) system powered by Microsoft Business Solutions for operational integrity and financial reporting. Together, these systems illustrate how integrating Transaction Processing, Decision Support, and Office Automation technologies enabled AirAsia to reduce costs, improve efficiency, and serve as a model for information-systems-driven success in the airline industry.
The airline industry throughout the world has become increasingly competitive, particularly given the never-ending rise in aircraft fuel costs. Different airline companies are finding different ways of attracting customers through various marketing initiatives. In Malaysia, AirAsia, founded in the mid-1990s, offered no-frills budget fares under the marketing theme "Everyone Can Fly" (AirAsia 2011). This Malaysian airline has captured the market not only locally but across the Asian region. The company's success was made possible not only through low fares and excellent service, but also through the acquisition of additional aircraft.
AirAsia has strategically adopted information technologies to integrate its operations and coordinate all business and management functions (Wong Pui Man 2009). Among the business information systems it has implemented, the company capitalized on developments in Transaction Processing Systems, Decision Support Systems, and Office Automation Systems. By integrating these various systems and ensuring that the right hardware, software, networking, and processes are in place, AirAsia was able to streamline business operations, yielding more efficient and effective outputs.
With information technology, for instance, "AirAsia was able to be the first airline in Southeast Asia to utilize e-ticketing and bypass traditional travel agents. This enabled the airline to save on the cost of issuing physical tickets (estimated at U.S.$10 per ticket), and eliminated the need for large and expensive booking and reservation systems, as well as agents' commissions" (Zhu 2011).
In terms of transaction processing, AirAsia deployed the Computer Reservation System (CRS) — "an integrated web-enabled reservation and inventory system suite that includes Internet, call center, and airport departure control functionality" (Wong Pui Man 2009). This system provides a hassle-free reservation and check-in process for AirAsia's customers, directly linking the airline to its customer base and simplifying the end-to-end travel experience.
In terms of decision support, the Yield Management System (YMS) anticipates and reacts to customer behavior in order to maximize revenue, taking into account operating costs (Wong Pui Man 2009). The system avoids conventional forecasting guesswork, enabling decisions to be made based on real-time information. Yield management of this kind is particularly valuable in the airline industry, where seat inventory, pricing, and demand fluctuate rapidly and must be managed dynamically to protect margins.
"ERP integrates back-end operations and reporting"
AirAsia is indeed a success story not only because of the viable business model it adopted, but by fully utilizing information technology in its operations. By continually improving on its current systems, AirAsia is well-positioned to lead the Asian regional market and continue opening flight destinations in other regions. The company demonstrates how maximizing the use of business information systems can drive business growth, and it stands as a model that other airline companies can follow.
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