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Market structure, pricing, performance and strategies Essay

Public transportation in the cities includes buses, taxis and light railway. The domestic air network is comprehensively revered by several local airlines. There are seven domestic airlines that operating within Malaysia, It Is Alarm salsa, Malaysia airlines, Appealing air, Brewery air, SAGA Airlines, Saba air and transmits. But among those domestic airlines there are only two big domestic airlines company that operating widely within Malaysia. It is Malaysia airlines and Alarm Asia. We know already that Malaysia airline Is the biggest airlines Industry In Malaysia.

It serves both, domestic and international flight which Breaking the barriers of the new millennium, their fleet of nearly 100 aircrafts serve more than 100 destinations round the world not including their domestic destinations. They serve 32 domestic destinations within Malaysia. Air Asia is a domestic airlines industry in Malaysia which is own by Tune Air 99. 25 per cent and Mafia Air for the rest. Eurasia, meanwhile, operates 26 flights weekly to Jota Kimball, 28 flights to Chucking. Two flights to Labial, seven flights to Language, and 14 flights each to Penman, Jota Barr and Mir.

Except that, they serve other destination also, It Is alarm setae and taw. Recently their performance Is boost and they

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will closely to take over the domestic airlines market. They have a very good rice strategy to increasing their customer volume and gain more profit. That’s why today there Is a tight competition between Air Asia and Malaysia airlines to serve the domestic flight market. 2. The market structure of Malaysian domestic airline Industry The Malaysian domestic airline industry Is a services Industry for transportation and cargo services.

It has its other competitive firm which they have differentiate services when we look at the transportation industry scope. There are variety transportation that people can pick out to take based on their ability and necessity. There are buses, re many bus firms and taxis firms. Bus firms in Malaysia such as LOP Jay Sad Bad, Limit Dijon Cool Bas Killing, Metro bus Nationwide Sad Bad, Transaction Sad bad and still many buses service firms, taxis firms and railway that provide transportation services in Malaysia.

And there are so many cargo services in Malaysia such as Sluggish Agencies Sad Bad, Jets Express Services Sad Bad, K. C. Data. Sad. Bad, Kasbah Cargo Handling Agencies Sad. Bad and many more. So if we look at the market structure for domestic airline industry in the transportation industry scope, its in the monopolistic competition market which have any players, product differentiation (bus services, taxis services, railway services and airlines services), have some control or little control over prices, easy entry and usually its non price competition.

It is easy for other new firms to Join this market, they can exist in this market if they can differentiate their product that another firm’s product. Because of many players and different product in this industry, they have little control over prices. They will have control over prices when we look at within the domestic airlines industry scope. As we know that it is only seven domestic airlines industry in Malaysia that serve domestic flight. And only two biggest domestic airline industry that make a hit in the Malaysian domestic airline industry.

They are in the oligopoly market, which have few players and have control over prices. The competition in the domestic airline industry tends to the price competition. It’s a war price competition. The two domestic airlines, Air Asia and Malaysia airlines is compete in their pricing strategy to attain more customer and increasing their profit. 3. The Competition of Air Asia and Malaysia airlines It is very perceptible that right now domestic airlines, Malaysia airlines and Air Asia re competing against.

Each of them attempts their best strategy to increase their flight volume and increase their profit especially they improve their pricing strategy. Their Performance Air Asia does the best pricing strategy, they offering cheeky ads, funky staff attitude, easy online booking, and low fares–as little as $9 from Koala Lump to Penman (compared with $44 on MASS)–Air Asia has had no trouble keeping its planes full.

It’s operating at a profit, with margins of 15% on the $36 million in revenues the carrier generated in the first five months of 2002. The government has allowed Air Asia to come a symbol of economic reform and is clearly rattled by the upstart. (Internet source 17) In August Malaysia Airlines announced it would cut domestic fares by half, only a year after raising prices to boost profits. That’s a claim MASS can’t make. The Malaysian flag carrier lost $219 million in the in a decade.

They believe that their loss is because of the combination of the decline of the international passengers’ arrivals after the September 1 1 and the fare revision august 2001. The impact of the domestic fare increase in August for Peninsular Malaysia was clearly seen from the 12. 6% reduction in passengers for this region as opposed to an increase of more than 5% for Peninsular Malaysia-Saba/ Karakas and internal Saba/ Karakas services. ND They noted that the competition with Air Asia did not result in any significant loss in Malaysia Airlines’ domestic market share, particularly on the major routes to Penman, Jota Kimball and Chucking. Their Pricing Strategy The Malaysia airlines introduces their pricing strategy with the national network special fares, MASS is doing the pricing strategy based on the different target market, for example special fare for students, family fare, senior citizen and group fare and so on. For students MASS give 25% rebate for a certain conditions.

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