Background information on AML
The management of Asia Miles Limited is managed by the Cathay Pacific Airways Asia Miles Limited which is wholly owned by Cathay Pacific Airways Limited. AML is located in Hong Kong and has operated Asia Miles since February 1999 (Airways, B 2016) The Cathay Pacific’s official loyalty programme is Marco Polo Club. Asia Miles is an unaffiliated travel reward programme comprising of a variety of airline and hotel partners, as well as credit and charge card companies, car rental agencies, telecommunications companies and other non-air partners. Members of The Marco Polo Club are automatically enrolled as Asia Miles members. AML is a subsidy of Cathay Pacific Airways and is an international airline registered and based in Hong Kong, as it was incorporated in the way back in 1946, and at that time it almost carries one-millionth passenger who is a great amount as a starter industry or for any service provider company, but now it almost carries more than a million of the passengers each month. Due to good image and high profitability, it has provided subsidiary facilities to carry on the operation in hotels, airways, and so to AML that is Asia Miles Limited in the year 1999 since then, Asia Miles is also performing very well as it got the support from the Cathay Pacific Airways Limited. It got benefits also in Hong Kong as Cathay Pacific already operating in Hong Kong.
Potential future Strategy
SWOT analysis for the Asia Miles Limited
SWOT analysis is mainly done to know the relevant strength and weakness and what are the opportunity and threats.
1. Strong brand image and equity and customer experience
2. Asia Miles is present across the region’s leading to increased synergies of operation
3. It has number of fleet and varied mix of aircrafts which is leading to fuller utilization of the fleet based on the demand condition
4. As a subsidiary of Cathay, it also has the code sharing agreements along with membership in One World Alliance Weakness
1. Due to having high leverage it is somewhat weak in finance in some way
2. It has limited scope for future expansion due to future finance leases liabilities.
3. An initiative of Reduction in the cost may lead to an unpleasant measure.
1. Future growth is possible as due to emerging market growth potential
2. Advancement and improvement in technology may lead to improved operation and may help in reducing the costs
3. Opportunities due to expansion in freight sector. Threats
1. Heavy competition from both market that is domestic and international.
2. Sodality in jet fuel price may hamper as it the important operating expense for the company.
3. Regulative issues were relevant to continuing operation in the domestic as well as in international segment.
The major weakness is found is that it has low liquidity ratios from the last decades so in a way to improve it need to focus on its financial activities to cope up in the future (Chen et al., 2015). This is due to company raised more debt, and it's a highly leveraged company. But it has the great opportunity that is emerging market in China Indonesia, India. Major threats are that it has intense competitive pressure from both the market that is domestic and international. In spite of all, it has the great and sound image and equity and excellence customer experience which is the key to success in long run. But it needs to focus on its weakness and try to make it as its strength.
Five force analysis
Threats of new entrant- as Asia miles is very well in its brand loyalty, so there is less chance of posing a danger with new entrant and although it is providing it service since 1999 with the collaboration of Cathay Pacific Airways.
Threats of substitute- as substitute service or product are considered there are a lot of substitute to AML so it possesses the danger that customer may opt other airlines. So for this great positioning should be done in a way to make a more loyal customer, so in case of Asia Miles it has a huge loyal customer so currently, there is not much danger of substitute available, but he needs to continue in improving its services. Major substitutes are Malaysia and Singapore Airlines.
Bargaining power of buyer- here in case of bargaining power of buyer, buyer bargaining power is more as there are many airlines operators available in the Hong Kong market.
Bargaining power of supplier- here Asia Miles Limited has only a few suppliers, so the bargaining power of supplier is high. So in a way to reduce the bargaining power Asia Miles Limited should increase the supplier, as this will also lead Asia Miles to play safe and secure.
The PESTLE analysis of AML
Political- as far as the market of AML that Asia Miles Limited is considered it was found that the major market of AML is disturbed with the political issues so the political unrest in the major market may cause a decrease in traffic.
Recently in 2014, the political disturbance in Thailand was impacted to AML as it resulted in a sharp decrease in passenger traffic for almost a year.
Economic- due to the reduction in the oil price it leads to the reduction in fuel cost. In 2015 report represent that AML/ Cathay Pacific saved 20.4 percent Hong Kong $ in the Financial year 2015. But due to increasing the value of Hong Kong $ is it turning off the tourist also since 2016.
Social- AML is providing and investing in training and workshop for young generation and at the same time taking measure, initiative to reduce illegal trafficking.
Technology-AML has devoted to technology advancement always and all the time. It introduces the e-business platform also Asia Miles is using Information Technology in a way to improve communication with mainly customer, staff and passenger. So thereby this adopting of information technology is increasing the work efficiency also.
Legal- antitrust proceedings in various jurisdictions
Environment-as AML has considered it is very well in protecting the environment simultaneously with earning sound image and reasonable profit. As he is indulging in the waste management project, also it uses all it used silver foils used in catering in the plane to recycle it and give the eatable left materials to various industry to supply it to the animals. So by this way, it is showing the concern regarding the environment also and gaining the good brand and customer image among various players in the industry.
Recently in 2017 November 3rd, The Marco Polo Club announced the various new plan to attract the members and customers such as it announced if you fly regional within Asia, then you will be entitled to get additional 5 to 10 club points per sector across most fare classes in all cabins.
So overall we can say that Marco Polo Club is very well performing in a way to capture more members and it is providing loyalty program in regards to Asian Miles, Cathay Pacific Airways, etc.
Product development and information technology of the company are also encouraged for the advantage of the company for the future operations. High end in technology gives the company an edge to the competition.
• Should lower the labor expense in a way to increase the profit
• Increasing the liquidity ratio is needed
• Objectives should be clear and measurable so that employee can put all their best effort in achieving them.
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