Opportunities

NEW SECONDARY HUBS and INTERNATIONAL FLIGHTS EXPANSION

The forming of PAA is an advantage on both parties when it comes to brand
awareness. The affiliation widens the customer base of AirAsia and Zest Air the
former reaching local bases in the Philippines and the latter with internationally
along with other AirAsia affiliates.
ECONOMIC DOWNTURN
An economic downturn creates an opportunity for Philippine AirAsia to extend its
services to customers with limited budget. During these times, there is a slowdown
in economic activity resulting in a fall in the worldwide stock market. Moreover, it
results to the fall in the rate of leasing aircrafts. PAA gets to lower the fare rates.
SOCIAL, CULTURAL, DEMOGRAPHIC AND NATURAL ENVIRONMENT FORCE
I-remove lang ni cos ang gina mean lang man sini is ang ASIA TRADE, TOURISM,
AND INCREASING BRAND AWARENESS
ASIA TRADE, TOURISM, AND INCREASING BRAND AWARENESS
Asias growth in trade and tourism encourages more tourists within Asian countries
and from other continents to Asia. This increases the demand for air carriers and
importantly, the demand for low cost carriers by budget sensitive travellers. PAA
takes the opportunity to raise its customer value through providing customer
service for low-priced tickets and other services (such as direct hotel reservations
and travel insurances) for their competitive advantage.

Threats
NEW ENTRANTS AND THE DOMESTIC MARKET
The Low Cost Carriers provide the majority of domestic flights in the Philippines,
although, the market is not exclusive to Philippine AirAsia. In fact, the leading LCC in
the domestic market is Cebu Pacific with 60% share in 2015.
However, the LCC group is not the only aviation service providers in the country.
Other carriers have been growing and expanding that by may 2016, Emirates holds
around 40% share of the domestic market.

CEBU PACIFIC-TIGER AIR MERGER

FUEL PRICE INCREASE

Evidently, there is an indirect relationship between the market price of fuel and the
revenue of an aviation company. Being the main variable cost of flying, the rapid
fluctuation of oil prices in the market significantly affects the profitability of
Philippine AirAsia. And being a Low Cost Carrier, AirAsia cannot afford to spending
on high costs for its low fares. In fact, AirAsia has encountered this challenge in
2012, when it cancelled its flights in Europe and India.
AVIATION RULES AND GOVERNMENT POLICIES
The uncertain risks in flying (such as accidents, terrorism, and other fortuitous
events) decrease the assurance that customers have on carriers. Its low-cost
feature makes AirAsia exposed to more aviation regulations and policies. This limits
the aviation company the possible destinations and may be readily rejected by the
government if it is not in their favor.