Review of the Strategic Situation of Air Asia X Essay

Review of the Strategic Situation of Air Asia X - Essay Example The essay "Review of the Strategic Situation of Air Asia X" presents a review of the strategic situation of Air Asia X based on the case study â€Å"AirAsia X: Can the low-cost model go long haul?†. This essay also examines AirAsia X’s business environment, analyses AirAsiaX’s current strategy and appraises the strategy. The airline industry in Malaysia is highly developed. The state has emphasized on the industry’s infrastructure so that the services provided in the industry are kept at high quality. The airline industry in Malaysia is a close industry; there are only two competitors AirAsia X and the Malaysian Airline System. Since 2011, efforts have started for ‘a share swap’ between the two firms. The Chief Executive of Air Asia Group would acquire the 20% of the shares of MAS. The terms of this agreement have not been verified by both parties. In the beginning of 2012, the Maybank Investment Bank warned that the country’s airline industry should expect to face strong turbulences due to the recession developed in West. Since 2011, a decline in the industry’s profits has appeared, a trend that leads to concerns about the industry’s prospects in the future. In June 2012 IATA stated that the profits of the global airline industry for 2012 would be expected to be significantly reduced due to the increase in the price of oil and the debt crisis in the European Union. One of the most known frameworks for the analysis of a firm’s strategic decisions is the Five Forces model of Porter.