Wilson Wong, in his attack on AirAsia , has forgotten the many, many fundamentals of an industry. Why shouldn't AirAsia abuse its starters advantage if that maximises profits that way? AirAsia is monopolising the budget airline industry in the region. As a business, its best interest is to keep that monopoly.
They do so by controlling prices and preventing competitors from entering the market. Wong seems to claim indirectly that AirAsia does not fly non-profitable routes. But really, why should it?
It's a business going for profit Its maximises profits for its shareholders and as its management sees fit; not to the whims of individual passengers. Whether this is a good strategy or not, we leave it to the management and the market to sort out.
I do agree that AirAsia's service is below par, but this is reflected in their pricing. When fewer people ride with AirAsia because of service, they either lower prices further or improve on service. Either way, the market and AirAsia decides.
AirAsia is doing what its doing because the market allows it to do so. The same can be said about AirAsia's staff rudeness. As part of the market, the individual can do something, but if someone else is willing to pay for that ticket you decided not to buy, direct some wrath to society too.
Finally, we can comment and complain about AirAsia's service, but market forces will correct it by allowing another competitor to start up or force AirAsia to reduce its prices or improve its service.
Either way, AirAsia is doing what is in its best interest. It does not benefit budget commuters, but which monopoly does? As a side note, all airlines price discriminate anyway. Buy a ticket six months ahead or two days before a flight to find out why.
What we can do as a market is to not fly AirAsia and hopefully encourage competition, but for now, kudos to AirAsia for monopolising the sector. But I hope it loses its monopoly soon.
