AirAsia: Asia's Largest Low Cost Airline's Foray into India

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Case Details:


Case Code : BSTR432 For delivery in electronic format: Rs.400;
For delivery through courier (within India): Rs. 400 + Shipping & Handling Charges extra


Diversification/ Geographic Diversification/ Entry Strategy/ Joint Ventures
Case Length : 14 Pages
Period : 2012-2013
Pub Date : 2013
Teaching Note : Not Available
Organization : AirAsia Berhad
Industry : Aviation
Countries : India; Malaysia; Asia


The case is about the entry strategy of Malaysia-based AirAsia Berhad (AirAsia), Asia's largest budget carrier, in India. In February 2013, AirAsia announced its plans to launch a regional airline in India in association with Tata Sons Ltd. and Telestra Tradeplace Pvt. Ltd. The new airline would be managed by AirAsia and operate from Chennai. It would target tier II and tier III cities in India. The case discusses the low cost business model of AirAsia and its target market. It also includes a detailed note on the Indian aviation industry, India's civil aviation policy, and the legal requirements to be fulfilled by a foreign company to enter and operate in this highly regulated industry

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The case describes the joint venture in detail. It highlights the process of forming a new airline. The case ends with a discussion on the challenges that lie ahead for the company and on whether AirAsia will be able to replicate its business model in India or not.


Study and analyze the structure of the Indian civil aviation industry;
Understand the issues and challenges of low cost business model in the Indian aviation industry;
Analyze the target market and the differentiating strategy of a low cost airline in India in comparison with that of a full service airline;
Evaluate the problems faced by a foreign airline in starting operations in India and the future challenges that need to be overcome in order to become successful in India's highly competitive aviation market.


  Page No.
Introduction 1
Background Note 1
Indian Aviation Industry 3
The Joint Venture 4
Challenges 7
Looking Ahead 8
Exhibits 9


Diversification; Internationalization; Mode of entry; Joint venture; Industry structure; India's civil aviation policy; Competition; Legal requirements; Low cost; Low cost business model, strategic disinvestment, brand licensing, financial investor, business model

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