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Competitive advantage is when an organization can do something that other organizations cannot. Organizations develop a competitive advantage to stay ahead of rival organizations (Christensen, 2001, p105-109). An example is when organizations can produce markets and sell their products at a cheaper rate. Cost advantage enables organizations to have higher sales margins, unlike their market rivals. Organizations need to develop and maintain a competitive advantage some develop their advantage by lowering their costs. Competitive advantage is crucial as it helps organizations adapt to the constant change in the environmental business environment. Another way is by evaluating and implementing strategies following the changes in the business environment.

AirAsia was established in 1993 but fully started its operations in 1996. AirAsia has grown over the years and expanded from only having two aircraft and 200,000 passengers to having 79 airplanes and having 1.18 million passengers. AirAsia has established itself as one of the most successful low-cost airlines. Their competitive advantage strategy lies in offering passengers low costs (Chan, 2000). To maintain their cost advantage, they maximize their flying time. They ensure that they reduce as much as possible their time on the ground and maximize their time flying. AirAsia also only offers a single class which enables them to design more seats in every plane. The Boeing 737 on a two-class carry 132 passengers while on a single-class they would carry 148 passengers.

AirAsia is also able to maintain its operations at a low cost through sales and marketing. Instead of paying sales agents commission, the company engages in direct sales through their websites and call centers. AirAsia outsources services through other third parties. Outsourcing helps them reduce maintenance expenditure. Another strategy that enables Asia Air's competitive advantage is that they do not offer frills services. During travels with AirAsia, one has to pay extra to get additional comforts durn traveling. The company does not have complementary foods. If the passengers request snacks and drinks, they have to pay for them. Asia Air n air has also invested in information technology. The company uses open skies communication systems (CSR) which connect to AirAsia. In 2005 the company also adopted ERP systems to support month-end financial closing. AirAsia pays a high priority to their human resource since the relaunch by Tony Fernandes. The company ensures that all employees are in an environment that supports employee growth. The environment also promotes job flexibility as employees are multi-tasked.

It is a challenge for other companies to try and apply the AirAsia cost advantage competitive edge. Operating at a lower cost can be a challenge if not strategically planned and implemented. Asia Air competitors will face a difficult challenge lowering their cost as they would have to be lower than those of AirAsia (Arbi et al., 2017, p48-60). There were plans to participate in the long air travels. The company was planning to extend their flights of more than four hours to China, Australia, Europe, and the Middle East however these changes would experience a few challenges. The application of their cost advantage makes the company compatible in operating for the long-haul. In comparison to other companies operating on the long-haul AirAsia already offers the cheapest rates in comparison to other Air travels