HRM 645 GROUP ASSIGNMENT CHANGES & DEVELOPMENT OF AIR ASIA NBH8C (GROUP 7)
BACKGROUND OF AIR ASIA The birth tale of AirAsia, the aviation branch of Capital A, is a renowned saga within the industry. In 2001, Tony Fernandes and Kamarudin Meranun embarked on a journey, acquiring a struggling airline equipped with two aircraft and a workforce of 200. Through their strategic efforts, they transformed it into the fourth-largest airline in Asia. Operating with affordability, inclusivity, and accessibility as its core principles, AirAsia spans Malaysia, Thailand, Indonesia, the Philippines, and beyond, boasting a fleet of over 200 aircraft and a team of 21,000. With a commitment to serving the underserved, AirAsia has facilitated the transportation of over 600 million passengers to more than 160 destinations. Recognized for democratizing air travel in the region, its renowned tagline, 'Now Everyone Can Fly,' symbolizes the airline's mission to connect people and places. awards won by air asia why we choose air asia the downturn trend during pandemic Skytrax 2022 World Airline Awards World’s Best Low-Cost Airline for 13th Consecutive Year Cirium 2022 Most On-Time Airline in Asia Pacific Top 3 Most On-Time Low-Cost Airline in the world OAG 2022 Top 4 Most On-Time Airlines In the World Highest Ranked Airline in Thailand for OTP CHALLENGES IMPACT OF COVID-19 PANDEMIC TO AIR ASIA FLIGHT CANCELLATION DECLINING DEMAND EXTRAVAGANT REFUND LOST OF POTENTIAL CUSTOMER CONTROLLING OPERATIONAL COST LAYING OFF EMPLOYEE In 2020, domestic tourism in Malaysia experienced a significant drop in the number of visitor arrivals and tourism expenditure due to the COVID-19 lockdown. A total of 131.7 million domestic visitors were recorded in 2020 with a decrease of��44.9 per cent as compared to the previous year (2019: 8.1%). In terms of volume of total tourism trips, domestic visitors undertook 147.0 million trips within the country, declined by 55.8 per cent as against 2019.Domestic tourism expenditure in 2020 plummeted 60.8 per cent with only recorded RM40.4 billion (2019: RM103.2 billion). This was the first drop since 2008 when DOSM started to compile Domestic Tourism Survey statistics.� CRITICAL STUDIES The COVID-19 pandemic has had a huge negative impact on tourist arrivals into Malaysia. The MCO restricted all international and domestic travels, in particular for tourism purposes. This had caused an unprecedented decline in tourist arrivals in 2Q20 In Malaysia’s airline industry, AirAsia suffered a significant loss during the pandemic. In 2020, AirAsia’s and AirAsia X’s market shares fell considerably to 19.5% and 1.4%, respectively (2019: 42.2% and 7.2%, respectively). The drop in the market shares for AirAsia and AirAsia X in 2020 was due to significant capacity cuts as both carriers halted their international flight operations, which account for approximately 45.0% and 100.0% of their total flight operations in 2019, respectively.
GROUP 7 NBH8C - HRM 645 (ORGANIZATIONAL DEVELOPMENT & CHANGES) ISSUE 1 BUSINESS & DIGITAL TRANSFORMATION During the COVID-19 pandemic in Malaysia, the government introduced Movement Control Orders (MCO) to mitigate the virus's spread. AirAsia, like many in the aviation industry, felt the impact of the crisis with a significant decrease in air travel demand due to restrictions, lockdowns, and health concerns. This led to challenges including lower passenger numbers, flight cancellations, financial strain, and disruptions in the supply chain for AirAsia's in-flight Food & Beverages brand, Santan, which is the world's first restaurant brand by an airline to offer in-flight food on the ground. To address challenges, AirAsia adopted an organizational development (OD) approach, emphasizing strategic interventions for digital business transformation and restructuring. Capitalizing on opportunities during the pandemic, the company accelerated its shift from an airline to a digital travel, lifestyle, and agriculture entity. On June 15, 2020, AirAsia ventured into agribusiness, aiming to disrupt the industry and make a positive impact in the communities it serves. OUR FARM (LATER REBRANDED AS AIR ASIA FARM) AIR ASIA GROCER Founded to further streamline the group’s ecosystem and to complement airasia’s transformation into a leading one-stop travel and lifestyle e-commerce platform An online grocery platform which include cargo, logistics and payment capabilities. Business to Business (B2B) & Business to Consumer (B2C) Create new ecosystem that help agri-business expand with greater outreach. Offer better value for money for end-consumers Reduce costs to buyers, increasing profits to farmers. Had increased Air Asia’s ancillary revenue during the crucial time. New agriculture supply chain, connecting producers directly to business Uses technology and data to fulfil demand from F&B Outlets and supermarkets Cost efficient and reduced procurement cost up to 25% Help increase producers income “When it first started, Ourfarm had only engaged with close to 350 registered agricultural producers under the Ministry of Agriculture and Food Industries (MOA), adding that the platform currently has about 500 private and independent producers onboard.” - Lalitha Sivanaser, Chief Executive Officer OURFARM
GROUP 7 NBH8C - HRM 645 (ORGANIZATIONAL DEVELOPMENT & CHANGES) With their business & Digital transformation strategy and the intervention action plan taken by AirAsia, they are able to: AirAsia enhances supply control, introduces new products for market segmentation, promotes price transparency, and reduces supply chain costs by eliminating middlemen. This enables farmers to boost their income. This on the other hand benefits their F&B business (Santan) to have the abiloty to secure fresh produce at lower price With technology has taken center stage as a driving force for their effective organizational approach, Airasia can navigate challenges but also capitalize on opportunities with greater agility Becoming more productive, cost-effective, and competitive Even though Airasia have to reduce workforce to up to 30% and reduce staff salaries by 75% during the pandemic, they are able to expand their new employment opportunities. Retrench cabin crew are welcomed to join OURFARM and trained to communicate effectively and stay calm in dealing with people. Improve work environment and people experience. Embracing Digital Transformation Sustainability of the company and a good punlic image The sustainability of agriculture and food industries depends on technology for progress, competitiveness, and food security. In the digital era, agricultural e-commerce can revolutionize product sales and farm management. With support from the Ministry of Agriculture and Food Industries (MAFI), AirAsia gains a positive public image, building trust, credibility, attracting opportunities, and fostering improved relationships with existing and new customers. In summary, the organization's OD interventions effectively enhanced business transformation strategies, resulting in improved overall performance, increased annual revenue, reduced operating costs, and heightened customer satisfaction and workforce productivity. The Annual Report 2022 highlights substantial growth for airasia grocer, especially as demand for food increased and regional flights resumed. This allowed them to serve Santan and capitalize on Teleport services for an expanding export customer base. The business segment, previously impacted by the pandemic, experienced a nearly six-fold revenue increase. To accommodate this growth, AirAsia expanded into new markets and streamlined operations by shifting the business-to-consumer (B2C) segment to airasia food, ultimately achieving an 11.5% gross margin.
GROUP 7 NBH8C - HRM 645 (ORGANIZATIONAL DEVELOPMENT & CHANGES) ISSUE 2 CULTURE & EMPLOYEE ENGAGEMENT Adapting to the post-COVID-19 working culture necessitates organizational flexibility, proactivity, and consideration for employee well-being. With technological advancements impacting the complexity and dynamics of work activities, AirAsia must implement effective strategies to navigate these challenges. While the initial adjustment may be challenging, many employees have not only adapted but also found new ways to learn, improve, and stay safe while working from home. ADAPTIVITY Remote Work Policies Flexible Work Arrangements Communication & Collaboration tools Employee Well-being Training & Development Employe Engagement • Establish clear remote work policies that outline expectations, communication channels, and performance metrics for remote employees. • Provide guidelines on setting up a conducive home office and offer support for necessary tools and equipment. • Implement flexible work hours to accommodate employees' varied schedules, especially those dealing with caregiving responsibilities or other challenges. • Consider hybrid work models that allow employees to split their time between remote and in-person work. • Invest in reliable communication and collaboration tools to facilitate seamless virtual interactions among team members. • Encourage the use of video conferencing to maintain a sense of connection and foster team collaboration. • Prioritize employee well-being by providing mental health resources, counseling services, and promoting a healthy work-life balance. • Conduct regular check-ins to gauge the well-being of employees and address any concerns promptly. • Offer training programs to help employees adapt to new technologies and tools necessary for remote work. • Foster a culture of continuous learning to ensure that employees stay relevant and engaged. • Organize virtual team-building activities, social events, and recognition programs to maintain a sense of camaraderie among remote employees. • Foster a culture of open communication and encourage feedback to address any challenges. • Establish clear remote work policies that outline expectations, communication channels, and performance metrics for remote employees. • Provide guidelines on setting up a conducive home office and offer support for necessary tools and equipment. • Implement flexible work hours to accommodate employees' varied schedules, especially those dealing with caregiving responsibilities or other challenges. • Consider hybrid work models that allow employees to split their time between remote and in-person work. • Invest in reliable communication and collaboration tools to facilitate seamless virtual interactions among team members. • Encourage the use of video conferencing to maintain a sense of connection and foster team collaboration. • Prioritize employee well-being by providing mental health resources, counseling services, and promoting a healthy work-life balance. • Conduct regular check-ins to gauge the well-being of employees and address any concerns promptly. • Offer training programs to help employees adapt to new technologies and tools necessary for remote work. • Foster a culture of continuous learning to ensure that employees stay relevant and engaged. • Organize virtual team-building activities, social events, and recognition programs to maintain a sense of camaraderie among remote employees. • Foster a culture of open communication and encourage feedback to address any challenges.
GROUP 7 NBH8C - HRM 645 (ORGANIZATIONAL DEVELOPMENT & CHANGES) inTERvention strategy Despite pandemic restrictions and remote work, AirAsia maintains high morale. The People & Culture Department spearheads tech-driven strategies, restructuring processes, and adopting new methods to engage employees, emphasizing the importance of a connected workforce.� ALL STAR ON AIR Weekly programme on Workplace Live to share group updates, connect Allstars to CEOs and share what other teams have been doing #INTHISTOGETHER CAMPAIGN Allstars Separation Toolkit AirAsia’s Got Talent CV writing & interview workshops Allstars Virtual Career Fair on Workplace Talent Directory Campaign from March - July to instil hope, positivity and the #oneairasia spirit by organising donation drives and supporting local businesses #HUMANOFAIRASIA STORIES SUPPORT FOR FURLOUGHED AND RETRENCHED ALLSTARS A series of monthly write-ups that showcases Allstars’ contributions or efforts during the pandemic ALL STAR ON AIR #ASKMEANYTHING #ALLSTARSWFH #ALLSTARSWFH MANAGEMENT #ASKMEANYTHING UPDATES Quarterly management updates on Workplace Live Policies and announcements to keep Allstars informed and updated on COVID-19 related matters SAFE FLYING CAMPAIGN Weekly programme featuring indicatives under the Learning, Social, Fitness and Well-being pillars #ALLSTARSWFH ENGAGEMENT AirAsia offers diverse activities, from cooking lessons to language classes, fostering unity during challenging times. Beyond the fun, employees are leveraging the opportunity to acquire digital skills, preparing for the evolving business landscape in a post-COVID-19 world.
GROUP 7 NBH8C - HRM 645 (ORGANIZATIONAL DEVELOPMENT & CHANGES) the effectiveness THE RESULTS A survey sent to non-operations Allstars on May 16, 2021, revealed that 62% responded, with 83% experiencing an easytransition to remote work. Additionally, 95% felt engaged and informed, while only 14% reported productivity impact due to hibernation. Respondents also shared suggestions for enhancing their remote work experience. A May 16, 2021 survey among non-operations Allstars in the Group garnered responses from 62%. Results showed 83% found the transition to Working From Home easy, 95% felt engaged and informed, and only 14% experienced productivity impact due to hibernation. Respondents also offered feedback on enhancing their remote work experience. AirAsia encourages employees to "Dare to Dream," supporting ambitious plans and providing assistance in achieving goals. Emphasizing continuous professional training, especially during the pandemic's operational slowdown, the organization urges staff to acquire digital skills for a transition to its digital businesses. An Upskilling Framework aids in developing personalized plans aligning with individual aspirations and digital growth strategies. The Redbeat Academy, launched in 2020, facilitates accessible digital learning. This proactive approach has enabled employees to pivot to new roles, acquiring necessary skills. Putting people first and fostering a core value of reskilling, AirAsia shares inspiring stories of Allstars successfully adapting to new challenges by upskilling and taking on new roles within the company. Thus, based on our findings towards the organization OD interventions action by their Group People & Culture Department, the organization successfully executed the transformation program in Improving the work environment and people experience. With their HR intervention, the organization also successfully transform their development program by upskilling the employees to adapt with new job responsibilities and becoming more productive, cost-effective, and competitive. Mohamed Hazriq Fitri first grabbed the opportunity to join Redbeat Academy in 2019 because he believed he needed new skills to face the digital revolution. In the beginning, it was a struggle for him to juggle being a ramp officer and study part time. However, Hazriq firmly believes that you should “never stop learning until you are old” and continues to persevere. He is currently going through the Data Analysis and Machine Learning Course at the academy in order to improve his skills as a data analyst. Cynthia Maretta pursued her dream of becoming a cabin crew member for AirAsia Indonesia in 2017, five years after she joined AirAsia as ground staff. Bali was the last destination she served before the Covid-19 outbreak severely limited flights in the region. Grounded and locked at home, Cynthia volunteered to become an agent in the customer happiness team, which was overwhelmed by a sudden influx of guest requests and queries. Her years of experience handling guests’ needs inflight proved invaluable in helping out the customer service team during the most challenging of times. FROM RAMP OFFICER TO DATA ANALYST FROM CABIN CREW TO CUSTOMER HAPPINESS AGENT
Conclusion To conclude, Organizational Development (OD) plays a vital role in facilitating positive change and growth within an organization. For AirAsia even in a pandemic, with a planned and systematic OD, they are able to increase the organization's effectiveness and health through interventions in its processes, systems, structures, and culture. Change Management With OD, AirAsia enabled the organization to navigate and manage change effectively. This includes responding to external factors like technological advancements, big data driven or economic shifts, as well as internal changes. Their strategic change interventions that focus on business digital transformation and restructuring to align the organization with changes within its internal and external environment had successfully adopted to ensure their sustainability in the market. Enhancing Organizational Effectiveness With OD interventions AirAsia had designed to improve the overall efficiency and effectiveness of an organization. This might involve streamlining processes, optimizing workflows, or implementing new technologies. Cultural Transformation AirAsia use OD as an instrumental in shaping and aligning organizational culture. It helps the organization to develop a positive and adaptive culture that supports the achievement of strategic goals and fosters a healthy work environment. AirAsia Has A Transformational Leader Tony Fernandes, as the co-founder of AirAsia has been recognized for his transformational leadership style, which is characterized by inspiring and motivating the employees to achieve remarkable results. He transformed AirAsia from a struggling airline into one of the most successful low-cost carriers in Asia after the pandemic. He also empower their teams and foster a sense of ownership among his employees and encouraged a culture of innovation and entrepreneurship within AirAsia, References : https://www.malaymail.com/news/money/2020/06/15/airasia-launches-agriculture-e-commerce-platform-ourfarm/1875749 https://quota.media/airasia-deal-enhances-malaysian-food-security/ https://newsroom.airasia.com/stories/a-year-on-airasia-farm-remains-bullish-on-agriculture-in-the-face-of-covid-19#gsc.tab=0 https://newsroom.airasia.com/news/ourfarm-connects-agriculture-producers-directly-to-businesses#gsc.tab=0 https://newsroom.airasia.com/stories/ourfarm-brings-change-to-agribusiness-supply-chain#gsc.tab=0 https://www.businesstraveller.com/business-travel/2020/06/08/air-asia-to-reduce-workforce-by-30-per-cent-cut-salaries-by-75-per-cent-report/ https://newsroom.airasia.com/stories/2020/4/22/inthistogether-living-the-work-from-home-allstar-life-ealc4#gsc.tab=0 https://www.capitala.com/misc/Capital_A_ar2022.pdf https://newsroom.airasia.com/sustainability/human-capital-development#gsc.tab=0 https://newsroom.airasia.com/stories/pivoting-in-the-face-of-pandemic#gsc.tab=0 https://asia.nikkei.com/Opinion/How-AirAsia-s-Tony-Fernandes-smashed-a-COVID-19-home-run https://hrmasia.com/people-culture-airasia/ https://newsroom.airasia.com/stories/company-and-employees-as-one-through-the-pandemic-together#gsc.tab=0 Carroll N., Conboy K. (2020). Normalising the “new normal”: changing tech-driven work practices under pandemic time pressure. Int. J. Inf. Manage. 55:102186. 10.1016/j.ijinfomgt.2020.102186 https://www.malaymail.com/news/money/2020/06/15/airasia-launches-agriculture-e-commerce-platform-ourfarm/1875749 https://quota.media/airasia-deal-enhances-malaysian-food-security/ https://newsroom.airasia.com/stories/a-year-on-airasia-farm-remains-bullish-on-agriculture-in-the-face-of-covid-19#gsc.tab=0 https://newsroom.airasia.com/news/ourfarm-connects-agriculture-producers-directly-to-businesses#gsc.tab=0 https://newsroom.airasia.com/stories/ourfarm-brings-change-to-agribusiness-supply-chain#gsc.tab=0 https://www.businesstraveller.com/business-travel/2020/06/08/air-asia-to-reduce-workforce-by-30-per-cent-cut-salaries-by-75-per-cent-report/ https://newsroom.airasia.com/stories/2020/4/22/inthistogether-living-the-work-from-home-allstar-life-ealc4#gsc.tab=0 https://www.capitala.com/misc/Capital_A_ar2022.pdf https://newsroom.airasia.com/sustainability/human-capital-development#gsc.tab=0 https://newsroom.airasia.com/stories/pivoting-in-the-face-of-pandemic#gsc.tab=0 https://asia.nikkei.com/Opinion/How-AirAsia-s-Tony-Fernandes-smashed-a-COVID-19-home-run https://hrmasia.com/people-culture-airasia/ https://newsroom.airasia.com/stories/company-and-employees-as-one-through-the-pandemic-together#gsc.tab=0 Carroll N., Conboy K. (2020). Normalising the “new normal”: changing tech-driven work practices under pandemic time pressure. Int. J. Inf. Manage. 55:102186. 10.1016/j.ijinfomgt.2020.102186
Special Thanks To DR. NOR FAREHAN BINTI OMAR OUR TEAM MEMBERS HRM 645 INSTRUCTOR Nik Amyr Suffian bin Nik Hasbollah HRM 645 GROUP ASSIGNMENT CHANGES & DEVELOPMENT OF AIR ASIA NBH8C (GROUP 7) (2020183151) Shamsul Firdaus bin Shamsulkamal (2020321969) Muhammad Afiq Farhan bin Nasruddin (2020971751) Mohd Izzuddin bin A Majed Mohamad Zakwan bin Moham Shahrum (2020328401) (2020954087)