AirAsia Malaysia 2001
This case presents the situation facing Tony Fernandes, the former Vice President of Warner Brothers, ASEAN region, in 2001, who had to decide whether to venture into the aviation business by acquiring an existing airline or drop the idea altogether. Fernandes was interested in starting a budget airline in Malaysia similar to low-cost airlines in the USA and Europe. He and his two close associates presented a proposal to Mahathir bin Mohammad, Malaysia's Prime Minister (PM), to start a low-cost airline. Mohammad rejected the proposal and suggested Fernandes to consider buying an existing airline. Conceptually it helps the participant to build the concept of entry through acquisition mode as opposed to entry through own creation. In the larger context, it involves the participants in evaluating a strategic opportunity for a new entrant.