Issues Faced by Air Asia in its Advertising

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Date added: 17-06-26

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TABLE OF CONTENTS
Content Page
1.0 Introduction
2.0 Key Issues and Problems 2.1 Misleading Advertisements 2.2 Offensive Advertisements
3.0 Reasoning and Analysis
4.0 Conclusion
5.0 References
6.0 Appendices
1.0INTRODUCTION 2.0KEY ISSUES AND PROBLEMS Some of the major issues and problems faced by AirAsia in its advertisements are discussed below. 2.1Misleading Advertisements Misleading advertisement is unethical because it distorts and misrepresents a product. This means that the actual product is not the same as what it was advertised. For example, a product is advertised to have a particular feature, but in actual fact, that feature does not exist. Most often, advertisements are able to mislead consumers in terms of prices and such is the case for AirAsia Berhad. Operating under the well-known taglines of “Lowest fares only @ airasia.com” and “Now Everyone Can Fly,” AirAsia offers cheap flights to consumers of over 85 destinations. The company is always coming up with new promotions to allow customers to fly at a very low price to locations both locally and internationally. Drive along a highway and you might come across red billboards promoting AirAsia’s latest “all-in fare” flight from Kuala Lumpur to overseas such as Gold Coast, Osaka, Perth, Shanghai, Seoul and Tokyo at a price of RM 299. Now, consumers would think that “all-in fare” means the rate charged has included tax charges, baggage charges and all other necessary charges, but AirAsia has a totally different view on that. Customers were often greeted with surprises of extra charges when they checked in. AirAsia misled the consumers by advertising their flights rate without showing the total cost which should include all taxes, duties, fees and other mandatory charges. AirAsia has been advertising low headline prices exclusive of mandatory charges and taxes for more than a decade. It hides the actual cost; not making it clear to customers that there might be other extra charges applicable to the advertised RM 299 for example. This makes price comparison difficult for customers as the advertised rates are not the final actual rate. It is just a marketing gimmick to attract more customers with the rather ‘low rates’. Therefore, a number of consumers will automatically assume that AirAsia is the cheapest and more reluctant to find out more about the flight rates of other flight companies. As a result, they tend to make bookings or decisions they more often than not, regret. In fact, the price is slightly cheaper at AirAsia but that is before AirAsia add on the counter check-in charges. Apart from that, AirAsia also charges RM5 of convenience fees on credit cards usage if customers are paying payments online via credit or debit card, which by right no merchants have rights to impose such charges. However, it seems as though AirAsia has taken to charging all kinds of services in every possible ways. After adding up all the other charges, the total flight price spent by consumers is almost and sometimes more expensive than other airlines in the industry. Now, that is not a low cost flight fare, as AirAsia proudly claimed to be. On top of that, the rate is only applicable for one-way trips and consumers are often charged higher for return tickets which, AirAsia failed to reflect in its advertisements. Because of this same reason, AirAsia was found guilty under the Australian Consumer Law for not displaying all relevant information of the airfares prices inclusive of all taxes, duties, fees and other mandatory charges “in a prominent way and as a single figure” (Wee, 2012). AirAsia should show accurate price information to the consumers in such a competitive industry because consumers are price sensitive. Due to the breach of law, AirAsia was imposed a fine of AUD 200,000. Another downside of flying with AirAsia is that it is inconvenient to travel with senior citizens because they have to walk a long way to the plane as the company does not have aerobridges and a charge of RM 60 will be imposed for the use of wheelchairs (Nik, 2014). 2.2Offensive Advertisements Ethical advertising should be positive and optimistic and does not exploit stereotypes based on gender, age, race and so on (Vaux, n.d.). Marketers may get carried away when brainstorming for innovative advertisement ideas and such is the case for Tune INSURE, an AirAsia insurance product that insures passengers from medical to lost or damaged baggage to compensation for delayed flights of more than two hours. One of its advertisements contains a tagline: “You want your momma, because you’re in a hospital with lousy nurses.” This had stirred anger among the medical practitioners, mostly nurses, as the tagline is offensive and it gives a bad impression to the nursing profession (Png, 2014). Moreover, this advertisement can be found at the back of the seats of AirAsia’s planes and is viewed by all passengers. It gives an impression that Malaysian nurses are ‘lousy’ among the foreign passengers. An online petition had been signed by 1226 people, urging for the advertisement to be taken down and a public apology from AirAsia. In Philippines, there was a public uproar with AirAsia Zest’s radio advertisement that downgrades the portrayal of women. In that particular advertisement, AirAsia Zest promoted its ticket sales by comparing it to a woman. The advertisement features two male voices, discussing and comparing how the ticket sale was “cheaper and more enjoyable than an attractive woman with long legs, small waist and smooth skin” (Sen. Cayento’s Official Website, 2014). Senator Pia Cayento had urged AirAsia Zest for a public apology over the offensive ‘anti-woman’ advertisement (Luci, 2014). Advertisements that prey on human emotions are also considered unethical (Vaux, n.d.). For example, an advertisement that instills fear into consumers if they don’t purchase and consume the product is an unethical advertisement. Another type of unethical advertisement that is widely used especially in the Western countries since a decade ago is those advertisements that rely on sexual appeal to attract its target audience. While this practice is not seen in Malaysia, there are a few of AirAsia’s advertisements that use a hint of such element in their advertisement, though not as explicit as the commercial advertisements in the Western countries. In a particular advertisement, a man is shown being ‘served’ with plates of meal by 5 air-stewardesses with a tagline “Careful, they’re hot!” The meaning behind the tagline is to send the message that AirAsia serves hot meals and hot deals (low flight tickets) to its passengers. However, some may interpret it the wrong way as the stewardesses were dressed in their tight red uniform and skirts hiked up. This not only highlights the unethical virtues of the company, it also portrays an unprofessional and bad image to the air-host/hostess profession. 3.0REASONING AND ANALYSIS Below are the reasoning and analysis regarding the discussed unethical issues and problems faced by AirAsia in its advertisements. 3.1Misleading Advertisements AirAsia promotes its flight package without reflecting the total fares by excluding all the taxes, duties, fees and other mandatory charges. It is fair to say that this particular conduct of AirAsia is unethical because it conceals the actual price information in its marketing purpose advertisement. Generally, most of the potential passengers thought that the advertised airfares depict the final actual fare for the flights they are paying for; which means that the advertised fares would have included all the necessary expenses payable for the flight. However, this is not the case for AirAsia’s advertised fares. The flight fares advertised in newspaper and other promotional media only reflects the flight fare, but not the final monetary value that the passengers need to pay for their flight. In such a case, these advertisements indirectly mislead the public and thus affecting their cost-benefit analysis on which airline they will patron. Besides, the psychological pricing strategy of setting a low flight fare tends to misdirect the public that AirAsia is the cheapest air transport provider in Malaysia. The fact is AirAsia’s flight rates advertised only shows the gross amount payable, not the net. Nonetheless, most of the customers tend to be attracted by the low price promotion rather than think rationally on whether it is possible or economically feasible for AirAsia to actually provide such a low cost flight package compared to other airlines; as the saying goes, it is too good to be true. At the same time, AirAsia also charges RM5 of transaction fees on bank card usage if the customers are made payment online. As what we think, it is considered reasonable for AirAsia to surcharge RM5 per transaction on the passengers purchase online. This is because AirAsia attempts to incur additional expenditure on the card-based transactions for the bank processing fees if the passengers do not actually bear on these costs. Similarly, most of the information technology shops nowadays also implement this policy that additional costs (e.g. 3%) will be charged on the customers who make payment by bank cards. Thus, it is fair for AirAsia to fee the online purchasers RM5 nett, regardless of the transaction amount on the flight fare. In most of the circumstances, it might seem lower than the surcharge computed based on specific percentage because the invoice price for the flight fare attempts to be quite high in nature. In addition, the promotional packages, introduced by AirAsia, attempt to be only for one-way trips and the passengers are most likely to be charged higher for the return tickets. This scenario appears to be unethical for the airline-based company to do so because majority of the potential passengers will be definitely returned to their origin after their holiday or business visits. Thus, it is necessarily for AirAsia to reflect this critical information in its advertisements to avoid mutual misunderstanding, if and only if, it does the promotion on only one-way flights. In contrast, AirAsia’s act might be considered ethical if egoism applied. From the AirAsia perspective, it is a marketing approach to charge low in order to attract more consumers taking their flight instead of its competitors’. This business model has indirectly complied with the low-cost budget airline principle that gives everyone the opportunity to take a flight. Meanwhile, the increase in the company revenues attempts to maximize the company’s value (i.e. self-interest), and thus increasing in shareholders’ wealth. They might claim that there is no fraud intention, but their public advertisement is just ambiguous and unclear. The consumers have the rights to query AirAsia management or employees while performing their transactions. 3.2Offensive Advertisements 4.0CONCLUSION 5.0REFERENCES 6.0APPENDICES airasia-ads-on-17-12-2012.jpg Figure 1: One of AirAsia’s misleading advertisements for not including taxes and charges in advertised air fares. (Source: http://weechookeong.com/2012/12/18/australian-court-fined-airasia-a200000-for-misleading-advertisements/) offensive_ad_nurse_840_473_100.jpg Figure 2: AirAsia’s offensive advertisement placed on the back of its aircraft seats that belittled nurses. (Source: http://www.themalaymailonline.com/malaysia/article/advertisement-belittling-nurses-slammed-fernandes-apologises) © All Rights Reserved Chua, K.J., Heng, K.O., Logeswaran, S., Lim, W.P., Siau, L.S. & Tong, Y.C. (Students of UTAR, FAM)
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