Tuesday, December 23, 2008

Tony Fernandes named Tourism Personality Best Tourism Transportation Award for AirAsia

Dato’ Sri Tony Fernandes (far left), accepting the Tourism Personality of the Year award from Deputy Secretary General of the Ministry of Tourism Malaysia, Datuk Ab Ghaffar A Tambi (second from left). Accompanying them are Managing Director of Kumpulan Karangkraf Sdn. Bhd., Dato’ Hussamuddin Yaacob (second from right) and Libur Magazine Editor, Azli Halim (far right).

AirAsia received another recognition when AirAsia Group CEO, Dato’ Sri Tony Fernandes was named Tourism Personality of the Year at the Libur Tourism Awards 2008 held in Kuala Lumpur Wednesday. The Awards was organized by Libur, a Malay language travel magazine.

The Tourism Personality Award was aimed at honouring organizations and individuals for their endeavors in promoting and developing the country’s tourism industry.

AirAsia was also recognized with the Best Tourism Transportation Award in the airline category, for its contribution in transporting millions of tourists each year into Malaysia. With its extensive network in South East Asia with over 100 routes and covering over 60 destinations, the airline has carried over 55 million passengers since it started operations in 2001.

Dato’ Sri Tony in his acknowledgement speech said, “We always see Malaysia as an important tourist destination. When we first started, we made every effort to bridge all places in Malaysia by setting up an extensive domestic network. There are various places of interest that this country offers, so it is very important to provide easy access and of course, affordable fares, so that tourists will be motivated to return for their holidays.”

“AirAsia has garnered multiple awards internationally, but nothing beats the recognition given by our local tourism industry as it a mark of acknowledgement to our efforts for Malaysia, which will definitely inspire us further, as an ASEAN airline, to bring Malaysia to the forefront as one of the best travel destinations in the world,” he concluded.

The awards were presented by Datuk Ab Ghaffar A Tambi, Deputy Secretary General of the Ministry of Tourism Malaysia, representing Minister Dato’ Sri Azalina Othman Said.

With AirAsia X, a long-haul low-cost airline as its subsidiary, it provides additional links to Malaysia for tourists from Australia, China and Europe, contributing to the already solid passenger traffic into the country via the Low Cost Carrier Terminal (LCCT).

AirAsia-Jetstar merger brewing

Airlines’ bosses mulling over idea

PETALING JAYA: Something may be in the air between Qantas Airways Ltd and AirAsia Bhd. If things work out, a merger between AirAsia and the Australian carrier’s units Jetstar and JetstarAsia may be in the offing.

The talks are still in preliminary stages and it is learnt that AirAsia’s boss Datuk Seri Tony Fernandes and Qantas new chief executive officer Alan Joyce have been mulling over it. They last talked on the issue last week, a source said.

This comes at a time when Malaysia Airlines (MAS) is also in talks with Qantas for a possible alliance, but any alliance between Qantas and MAS will be between the network airlines.

Last week Qantas and British Airways announced the calling off of plans to merge into a mega carrier after failing to agree on key terms. The merger could have created an A$8bil plus carrier by market value with a fleet of about 500 planes.

The end of talks with BA opens new doors for other players such as MAS and AirAsia to search for synergies with Qantas. Now the brewing merger involves the low-cost carriers – AirAsia, Melbourne-based Jetstar and Singapore-based JetstarAsia.

Fernandes, when contacted yesterday, told StarBiz that “we are always talking and looking at ways to strengthen AirAsia into a global brand. If there are opportunities of equals which will enhance the brand, then it is something worth considering.’’ He declined to comment further.

Qantas’ Joyce was not immediately available for comment.

Datuk Seri Tony Fernandes

But a Qantas spokesman, in an e-mail response to a query from StarBiz, said: “We talk to airlines all the time about possible partnerships, relationships and cooperative agreements.’’

Jetstar’s Australian operation is wholly owned by Qantas but is managed separately and operates independently. Jetstar’s intra-Asian operation – JetstarAsia – is a Singapore-based partnership between Qantas (49%), local businessmen Tony Chew (22%) and FF Wong (10%), and Temasek Holdings (19%). JetstarAsia officials declined to comment when contacted yesterday.

In an economic downturn when passenger traffic is on a decline, airlines look to cooperate by forming code shares, alliances, strategic partnerships and even mergers to sustain operations. If a merger shapes up, it could possibly involve a share swap, a source said.

“A possible merger of Jetstar, JetstarAsia and AirAsia would mean that the operations of the airlines will be merged to create a stronger airline which could potentially be known as AirAsia/Jetstar with a larger network, a bigger aircraft fleet and wider access to many more markets.

“There are synergies by combining AirAsia and Jetstar. With a merger, passengers from Asia will have wider choices to fly to Asia, Australia, New Zealand, India, China and even Honolulu (via Jetstar),’’ he said.

The Kangaroo route (from any Australian point to KL and on to Europe) is a possible route that these airlines will capitalise on. Jetstar stopped flying the Sydney-KL route in September due to the economic slowdown.

Qantas and MAS talks were still progressing, another source added. He said the alliance would be modelled alongside the KLM/Air France structure. That model allows MAS to retain its identity.

MAS first began talking to Qantas a year ago.

Yesterday Qantas also announced that it has reduced its international and domestic fuel surcharges for the third time in recent months because of falling oil prices.

The new surcharges apply to tickets bought on, or after, Dec 23. Qantas executive general manager John Borghetti said the group’s fuel bill this financial year would still be A$400 million higher than in 2007/08. The surcharge has been cut by A$20 to A$35 for shorter-haul Asian destinations such as Bali.

The fuel surcharge for a one-way ticket from Australia to the United Kingdom and Europe has been cut by A$30 to A$160.

Qantas joins the league of airlines that are reducing fuel surcharges since crude oil prices have fallen over 70% from its July height of US$147 a barrel.

Saturday, December 20, 2008

'KLIA East @ Labu’ gets government go-ahead: Airport part of 'massive city'


KUALA LUMPUR: The cabinet has given the green light for a new low-cost carrier terminal on a 2,800-hectare site in Labu, Negri Sembilan, Transport Minister Datuk Seri Ong Tee Keat said.

Ong said the new LCCT would be built under a private finance initiative by conglomerate Sime Darby Bhd and budget airline AirAsia.

The airport will anchor Sime Darby's "massive integrated city" development in Labu, which includes five townships with services in education, health, sports, high technology, recreation and entertainment.

The RM1.6 billion terminal will be funded by Sime Darby and joint-venture partners which could include AirAsia and Malaysia Airports Bhd.

Ong said the new terminal was needed as the current facility in Sepang would not be able to cope with the increased passenger volume.
Under its final expansion phase, after which there will be no more room for growth, the Sepang LCCT will have its capacity increased to 15 million passengers a year, a figure industry sources say is likely to be exceeded by 2011.

Including its Thai and Indonesian affiliates, AirAsia flew some 18 million people this year. The new terminal will be built to accommodate 25 million passengers a year, and last on present forecasts until 2030.

Ong said he could not give a timeline on when work would start on the new LCCT.

"It is up to them as to when they want to start work. For our part we will make sure there is connectivity between the Kuala Lumpur International Airport and the new LCCT.

"We want to ensure passengers will be able to move from both places speedily, smoothly and efficiently."

To be called "KLIA East@ Labu", the new terminal is slightly closer to central Kuala Lumpur than the present LCCT and will boast connectivity by both road and rail.

A 7km branch road will link it with the North-South Expressway and a 3km spur line will be built from the railway station in Labu -- a stop on the KL-Seremban KTM Komuter route.

Welcoming the project's approval, Negri Sembilan Menteri Besar Datuk Seri Mohamad Hassan said the KLIA would be connected to the new terminal by a 7km Express Rail Link (ERL).

Industry sources said a ground-breaking ceremony was being slated for late next month with construction planned for completion in two years.

When the new facility is commissioned, the Sepang LCCT, which has more than recovered its cost from the explosive increase in passenger numbers over the last two years, will serve other budget carriers, such as Singapore's Tiger Airways.

Mohamad said the siting of the new terminal near Kampung Gadong Jaya in Labu would boost economic growth in the state.

"The location is not far from the existing terminal. It will be an extension of the KLIA.

"When the airport is built, the state can expect economic development, such as housing estates and business centres, in the surrounding areas," he said.

Proposed LCCT to be privately funded

SEREMBAN: Mentri Besar Datuk Seri Mohamad Hasan has told critics to stop making claims that the proposed construction of a new low-cost carrier terminal near Nilai was a waste of government funds.

Mohamad said they should get their information right before making unfounded claims as the proposed project was a privately-financed initiative and the Government did not need to spend a single sen for its construction.

“Some people are saying that this is my project and I intend to give it to my cronies. This is so pathetic,” he told reporters at his office yesterday.

He said even if the state government planned to carry out a project, it would go through the normal tender process.

Mohamad was commenting on claims that the proposed construction of the project was a “brazen” waste of public funds particularly when the economic scenario in the coming months was not expected to be good.

Mohamad had last month said the new airport, to be located between Nilai and Bandar Enstek, would be built to replace the present LCCT in Sepang.

He said the proposed airport, to be build on a 2,800ha area, would be bigger than the present LCCT which could no longer accommodate the increasing passenger volume.

The proposed project would be developed by Sime Darby, which owns the land, and AirAsia.

“We need a new airport as AirAsia now has bigger wide-bodied planes. Its aircraft fleet has also expanded tremendously,” he said yesterday.

He said the proposed airport would also be equipped with aero-bridges and state-of-the-art facilities for passenger comfort.

Mohamad said although Sime Darby, AirAsia and the state government had agreed to the project, the Cabinet would have the final say on the matter.

He expressed hope that the Transport Ministry, Malaysia Airports and the Department of Civil Aviation would support the proposed project.

Two universities and several private institutions of higher learning would also be built in the vicinity of the proposed project, which is located in the state’s central corridor.

Merry AirAsia X-mas with cheap flights to Kuala Lumpur

Australia Friday, 19 December 2008

The champion of low-cost long-haul travel AirAsia X wants people to enjoy at least one good holiday in 2009 offering one-way flights to the Malaysian capital Kuala Lumpur from Perth from a low $199*.

Flights are also available from the Gold Coast to Kuala Lumpur from $298* one-way and Melbourne to Kuala Lumpur one-way from just $309*.

The discount Kuala Lumpur airfares are available online to December 19 or until seats sell out for the travel period between April 1 and June 30, 2009.
Airfares include airport taxes, surcharges and fees.

With bleak economic times predicted for 2009, now is the time to make sure you don’t miss out on a well-earned break.

As part of AirAsia X’s latest Christmas deal the airline is encouraging travellers to use the shopping and sightseeing hotspot of Kuala Lumpur as a base by using connecting AirAsia flights to other Asian destinations.

*Conditions apply, subject to availability

Friday, December 19, 2008

AirAsia hopes to get visitors back to Thailand

Wed, Dec 17, 2008

BANGKOK, THAILAND: AirAsia is offering 100,000 free seats to draw tourists back to Thailand after political turbulence saw the closure of Bangkok's two airports.

The regional campaign cheekily themed "Get your Baht to Thailand" is the budget airline's effort to help the Thai tourism industry which was severely affected over the last few months.

"We are here to make sure that the world does not forget that Thailand is a wonderful place for tourists," said AirAsia group chief executive officer Datuk Seri Tony Fernandes.

"We want to ensure that AirAsia brings people from Asean countries, India and China and the world - especially through AirAsia X - to visit Thailand."

"AirAsia was there during the Bali (bombing), SARS, tsunami and Aceh (when no airlines wanted to fly there) and with this promotion, we are showing our commitment to Thailand."

AirAsia's campaign, launched exclusively at www.airasia.com, starts today at midnight and ends on Friday for travel between Jan 6 and March 31.

Low cost terminal 'crucial'

Airports of Thailand (AOT) is being urged to discount its airport fees and build a terminal for low cost carriers at Suvarnabhumi Airport in a bid to get airlines to return to the Kingdom, as well as to help restore the tourism sector.

Tassapon Bijleveld, CEO of Thai AirAsia, said the airline is planning to write to AOT early next month, calling on the agency to give a 50percent discount on airport services at a time when the country needs to reclaim airlines back to the country, following the recent closures of Suvarnabhumi and Don Mueang airports.

Tassapon said the company was paying Bt30 millionBt40 million per month in fees to AOT."If AOT AOT will in turn gain more benefits," Tassapon said. could give more incentives to us, then we can sell lowerprice tickets and, when more tourists come to Thailand,

Tony Fernandes, group CEO of parent company AirAsia, said in Bangkok yesterday that Thailand needed to have a dedicated terminal for lowcost carriers. He said Singapore and Hong Kong had already built their own.

"If Thailand wants to stay competitive, it should have a lowcost terminal," he said.

According to Tassapon, Thai AirAsia estimates it will carry 4.1 million passengers this year, down from the targeted 4.7 million due to the eightday closure of Bangkok's commercial airports. The airport closures caused AirAsia to cancel 160 daily flights in and out of Bangkok.Meanwhile, in a bid rebuild inbound tourism, AirAsia and the Touris m Authority of Thailand yesterday announced a regional campaign called "Get Your Baht to Thailand " by offering 100,000 free AirAsia seats into and out of the Kingdom, as well as on all domestic routes.

Passengers can book the tickets from today until Friday, for travel between January 6 and March 31.

The cost of the promotion is Bt300 million, of which Bt200 million is for the fares and the rest for advertising and activities.

Thai political problems just a hiccup -AirAsia CEO

BANGKOK, Dec 16 (Reuters) - Malaysian budget carrier AirAsia (AIRA.KL) said on Tuesday it expected passenger growth in 2009 of 4-5 million to add to its 19.5 million travellers this year, despite a global recession and political problems in Thailand.

Chief Executive Tony Fernandes, whose company suffered a setback when anti-government protesters recently blocked flights for a week at Bangkok's main airports, said Thailand's strife was "just a hiccup" and the fight was now on to win back the confidence of tourists.

"I'm confident we are adding new routes and planes, and really, every country has their own political troubles," Fernandes said. "We're actually hoping to add another 4-5 million travellers in 2009 on top of what we have now."

The company is offering 100,000 free seats from its hubs in Malaysia, Indonesia and Thailand for passengers travelling to popular Thai destinations Chiang Mai, Krabi and Phuket starting from January 2009, Fernandes said.

"Thailand is one charming tourist destination," Fernandes said at a briefing in Bangkok.

He declined comment on the company's plans after its major shareholder, Tune Air, failed to proceed with a potential buyout of the airline. Tune Air holds 30.7 percent of the $573 million firm.

Despite a third-quarter loss at Southeast Asia's largest low-cost airline, passengers continued to favour budget carriers, Fernandes said.

The airline, which operates 378 flights a week, posted a loss of 465.5 million ringgit ($131 million) after it took a one-off charge for contracts tied to fuel hedging and trades held by the bankrupt Lehman Brothers.

It was its first net loss since it went public in 2004.


Thai AirAsia Co, the airline's Thai unit, suffered losses of 350 million baht ($10 million) when travellers shunned the country after anti-government protesters halted flights to and from Bangkok's main airports for more than a week.

Thai AirAsia would miss its passenger target of 4.6 million this year and now expected 4.1 million, but the number would climb to 5.2 million in 2009 due to new aircraft and routes opening, Thai unit chief Tassapon Bijleveld said.

"What happened was a nightmare," said Tassapon, adding its load factor had dropped to somewhere above 80 percent from 92-93 percent in 2007.

"But like we people say, it's 'mai pen rai'. It's no problem. We can start over," he said.

Among new international destinations the group expected to fly to in 2009 were Bali, India and Guangzhou, he said.

AirAsia wins ICT Award

15 December 2008

AirAsia’s extensive use of modern information and communications technology (ICT) to support its operations across all ten ASEAN countries and China has earned the airline recognition from The Association of Computer and Multimedia Industry, Malaysia (PIKOM), one of the country’s largest and foremost ICT industry associations.

The association conferred on AirAsia the PIKOM ICT Organization Excellence Award. AirAsia Group CEO Dato’ Sri Tony Fernandes received the award from Datuk Dr. Maximus Johnity Ongkili, Minister of Science, Technology and Innovation, during the association’s recent annual leadership awards ceremony in Kuala Lumpur.

Tony said, “Our investment in technology to grow the business across all fronts is bearing fruit. ICT has enabled us to offer cutting edge products and to continue to offer quality service to our constantly expanding passenger base. AirAsia’s use of ICT is second to none in the airline industry. All areas of our business are supported by ICT, which allows us to be fast and efficient in servicing our guests, who use our technological tools to, among others, check flight schedules, book seats, pre-order meals and buy holiday packages. ICT has been instrumental in the success of AirAsia”

Over 80% of AirAsia’s flight bookings are done via the internet.

PIKOM’s annual awards recognize outstanding ICT industry leaders and users. PIKOM counts among its members over 1,000 companies engaged in the whole range of ICT products and services. PIKOM’s member companies account for 80% of Malaysia’s ICT trade.

Thursday, December 11, 2008

LCCT international arrival hall ahead of schedule

THE new international arrival hall at the Low-Cost Carrier Terminal (LCCT) at Sepang in Selangor will open for operation on Dec 15, weeks ahead of its original scheduled date.

The hall is part of the RM160mil new wing constructed under the LCCT expansion plan.

The whole wing is also expected to be fully ready for operation earlier than the original completion date of March 15 next year.

Spacious and hardly low-cost: Malaysia Airports Bhd (MAB) senior general manager for operations Datuk Azmi Murad at the new international arrival hall within the LCCT’s new RM160mil wing

According to Malaysia Airports Bhd (MAB) senior general manager (operations) Datuk Azmi Murad, the extension would add 32,000sq m of additional floor space to the existing 28,000sq m available.

“The check-in counters will be increased from 72 to 117 for a smoother passenger flow. The counters usually handle 600 passengers per hour but will soon be able to handle 2,200 passengers an hour,” Azmi told StarMetro.

“The grand total of six baggage carousels will save passengers’ time,” he said.

“With the additional floor space, we will accommodate more retail and F&B outlets, and shower and surau facilities,” Azmi said.

The expansion was implemented following the tremendous increase in passenger load at the LCCT soon after its opening in 2006.

Busy during off-peak too: The Low-Cost Carrier Terminal (LCCT) in Sepang was built for 15 million passengers initially but handles around 30,000 passengers daily with a 30% increase during holidays

By last year, the LCCT was operating beyond its originally planned capacity of 15 million passengers a year.

Azmi said the new wing could help cope with the 34% growth because once it was fully operational in March next year, the extended terminal could serve 30 million passengers a year.

Besides the AirAsia domestic flights and the AirAsia X international services to Thailand, Indonesia and Australia, the LCCT also caters for the Cebu Pacific Airways of the Philippines and the Tiger Airways of Singapore.

“We handle 30,000 passengers daily on regular days but during festivals and school holidays, there is an increase of 30% in passenger load. With the new wing, we can cater for more airlines,” Azmi said.

AirAsia X, meanwhile, is scheduled to start operating the London Stansted-Kuala Lumpur route from the LCCT in March next year.

According to LCCT-KLIA manager Raghbir Singh, measures taken to cope with the surge in travellers during peak seasons include extending the waiting area at the present terminal.

“By taking up the service road previously used by taxis, we have a 3,000sq m frontage for a bigger waiting area with 600 seats,” Raghbir said.

According to Azmi, to ease congestion at the present departure hall, passengers are only allowed to check in once their respective counters are opened. The others have to wait at the seating area.

As for public transport, eight bus companies link the LCCT to Kuala Lumpur, Klang, Shah Alam, Seremban, Malacca, Ipoh and Genting. There are also ample taxi services.

At present, the MAB is toying with the idea of a mechanical carpark because parking bays will soon be limited once the new wing is fully open.

With air fares increasingly becoming cheaper and competitive, resulting in the healthy increase in passenger load, Azmi does not discount the possibility of his company building a permanent and larger LCCT.

“Our holding company Malaysia Airports Holding Berhad (MAHB) owns 100sq km of land in Sepang. So we have enough space for a permanent terminal.

“We have a few locations in mind,” he said.

He also said if AirAsia did succeed in building its own low-cost carrier terminal, the present LCCT could be converted into a cargo warehouse or for other purposes.

Brands make a difference

BRANDS make a difference, and raising the standard of brands was the main focus at the Global Brand Forum (GBF) conference organised by Media Prima last week.

Fernandes with the Global Brand
Forum’s Malaysian Brand Icon Award

With the current economic turmoil, it was timely for marketers, media representatives and CEOs and numerous conglomerates to get tips from renowned figures in the industry to push their brands to greater heights.

AirAsia group CEO Datuk Seri Tony Fernandes advised those present at the forum to leverage on media coverage after they have established their brand and made it unique.

"Now is not the time to cut down on advertising as it is the best way to build a brand and stay ahead of competitors," he said.

"AirAsia has seen growth on advertising expenditure (adex) and we will continue to increase our adex by 15% to 20% next year."

He said apart from creating innovative product offerings, AirAsia’s other marketing efforts included collaborating with leading brands such Manchester United and Amazing Race to establish a symbolic relationship and obtain brand exposure.

Citing other efforts, Fernandes said that "free" seats giveaway campaigns are always a hit.

When AirAsia organised the Love Bali campaign with Media Prima’s TV3 after the terrorist attacks, "we wanted to make a difference".

"We wanted to help by flying people over to lend their support as well as to boost the economy. The Bali campaign offered around 12,000 free seats and within an hour, all seats were sold out," he said.

At the event, Fernandes was presented with the Global Brand Forum’s Malaysian Brand Icon Award 2008 which recognises an individual and not the company, for amazing vision, inspiring the public and for efforts in reinventing a category.

Earlier, former Procter & Gamble chief marketing officer Jim Stengel said to create a global brand, one has to be accustomed to change by re-evaluating brand value and innovating one’s brand from within the company and only then to consumers.

"The brand must have a clear representation and how it can help improve consumers’ lives," he said, pointing out Google and Nike as examples.

"Google is universally accessible by providing useful information while Nike’s idea was to lead the company via a leadership position in athletics – ‘If you have a body, you’re an athlete’."

Other speakers who attended the forum were Shanghai Tang Hongkong creative director Joanne Ooi and Flickr co-founder Stewart Butterfield, who also shared the same sentiments as the first two speakers – brands need to be consumer-centric, innovative and unique, which are achievable via various marketing and advertising efforts which is crucial, especially with the economic crisis.

Monday, December 8, 2008

Your 10 questions

This column takes readers’ 10 questions to interesting people in the public eye. This week interviewee is Datuk Seri Tony Fernandes CEO, AirAsia Bhd.

As the founder of the budget airline and the man who has revolutionised the country’s airline sector, he is easily one of the most written about CEOs in the country. Interestingly enough, readers still have plenty to ask him. Fernandes takes time to answer some of them.

1 Who is behind your success and what is your philosophy in life? – Anne Athi, Penang

Datuk Seri Tony Fernandes

My father and mother. I believe in the unbelievable, dream the impossible and never take no for an answer.

2 You are such an inspiring and positive person. You are featured in nearly every magazine, but how come you don’t talk about your personal life? For instance, are you married with children? – Doris Ong, clinic nurse, Ipoh

It’s a rule I have with my family and I do not intend to change it. Business is business, personal life is separate.

3AirAsia is now one of the co-sponsors for F1 team AT&T Williams. As AirAsia is a budget carrier and is all about low frills and low cost, does it fit into AirAsia’s strategy to sponsor such a team? – Shane Lai, businessman, PJ

The purpose to sponsor fitted nicely with our strategy especially with AirAsia X’s route map. The F1 is held in some destinations that AirAsia X flies to or will be flying in the future. We would not have sold 25,000 tickets to London if not for the marketing and branding. I also motivate my staff to have high quality and efficiency like the F1 team.

4 How do you see 2009 affecting your business and what are your strategies to overcome this and the competition with Malaysia Airlines? – Lim Meng Siang, investment banker, KL

MAS is obsessed with what AirAsia is doing. They really should be focusing on their market and business, as lack of focus will cause them dearly in years to come. We have moved on. Our battle was about getting rights, we have got them. Our challenge is to continuously keep our fares low and cost down. We are also not looking over our shoulders and believe competition comes from within us.

5 How many flying hours do your pilots have on average and what is their average age? – M.K. Leong, lawyer

Our pilots fly 90 hours. I have to check their age as I do not carry that information in my wallet.

6 How do you intend to reward your shareholders when you keep buying new aircraft at a time when other airlines are scaling down? – Jenny Low, businesswoman

Airline business is not about quarterly profits, it is a cyclical business with ups and downs. AirAsia has a 10-year plan and we are half way through that plan. America’s Southwest Airlines recorded long-term growth and not quarterly profits and they have done very well. To us growth continuity is key in our business and so is growing market share. We have elevated ourselves and have the staying power. AirAsia is a long-term bet.

7 What are the criteria in picking your air stewardess? MAS air stewardess, while also pretty, look more “simple’’ whereas AirAsia stewardess have a more “dangerous’ look. Just curious Marilyn Phoon, former SIA air stewardess, now E & E engineer

I suppose stewardess should not look the same and I cannot tell them how to look. I leave that to them but they have to be comfortable with their appearance to interact and exude a natural feeling. Crews are the stars of the show and individuality is all about being you, and that is all about creativity and innovation.

8 When flights are late and I try to call your customer service to check the flight status, nobody answers or I am put on hold for an unnecessary long period of time. Why is that so?Rose Irene Mohammad Ali, chemical engineer, KL

Certainly our call centres have not kept up with the growth the airline has experienced and that explains the huge number of customer calls. We are urging customers to self-serve. We try to send SMS and keep updating customers. We are now outsourcing our call centre but at the same time we are conscious of our cost as higher cost will lead to higher fares.

9 Why do you not package Tune Hotel and AirAsia tickets together?S.C. Leong, retired auditor

There are some packages but these are two separate companies, although they have common shareholders.

10 Why don’t you sell two-way tickets instead of quoting one-way tickets?Grace Leong, teenager

One way tickets give greater flexibility and efficiency for people to change.

Saturday, December 6, 2008

AirAsia boss aspires to 'take over' SIA

KUALA LUMPUR (Dec 5, 2008): Budget airline AirAsia boss Datuk Seri Tony Fernandez yesterday said his long-term objective is to one day “t

Najib presents Fernandez with the Brand Icon Award.

ake over” Singapore Airlines.

Speaking at the Global Brand Forum Malaysia at the Palace of the Golden Horses, the maverick entrepreneur revealed his company’s ambitions at the end of a slide presentation.

To the amazement of those present, he showed two pictures – one of aircraft livery and the other of AirAsia’s new uniform for its stewardesses – and told his audience what he he would name his new company – “Singapore AirAsia”.

Fernandez, who was later presented with the Malaysian Icon Award by Deputy Prime Minister Datuk Seri Najib Razak for his contribution to the country, kept the audience in stitches throughout his one-hour presentation.

“And this is the uniform the stewardesses onboard Singapore AirAsia will wear,” he said, pointing to a picture of a smiling woman wearing a combination of the famous SIA baju kebaya and striking red AirAsia skirt.

While many in the audience laughed it off, industry observers took the view that it was a signal from Fernandez, following news reports of Malaysia Airlines having talks on a possible merger or a strategic alliance to form a global airline with British Airways and Qantas.

A Malaysian newsportal said that owing to global economic pressures, the airline industry was going through a consolidation period, with talks of mergers, acquisitions and bankruptcies dominating the business pages.

Najib said he was proud of Fernandez’s achievements, not only for his company but for the country as well.

AirAsia on par with Singapore Airlines

SINGPORE, Dec 4 — AirAsia chief executive officer Datuk Tony Fernandes was all glee on Monday when the low-cost carrier began the first of its seven daily flights from Singapore to Kuala Lumpur.

The reasons were many. At the top of the list was that his dream of total open skies between Singapore and KL had been realised. He compared the challenge of opening the route — which used to cost about S$400 (RM960) return on full-service carriers — to "Nelson Mandela fighting for freedom".

"It was ridiculous that the most expensive route in Asia was KL-Singapore," he said.

Now, the fares could be as low as S$60 return on budget carriers, which also include Tiger Airways and Jetstar Asia. There are some 14 flights daily from Singapore to KL.

The plane that Fernandes greeted on the tarmac on Monday was 85 per cent full, with many Singaporeans on board. From this group, Fernandes met a couple who flew to Kuala Lumpur on their way to Langkawi. Which thrilled him no end.

"Singaporeans certainly don't think about flying to KL to take a flight," he said. Indeed, flying to KL allows Singaporeans to tap into a web of budget connections offered by AirAsia and its long haul arm, AirAsia X. Both launched new routes last week — the former to Trichy, Tamil Nadu; the latter to London.

Does Fernandes think Singaporeans will fly to KL to switch planes?

"I think it's beginning to happen," he said. "Singaporeans are very savvy. They are very loyal to their wallets. Malaysians, too," he added with a laugh.

The company recently scrapped its fuel surcharges, which Fernandes admitted was a big risk, but according to him, sales tripled.

"Singaporeans are also adventurous. The young in Singapore want to travel. They want to see Borneo, Siem Reap ... We provide that connectivity, so I don't think it will be hard to convince them."

Route-wise, short-haul carrier AirAsia has covered all the countries within its range. It will focus on flying to more destinations in China and India. There's more potential for AirAsia X to go global.

"I'd love to see AirAsia X fly to Africa — KL to Nairobi. And, one day to the (United) States. Maybe my last route will be KL-Rio."

That's Rio de Janeiro, Brazil, which is more than 24 hours by plane away from KL.

But Fernandes is accustomed to dreaming big, taking risks and opening routes to places most people don't know about. Like Tiruchirappalli, or Trichy, which he had heard about at a funeral. He decided to fly to Trichy because of the town's religious significance and the fact that a "lot of Indians from Malaysia and Singapore are from there".

His dream is for the seven-year-old AirAsia to take on Singapore Airlines — though not all of it. "SQ is the best airline in the world without a doubt," he said. "My aim now is to tell people that we are as good as they are ... in the back end. I think we can be as good in the economy section. That's my goal before I leave my job as CEO."

Thursday, December 4, 2008

AirAsia launches Kuala Lumpur connection to India

The first route launched by AirAsia to India arrived from Tiruchirappalli on Monday, celebrating both the inaugural flight and the overwhelming 100 percent load for the first two weeks of flights.

The route was opened for sale only a month ago, and already a 100 percent load from 1st to 18th December 2008 has been recorded, as well as an average of over 80 percent load factor both ways.

The daily service is being operated on the new Airbus A320, offering 180 seats each way.

“The continuous strength of this network will allow AirAsia to rapidly drive growth, perhaps even ramping-up more frequencies in the future so that our guests can continue to enjoy our revolutionary low fares,” he continued.

The Indian population of Malaysia is expected to benefit from these services, as Fernando commented, “Our extremely affordable fares will enable them to trace back their family roots, renew family ties, and perform pilgrimage or travel for holiday purposes.”

The new service from Kuala Lumpur to Tiruchi departs daily at 7:40, on AK231, returning at 9:25 from Tiruchi on AK 232.

Attending the inaugural flight celebration, the High Commissioner for India in Malaysia, HE Ashok K Kantha recognized “AirAsia has revolutionized air travel with its low fares and made flying affordable for everyone.”

He added, “We are confident that AirAsia will not only assist us in boosting bilateral agreement, the local tourism industry and economy but also opening up our market.”

AirAsia to resume flights to Bangkok Friday


Budget carrier AirAsia will resume its commercial flights to and from Bangkok via the Suvarnabhumi International Airport on Friday.

All its 108 flights scheduled for Friday will take off and land at the US$3.5 billion airport which was reopened for limited flights Wednesday after thousands of anti-government protesters left the building this morning following an eight-day siege.

The airport was closed at 9pm on Nov 24, paralysing Bangkok’s air travel and stranding over 300,000 foreigners.

AirAsia and its Thai subsidiary had to cancel an average of 100 flights daily, but mounted several rescue flights to and from the Utapao Airport located at a naval base near Pattaya.

“We would like to caution guests (passengers) that as the AirAsia call centre has been overwhelmed with calls, guests may face difficulties getting assistance. However, guests may obtain latest updates on AirAsia flights on AirAsia.com,” it said in a statement.
The airline said that beginning Tuesday, more rescue flights were mounted to ferry stranded passengers to Chiang Mai, Phuket, Kuala Lumpur, Singapore, Macau, Shenzhen and Hong Kong.

AirAsia also advised its passengers affected by the cancellations that they would automatically receive a credit shell that could be used to book new AirAsia flights.

The credit shell is to be redeemed within three months for their future travel to any AirAsia (except AirAsia X) destination. Passengers with membership login account numbers are able to utilise credit shell for Internet bookings.

Passengers who have purchased the AirAsia GoInsure Travel Protection are advised to call the 24-hour AIG Travel Assist at +603-27725622 if they need help in obtaining accommodation or other forms of travel assistance, or want to file a claim.

Wednesday, December 3, 2008

AirAsia sends emergency jets to Bangkok

MALAYSIAN BUDGET carrier AirAsia Berhad is sending emergency jets to Bangkok until Dec. 4 to pick up passengers stranded by the closure of two airports seized by Thai protesters, the airline said in a statement yesterday.

AirAsia was scheduled to operate two return flights each from Bangkok to Hongkong and Singapore today. The aircrafts will land at the Thai naval base U-Tapao Royal Thai Navy Airfield.

The low-cost airline is also operating one return flight each from Bangkok to Macau, Shenzhen, and Chiang Mai, and Phuket in Thailand. From the last two sites, AirAsia is operating return flights to Singapore and Kuala Lumpur.

Passengers leaving Bangkok will be shuttled for free from the Bangkok International Trade and Exhibition Center in Bangna to U-Tapao. Passengers arriving in Bangkok via U-Tapao, meanwhile, will be transported to the Suan Lum Night Bazaar in the city center.

Tomorrow, AirAsia will fly the same routes, but will double its return flights from Bangkok to Macau and will not send rescue flights to Shenzhen anymore.

Stranded AirAsia ticket holders were advised to visit the company Web site for departure times. Other guests who wish to board the rescue flights must transact with the airline’s sales counters.

AirAsia has been operating these flights daily since Nov. 28, initially flying only between Bangkok and Kuala Lumpur.

Local carriers Philippine Airlines and Cebu Pacific have also sent emergency jets to Thailand early this week. Flights of both airlines to Bangkok have been canceled since Nov. 26, when anti-government protesters took over Suvarnabhumi International Airport in Bangkok, Thailand’s main gateway, and later, the secondary gateway of Don Mueang International Airport, in an attempt to oust the prime minister.

AirAsia to continue aggressive marketing

LOW-COST carrier AirAsia Bhd (5099) will continue to increase capacity and market its routes aggressively to ensure its revenue remains robust, said its top official.

Group chief executive officer Datuk Seri Tony Fernandes said with its additional flights to Singapore now, he was certain that Kuala Lumpur (KL) can grow to be the largest hub in Southeast Asia.

"Just today we had two passengers from Singapore who stopped over here before flying off to Langkawi. So the fear that Singapore will be attracting more passengers is baseless," he said.

AirAsia now has seven daily flights between KL and Singapore.
While Fernandes did not discount that its fourth quarter will be impacted by the current turmoil in Thailand, he said AirAsia's load factor was better due to its recent no-fuel surcharge initiative.

"In a time like this, we have to constantly find ways to stimulate the market instead of not doing anything," he said.

Fernandes said AirAsia had not seen a dip in forward bookings for flights to Bangkok.

"It is still quite strong. You have to remember that Thailand has gone through many difficulties and overcame it all," he added.

AirAsia has not flown in or out of Bangkok in the past six days after Thai authorities closed Suvarnabhumi International Airport after anti-government protesters storm the terminal.

It has sent two rescue flights today for passengers still caught there.

Fernandes said all 15 AirAsia planes located at the Suvarnabhumi airport are now residing in three other Thai airports.

AirAsia will add more flights surrounding the Bangkok hub (such as Phuket to KL) starting tomorrow.

Fernandes was speaking to reporters in conjunction with its first flight to India yesterday at the Low Cost Carrier Terminal, KL.

AirAsia has recorded 100 per cent load from December 1-18 for its flights from KL to Trichy while achieving 80 per cent load factor this month.

Fernandes said that AirAsia may consider increasing flights to Trichy.

"Definitely there is a demand for a second flight and we are looking at it. It's a matter of whether we put another flight to Trichy or look at another Indian destination," said Fernandes.

He said it was still viable for AirAsia and AirAsia X to fly to 10 Indian destinations, such as Bombay, New Delhi, Madras, and Tiruvananthapuram, within the next 18 months.

"There is strong demand because people arriving in KL can get (on connecting flights) to Bali, Phuket or Langkawi," he said, adding that its maiden flight to Trichy was already profitable.

Tuesday, December 2, 2008

AirAsia launches Flights between Tiruchirappalli and Kuala Lumpur

On Monday, AirAsia launched flights between Tiruchirappalli (Trichy), India, and Kuala Lumpur in Malaysia. The low-cost airline will serve the route with direct daily flights to Trichy departing from LCC Terminal, Kuala Lumpur on AirAsia’s new 180-seater Airbus A320.

The airline claims to have already recorded a 100% percent load on flights between 1 and 18 December 2008 from Kuala Lumpur to Trichy with an average 80% load factor both ways.

Dato’ Sri Tony Fernandes, Group CEO of AirAsia Berhad said, “We truly hope that with this new service, the people from Trichy and its neighboring regions will have access to more low-cost alternatives to international routes and additional destinations from Kuala Lumpur where AirAsia champion. Furthermore, there is a huge population of Indians in Malaysia who descended from South India and with our extremely affordable fares will enable them to trace back their family roots, renew family ties, and perform pilgrimage or travel for holiday purposes”

Tiruchirapalli, situated on the banks of the river Cauvery is the fourth largest city in Tamil Nadu. The most famous land mark of this bustling town is the Rockfort Temple, a spectacular monument perched on a massive rocky out crop which rises abruptly from the plain to tower over the old city. The city is a thriving commercial centre in Tamil Nadu and is famous for artificial diamonds, cigars, handloom cloth, glass bangles and wooden and clay toys.

Sime, AirAsia Shares Drag KLCI Down

SHARES of Sime Darby Bhd and AirAsia Bhd took a beating and dragged down the overall market yesterday, as concerns over their outlook weighed on market sentiment.

The benchmark Kuala Lumpur Composite Index (KLCI) fell by over two per cent, or 17.71 points, yesterday. Shares of the conglomerate and the discount carrier, among the top 10 active counters, lost more than 10 per cent yesterday.

Sime Darby, which sells palm oil, properties and cars, fell as much as 14.5 per cent or 85 sen to RM5. It closed at RM5.10 yesterday.

The conglomerate, in its first-quarter results briefing on Friday, halved its full-year earnings forecast to RM1.9 billion, from RM3.7 billion initially, due to lower palm oil prices and concerns of an economic slowdown.

This led to several analysts lowering Sime Darby's target price, while some downgraded their recommendations.

"Given the drop in palm oil prices, protracted downturn in property as well as motor distribution segments in subsequent quarters, it is unlikely that Sime's full-year net profit would now match either our and consensus forecasts," said HwangDBS Vickers in a report.

The research house forecast Sime Darby's full-year net profit to hit RM1.98 billion.

AirAsia was not spared either, after the company posted its first quarterly net loss since 2004, due mainly to some one-off provisions.

Its shares fell by 12.2 per cent, or 13.5 sen, to 97.5 sen yesterday, its steepest one-day fall since 2004.

"It's a `sell'. Even as we see AirAsia returning to profitability, we are concerned about its longer-term prospects as its associates continue to bleed and AirAsia reaches saturation point in Malaysia.

"Although there may still be a possibility of privatisation (management said they still have two weeks to sort it out), the offer price can still be revised down. As such, we feel the poor prospects outweigh the privatisation possibility," said OSK Research in a report.

Daily KL-S’pore flights soar

PETALING JAYA: From yesterday, air travellers on the Kuala Lumpur-Singapore route can choose 14 daily flights from low-cost carriers and more than 15 from full-service carriers.

This is a huge jump in choices from a year ago, which saw only Malaysia Airlines and Singapore Airlines plying the route.

In February, low-cost carriers had begun launching limited flights.

But from Dec 1, all airlines in Malaysia and Singapore can launch flights between the two capital cities.

The change has come a month ahead of the liberalisation of the Asean Open Skies for capital cities.

Both AirAsia and Tiger Airways, which are flying seven and three to four flights respectively on the route, are eager to increase the frequencies.

AirAsia Bhd group chief executive officer Datuk Tony Fernandes told StarBiz yesterday that he wanted to add an additional flight by next month when the airline took delivery of more aircraft.

“My target is to have 12 daily flights for stage one. Eventually we would like to have 24 flights daily or every half-hourly flight,’’ he said.

The response had been “fantastic’’ for the KL-Singapore route even though it was just day one of the sector’s full liberalisation, he said.

The budget airline sees its load factor averaging 75% on the route.

Tiger Airways chief executive Tony Davis told StarBiz from Singapore that the carrier had seen huge demand for its flights and would increase its frequency to five daily flights from three or four now on weekdays.

“Our loads are very good and we see strong consumer demand. We just saw our 3.30pm flight took off from Singapore to KL and there were only two empty seats out of the 180 seats in the aircraft,’’ Davis said.

National carrier MAS commercial director Datuk Abdul Rashid Khan, believes the Singapore-KL route has always been a springboard for connecting flights from KL International Airport (KLIA) to its global destinations such as outbound traffic from Singapore and likewise, for the return via KLIA.

“We will continue to leverage on (our) partnerships to remain competitive as well as profitable on this route,’’ he said in an e-mail response.

An SIA spokesman, in an e-mail reply said the opening of the sector was good for consumers and the airlines. Competition would force airlines to be more cost effective and innovative in the product and service offerings, he added.

“We offer competitive fares. The Singapore-KL route will now function like most other markets in the region. There will be price competition and fares will vary in line with demand,’’ the spokesman said.

MAS and AirAsia mount seven daily flights each on the route, SIA and SilkAir, four flights each, Tiger, three or four flights and JetStar, three.

Malaysia’s Firefly is still hoping to ply the route from Subang and is still awaiting the Government’s response, according to managing director Eddy Leong.

Monday, December 1, 2008

AirAsia Aims To Secure 10 New Routes In India

KUALA LUMPUR, Dec 1 -- Low-cost carrier, AirAsia Bhd, is confident of securing 10 new routes to India within the next eighteen months, Group chief executive officer Datuk Seri Tony Fernandes said Monday.

He said the carrier had launched its inaugural Kuala Lumpur-Tiruchirappalli flight in south India recently.

"AirAsia received overwhelming response for the route. Barely a month after operating the route, we recorded 100 per cent load factor from Dec 1 to 18," he told reporters.

AirAsia currently serves the route using the 180-seater Airbus 320.

AirAsia Falls After Quarterly Loss, Analyst Downgrade

Dec. 1 -- AirAsia Bhd. fell the most in almost five weeks in Kuala Lumpur trading after Southeast Asia’s biggest discount carrier reported a loss.

The carrier slid as much as 11 sen, or 9.9 percent, to 1.00 ringgit, the worst performer on the benchmark Composite Index. The loss was the first since the company went public in 2004.

AirAsia lost money on trades held by the bankrupt Lehman Brothers Holdings Inc. and wrongway bets on oil prices. Chief Executive Officer Tony Fernandes also faces slowing travel demand at the airline’s Thailand hub, which has been paralyzed by a week-long anti-government protest.

“It’s a sell,” Christopher Eng, an analyst at OSK Research Sdn., said in a report today. “We are concerned about its longer-term prospects as its associates continue to bleed and AirAsia reaches saturation point.” He downgraded the stock to “sell” from “neutral” and lowered his price target to 67 sen from 1.10 ringgit.

Even after stripping out the one-time charges, AirAsia still recorded operating losses “significantly below” OSK’s estimates and consensus expectation, Eng said.

AirAsia posted a loss of 465.5 million ringgit ($129 million) in the third quarter as it had a charge of 215 million ringgit to cover costs from unwinding hedging contracts and the likely non-recovery of collateral for trades held by Lehman.

Thai Losses

Thai AirAsia Co., the airline’s Thai unit, had a loss of 250 million baht ($7 million) as travelers shunned the country. AirAsia last week canceled all flights to the Thai capital after anti-government protesters stormed the main terminal of the city’s airport, closing it down.

Thai Airways International Pcl and Thai AirAsia were the biggest operators at Bangkok’s Suvarnabhumi last year, accounting for 28 percent and 12 percent of commercial aircraft movements respectively, Airports of Thailand said on its Web site.

Global air travel declined for a second consecutive month in October, with the International Air Transport Association predicting worse to come because of recessions in many parts of the world. The trade group represents more than 200 airlines.

BRIEF-HSBC cuts Air Asia target price to RM 0.60

Nov 30 (Reuters) - Air Asia :

* HSBC (nyse: HBC - news - people ) cuts air Asia target price to rm 0.60 from rm 0.90

* Management said at the briefing it will recover the cost of unwinding its fuel derivatives in 2-3 months via a simple derivative structure pending on oil prices falling further. Management would not provide more details on this plan nor elaborate on its previous announcement regarding potential privatisation at MYR1.30-1.35 per share.
* We maintain our long-held view that Air Asia create rather than eliminate risk via its derivatives positions, especially where they are off balance sheet and poorly disclosed.

* Cutting earnings forecast: Stripping out forex and derivative losses, 3Q08 recurring pretax losses of MYR77m exceeded our forecasts by MYR67m mainly due to higher operating costs. We increase our FY08-10 operating costs assumptions and adjust FY08 earnings for 3Q08 forex and derivative losses and lower tax credit.

* Maintain UW with lower TP: We continue to value the company using asset replacement value, add non-aircraft assets less liabilities and obtain a revised target price of MYR0.60 based on our revised earnings. Risks include Air Asia providing limited disclosure about its derivative positions, making it difficult to assess its gains or losses.

Air Asia Fees To Air Asia- X Rises

AIRASIA Reported Nov 1, 2008 that its Services Agreement to AIRASIA-X had been extended for a further period of 12 months effective Nov 1, 2008 with new inclusions for a sum of RM43m inclusive of a 10% mark-up.


TYPE: Short Analysis / Reviews
01 December 2008

AIRASIA's FUEL SPECULATION BINGE ENDS WITH 3QFY08 LOSS OF RM465M By J Vong AIRASIA's investor relations department has been less loud with its releases in the past 2 quarters typifying almost third-rate-run listed companies in respect of informing their investors promptly and clearly.

This was, of course, not lost on the small investor who had been piqued for the last 3 quarters following some research house's alert that AIRASIA had taken bold forward selling positions in oil options at USD92.50 per barrel. Oil prices, of course, obligingly rose to USD147 per barrel to upset AIRASIA's 'hedging' plans.

When AIRASIA realised that it may have gotten in at the wrong end of oil price movements, the Company announced that the oil options 'selling' was for 'hedging' purposes and that losses could be minimised through a reversal of positions.

The Airline claims of its fuel hedging (which is for consumption) and losing money in a price uptrend is definitely unusual. That points to speculation rather than hedging.

TONY FERNANDEZ, the CEO, must come on record of having the distinction of trying to redefine the meaning of 'hedging'. Hedging as we were taught in university meant the buying or selling forward of positions where there was certainty of consumption or output.

AIRASIA is well known for its forward sales of airline seats for cash. So 'hedging' would have meant the forward buying of it required oil positions which any small investor would have thought to be 'smart' and 'safe'. Obviously, AIRASIA 'sold' forward oil positions and turned itself into an commodities speculator instead of being just an airline operator.

So 3QE Sep 2008 Loss of RM465m must be something of a record of sorts (wiping off the entire YTD earnings plus more) for which the CEO must bear full responsibility.

For 3QE Sep 2008, AIRASIA recorded sharply higher Revenues of RM658m against RM461m in 3QFY07. Gross Profit from Operations was RM103m or 15.6% on Revenue against RM166m or 36% in 3QFY07.

Profit from Operations dropped to RM91m or 13.8% from RM145m or 31% in 3QFY07. 3Q-FY08 reflected the huge impact of rising oil prices on AIRASIA's operations. But despite that, the Airline turned in an Operating Profit due in no small part to its extremely strong Revenue growth of 42.7% over 3QFY07.

For the 9ME Sep 2008, the Cumulative Loss was RM294.8m or 12.4 sen per share wiping off 2008 cumulative earnings plus more. 9M-FY08 Revenue rose to RM1.80 bil. compared with 9M-FY07 Revenue of RM1.30 bil - a sharp 38.4% growth. Revenue growth was due largely to the new aircraft deliveries and an expanded route network.

Actual interest charges for its secured Borrowings of RM6.35 bil. for 3QE Sep 2008 recorded a Net Interest Expense of RM80m after taking into account Interest Income. The effective interest rate on borrowings amounted to 5.2%. This reflected that AIRASIA was still profitable operationally despite the turbulent period of oil price surge.

3QFY08 speculative losses were, however, very large. AIRASIA recorded a Loss of " .... RM215m ... for the .... unwinding of our fuel derivative contracts and also the likely non-recovery of margin held by LEHMAN BROTHERS COMMODITY SERVICES inc ...(which filed for bankruptcy on Sep 15, 2008) ....". The Company also said that fuel prices are now trading at levels last seen in 2005.
AIRASIA in its 3QFY08 report now says that the Group as at Sep 30, 2008 had partial cover over 35% of its fuel consumption for Yeas 2008 and 2009. The statement which was released on Nov 28, 2008 also said that ".... the Group had subsequently liquidated its positions to take opportunity of the lower spot prices....". There goes another ambiguity in its disclosure.

However, AIRASIA cautions that with the current weakening of the Ringgit against the USD it will have a negative financial impact.

3QFY08 Forex Translation Losses were RM212m. The Company said that the Loss could potentially turn into " .... a gain of RM365.6m ..." based on the USD Exchange rate which can only " .... be reflected in the financial statements upon realization over the duration of these contracts ....".

AIRASIA said that the Group " .... had hedged 75% of its dollar liabilities pertaining to its aircraft, engine and simulator loans into Ringgit by using long dated foreign exchange ....". The Group had also entered into " .... interest rate swaps (some of which are capped) to hedge against fluctuations in the US-LIBOR on its existing and future aircraft financing for deliveries between 2005 and 2009. The effect of this transaction enables the Group to pay fixed interest rate of 3.25% on Ringgit and between 4.55% and 5.2% on USD over a period of 12 to 14 years ....".

AIRASIA said that as at Sep 30, 2008, the Company had contractual Capex commitments for RM16.81 bil. and Authorised but uncontract Capex of RM7.29 bil. giving the Group a total of RM24.1 bil. in Capex spending.

AIRASIA's associates THAI AIRASIA and INDONESIA AIRASIA continue to be loss-making. FRS 128 defines interest (equity) in an associate as " ... the carrying amount of the investment ... under the equity method together with any long-term interests that, in substance, form part of the investor's net investment in the associate ...".

On the above basis, the unrecognised share of Operating Loss as at Sep 30, 2008 amounted to RM75.8m in THAI AIRASIA and RM89.5m in INDONESIA AIRASIA. The associates continue to be loss-making.

AIRASIA enjoys tax deferment for reason of its capex spending. There have been detractors from the way the Company treats its deferred tax. As at Sep 30, 2008, Deferred Tax recorded RM146.2m.

Cash Balance as at end Sep 2008 was RM774m compared with RM547m as at end Sep 2007.

AIRASIA reported that for 3QE Sep 30, 2008, the Airline experienced 'seat load factor' of 75% compared with 76% for the immediate preceding quarter. The was explained as being in line with seasonal fluctuations.

Passenger volume grew 24% in 3QFY08 to 3.01m passengers compared with 3QFY07. In 2QFY08, the Airline carried 2.82m passengers. Average fare was higher by 12% at RM195 compared with RM174 in 3QFY07. The higher average fare was due to ancillary income and from the increase in fees. The lower overall load factor to 75% was due to significant seat capacity addition during the period and the full impact of the Moslem fasting month.

For 3QFY08, Revenue per Available Seat Kilometre (ASK) was 13.63 sen. Cost per ASK was 13.54 sen and Non-Fuel Cost per ASK was 4.43 sen. The average number of operating aircraft during 3QFY08 was 38.19 compared with 36.6 in 2QFY08.

THAI AIRASIA operations continue to be challenging due to the political street demonstrations. THAI AIRASIA achieved a load factor of 79% and a on-time performance of 93%. THAI AIRASIA now operates 7 new Airbus 320 aircraft.

INDONESIA AIRASIA achieved load factor of 78% down from 2007 load factor of 79%. The Indonesian outfit which operates Boeing 737s has received its first Airbus 320 on Sep 19, 2008.

Sunday, November 30, 2008

AirAsia To Mount Second 'Rescue Flight' Saturday

KUALA LUMPUR, Nov 28 -- AirAsia will mount another "rescue flight" from Kuala Lumpur to Bangkok (U-Tapao) via Singapore Saturday.

In a statement here Friday, it said the flight will depart KL International Airport's LCC Terminal at 4.25pm and arrive at Singapore's Changi International Airport at 5.20pm.

It will leave Singapore at 5.50pm and arrive at U-Tapao Airbase in Bangkok at 6.50pm.

AirAsia said the flight departing Bangkok for Kuala Lumpur at 7.20pm would give priority to AirAsia passengers who have been stranded in Bangkok for the past few days. It will arrive at Kuala Lumpur at 10.05pm.

AirAsia said it would notify the affected passengers by phone and those who wish to board the flight urgently should contact the company's 24-hour emergency hotline at +6625159999 in Bangkok or +603-86604554 in Malaysia.

It said AirAsia passengers landing at U-Tapao Airbase will be transported by bus to central Bangkok free of charge.

Those flying back to Kuala Lumpur will be provided complimentary bus pick-up to U-Tapao. The pick-up time is 2pm from Novotel Bangna Bangkok, 333 Srinakarin Road, Bangkok.

AirAsia mounted its first rescue flight to Bangkok today carrying 20 passengers and would return to Kuala Lumpur with 63 passengers.

Friday, November 28, 2008

AirAia Records Operating Losses Of RM75.933 Million In Q3

KUALA LUMPUR, Nov 28 - AirAsia Bhd posted operating losses of RM75.933 million in the third quarter ended Sept 30, 2008 from an operating profit of RM47.763 million in the same period last year.

The losses were lower than expected despite the extremely difficult operating environment, including high fuel prices, said its chief executive officer Datuk Seri Tony Fernandes in a statement here Friday.

The low cost airline however posted a revenue of RM658.473 million from RM461.585 million previously.

"The resilience and strength of AirAsia produced a strong 43 percent revenue growth driven by strong passenger demand and ancillary income," he said.

Passenger numbers grew by 24 percent to 3.0 million, Tony said.

"We expect to carry a total of 20 million passengers across the AirAsia Group in 2008," he added.

The load factor for the period was at 75.4 percent, which is in line with expectations as we added a significant capacity of 33 percent and introduced five new routes during the period, he said.

Airasia said yield or revenue per available seat kilometer (ASK), was up by 12 percent, driven by a 12 percent higher average fare and strong contribution from ancillary income.

Ancillary income for AirAsia continued to deliver a stellar performance with a 88 percent growth against the same period last year and the per passenger ancillary spending increased by 52 percent to RM23.1 per passenger.

Ancillary income now represents 10.6 percent of total revenue for AirAsia.

"This will be the driver for strong profit margins going forward," said Tony.

According to Tony, unit cost excluding fuel, improved by an impressive 10 percent stemming from productivity gains and an increased number of Airbus A320 aircraft joining the fleet.

He said the Thai operations endured a challenging period due to escalating domestic political disturbances and the temporary closure of airports in Phuket, Krabi, Hadyaai and Narathiwat.

Despite these tough operating conditions, the Thai operations managed to achieve an impressive 79 percent load factor and a 29 percent increase in average fare.

The Thai operations also managed to reduce losses by 44 percent against the immediate preceeding quarter despite the much higher fuel price.

The Indonesian operations meanwhile, made significant improvements with a 61 percent higher yields compared to last year and a 78 percent load factor.

"The route reorganisation exercise coupled with the improved competitive environment enabled the Indonesian operations to narrow down losses by 88 percent against the immediate preceeding quarter," he explained.

On the future outlook, Tony said that the forthcoming fourth quarter is traditionally AirAsia's strongest quarter and sees a sustained strong demand for its services.

He said, the directors expect that, barring unforeseen circumstances, the groups performance will be satisfactory for the fourth quarter.

AirAsia on rescue flight to Bangkok for stranded passengers

KUALA LUMPUR: AirAsia has dispatched a rescue flight to Bangkok Friday to help bring back the low-cost carrier’s passengers stranded in the city following the closure of Bangkok’s Suvarnabhumi International Airport.

The flight was to depart the low-cost carrier terminal (LCCT) in Sepang at 4.25pm and arrive at the U-Tapao airbase in Bangkok at 5.30pm Thailand time, AirAsia said in a statement here on Friday.

“The rescue flight will depart for Kuala Lumpur from U-Tapao at 6pm Thai time. Priority will be given to AirAsia’s passengers who have been stranded in Bangkok for the past three days,” it said.

According to the statement, outbound passengers from Kuala Lumpur to U-Tapao will be transported by bus to central Bangkok free-of-charge while passengers flying back to Kuala Lumpur would be provided complimentary bus pickup to U-Tapao from the Novotel Bangna Bangkok, 333 Srinakarin Road, Bangkok at 2pm Thai time.

Passengers will be accepted on the flight subject to availability of seats and are advised to visit www.AirAsia.com for the latest updates, the statement added.

Thursday, November 27, 2008

AirAsia X looking at some 25 A350s or 787s, plus more A340s

Malaysia's AirAsia X is evaluating an order for around 25 Boeing 787s or Airbus A350 XWBs as it seeks additional Airbus A340s to boost its widebody fleet in the interim.

The long-haul budget carrier has recently taken delivery of the first of 25 A330-300s it has on order, and early next year will introduce an ex-Air Canada A340-300 on lease from Orix Aviation. This aircraft will be used to launch services between Kuala Lumpur and London Stansted in March.

Speaking during an event in London to promote the new Stansted service, AirAsia Group chief executive Tony Fernandes revealed that while additional A340s were under consideration in the near term, the airline ultimately aims to acquire a large fleet of A350s or Boeing 787s.

"We are looking at about 25. Seeing as we are so Airbus-driven, it is more likely to be the A350 than the 787," he says, adding: "The timeline as to when we do this depends on the manufacturers, but we are in active discussions."

Fernandes says that more immediate plans call for two more A340s "as soon as possible".