Air Asia and MAHB should resolve their differences, says Khazanah

KUALA LUMPUR, Jan 19 - Khazanah, which holds a stake in Malaysia Airports Bhd (MAHB), is against the proposed low cost carrier terminal at Labu, also known as KLIA-East.

Khazanah managing director Tan Sri Dato' Azman Mokhtar says that he does not support the Labu terminal and urged both parties to stick to the KLIA master plan.

He says that 10,000 hectares have been set aside for KLIA but only one third has been utilised.

"Air Asia and MAHB should resolve their issues," he said. "They should have hardware and software connectivity and enable seamless travel. The cluster of terminals must be together."

MAHB has proposed an alternative terminal to the one that Air Asia is pushing for. However, the cabinet has already given the go-ahead to Air Asia and its joint venture partner Sime Darby to go ahead with the KLIA-East terminal.

AirAsia To Launch Penang-Macau Route From March 1

KUALA LUMPUR, Jan 19 -- AirAsia will launch its new international route from Penang to Macau beginning March 1 this year.

There would be four direct weekly flights from Penang and three direct weekly flights from Macau, the low-cost carrier said in a statement here Monday.

AirAsia said one-way minimum fare is RM49 and available online via its website from Jan 19-25 for travel between March 1 and October 24.

With this new addition, AirAsia now serves four international routes namely Indonesia, Thailand, China and within Peninsular Malaysia .

New LCCT 'no luxury project'

Jan 19, 2009

SEREMBAN: The state government has stressed that the proposed low-cost carrier terminal (LCCT), to be known as the KLIA East @ Labu, is not a luxury project.

It is simply to complement facilities at the Kuala Lumpur International Airport.

Menteri Besar Datuk Seri Mohamad Hasan said he was confident the RM1.6 billion project would not only benefit the people but also the country, just as other projects such as the Proton Saga national car, the Penang bridge, North-South Expressway and Putrajaya had done.

"In times past, people had criticised the Proton project as a waste of public money, just like the other projects, but now all these 'mega' projects have proved beneficial.

"It is not surprising that when a new 'mega' project is about to begin, it will have its critics but the KLIA East @ Labu is not a luxury project. It is to provide an amenity for the convenience of the public," he said yesterday after handing out Chinese New Year ang pow to patients at the Rantau branch of the Mawar Haemodialysis Centre.
To the many who had questioned the necessity of building and developing the KLIA East @ Labu, he said: "I am confident that AirAsia Bhd and Sime Darby Bhd did thorough research on the project before proposing it.

"The rapid development of the country's low-cost aviation industry is one of the main planks in the argument to have the existing terminal, the LCCT in Sepang, replaced with a new one."

AirAsia to resume Kota Kinabalu-Macau service

AirAsia announced (15-Jan-09) that it will resume its Kota Kinabalu-Macau and Kuching-Macau routes effective 01-Mar-09. The airline is also increasing frequency for its Kuala Lumpur-Macau service to 4 flights daily also from 01-Mar-09. AirAsia currently has 3 daily flights from Kuala Lumpur to Macau.

AirAsia is also launching a new domestic route, Kota Kinabalu–Sibu with free seats.

Ms. Kathleen Tan, AirAsia Regional Head of Commercial said, “Enhanced air connectivity is key to growth as it provides convenient service for business and leisure travelers alike. AirAsia will continue to adjust our capacity to market conditions and seek new opportunities by responding to market demands.”

“We are pleased to reinstate flights from East Malaysia to Macau, as we recognize there is a strong demand for the routes. Meanwhile the new Kota Kinabalu-Sibu route will further enhance connectivity between the two commercial centres in East Malaysia.”

Analysts don’t know what they’re talking about: AirAsia CEO

Jan 15,2009

Once lauded as a budget model for the entire continent, AirAsia has been downgraded from “neutral” stock by analysts to “sell,” a result of the uncertain economic situation plaguing the aviation industry.

Nevertheless, the CEO Tony Fernandes remains optimistic: “One has to see our record of coping with crises.”

It was mere months ago that the company was soaring; Fernandes was introducing a huge range of hotel and finance projects.

But thirty airlines collapsed in 2008, and the International Air Transport Association has predicted a further $2.5 billion in industry losses for 2009, after $5.2 billion in 2008.

Despite the declining air traffic in Asia, the budget carrier is expanding and taking delivery of new planes.

Fernandes claims “I still think there’s a huge demand for travel,” relying on the concept that the financial crisis will encourage travellers to downgrade to no-frills carriers, such as AirAsia.

His theory stands in spite of the results of Synovate’s study in August, which found that the first luxury to be axed in difficult economic times for Malaysians was travel.

Oil prices cause losses for carrier
Furthermore, the third quarter of 2008 saw AirAsia post its first net loss since becoming public in 2004.

The losses of $136 million were attributed to the airline’s hedging contracts against higher oil prices, prior to their dramatic fall. Nevertheless, a pre-tax profit has been anticipated for 2008 of $835,000 on revenue of $677 million.

As oil prices fell well below the $70 mark, AirAsia seems set to lose further, as the $50 mark had projected $481 million in losses, and barrels are currently below $40, according to the The Malaysian Insider.

“I really don’t think most analysts in this part of the world know what they’re talking about,” Fernandes responds to the analyst downgrade on AirAsia stock, from neutral to sell. Thge share price has fallen from its peak in October 2007 of 65 cents to 27 cents. “All I’m seeing is a very strong load.”

The load factor for AirAsia did only drop one point between the second and third quarter of 2008, to 75 percent. Furthermore, the carrier had a 33 percent increase in seats.

Total passengers for the quarter jumped 24 percent in comparison to 2008, and the average fare also grew 12 percent.

The low share price prompted Fernandes to attempt to take AirAsia private, but financing proved too much of an issue in the current climate.

Future plans show promise for AirAsia
It seems that in spite of ongoing financial issues, the many plans Fernandes shared in 2007 continue to come into fruition, with the launch of long-haul budget carrier AirAsia X, the no-frills financial service, Tune Money, and the hotel chain, Tune Hotels.

Expansion plans may have consequences for all of the operations, with AirAsia X bearing debts for 25 Airbus A330s worth $5 billion, the recent departure of both CFO and CEO of Tune Money despite predictions of a $3.5 million profit in 2009, and only two hotels opened of the planned 18 for 2008.

The future may not be a bleak for AirAsia; after all, many doubted Fernandes’ ability after he bought AirAsia back for one cent in 2001, and assumed its $11 million in debt.

Furthermore, AirAsia has introduced 29 routes in the past year, flying 110 in total, and 37 of which are exclusive to the carrier.

The airline continues to exercise its competitive advantage, and have prospered whilst rivals Nok Air in Thailand is shrinking, and Adam Air in Indonesia has collapsed.

The permission to fly the lucrative route between Kuala Lumpur and Singapore has been a further boost; until recently the Malaysian and Singaporean governments had sought to protect their flag carriers.

The replacement of existing Boeing 737s with new fuel-efficient Airbus A320-200s is also expected to lead to savings, but finance could prove an issue, as AirAsia already boasts a debt of $1.8 billion.

“If we can’t get credit, what’s going to happen to other airlines [whose credit isn’t as good as AirAsia’s]?” Fernandes questions. “If after three years, there’s still a credit crisis, we’re all screwed anyway. If people can’t get loans there won’t be an economy to speak of.

Despite his reach to India and China, the future, it seems, lies in AirAsia dominating its home ground of Southeast Asia, Forbes Asia reports.

“I’m a big believer in ASEAN,” says Fernandes, hoping for an open skies policy that isn’t expected until 2015. “If we can get an ASEAN common market, who cares about India and China?”

“Our playground is 600 million people.”

Tune Money appoints new CEO

Jan 15,2009

KUALA LUMPUR: Tune Money Sdn Bhd has appointed Joyce Lai chief executive officer (CEO), effective Jan 7.

Lai replaced Tengku Zafrul Aziz, who left in November, the company said in a statement.

Director Datuk Seri Tony Fernandes said that Lai’s appointment was in line with the company’s vision to have a CEO with marketing background to drive the company.

Previously, Lai was AirAsia Bhd’s regional head of communications, looking after the AirAsia’s and AirAsia X’s corporate and brand communications.

She joined the budget airline as senior manager, media division in September 2001.

Prior to joining AirAsia, Lai held various key positions in Warner Music Malaysia from 1994 to 2000, as head of international and group product and strategic marketing manager.

Subsequently she joined BMG Music Malaysia in 2001 as marketing director and left the same year.

MSWG wants more information on KLIA East@Labu

PETALING JAYA: The cost benefit of the proposed low-cost carrier terminal (LCCT) in Labu, Negri Sembilan in financial and non-financial terms is an important question that needs to be addressed, according to Minority Shareholder Watchdog Group (MSWG) chief executive officer Rita Benoy Bushon.

At present, information on the proposed joint development of KLIA East@Labu by Sime Darby Bhd and AirAsia Bhd was sketchy, she said in a statement.

“The funding arrangements and ownership of the proposed LCCT are also important for shareholders to assess the impact on the companies’ gearing and cash flow,” she said. In MSWG’s view, the proposed new LCCT was expected to negatively impact Malaysia Airports Holdings Bhd (MAHB), Bushon said.

“It will cannibalise the existing capacity of KLIA given that AirAsia contributes 16% and 49% of international and domestic passenger movement respectively to the traffic flow in KLIA.”

She said under the current depressed market condition and likely difficult times ahead, initiatives led by the private sector were most welcome.

While there may be persuasive arguments for Sime Darby and AirAsia to build a new LCCT, MSWG believed that an orderly development and construction of airports and aviation infrastructure in the country must be given top consideration to ensure optimisation of resources in line with the country’s National Airport Masterplan.

“It is good to have competition but whether there is room for two LCCTs is debatable,” Bushon said.

While directors had a duty to make decisions in the best interests of their company, its shareholders and stakeholders, MSWG also believed “commercial viability, merits of competition and value creation should be at the heart of any corporate decision,” she said.

In light of this, Sime Darby, AirAsia and MAHB would need to provide more information and answers to address shareholders’ concern, she said.

AirAsia lobbies Penang for LCCT

2009/01/15
AirAsia Bhd group CEO Datuk Seri Tony Fernandes says the company needs sufficient parking bays for its aircraft.

PENANG: Low-cost carrier AirAsia Bhd is looking at Penang as a potential hub for a low-cost carrier terminal (LCCT).

It is learnt that group chief executive officer Datuk Seri Tony Fernandes made a case to the Penang government to build the terminal and the authorities are keen on his proposal.

Sources said the proposed LCCT in Penang would be independent from the budget air terminal that AirAsia wants to build in Labu, Negri Sembilan.

The proposed Penang terminal has been priced at RM120 million, excluding the cost of land, said sources.

At a presentation made on Tuesday to Penang Chief Minister Lim Guan Eng, elected representatives, industrialists along with selected government and quasi-government agencies in Penang, Fernandes did not indicate how much land was needed for the LCCT.
However, he proposed two sites which are aligned with the Penang International Airport at Bayan Lepas. The land, however, does not belong to the state government.

During the briefing at Lim's office at Kompleks Tun Abdul Razak in George Town, Fernandes stressed the need for AirAsia to find sufficient parking bays at night for his aircraft and the fact that there would be a problem soon when the airline took delivery of additional planes.

"By offering point-to-point flights from various hubs, AirAsia will be able to solve its parking issue while Penang will benefit via the coverage of direct flights serviced by AirAsia," said a source.

Apart from Malaysia Airlines, which offers direct international flights from Penang to selected destinations, other carriers using the airport include AirAsia, Cathay Pacific, Thai Airways International, Lion Air, Singapore Airlines, China Southern Airlines, China Airlines, Firefly, Kartika Airlines and Sriwijaya Air.

AirAsia began flying into Penang in 2002 and offers direct flights to cities in Thailand and Indonesia.

Fernandes declined to comment on the matter, while Lim could not be reached.

In 2007, the Penang government gave conditional approval to LC Airfields Sdn Bhd to set up a low-cost carrier terminal on the island.

Business Times had reported that the proposed LCCT would likely be sited north of the passenger terminal building in Bayan Lepas, and that AirAsia had asked for rights to be the licensed operator of the new terminal in order to keep costs low.

The Penang International Airport was expanded in 2001 to accommodate an annual capacity of five million passengers.

In reality, the airport can accommodate only slightly more than three million passengers a year because space meant for transit passengers has been leased to duty-free shops.

AirAsia Implements New Baggage Policy

KUALA LUMPUR, Jan 13 -- Low cost carrier AirAsia, has implemented a new baggage policy effective today.

Dubbed Supersize, AirAsia pasengers can now choose from three tiers of baggage sizes when purchasing tickets online.

For domestic flights, customers can choose from Supersize Regular for up to 15kg of baggage and pay a nominal sum of RM5, Supersize Medium for up to 20kg at RM43 or Supersize Large for up to 25kg at RM80.

For international sectors, the charges are RM5, RM55 and RM105 for Supersize Regular, Supersize Medium and Supersize Large respectively, it said in a statement today.

"With the implementation of Supersize, customers no longer have to pay the checked-in baggage handling fee of RM5 per piece of luggage.

"This means passengers who opt for Supersize Regular can check-in more than one piece of luggage but only pay RM5 as long as the total weight does not exceed 15kg," its regional head of commercial, Kathleen Tan said.

She said a similar baggage policy had previously been implemented for AirAsia X flights with rate revisions for its Supersize implementation.

Tan also said from today, Supersize Regular for AirAsia X remained at the previous rate of RM20, while Supersize Medium and Supersize Large now cost RM55 and RM105 respectively.

Meanwhile, the over-the-counter excess baggage fees remained at RM15 per kg for domestic flights and RM20 per kg for international sectors, she said.

"There is also no change to AirAsia X excess baggage charge of RM20 per kg on all its international sectors, except for London Stansted, where the charge is RM50 per kg," Tan added.

AirAsia's case for its own home

DATUK TONY FERNANDES: "The principal cause of moving to Labu was our fear of MAHB’s inability to build a terminal in time. 2011 is fast approaching and we can’t afford a delay because a lot of our planes have already been bought. We definitely need a bigger place."

2009/01/12

AirAsia hit turbulence over its plan for a purpose-built airport in Labu, Negri Sembilan. CEO Datuk Tony Fernandes tells DAVID YEOW that having its own terminal is the only way to accommodate the budget airline’s growth

Q: What's the story behind Air-Asia's plan to build its own low-cost carrier terminal (LCCT) in Labu?
A: AirAsia has had three moves; it's not something we enjoy doing. We've gone from operating in Subang to the main terminal at Kuala Lumpur International Airport and then to the LCCT in Sepang, all in the space of seven years. Most airlines don't move in their lifetime.

At each stage, the move was prompted by capacity. When we were operating from KLIA, Ma-laysia Airports Holdings Bhd (MAHB) could see that we were going to outgrow the main terminal quickly.

But this is something a lot of people don't understand, because when they go to KLIA, it looks empty. So the question people always ask is, why doesn't AirAsia just stay at the main terminal?

If you count all the parking bays or aerobridges at the main terminal and its satellite, there are only 55 bays. That's insufficient for AirAsia's entire fleet, let alone in combination with those of Malaysia Airlines and others.
So, MAHB said they would look for a new facility, which led to the current LCCT in Sepang. We were assured by MAHB that we would have good connectivity and low charges, which were the main thing.

We went in March 2006. But as soon as we got there, we began to outgrow the capacity. So, we were concerned because the next spurt of growth, which would be coming from AirAsia X (the airline's long-haul affiliate), would be scotched if we didn't have the facilities.

Our prediction is that if we continue to operate from the LCCT, by 2011 it would be 4.5 million short in passenger capacity. Already with the current LCCT, we are running by a million passengers short and it's a nightmare.

So we started scouting around for land to build a new LCCT.

Our first option was with MAHB, but then there was the issue of who would finance it. We said, let's try to do it ourselves this time so the process wouldn't be so slow.

The principal cause of moving to Labu was our fear of MAHB's inability to build a terminal in time. 2011 is fast approaching and we can't afford a delay because a lot of our planes have been bought. We definitely need a bigger place.

We looked at 13 sites outside KLIA, and stumbled on Sime Darby's Central Vision Valley project. Subang would have been my ideal choice,

I've been a broken record about it. But a lot of the land has been sold, so we abandoned that.

Q: People are concerned that the move to Labu would make the distance longer and connectivity a bigger headache. Is this true?
A: I see the LCCT at Labu as KLIA-East, and not another airport. It's just 8.6km from KLIA, about the same distance from Terminal Five to Terminal One at London's Hea-throw airport.

And in a strange way, due to the geography of the land, it's actually closer to Kuala Lumpur. It is 58km from KLCC, compared with 78km to KLIA from the city.

It's just off the Nilai highway interchange and is also well connected by rail. It's actually an easier airport to get to.

Q: KLIA serves about 25 million passengers a year. KLIA-East can serve up to 50 million annually. What would you say to detractors who see KLIA-East as undermining KLIA's role as the nation's premier airport?
A: It's two business models. Ours is a low-cost airline, theirs caters to the premium airlines.

I guess we also have to look at where Malaysia is going. Does everything need to be in one place?

At the end of the day, with good connectivity, we are making Kuala Lumpur the hub. We are serving the Kuala Lumpur tourism market.

Clearly we have established the need for a new terminal. The question now is, should it be at KLIA or somewhere else?

It's a perfect scenario here. We have a massive piece of land adjoining KLIA, which can meet the needs of an airline that was not there when the KLIA master plan was conceived.

There was no such thing as a low-cost airline in Malaysia back then. We came out of nowhere.

Q: Why not use the proposed new expanded LCCT at KLIA, which MAHB now promises to complete at about the same time in 2011 as the one in Labu?
A: Prior to us coming out with the proposal to build KLIA-East, there was no such plan mentioned to us. The only plan MAHB talked about was offering us the terminal opposite the main one at KLIA at a cost of RM2.9 billion, which is substantially more than what we have budgeted for.

And on top of that, we wouldn't have our own runway.

On the actual date of completion for MAHB's LCCT, we heard that it's fluctuating between 2012 and 2014. This is despite the press release that states it would be completed by the end of 2011.

That caused me panic. You're talking about our bread and butter. What am I going to do with all the planes?

Furthermore, we looked at the site MAHB is considering -- we had considered it ourselves initially -- and became concerned about the condition of the soil there.

It's swamp land. The treatment of that soil would take a long time before you can start building.

And MAHB's plan did not mention a runway. They talked about a runway at some stage, without further details. They also didn't give details about the cost of the new LCCT, which is crucial to us because someone has to pay for that terminal and that someone is AirAsia.

We have been complaining that we have been overcharged and it doesn't look like things will change if we continue with MAHB.

Airport charges are fundamental to us. How costly the building of an airport is will result in how expensive the airport charge is.

On the other hand, AirAsia is confident that it can build KLIA-East for less than RM1.6 billion, including our own runway, and complete it in the next two years.

If we have our own runway next to our terminal, we can cut our operational costs, including environmental benefits from less fuel burn.

Since MAHB's announcement, we, as their biggest customer, have yet to get a phone call or word from them saying "let's talk".

Q: Is any sort of government loan involved in KLIA-East?
A: It's going to be completely privately financed and AirAsia is ready to undertake it. The cost would probably be less then RM1.5 billion, probably RM1.3 billion, roughly the price of 10 Airbuses.

We have been inundated with calls from investors. So we are confident of this. Even if we have to take it up in our own balance sheet, we can easily finance this because the returns on the project are good and there are a lot of people who want to finance it.

In terms of ownership, I think it's too early to say who will own KLIA-East. We might take it up or we might enter into a sale-and-lease agreement with interested parties.

Q: With your new LCCT based in Labu, some people are concerned that you are disrupting the government's plan for KLIA as an international airline hub.
A: Again it's a myth. The hub is not KLIA. The hub is Kuala Lumpur.

In the United Kingdom, no one talks about the hub being in Heathrow and everything having to be built around it. The hub is London and there are five airports around it to serve different segments of the population.

When we talk about KLIA as the hub, what are we talking about?

The truth is, there is no connectivity between the current LCCT and KLIA that is worth getting excited about.

A hub offers the ability to change airlines with a minimum of hassle and a maximum of connectivity. It's impossible to do that at the main terminal. You cannot fly in to KLIA and change to AirAsia without going through Immigration and Customs.

The KLIA hub that we think we have has been destroyed in that respect. And don't get me started on the connectivity between KLIA and LCCT.

A person flying in from the UK would have to get his luggage, check out of Immigration, pass Customs and take a bus or taxi to take a flight via AirAsia.

I rate the bus service as one of the worst in the world for airport connectivity. It's badly managed and doesn't run on time.

Or you can take a taxi, which costs you about RM45 to get from KLIA to LCCT. You call that connectivity? You call that a hub?

But why is only AirAsia being accused of undermining the KLIA hub?

What about FireFly and their plans to bring in one million passengers to Subang Airport? Shouldn't someone argue that the one million passengers should be sent to KLIA?

Q: But if AirAsia moves into MAHB's new LCCT at KLIA, wouldn't that make it a hub? Wouldn't it be better for the country for AirAsia to move there instead?
A: One reason why we started AirAsia X is because the connectivity at KLIA is poor. There are not that many international connections.

That's why we thought that if we don't do something, we are going to lose out because Tiger Airways (a Singapore competitor) has all the benefits of Changi airport.

Malaysia only has two European connections, Lufthansa and KLM (Royal Dutch Airlines), and maybe five Gulf airlines.

We were scared. That's why we started AirAsia X. And now we can say we have passengers from Australia who connect with us. Eighteen per cent of passengers from AirAsia's foreign connections stay in Malaysia, while the rest use us to connect elsewhere. By March 2011, we will have flights to London, Japan and the Gulf.

In other words, AirAsia has become a hub by itself. You can put us in the new MAHB-proposed LCCT and there still wouldn't be any on-site connectivity.

We might be at KLIA but we are still situated at the terminal opposite the main airport. No link, no connectivity, hub destroyed.

If we can focus on Kuala Lumpur as the hub, I dare say we could be bigger than Changi by 2013, when we collectively serve up to 55 million passengers a year.

Where in anyone's dreams would KL the hub beat Changi? And yet it is near to realisation. The reality to all my fellow Malaysians is, that's income coming into the country.

Q: What about accusations of wastage? That the government has spent all that money building the current LCCT and now we need to build another one, possibly two.
A: There's no way AirAsia can remain at the existing facility. Something needs to be built.

It's set that we have to build a new terminal. Whether we build it in KLIA or Labu, it has to be built, so there's no money wasted there.

Then you say there are two runways at KLIA, we should maximise them first. But MAHB has said that eventually there is a need for a third runway, and guess what we are doing? We are building it now and it's only 7km from the existing two.

There is no wastage. Nothing unnecessary is being built.

The only duplication I would say is the tower. Because of the distance of the new runway from KLIA, we need our own air traffic control tower.

We will finance the construction of the tower, not the government. Department of Civil Aviation officials will have to man it, but we will also pay their income.

Q: There has been a lot of negative public perception of this project. People are suspicious of the way the project was approved by the cabinet. People are wondering why Sime Darby, a huge government-linked company, is coming in. The blogs are rife about you benefiting from cronyism.
A: I have responded to many of the allegations on the blogs themselves. I have nothing to hide.

We are a very negative nation. I think we live in a wonderful country though it's not perfect.

But the bad thing is, Malaysians have this bad habit of stereotyping successful people.

AirAsia has worked really hard for all that we have for the last seven years, without any handout.

Let's look at this situation and the potential cronyism.

Sime Darby is a public-listed company. Everything is open, it's all public accounts. It's transparent, everything is an open book.

AirAsia is now negotiating aggressively with them on the terms of KLIA-East, no different from how we negotiate with MAHB or anyone.

As for the cabinet decision, we put in the proposal six months ago. It's only now that the information has come out. It wasn't an on-a-whim decision. The government doesn't do things like that.

Even Penang Chief Minister Lim Guan Eng is asking us not to build the new LCCT in Labu but in Penang. If we are cronies, then why is the opposition asking us to do that? It took me seven years to get the KL-Singapore route. If I was a crony, would I have to wait that long?

We are basing the terminal in Labu for many reasons and one of them is the potential of bringing more development to Negri Sembilan and Malacca.

The government has been talking about its economic stimulus package, but the government alone cannot be responsible for stimulating the economy.

By building KLIA-East, we are creating jobs and pumping money into the country. Sime Darby has an amazing plan for its Central Vision Valley project.

KLIA-East can be the first purpose-built low-cost airport in the world. We can radicalise the passenger experience. No one has done that.

Buy Air Asia merchandise online

12 Jan 2009

WHAT’S fun, red and available online?

Answer: The Red Megastore – an online store by AirAsia offering its own merchandise.

The affordable AirAsia merchandise range from fashionable, exclusively designed caps and tee-shirts to practical items like universal travel adaptors, watches, thermos mugs, in-flight comfort kits and durable leather passport holders.

Products also include USB flash drives – encased in cartoon-like, miniature Airbus A320s for easy document storage on the go.

Just log on to www.redmegastore.com, from the comfort of home or anywhere you can go online.

With a click of the mouse shoppers can browse through the store’s online catalogue which organised under specific categories so shoppers can easily navigate through the portal and choose the products that they wish to purchase.

Extending its motto of providing everyday low fares, AirAsia also ensures that all products sold via the Red Megastore are meticulously designed and manufactured to meet the highest quality standards, while maintaining its affordability.

"AirAsia is such a popular brand name in Malaysia and the region and is very fast making waves across the globe. Our merchandise are highly sought after by both ardent collectors as well as the general public," said AirAsia regional commercial head Kathleen Tan (pix).

"Our merchandise is available at very affordable prices, but high quality is our assurance.

"This is possible as we design many of our products in-house, and select vendors that offer high quality products with good value."

When it comes to quality and customer satisfaction, we are very stringent," she said, adding merchandise like the Airbus A320 aircraft models are available exclusively in the Red Megastore.

The Red Megastore which accepts payments via Visa and MasterCard, also ensures that delivery of purchases will reach customers in Malaysia within seven days and for overseas shipments to major cities, 14 days from the date of order.

AirAsia X eyes Japan

Jan 11, 2009
KUALA LUMPUR - LONG-HAUL budget airline AirAsia X on Sunday said it hoped to launch flights to at least three destinations in Japan by year-end after Tokyo relaxed its tough visa requirements for Malaysians.

'With our new A330-300 being delivered, I hope to mount flights by end of the year to at least three destination in Japan,' chief executive officer Azran Osman-Rani told AFP.

Mr Azran said since October, Japanese officials had dropped the requirement for Malaysian travellers to show a confirmed ticket and accommodation before a visa was issued.

'We explained to the Japanese authorities how our ticket booking model works and they accepted it,' he said.

Mr Azran last July said AirAsia had to delay flying to Japan due to the tough visa rules. AirAsia was concerned over what would happen if a passenger bought a ticket online but was then refused a visa.

The three destinations are to the north (Hokkaido), Osaka and Fukuoka, he said.

An affiliate of regional low-cost carrier AirAsia and Virgin Group, AirAsia X was launched in January 2007. AirAsia and AirAsia X have common shareholders, including AirAsia founder and CEO Tony Fernandes.

Richard Branson's Virgin Group has taken a 20 percent stake in the airline and the British billionaire has vowed to ensure that the project turns a profit.

Abacus helps airlines bolster passengers.

Saturday, 10th January 2009
Asia’s leading travel facilitator, is helping its airline partners boost passenger loads by pushing their seat inventories to its extensive network of travel agents using its proprietary technology solution.

Abacus International recently launched successful promotions in Thailand with AirAsia, Asia’s largest low-cost carrier (LCC).

Abacus International Vice-President for North Asia and Content Marketing, Patrick Lai said that in such a challenging market, it is crucial that every partner in the supply chain steps up their efforts to help stimulate the travel market.

“When the economic indicates were starting to head downwards, we saw the importance of opening new market avenues for regional airlines and embarked on a campaign with AirAsia to make their flights available to Abacus-connected travel agencies in Thailand via the Abacus Whiz system. We further encouraged the agents to make bookings by adding a reward scheme to the campaign,” said Mr. Lai.

The campaign saw an increase in bookings of AirAsia content in Thailand by five-fold. Abacus-connected travel agencies in Thailand enjoyed positive business results and received great feedback from their agents and customers on the Abacus-AirAsia campaign.

“Previously our consultants had to separately go to the internet to make AirAsia bookings and this can be quite inefficient as the internet has its connectivity issues during peak hours. Now that we can access AirAsia’s content via Abacus Whiz, our consultants are able to respond to customers’ requests faster and enjoy a much improved workflow,” said Mr. Tientavee Chityongyutt, Managing Director of S.T. International Co., Ltd.

Mr. Lai also added that “with the success of the campaign with AirAsia, we will continue to work with the other airlines for more promotions to stimulate demand across the regions in the coming months.”

Fire at KL budget airport

Jan 9, 2009

KUALA LUMPUR - A FIRE broke out at Malaysia's budget airport terminal on Friday, forcing the evacuation of all passengers and staff and disrupting flight operations, its main tenant AirAsia said.

AirAsia's chief executive officer Tony Fernandes said there were no casualties in the blaze, which started around 11.15am (Singapore time) and was extinguished just over an hour later.

'AirAsia has efficient evacuation plans in place and I am very pleased at how our emergency and crisis team responded that we managed to get everything back to normal within one hour,' he said in a statement.

AirAsia officials said the blaze occurred at a new section of the terminal currently under construction, but the fire department said it broke out at a duty-free store.

'It was a small fire... We scrambled two fire engines and 12 personnel,' a fire department operations room spokesman told AFP. 'We are investigating the cause.'

AirAsia officials said the fire produced thick smoke but failed to trigger the fire alarms. Staff nevertheless shepherded all those in the terminal outside the building.

AirAsia said flights scheduled for Friday 'might experience slight delays' buy that it did not expect any cancellations.

An eyewitness at the scene, 31-year-old businessman Cham Ze Hoe, said he joined a large crowd of people standing outside the terminal when he arrived to catch his flight but was prevented from going inside.

'I was stuck in a bus outside the LCCT and I thought it was a traffic jam... I got down from the bus and walked towards the terminal,' he told AFP.

'I could see smoke coming from the LCCT building. There were hundreds of people standing outside.'

The LCCT, which opened in 2006, is located 20 kilometres from the capital's main facility, the Kuala Lumpur International Airport. It is used by AirAsia as well as Cebu Pacific and Tiger Airways.

AirAsia on Thursday unveiled plans to shift to its own US$460 million (S$679.2 million) airport outside Kuala Lumpur and abandon the overcrowded LCCT, which it has rapidly outgrown.

The warehouse-style terminal, built at a cost of US$29.2 million, was designed to handle 10 million passengers a year.

Labu LCCT ownership structure ready by April

Friday January 9, 2009

SEPANG: AirAsia Bhd expects the ownership and financing structure for the proposed low-cost carrier terminal (LCCT) at Labu in Negri Sembilan to be finalised by April, said group chief executive officer Datuk Seri Tony Fernandes.

“We are in talks with several domestic and international investors who have expressed interest in financing the project,’’ he told reporters yesterday in a briefing on the project, to be known as KLIA East.

He did not name the potential investors.

Sime Darby Bhd was recently given the nod by the Government to build the low-cost terminal at Labu, which is estimated to cost between RM1.6bil and RM2bil.

Datuk Seri Tony Fernandes briefing the media near the proposed site of the new low-cost carrier terminal on Thursday.

Sime Darby will provide about 3,000 acres of land which will house a terminal building that can cater up to 30 million passengers a year.

The facility can be expanded to handle 50 million passengers with two runways.

The Labu site is 50km from Kuala Lumpur and 18km from KLIA.

If all goes as planned, the terminal will be completed by 2011, at a time when AirAsia’s passenger capacity will be much higher than the 10 million it handles at the current domestic LCCT.

AirAsia handled about 20 million passengers last year, taking into account its operations in Thailand and Indonesia, and that of sister airline, AirAsiaX.

By 2013, it expects to fly 60 million passengers per year, when it will have 159 narrow-bodied and 25 wide-bodied aircraft.

“By 2013, only Japan Airlines will be bigger than us in terms of passenger numbers. We would be the second biggest airline in Asia by 2030,’’ Fernandes said.

That was why AirAsia needed a new terminal as the existing terminal’s capacity at LCCT, which is being expanded to handle 15 million passengers annually, would not be able to handle the projected growth, he said.

Fernandes said the airline had seen 13 sites but found the Labu location ideal.

“The key thing is that we cannot slow down our growth because we have bought aircraft and we need a bigger terminal. We are building for 30 million passengers and we should be supported,” he said.

By having a dedicated terminal, Fernandes said the airline could bring down its cost by 20% and this would be translated to lower fares.

Asked if other airlines would be able to use the KLIA East airport, Fernandes said “the idea is not to go into (the) airport business but to serve our business.’’

AirAsia to have own airport

AirAsia announces plans for own airport outside Malaysian capital KUALA LUMPUR - BUDGET carrier AirAsia said on Thursday it will shift to its own US$460 million (S$681.4 million) airport outside Kuala Lumpur, and abandon its overcrowded terminal next to the main international airport.

The move has thrown into doubt the national airport operator's plans to build a new Low Cost Carrier Terminal next to Kuala Lumpur International Airport (KLIA), to replace the existing facility that opened in 2006.

'We believe in lowering our business costs, it is the key to our success,' AirAsia founder Tony Fernandes told a press conference.

'The new airport which will be known as KLIA East will provide more capacity for aircraft and passengers, and enable us to bring down fares,' he said, adding that costs could be lowered by 30 per cent.

Mr Fernandes rejected criticism that KLIA has more than enough capacity to handle AirAsia's growth plans, and that the sprawling city has no need for what would be its fourth airport.

'I think we know what we need, we are not silly,' he said. 'There is nothing here (at the old terminal) to add value to our passengers. Allow us to take our destiny in our own hands.' Mr Fernandes said the new airport would be exclusively for AirAsia, and designed to handle up to 30 million passengers annually. Construction could begin within six months with a completion date of March 2011.

The new airport would be linked by new train and road links, and be about 30 minutes' drive from the city centre - less than the journey to KLIA.

Malaysian conglomerate Sime Darby had said it has won government approval to begin the project, which is to be the centrepiece of its new development at Labu in Negri Sembilan state.

'We have a fantastic partner, it will enhance tourism. We will also have a theme park, it will be like Orlando airport where Disneyland is located,' Mr Fernandes said.

AirAsia has dramatically outgrown its rough-and-ready terminal adjoining KLIA, which has no rail links with the city or the main airport, and has become increasingly crowded and unpleasant for passengers.

The terminal was completed in just nine months, with a capacity for 10 million passengers and a provision for expansion to 15 million passengers.

The expansion of the current low-cost terminal is due to be completed by March, but by then AirAsia will already have exceeded its enlarged capacity with some 15.7 million passengers a year.

AirAsia Launches Regional Sale

AirAsia Launches Regional Sale

KUALA LUMPUR, Jan 5 -- AirAsia, Asia's pioneering low cost airline, has launched a regional sale offering airfares starting as low as RM9 excluding airport taxes, administration fees and applicable for one-way travel for domestic and international routes.

The low fares offered are available to all of its Asian destinations departing from its hub from Kuala Lumpur, Kota Kinabalu, Kuching, Johor, Bangkok, Jakarta and Bali, it said.

The sale will be from Jan 6-18 for travel from Feb 9 to June 30, this year, AirAsia said in a statement here Monday.

"With over 100 routes to choose from, we believe we cater to leisure and business travellers, giving them more choices and flexibility with our unbeatable low fares and extensive flight frequencies," its regional head of commercial, Kathleen Tan, said.

A closer look at the proposed KLIA East@Labu

THERE are some reservations over the proposed new terminal at KLIA East@Labu.

After all, there is already the KLIA and the LCCT.

But let’s look at the bigger picture.

The new terminal will allow AirAsia and AirAsia X to grow and strengthen Malaysia’s position as a global air transport hub.

It’s actually going to be an exciting project.

Let’s look at it with the full statistics.

Latest figures show that in 2008, KLIA attracted 27.4 million travellers, far lower than the 37.8 million at Changi Airport and the 41.7 million at Bangkok International Airport.

The present LCCT is overcrowded and was never intended to be a permanent terminal.

But with a strong terminal, Malaysia will unseat Singapore by 2013 with 55 million air travellers compared with slightly over 51 million in Singapore.

Thailand will still hold the top position with an estimated 57 million travellers going through Bangkok.

This scenario will only happen if a new low cost terminal is built.

The present LCCT is overcrowded and was never intended to be a permanent terminal.

Repeat – a temporary structure.

It was built as a cargo terminal.

Even recent plans to expand the LCCT to accommodate 15 million passengers a year will not help AirAsia much.

Indeed, its expansion will not be able to sustain AirAsia’s passenger volume within a year.

The airline’s growth estimates show that AirAsia will carry 12.3 million passengers in 2009; 15.7 million in 2010; 19.4 million in 2011 and 30 million by 2013.

The current LCCT also has a severe shortage of aircraft parking bays and this could impede the growth of AirAsia.

There are 33 bays for A320s and three bays for A330/A340.

By next year, there will be a shortfall of six bays for the airline that has ordered a fleet of new aircraft.

By 2010, the shortfall will grow to 16 bays.

Malaysia Airports Bhd has said that it will be able to build a new LCCT by 2014.

By this time, the shortfall of parking bays will be 41 and there will be a 12 million shortfall at the present LCCT.

Little wonder then that the Cabinet, Finance Ministry and Economic Planning Unit officials endorsed the plan to build KLIA East@Labu last week.

The reality is that the current LCCT has outlived its usefulness and with the Government facing the reality of a worldwide economic slowdown, funds are tight to build a new facility.

The plan put forward by Sime Darby Bhd and AirAsia involves private sector financing.

Sime Darby will set aside a sliver of the huge tract of plantation land it owns in Labu and its property arm will build KLIA East@Labu by 2011 at a cost of RM1.6bil, minus land cost.

The multinational will then sell the terminal to either AirAsia or a consortium led by AirAsia.

It’s not difficult to understand why Sime Darby is involved in the venture.

It wants the terminal and its ancillary facilities to become a catalyst for its Vision Valley development.

This Vision Valley master plan of housing, recreational, wellness and health facilities is aimed at meeting the needs of the Klang Valley population which is set to grow to 10 million by 2025.

Two of the main supporters of the KLIA East@Labu have been the Negri Sembilan and Malacca state governments.

Both these states know that they will benefit from the economic activity generated by the terminal while Malacca is likely to get a stronger inflow of tourists.

Sources said several other sites for the new LCCT at the present KLIA site were proposed but were found to be unsuitable.

The site at KLIA North was not suitable because the height of the ERL track makes it impossible to develop it there while the swamp soil condition at KLIA West is too costly and time consuming to develop.

How will KLIA and KLIA East@Labu be connected?

·A 7km branch road will be built to link KLIA East@Labu to KLIA and the North South Expressway.

·A 7km ERL link is proposed from KLIA to KLIA East.

·A bus hub will be built at KLIA East

·A 3km KTM Komuter railway line is being proposed from the railway station in Labu.

All the costs for building the airport, road and rail links will be privately financed.

Where is KLIA East@Labu?

About 8.6km from the KLIA main terminal building.

By road, the distance from KL’s Golden Triangle to KLIA East is 50km, compared with a distance of 78km to KLIA.

With the new terminal, flying low cost carriers will never be the same again. It can only get much better.

AirAsia X keeps hiring as London route seats snapped up

Malaysian budget carrier AirAsia X said it can weather the storm of a sharply deteriorating global economy and is hiring pilots to expand its routes to China, India, South Korea and Japan.

Chief Executive Azran Osman Rani said that while it was a challenging period for the aviation industry as many countries slip into a recession and carriers go bust, there were "a lot of business opportunities for us."

Bookings for its direct London flight on its leased Airbus 340-300, due to begin March 11, were overwhelming, he said, with 30,000 seats sold.

Demand was great as ticket prices cost about 2000 ringgit (A$838), less than half the price of a regular non-budget flight.

AirAsia X will fly five times a week between the Malaysian capital Kuala Lumpur and Stansted Airport on the outskirts of London.

Azran said AirAsia X was looking to expand its routes in 2009 into northern India including New Delhi, Amritsar and Mumbai, and to Beijing. In 2010 it aims to target South Korea and to Tokyo, Hokkaido in northern Japan and Kyushu in the south.

Azran said it was taking on new staff for its expansion. "We are still hiring pilots and cabin crew despite the tough economic outlook next year," he said.

AirAsia X, which currently flies to Australia's Gold Coast, Perth and Melbourne, and Hangzhou in China, will end the year with about 362 million ringgit in sales.

It aims to expand sales tenfold to one billion dollars by the end of 2010, despite the global slowdown.

Azran said the main challenge amid the uncertain global outlook was "to effectively scale up the scope of our business while keeping the lid on costs."

He said that oil prices, which have sunk sharply in recent months, were not expected to surge in the short and medium term.

The carrier currently has three A330-300 aircraft, one of which is leased. It has placed an order for 25 more by 2013, of which Airbus has delivered two.

Richard Branson's Virgin Group has taken a 20 per cent stake in the airline and the British billionaire has vowed to ensure that it turns a profit.

Airasia's New Call Centre To Be Ready By Feb 15

KUALA LUMPUR, Dec 30 -- AirAsia expects its world-class integrated call centre in Kuala Lumpur, currently under construction, to be up and ready for service by February 15 next year.

The centre will cater to all its operations in the country and will be capable of dealing with any crisis situation, the low cost carrier company said in a statement here Tuesday.

"As we are presently undergoing migration, our call centre is operating with limitations and thus you may find the lines to be heavily congested," said its group chief executive officer Datuk Seri Tony Fernandes.

The airline's present call centre receives an average total of 15,000 calls a day.

Amid the congestion, AirAsia is encouraging its customers to utilise its website at AirAsia.com where they will be able to perform a host of tasks and transactions related to their flight bookings.

"We sincerely apologise for the frustration caused by our call centre congestion. I assure you that you will have a whole new experience with our new international call centre when it's up and running in six weeks," Fernandes said.