Monday, July 6, 2009

AirAsia inks deal with sports team amid negotiations for US route

28 June 2009

SEPANG, Malaysia – While leading Asian low-cost carrier AirAsia has yet to fly to the US, it is already boosting its brand among Americans by announcing a partnership with football team Oakland Raiders.

As the Raiders' sponsor in the National Football League playoffs, AirAsia considers the deal as one of its catalysts in promoting the AirAsia brand, particularly in the US.

AirAsia Group chief executive officer Tony Fernandes said, "We are very excited to associate ourselves with a great, iconic team like the Oakland Raiders as they reflect our own endeavor for excellence. This is the latest step we are taking to boost our brand globally."

"The main benefit of this partnership is reaching a large market. We see California as a big market for us. In the east coast of US, there is New York. This is also a great stepping stone to do flights to San Francisco and Hawaii," Fernandes added, noting that AirAsia always has a long-term plan.

Highlighting the sponsorship deal was an AirAsia A340 airliner called "Xcellence" which sports the Raiders logo, a picture of some of its players and other trademarks such as the team's shield (on the plane's tail fin) and an eye patch (on the plane's nose).

The new plane will fly into Oakland in September for a kick-off game but it will take a while before AirAsia actually makes regular landings in the US.

Azran Oman-Rani, CEO of AirAsia X, told that they might fly to the US by next year although this will depend on the progress of negotiations.

"We target to fly to the US starting next year but we don't know yet where and when exactly. We have to see which airports would be willing to work with us and we have to ask for approval from the US government," he said.

According to him, AirAsia X's new A340 plane, which currently plies the London-Kuala Lumpur route, "symbolizes our ambition to open up the North American market as our future growth area."

AirAsia services the most extensive airline network in Asia, with 122 routes covering over 70 destinations. With operations based in Malaysia, Indonesia, Thailand and in Clark in Pampanga, it has carried over 70 million passengers to date, and has grown its fleet from just 2 aircraft to 80.

AirAsia X is its low-cost, long-haul carrier that flies to destinations in China, Australia and the United Kingdom.

Bucking the trend

Despite the ongoing global economic slump and the growing swine flu scare that have taken out many other airlines, Azran said AirAsia will remain aggressive in expansion and will continue to buck the downturn.

He added that amidst the crisis is one silver lining: "It's easier to catch a bigger market share because other airlines are cutting back, stopping their operations and reducing flights."

"We've seen many crises from 2001---SARS, bird flu, tsunamis, earthquakes. Throughout, we have been flying. We believe that if we stop flying, it would be harder to catch up when things recover."

Azran noted that they remain true to their commitment to keep airfares low.

"We are not interested in increasing fares even when times are good. Our strategy is to keep fares affordable so more people could travel."

To do this, Azran said they will continue to bring down their operational costs and seek ways to earn extra money.

The partnership with Oakland Raiders is a good example. "We expect to earn from the sale of model airplanes, jersey caps, etcetera. If we earn extra, then we can offer cheaper fares," he said.

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