Thursday, July 9, 2009

AirAsia starts courier service

09 July 2009

AirAsia founder Tony Fernandes said the new venture would expand the low-cost carrier's non-airline revenue and help protect it from future oil-price spikes.

KUALA LUMPUR - BUDGET carrier AirAsia on Thursday launched 'Redbox', an express courier service it says will be 50 per cent cheaper than its rivals.

AirAsia founder Tony Fernandes said the new venture would expand the low-cost carrier's non-airline revenue and help protect it from future oil-price spikes.

'There is a huge untapped consumer market. I don't think many individuals use courier services,' he told a news conference.

Mr Fernandes said the Malaysian courier industry was worth 500 million ringgit (S$204 million) annually and that he intended to capture 30 million ringgit of that in the first year, a goal he said was 'easily achievable.'

The company is billing Redbox - named after the airline's signature colour - as the world's first low-cost courier service.

'It will build strong revenue, and bring costs down for business so they can be more efficient,' Mr Fernandes said.

Currently, 12 per cent of AirAsia's revenue is from ancillary services like food sold on planes, and Mr Fernandes is aiming to boost that figure to 20 per cent within the next few years.

AirAsia is partnering with Mail Boxes Etc, which will provide collection points for packages, and technology consulting firm DMSBT, which will establish an Internet service to track individual shipments.

Transport firm DHL will convey cargo to and from the airport.

Redbox will initially operate only within Malaysia, and next year extend to AirAsia's 65 destinations in Australia, Britain, China, India and Southeast Asia.

AirAsia refutes reports it is writing-off dues from two units

09 July 2009

PETALING JAYA: There will be no write-offs on the amount owed by Thai AirAsia (TAA) and Indonesia AirAsia (IAA) to parent AirAsia Bhd, said AirAsia group chief executive officer Datuk Seri Tony Fernandes.

This is in contrast to what some analysts are saying in their reports, which have suggested a possible write-off of RM603mil, of which RM248mil is from TAA and RM355mil from IAA.

As at Dec 31, 2008, IAA and TAA owed RM974mil and RM457mil to AirAsia respectively, while the amount owed by AirAsia to IAA and TAA was RM619mil and RM209mil respectively. Net borrowings due to AirAsia are RM603mil.

“A draft agreement is being prepared to ratify and seek approval from AirAsia shareholders at an EGM to be called on Aug 3 for the past and continuing financial assistance to the two units,’’ Fernandes told StarBiz.

This is necessary since the amount owed by the two 49%-owned associates exceeds the 5% threshold of AirAsia’s shareholders’ funds which stand at RM1.81bil.

TAA and IAA have paid-up capitals of 400 million baht and 180 billion rupiah respectively.

AirAsia has been funding the two associates since they began operations and the unwinding of fuel hedgings has had an impact, thus raising the level of their borrowings.

AirAsia, unlike many other airlines, decided to end its hedges when fuel price headed south.

Fernandes said the two units were now cash-flow positive and that they had been paying back some of their dues, but noted that it would take two to three years for them to fully pay their dues to AirAsia.

Things are looking much better since the group embarked on a change in the aircraft type and expanded routes.

“If anything, the losses in the recent past were also small and incurred due to geopolitical and market conditions,’’ Fernandes said.

“Our Indonesian operations are enjoying brisk sales as IAA is now flying to more international routes, especially to Singapore and Australia. Our Bali hub is also performing way above expectations. We are very bullish on both the countries and Indonesia is turning out to be politically stable.’’

The change in aircraft type was from B737 to A320, which is more fuel efficient.

“It is a turnaround story and by 2010, all the B737 aircraft will be replaced with the A320 and we will have phenomenal cashflow and benefit from this move,’’ Fernandes said.

Thai AirAsia has 14 aircraft (nine A320s and five B737s) while Indonesia AirAsia has 11 (seven A320s and four B737s). All these aircraft are leased from AirAsia.

“This year, TAA will get four more new A320s and IAA seven more and that allows them to expand further,’’ Fernandes said.

Part of the dues from the associates to AirAsia is from the cost of leasing the aircraft for their respective operations.

$99 Bali flights as AirAsia expands

8 July 2009

Low-cost airline AirAsia is offering Perth to Bali airfares from $99 to mark the addition of a second daily flight to this route.

The airline starts flying from Perth to Bali route from July 17 and said it would add a second daily flight from August 19.

Earlier this year people snapped up airline seats in just three hours after it announced it would operate on the route.

Regional head of commercial of the AirAsia group, Kathleen Tan, said the group was confident the Bali-Perth route would perform well.

“The huge response clearly demonstrates a demand for this connection. Likewise, there is a strong Indonesian community residing and pursuing studies in WA.

“Our loads for the forthcoming three months are running past 90% and we feel it is timely to add a second frequency. We stay true to our brand promise and are committed to offering the lowest fares and best value to our guests,” Ms Tan said.

“In addition, guests can look forward to our Bali hub as a gateway to connect to Bangkok, Singapore, Kuala Lumpur, Jakarta and another recently added popular tourist spot, Bandung, all at our amazing low fares.”

Promotional flights on the Bali-Perth route will be on sale from July 9-12 for travel from August 19 to April 30, 2010.

These seats are limited and available on a first-come, first-served basis and bookings can be made exclusively online via www.airasia.com and mobile.airasia.com

The new route will be served by AirAsia’s brand new Airbus A320 aircraft.

AirAsia aims to park 10 planes in Penang to start new hub

08 July 2009

This is in line with plans to make island its eighth hub

GEORGE TOWN: AirAsia Bhd’s plan to park more planes at the Penang International Airport can materialise faster if Penang has a low-cost carrier terminal.

Regional head of commercial Kathleen Tan said the budget airline operator had plans to park 10 planes in Penang, which was in line with its goal of making the island its eighth hub.

AirAsia has hubs in Kuala Lumpur, Johor Baru, Kota Kinabalu, Bandung, Bali, Jakarta and Bangkok; and a “virtual hub” in Singapore.

“This is our long-term plan to enhance the attraction of Penang as a hub. Presently the cost of operation in Penang is very high. If Penang had a low-cost carrier terminal, it would reduce our operation cost, and attract more travellers to fly from Penang,” she said in a telephone interview from Kuala Lumpur.

File pic of AirAsia aircraft at Kuala Lumpur International Airport's low cost carrier terminal in Sepang. Malaysian budget carrier is to park 10 planes in Penang and make Penang its 8th hub.


Tan said presently the Penang airport imposed higher international and domestic taxes, at RM51 and RM9 compared with RM25 and RM6 respectively charged at the Low-Cost Carrier Terminal in Kuala Lumpur.

She said from July 31, AirAsia would station one plane in Penang for the four weekly flights to Hong Kong. The round trip fare is about RM200.

“We are engaging a support team comprising pilots, engineers and technicians to be based at the Penang airport,” she said, adding that AirAsia was also adding a second flight to Singapore from Penang starting July 31.

AirAsia share sale may go to single investor

07 July 2009

Tony Fernandes, CEO of Malaysia low cost carrier AirAsia, says the 20% share issue the airline plans could go to a single investor.

"(A single investor) is an option," says Fernandes in an email to ATI. "Many have approached us for the whole twenty per cent."

Fernandes says he has no preference between a local or foreign investor, and confirms that she share sale is to reduce debt.

In late June the airline issued a brief announcement to Bursa Malaysia, Malaysia's stock exchange, saying it plans to issue new shares, equivalent to 20% of its issued and paid-up capital.

Further details will be made available upon appointment of the proposed agents, it said.

AirAsia currently has over 100 Airbus A320s on firm order and is now working to get financing for some of these.

AirAsia up on plan to sell shares to one fund

07 July 2009

AirAsia Bhd, Southeast Asia’s largest low-cost airline, rose for the first time in three days in Kuala Lumpur trading after saying it may sell all of a planned new share issue to a single investor

The stock added 1.8 per cent to RM1.12 at 9:04am.

AirAsia, which is planning to issue as much as 20 per cent more stock, is considering selling the stake to a single institutional fund or a strategic investor as part of a plan to reduce debt, chief executive officer Datuk Seri Tony Fernandes said in an interview late yesterday.

A strategic investor might be a private equity firm or a partner in the tourism industry, said Fernandes. He said he plans to meet potential buyers this month and the share sale should be completed in early August.

AirAsia hits the ground running


07 July 2009

AirAsia’s 20-strong team of runners has competed in their first Gold Coast Airport Marathon event.

Staff from the airline’s engineering department, cabin crew, guest services and corporate culture teams joined AirAsia X ceo Azran Osman-Rani and over 23,000 runners in yesterday’s event in perfect weather on the Gold Coast.

Mr Osman-Rani said AirAsia’s participation in the marathon and the few days spent on the Coast would provide staff with a great experience of one of their most popular destinations.

“The Gold Coast was our first Australian hub and has performed consistently well over the past few years,” he said. “Some of our staff don’t have the opportunity to sample the lifestyle and culture of the places we are promoting to the Asian market and we hope that by participating in the Gold Coast Marathon, our staff will experience things first hand, have a unique experience and enjoy themselves.”

Singapore’s costumed celebrity runner Jenap M. Said; Gold Coast Airport Marathon ambassador Robert de Castella; AirAsia X ceo Azran Osman-Rani; and Great Barrier Reef Island Caretaker Ben Southall.

Tuesday, July 7, 2009

AirAsia seeks shareholders’ approval

07 July 2009

PETALING JAYA: AirAsia Bhd is seeking shareholders’ approval and ratification for the provision of financial assistance to its Indonesian and Thai subsidiaries.

It told Bursa Malaysia yesterday that the ratification was for the provision of RM355mil and RM248mil to PT Indonesia AirAsia (IAA) and Thai AirAsia Co Ltd (TAA) respectively.

Both companies are 49% owned by AirAsia.

As at Dec 31, 2008, IAA and TAA owed RM974mil and RM457mil to AirAsia respectively, while the amount owed by AirAsia to IAA and TAA was RM619mil and RM209mil respectively.

AirAsia also said it was proposing to enter into financial assistance agreements with IAA and TAA to formalise the provision of financial assistance to IAA and TAA, as provided by the total net amount owing to AirAsia.

AirAsia Announces New Penang-Hong Kong Route

06 July 2009

KUALA LUMPUR-- AirAsia on Monday announced a new service from Penang to Hong Kong starting July 31 as part of the budget carrier's plan to establish Penang as its eighth hub.

According to the airline, the service is timely and will be well received by many as it has great advantage due to its extensive route network and low fares.

AirAsia is also increasing its second frequency to Singapore from Penang to cater to the demand from leisure and business travellers.

The new sector to Hong Kong and the introduction of second frequency to Singapore opens for sale for the booking period from July 7 to 12 for the travel period from July 31, 2009, to April 30, 2010.

AirAsia said in a statement today that it will be offering an all-in-fare from RM99 to Hong Kong and RM51 to Singapore to mark the launch of these sectors.

The airline, through its holiday division GoHoliday, is offering guests free rooms upon booking at its partner hotels in Hong Kong.

The promotion is valid via goholiday.airasia.com and available on a first come, first served basis.

"At a time when some airlines are cutting routes and downsizing capacity, we are breaking the trend with our aggressive expansion plans, increasing frequencies where there is proven demand, which certainly is for the Penang-Hong Kong and Penang-Singapore routes," said the airline's regional head of commercial, Kathleen Tan.

"We are also hoping to introduce new sectors to Shenzen and Guangzhou from Penang in the future," she said.

Tan said the Hong Kong route formed part of AirAsia's strategy to establish Kuala Lumpur as a gateway to other Asian destinations.

The airline's relationship with its long-haul affiliate AsiaAsia X will also connect traffic from Australia and the United Kingdom to the Chinese cities, she said.

AirAsia Chief Denies Newcastle Purchase

04 July 2009

KUALA LUMPUR-- AirAsia chief executive officer Datuk Seri Tony Fernandes has denied that the low-cost airline (LCC) is keen on buying English football club, Newcastle United.

Contacted by Bernama on the matter, Tony Fernandes said: "We are not either directly or indirectly part of the said Malaysian-led consortium intending to purchase Newcastle United. We deny any involvement whatsoever."

A report published today in a Malay daily, Harian Metro, said AirAsia had confirmed that it was in discussions to become the biggest shareholder of Newcastle United.

The daily had quoted an unnamed source within the airline as claiming Tony had an interest to buy a British soccer club.

The British media Friday reported that a Malaysian consortium led by several well-known businessmen had put in a 80m (RM456 million) bid to take control of Newcastle or 'The Magpies' from its owner Mike Ashley but they were bound by non-disclosure agreements.

What the captains of industries say

04 July 2009

STARBIZWEEK hosted a roundtable at Invest Malaysia 2009 with captains of industries to gauge their views on the measures unveiled by Prime Minister Datuk Seri Najib Tun Razak at the event as well as to pool their thoughts on what other issues need to be tackled as Malaysia takes the bold step to move towards a new economic model to raise the bar on the nation’s growth.

The roundtable participants included AirAsia Bhd group chief executive officer Datuk Seri Tony Fernandes, Malayan Banking Bhd president and CEO Datuk Seri Abdul Wahid Omar and Bursa Malaysia Bhd CEO Datuk Yusli Mohamed Yusoff. The session was moderated by The Star’s managing editor P. Gunasegaram.

StarBizWeek: One of the measures announced involves the demise of the FIC (Foreign Investment Committee). What is your opinion?

Wahid: It’s a very good move. To remove something that was there for 30 years takes a lot of courage. While the FIC had served its purpose, as we get into a new environment, we need to adapt and make policy changes that are relevant for the future.

In this globalised world, it is important for some of these hurdles, whether actual or perceived, to be removed.

Do you expect more companies will be interested in listing on Bursa Malaysia with the removal of the requirement for a 30% bumiputra allocation for IPOs?

Yusli: This certainly levels the playing field for IPOs. We previously had situations where promoters have said they would prefer not to list in Malaysia as other markets do not have such conditions. And it has been very difficult for us to counter that, especially when these companies had choices on other listing destinations.

It is now no longer an issue.

Tony, as an entrepreneur who started up an airline and then listed it on Bursa, is it some comfort to you that you now no longer have to keep checking if you meet the bumiputra equity requirement?


Datuk Seri Abdul Wahid Omar and Datuk Seri Tony Fernandes at The Star Roundtable.


Tony: Yes. It’s just one more obstacle removed that was an issue in the past. It makes it easier and I think it’s a bold and good move. Anything that makes business simple is positive.

The other part of the Prime Minister’s speech that you may be interested in is about GLCs (government linked companies) not crowding out the private sector. I know that has been your beef in the past. What do you think might come out of this one?

Tony: I’m going to carry this speech with me for the rest of my life ... got it underlined as well! (laughs)

It’s what I’ve been asking for seven years. There’s space for all of us. I echo Yusli’s comments but in a different way – I’ve also always wanted a level playing field. Today, if that were fully implemented, then AirAsia would be able to fully unleash its potential. But AirAsia is only one of the many companies out there that could be bigger or better given a level playing field.

And so, we are thrilled by it. Some people say, “Will it be implemented or not?” You know, at least it’s been said. I think that’s a massive step forward.

But I don’t think crowding out is the main issue. I think (the issue is) where the regulators are very close with the incumbent and there’s a natural tendency to protect the incumbent as opposed to looking at the whole national objective. GLCs should be allowed to compete fairly and may the best man win. We have GLC banks and we have private banks and the industry is very healthy. They have gone on to international expansion.

So, crowding out is not an issue for us. It’s about having a level playing field and being well regulated so that the industry can grow.

Obviously, you are not very comfortable with Malaysia Airlines and Malaysia Airports (MAB) being owned by the same shareholder?

Tony: No, I’m not. I think, I’ve been very public about that. You are not going to get a level playing field there. Or, they can be owned (by the same people) but there must be an independent regulator.

Right now, nobody will know if I’m asking for too much or if MAB is charging too much. There’s no independent body looking at it and deciding on the right pricing mechanism.

What else is there to be done

What the PM announced today is the start of a series of measures that will probably be announced over a period of time. What more would you want to see the government do?

Wahid: Keep on doing the right thing. I’m all for creating a more conducive business environment, not at the expense of any particular segment or community.

Tony: We’d love to see a lot more liquidity in our stock market to create more excitement. If you look at the shares traded for Malaysia Airlines versus the shares traded for AirAsia, it shows a clear liquidity issue. And we need more independent boards.

Any specific ideas of how to increase the liquidity?

Tony: The guys who own it should sell down more shares to the public.

But there’s always the question of timing and pricing, right?

Tony: When is the right time?

Yusli: It’s a chicken and egg problem. A company’s value is unlikely to increase if it is too tightly held. So, everything needs to be done together. We need a very good business model, a good management team and adequate free float of shares.

(Inadequate) free float is an issue raised by many foreign investors. They say Malaysia has many good companies but it takes them too much time and too long (to trade shares). The friction cost of buying into shares is too high compared to other markets.

At the same time, when they want to sell the shares, it also takes awhile.

Liquidity is an issue and it’s a prime concern to us at the exchange.

Free float and GLCs

Wahid: Sometimes the definition of government-linked companies is too wide.

If you define government-linked investment companies to include EPF (Employees Provident Fund) and PNB (Permodalan Nasional Bhd), these entities are not government per se. For example, in the case of Maybank, the shares are mainly held by unit trust funds managed by PNB as opposed to PNB per se. So, it is owned by over three million people through the funds.

What is important is how you govern these entities. For many, there is a separate board that’s very much independent and the main shareholders are not on the board but they make sure they vote in people who have the ability to serve on the board.

The board has the flexibility to appoint management and go through the selection process, nomination and so on.

Tony: That’s exactly what I’m saying. The banking industry is a model example of how private companies and government-linked corporations can work together. That’s what I’m advocating.

Yusli: That’s why it’s very important to have the right environment. For the government, it should be facilitating and enabling.

We need to create a more dynamic and entrepreneurial environment. If there is too much government intervention, then it is curtailing. People will only do business if they have links with the government and I think that’s not the right kind of business environment we want to have in the country.

Wahid: The issue of free float is not just confined to GLCs but also many family-owned companies in Malaysia. That will have to be dealt with at the same time.

One of the main criticisms of the NEP was that the bumiputra equity requirement was a major hindrance to growth. Now there’s no such quota. The FIC has been disbanded which means anybody who wants to invest – foreigner, local, bumiputra or non-bumiputra – in a company no longer has to worry about constantly satisfying the equity requirement under the previous guidelines. What does this do for Malaysia, really and where do we go from here?

Yusli: Well, again it levels the playing field.

Tony: Someone else said it quite well – it brings us back to where everyone else is. It doesn’t bring us forward, but it brings us back (to the same level).

Yusli: We are very competitive as a country here.

Tony: But there was always that stigma. Now, we have removed the stigma so that I can go out there and market efficiently.

Wahid: It is a matter of perception. That policy had been there, but there have been so many flexibilities through extensions and waivers. At the end of the day, it was a case of `if it isn’t very effective, let’s remove it”.

Stirring entrepreneurship

What do we do next to improve the competitiveness of entrepreneurship in the country, which has admittedly, not been there?

Yusli: Entrepreneurs will always be where there are opportunities. Tony is a classic example, he saw an opportunity.

We must allow people to fail as well. We have to create an environment where entrepreneurs take risks. But, we must then allow them to come back up.

If we create an environment that is too safe and returns are going to be capped because of this, then we will kill the entrepreneurial spirit.

So, what needs to be done for that?

Tony: From an entrepreneurial standpoint, access to capital. One of the great things about America is that they keep on coming up with new technologies and these guys always had access to capital.

I’ve tried to get that capital before and it’s a nightmare. Some of them actually said they want security!

There has to be a mindset change that if you want entrepreneurs, you are going to have to take some risks and be prepared to lose.

Perception is very important. Entrepreneurs may say they can’t make a living here, so they go abroad. That leads to a huge brain drain. When I give talks abroad in universities, there’s one section that is always louder than the others and it’s always the Malaysians. Then I wonder, “why are they not here?”

It’s easy to say you want innovation but if you don’t create a conducive environment and there’s no freedom of speech etc, you will not get it.

Yusli: With the new ACE market we are setting up in August, you don’t even need a track record. If you can get a sponsor, you can tap the capital market.

Wahid: What is lacking is the variety of funds – venture capital funds, seed capital and so on. In many markets, those who put up this capital are not the government itself, but also the private sector.

It would be great if businessmen who have done well in their segment could allocate a certain portion of their wealth into high-risk capital for other entrepreneurs.

The taxi dilemma

What else?

Tony: There should be less regulation in some areas and more freedom of pricing to allow more people to earn a decent living and invest in businesses and grow the businesses. I think politics and business sometimes get too intertwined.

Wahid: So, (if) the government steps back a little bit, you may get all these entrepreneurs ...

Tony: (But) who’d want to invest in a taxi business, right now? As an extreme example, that’s the problem of inefficiency, poor quality and under-investment. In the end, who has to bail it out? The government and the taxpayer when the money can actually go to more productive areas.

What you are talking about essentially is the licensing of the industry itself.

Wahid: That’s a very important point. If you don’t allow economic prices to be in operation, then it’s a problem. The taxi fare in Malaysia must be the lowest in the world and it’s not sustainable. Because of the low price, how do you expect people to actually invest in proper vehicles, maintenance and so on. And also you get all these touts, people being fleeced.

If you can allow the price to be set at a more economic level, people can make a decent living and facilities can be upgraded and services improved.

Tony: Ultimately the market will decide. If you charge too much for the taxi, no one is going to use it anyway.

Wahid: But on the other hand, the government is also concerned about the cost of living. You increase the fare, it will affect consumers ... For the New Economic Model, if we can actually migrate to a high income model, then these aspects will be addressed.

Setting the tone

With the measures announced today, do you expect to see investors or businesses flocking in or is there so much more that remains to be done to pitch our appeal?

Tony: It’s a start. It gets rid of one major impediment and brings Malaysia back to an even keel.

Secondly, I don’t believe it is all about foreign direct investment. I think it’s about our own people creating economic value and growing and building more AirAsias, IOIs, a bigger Maybank, a bigger CIMB ... We can’t just rely on foreigners coming in. Let’s be frank; they are only loyal to the lowest cost providers. We have got to look out for ourselves.

When you say investors, everyone thinks of foreign investors. There is a lot of local money here. And there is a lot of local money outside, which we need to bring back.

Yusli: The ability for investors to invest has to be made easy. And take off whatever your procedure is. Because when we aspire to move towards this new economic model, it does require a lot of investment. So businesses today are probably doing medium or low cost or low value type of businesses. We need to reinvest so that they can move up the value chain. So any reforms to enable that to happen faster, cheaper, easier will help.

Wahid: It is the job for the government to make sure the economy prospers. The ultimate beneficiary must be the people and so, social well being is very important. This is why we are looking at increasing our income per capita. It is no secret that KL has actually the cheapest property in terms of the Asean countries. It doesn’t make sense; we are much better off economically compared to many of our neighbours and yet, our property prices in the capital is very much lower. Once we are able to remove this, then the normal economic pricing level will come back. That’s when people will start to pay proper prices for the services.

Any further thoughts on what the Prime Minister has said today?

Tony: The timing is right. Recession is a great time to re-evaluate. We should grab this opportunity to look at the mirror, relook at what we are good at, capitalise on that, look at what we’re bad at and change it and move forward.

Wahid: I am comforted by the move to make the capital market more liberal and the enforcement mechanism more solid because there had been times when people had actually flouted the law and got away with it through various impediments. That greater power is given to the SC to prosecute, I think is most welcomed.

Yusli: The reform programme must continue. The FIC announcement is huge from our market’s perspective but we need to move on and address some of the other issues, like liquidity. We need to engage a lot of stakeholders – the government is one of them and the others and we need to convince people about our selling points.

The Prime Minister has announced a slew of measures since he took office not too long ago. As captains in your respective industries, what is the tone he is setting which you think most stands out?

Tony: The desire to change and make the hard decisions. He really wants to make an impact. And to change for the better.

He’s only been there (PM) for 89 days and a lot has happened. Willingness to change is key. And there is sincerity in the desire to make Malaysia a much better place.

Wahid: In terms of the number of measures, I don’t think I have ever seen so many measures being introduced in a single speech. That stems from a desire to change. And it is actually our duty to support him in this journey. This is not an easy period to introduce all these changes in this environment. It takes a lot of courage to do that. And that courage must be supported by people like us to actually implement this.

Yusli: It is the seriousness of the reform programme, which I think is important. And it needs to be followed through. One of the biggest criticisms or comments about Malaysia has always been that we are good on announcements but when it comes to implementation, we do not follow through. So what the rest of us can do is to make sure that we are also in the same reform programme.

Malaysia doesn’t have a choice. Otherwise we are going to be stuck in this middle income trap, between a low-cost economy and developed economy. We have to make that shift.

Dire need for reform in education

Tony: Someone from the panel (earlier) talked about where all the money from Petronas went. I have no idea but the money should go into productive (areas). Subsidies should go to the right people. With all due respect, when fuel was subsidised, it was crazy for the three of us to receive subsidised fuel. I’d rather that money go into education. I think in this day and age, it’s ridiculous to have afternoon schools. It’s very disruptive to the child. The afternoon should be play time for children to be creative and innovative, whether it’s art, music or drama.

Malaysia is 10 years away from being developed and we don’t have enough schools?

This is where how best we spend money is important as opposed to providing subsidies everywhere and not having enough money to build schools.

Yusli: Schools should be built right the first time. We built many schools. But not all are being used properly.

What do you have to say about the education system?

Yusli: If we want to create a quality population, we need to start with the young. It has to start from a very early age – from kindergarten all the way up. Otherwise, our graduates will not be employable for whatever reason. Focus should be on quality,

Wahid: One of the major differences at the moment is the people in the profession. We had the benefit of high quality and dedicated teachers then. Over time, we have not invested enough in teachers.

Tony: Back to my taxi argument – how much are we paying teachers? Taxi drivers are not getting enough, so you get the worse of the worse who are not employable anywhere else.

Would you rather move into the teaching profession or work for Maybank? This is the problem that has caused us to lose (talent) everywhere. How much do we pay? What quality do we get for that? That is a major issue.

Yusli: From the aspect of the new economic model, for Malaysia, it should be more about investing in software. In terms of hardware, we hear about countries having the first world infrastructure but second or third world mentality. We need to ensure that we don’t fall into that category. We need to have first world infrastructure and first world thinking. And that to me, is the by-product of education.

Tony: The product we’re getting from schools is not (that) bad ...

But that’s because you’re a preferred employer ...

Tony: Well, we have had to work on our product, change the thinking process and get more expressions out there. We have 6,500 brains working for us, as opposed to just 10 brains and the rest just implementors. That is our secret in AirAsia.

But the school system has to change and I agree with Wahid, that the teachers are key attributes. How many kids now have extra curricular activities? Where do you get your first management experience? On the sports field. Where do you get your first team work experience? On the sports field. Where do you get your first chance to express yourself? In the debating society, or the drama class. That’s where we’re lacking. The teachers then did a few things – they’d teach in the morning, coach football in the afternoon, or they’d run the drama class.

What about closing the wide gap between the government and private schools?

Tony: Absolutely. There shouldn’t be a second class and a first class. Sweden has a fantastic system. Where there’s a very strong private system, there’s a very good public system which is comparable and it’s up to you to choose. They should run concurrently ... so as not to burden the state with building so many schools and forcing everyone to go through that system when there could be choices available.

Fair regulation and simplifying bureaucracy

Can you elaborate on the point about less intervention from governments and fair regulation?

Tony: We have MCMC (Malaysian Communications and Multimedia Commission) which does a very good job regulating the telecommunications industry. Celcom, Digi and Maxis all compete but no one has a huge advantage over the other. The same for the banking industry that is regulated by Bank Negara. Where there is fair regulation, there is effective pricing controls.

So, in the case of aviation, you are saying there is no single regulatory body?

Tony: That’s confused between MOF (Ministry of Finance) and MOT (Ministry of Transport), and then sometimes, EPU (Economic Planning Unit). There is no aviation blueprint. How do we make the ministries more efficient? For example, banking is controlled by one body, more or less. But in tourism, which is a big contributor, there are so many different parts. Taxi is a key component of tourism and hotel development. But many of these segments come under various ministeries. What I would like is a simplification of the bureaucracy so that it is easier to do business.

Wahid: We have time. From the planning perspective, we are at the tail end of the 9th Malaysia Plan. When we get into the 10th and 11th Malaysia Plan leading up to 2020, there is opportunity for the government, for the new leadership, to spend more time to articulate what we want to achieve by 2020 and how do we get there.

I think there will be a lot of engagement with the government and the respective ministries and to give them ideas and suggest solutions.

I’m happy that this government is a listening government. There’s a lot of engagement behind the scene and a lot of input is being solicited.

AirAsia eyes more destinations in Asia Pacific, Middle East

04 July 2009

AirAsia Bhd, the low cost carrier which services an extensive network with 122 routes covering more than 65 destinations, is seeking to serve more major and small cities in Asia-Pacific and the Middle East.

Through its corporate philosophy of ''Now Everyone Can Fly'', the leading low cost airline in Asia says it is committed to serve three billion people who are "currently underserved with poor connectivity and high fares".

"We will go anywhere over four-hour destinations for our AirAsia X and below four-hour destinations for AirAsia," said AirAsia chairman Datuk Aziz Bakar in an interview with Bernama.

AirAsia X is the low cost long-haul affiliate carrier of AirAsia that currently flies to destinations in China, Australia and the UK.

The carrier is planning to add two to three new routes before end of this year in China such as Xi'an and Chongqing, and four new routes in India comprising Bangalore, Trivandram, Chennai and Cochin, Aziz said.
He said the airline has applied to fly into South Korea, and is also eyeing other destinations in the Middle East and Australia like Sydney.

"The time is right for us to fully take advantage of the current economic downturn and be prepared when the economy turns around.

"I think many full service airline passengers are turning to non-frill service because they tend to spend less and save more," he said.

Aziz said AirAsia was also promoting its services aggressively to stimulate demand.

"The demand is there and people will fly if they get cheap fares. Passengers only pay the ticket but when they pay for food, we have to make sure it is value for money," he said.

Aziz said AirAsia''s average load factor was about 73 to 75 percent in the last three months, while AirAsia X had been getting very strong load factor.

The London flight's average load factor was between 80 and 83 percent.

Asked on the impact of influenza A (H1N1) virus, he said the airline''s forward booking was not affected very much in the last two months but it was continuing with its aggressive marketing.

"There is H1N1, but if we are to offer 5,000 free tickets to fly to any destinations within Asia, I'm sure it would be fully taken up within three to four hours," he said.

Commenting on the new low-cost carrier terminal (LCCT), Aziz said AirAsia hoped the airport would be completed on time to accommodate its expansion plan.

"We can't just take the delivery of the new aircrafts with no place to park," he said.

AirAsia also hopes the commercial terms are agreed and accepted as soon as possible, he said.

It is understood that the new LCCT will be built by Malaysia Airports Holdings Bhd and work is expected to start this month, and scheduled for completion by the third quarter of 2011.

Taipei flyers on AirAsia welcomed to Malaysia


03 July 2009

Malaysia’s tourism officials and AirAsia greet guests from Taipei

AirAsia held a ceremony at Kuala Lumpur International Airport on Wednesday to celebrate the landing of its first flight and guests from Taipei.

Flight D7 2673 landed at 8.35 pm with 335 guests on board and was greeted by the Minister of Transport Malaysia YB Dato’ Sri Ong Tee Keat and Minister of Tourism Malaysia and YB Dato’ Sri Dr. Ng Yen Yen.

AirAsia Group CEO Dato’ Sri Tony Fernandes and Regional Head of Commercial Kathleen Tan and H.E. Tseng Ching Yuan, Representative of the Taipei Economic and Cultural Office in Malaysia were also present.

“Taiwan is among our key tourist source markets and I look forward to seeing the Kuala Lumpur-Taipei route attract more tourists from Taiwan to Malaysia and enhance our tourism performance” said Ng Yen Yen.

“Taipei embraces modernity while retaining its traditions and old world charm which I anticipate would be highly popular for both business and leisure travelers” said Fernandes.

“We expect to see excellent traffic from Asia, Europe and Australia feeding into our flights connecting to Taipei via our hub in Kuala Lumpur”

AirAsia’s low-cost long-haul affiliate AirAsia X operates an Airbus A330 on the new Kuala Lumpur–Taipei route which offers 5 direct flights weekly.

AirAsia launches daily Brunei-Kota Kinabalu flights

03 July 2009

From L-R: AirAsia Group CEO Tony Fernandes, Malaysian Transport Minister Ong Tee Keat, Minister of Tourism Malaysia Dr Ng Yen Yen and AirAsia Director Fam Lee Eee receive passengers from AirAsia's inaugural flight from Taipei to Kuala Lumpur. - COURTESY OF AIRASIA

SEPANG - AirAsia continued to boost its East Malaysia connectivity by launching another international route from Kota Kinabalu to Brunei Darussalam, according to a press release.

The new service will be the airline's sixth international service from Kota Kinabalu and second international service from Brunei.

The daily flight from Kota Kinabalu and Brunei, opens for sale for the booking period from July 3-12th July for the travel period from September 9, 2009 to April 30, 2010.

In conjunction with the launch, AirAsia will be offering all-in-fare from 29 ringgit one way.

Kota Kinabalu is AirAsia's second and biggest hub after Kuala Lumpur, serves nine domestic routes that include Penang, Johor Bahru, Kuala Lumpur, Kuching, Sibu, Miri, Labuan, Tawau, Sandakan, while the international sectors are Macau, Shenzhen, Clark, Jakarta and Singapore.

The flight for the new sector, which is set to commence on September 9, will cater to the emergent demands from East Malaysia.

Meanwhile, AirAsia's first guests from Taipei arrived at the Low Cost Carrier Terminal (LCCT) of the Kuala Lumpur International Airport on July 1 to a truly Malaysian welcome.

AirAsia Celebrates Its Inaugural Kuala Lumpur-Taipei Flight

01 July 2009

SEPANG -- AirAsia's first flight from Kuala Lumpur to Taipei departed at 10.00 am this morning, carrying 338 guests.

AirAsia's Group Chief Executive Officer, Datuk Seri Tony Fernandes said the flight had 88 percent load, carrying guests which included president of the Malaysian Friendship and Trade Centre in Taipei, Datuk Abdullah Mohd Salleh and AirAsia X CEO, Azran Osman-Rani.

AirAsia also celebrated its inaugural flight from Tapei Wednesday with touched down at 8.35 pm at the Low Cost Carrier Terminal (LCCT) of the KL International Airport (KLIA) with 335 guests on board.

"The new Kuala Lumpur-Taipei route with five direct flights weekly operated by AirAsia's low-cost long-haul affiliate, AirAsia X, received a remarkable response from travellers when it opened for sale on April 24, 2009," Fernandes said at the Kuala Lumpur-Taipei inaugural flight celebration to receive AirAsia's first guests from Taipei.

Minister of Transport, Datuk Seri Ong Tee Keat and Minister of Tourism, Datuk Seri Dr Ng Yen Yen were also at the event to welcome the visitors.

According to Fernandes, all promotional seats for the Kuala Lumpur-Taipei flight services offered at RM101 per way were snapped up within 12 hours after the sales announcement, with an estimated 80,000 guests flying the route until the year's end.

"This represents an average load factor of over 80 percent on the 383-seater Airbus A330," Fernandes said.

Fernandes also said there were no cancellation of flights with the H1N1 flu global epidemic and that sales were up since it abolished its administration fees.

"We are also starting new routes from Miri to Singapore," he said. -- BERNAMA

Refund policy for disrupted AirAsia flights

01 July 2009

AIRASIA passengers will get their money back if the low-cost carrier cancels flights or discontinues a route.

Transport Minister Datuk Seri Ong Tee Keat said for flights that were cancelled due to technical factors, passengers who bought their tickets early would get a refund in their credit card account or via a “credit shell”. A credit shell is a separate account, which is valid for three months, created for customers to pre-book other flights.

For routes which had been discontinued, Ong said passengers would be offered alternative routes.

“For passengers who have difficulties taking up the alternative route, or if there is no alternative route available, AirAsia will refund the ticket price to the credit card account or the credit shell,” Ong said in a written reply to Wee Choo Keong (PKR - Wangsa Maju).

However, Ong said there was no specific mechanism that provides a 100% guarantee to passengers for a full refund should the airline go bankrupt.

AirAsia placement to raise RM500mil

01 July 2009

Low-cost carrier hopes to complete exercise in two months

KUALA LUMPUR: AirAsia Bhd, which has announced its intention to do a 20% private placement, expects to raise about RM500mil from the exercise.

“The private placement is subject to approval from Bursa Malaysia. We hope to complete the exercise in two months.

“The idea is basically to try to raise around RM500mil to reduce our loans and have more cash,” chief executive officer Datuk Seri Tony Fernandes said on the sidelines of Invest Malaysia 2009 yesterday.

“There’s been a huge appetite for our equity. It’s always good to have cash, especially for an airline; hence we’ve decided to do a private placement,” he said.

Fernandes added the group would be working on the terms of the private placement.

“The first stage is to appoint bankers to see how best to do the exercise; whether it should be in two blocks of 10% each or a straight 20%,” he said.

Fernandes said its plan had been “warmly welcomed” and had received “very good feedback” although many people had been asking about AirAsia’s high gearing.

He said there was ample liquidity in the market and that it was a good environment to raise equity.

On the new measures announced by the Government, Fernandes said: “Today is a very big day for AirAsia. It’s what I’ve been asking for seven years and today we get a level playing field.”

“The Government has created a level playing field and, hopefully, this will prevent any excursion to hospital,” he joked.

Fernandes was admitted to a hospital recently after he fainted at the low-cost carrier terminal due to exhaustion.

Asked if the setting up of Ekuiti Nasional Bhd (Ekuinas) would help AirAsia, he said: “I think so. When we started seven years ago, we couldn’t get a cup of coffee from any bank for private equity.”

Fernandes said there was enormous talent in the country and there could be many more (like) AirAsia but lacked funding and hoped that Ekuinas would provide them support to grow.

“There’ll be mistakes but if they (Ekuinas) are too conservative in their approach, they will miss some fantastic opportunities,” he added.

AirAsia to sell new shares to raise up to $143 mln

30 June 2009

KUALA LUMPUR, Malaysia (AP) - Malaysian budget carrier AirAsia plans to sell new shares to raise as much as 500 million ringgit ($143 million) as it expands amid a global downturn, Chief Executive Tony Fernandes said Tuesday.

The airline will appoint bankers soon to sell the stock, which would expand the number of its shares by a fifth, in a share placement expected in the next two months, he told reporters on the sidelines of an investment conference.

"The key is that there is a demand for it.

It will put us in a good position. We will grow our market share and increase our capacity," Fernandes said. He didn't give further details.

Airlines worldwide are reeling from the global economic slump that has choked passenger and cargo traffic.

But AirAsia is increasing its routes and buying new planes, saying it is benefiting as travelers cut costs and downgrade to budget carriers amid the global economic slump.

In the quarter through March, it has expanded capacity by 19 percent as it launched seven new routes. Its net profit in the quarter hit a record 203.2 million ringgit ($57 million), up 26 percent from a year earlier.

AirAsia may sell as much as 20% more stock to cut debt

30 June 2009

KUALA LUMPUR: AirAsia Bhd, South-East Asia’s largest low-cost airline, said it plans to sell new shares to reduce debt in what would be the Malaysian company’s biggest share sale since listing in 2004.

The Sepang-based company plans to issue as much as 20% more stock, it said in a statement to Malaysia’s stock exchange after the close of trading yesterday.

Chief executive officer Datuk Seri Tony Fernandes said last month the company was considering raising about RM500mil in either a stock sale or rights offer.

AirAsia expects to take delivery of about 24 Airbus SAS planes annually from an order of 175 as the carrier adds routes to India and boosts flights to China.

The company will probably sell the stock in a rights offer to shareholders and use the money to lower its ratio of debt to equity, also known as gearing, Mohshin Aziz, AirAsia’s head of investor relations, said by phone.

AirAsia is “trying to reduce risk, trying to get structures where we can reduce the fluctuation impact of the markets, be it interest rates, forex, fuel if we can, to make the business more stable and predictable in terms of our cost component,” he said, adding that a price had yet to be set for the rights offer.

Based on yesterday’s closing price of RM1.15, the share sale could raise as much as RM546mil. – Bloomberg


AirAsia first airline in Asia to partner NFL Team

29 June 2009

Partnership with Oakland Raiders set to boost brand globally

For 7 years now, we have conquered the skies. For 49 years and running, they conquered the gridiron. Today, both stand together in unison, the start of an awesome winning combination.

AirAsia, the world’s best low-cost carrier and Oakland Raiders, three-time National Football League (NFL) Super Bowl champions, officially announced a winning partnership at the Low Cost Carrier Terminal today. AirAsia is proud to be a sponsor of an iconic NFL football team like the Oakland Raiders and this partnership is expected to be the catalyst in promoting the AirAsia brand in the United States.
AirAsia will also host a 1,000 FREE SEATS online contest in which one hundred students will be chosen at random for the opportunity to win one free ticket to a Raiders home game. Program and contest details will be made available on www.airasia.com and Raiders.com.
AirAsia Group CEO Dato’ Sri Tony Fernandes said, “This is a very meaningful moment for all of us in AirAsia. 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 actually the latest step we are taking, to boost our brand globally. Despite not operating into the US yet, AirAsia has already captured the attention of the US public and Aviation Week’s Laureate Award that we won recently is a testimony of that.”

Fernandes made history by being the first Asian to be recognized with the Laureate Award for the Commercial Air Transport category in March 2009, alongside other Laureate winners Alan S. Boyd, the first U.S. Transportation secretary, and the U.S. Coast Guard HH-60 Jayhawk, HH-65 Dolphin, HC-130 Hercules rescue teams.

“Being in NFL, a team needs to be performance-driven, and most importantly possess the passion to win. We relate very well to these traits, as they are the same qualities that drive us to excel, as recognized by 16 million air travelers who voted us as the World’s Best Low Cost Airline in the annual World Airline Survey by Skytrax,” concludes Fernandes.

The event also saw the unveiling of the Oakland Raiders aircraft livery, the airline’s latest campaign to establish its position as an innovative and trendsetting brand. At the same time, to inform the American public that through our extensive network, they could enjoy excellent connectivity via our hubs in Malaysia (Kuala Lumpur, Johor Bahru, Kota Kinabalu), Indonesia (Jakarta, Bali) and Thailand (Bangkok) to many fascinating and exotic destinations across Asia and Europe.

The livery is donned by AirAsia X’s latest Airbus A340 aircraft, dubbed ‘Xcellence’, matching the Oakland Raiders’ motto is ‘Commitment to Excellence’.

AirAsia X CEO, Azran Osman-Rani commented, “We're extremely proud to dedicate one of our A340s to the iconic Oakland Raiders brand. This trans-continental aircraft that plies our London-KL route symbolizes our ambition to open up the North American market as our future growth area. We'll be flying this aircraft into Oakland at the start of this coming NFL season, and I'm sure that the groundbreaking livery design will capture the imagination of millions of NFL fans and introduce them to our proud AirAsia brand and Malaysian heritage.

“By promoting Malaysia in North America, we hope to help bring more travellers from that part of the world to this country, which will help boost tourism and the local economy,” Azran said.

AirAsia X is a low–cost long-haul affiliate of low-cost short-haul AirAsia, and proudly the first Asian sponsor of an NFL team, and the owner of the world’s first NFL aircraft livery.

Present at the event was Oakland Raiders’ owner Mark Davis and Raiders legends Ted Hendricks, Rod Martin and Cliff Branch. The team’s famed Raiderettes (official cheerleaders of the Oakland Raiders) were also present, adding glitz and glamour to the event.
“We are absolutely thrilled with our new relationship with AirAsia,” said Oakland Raiders Chief Executive Amy Trask. “It is a unique and audacious relationship between two truly global organizations. As always, we eagerly seek creative opportunities to serve and interact with our fans throughout the world and we are delighted to work with AirAsia on this creative endeavor.”
The Oakland Raiders are a professional American football team formed in 1960, currently based in the city of Oakland, California. Their home ground is the Oakland-Alameda County Coliseum.

They currently play in the Western Division of the American Football Conference (AFC) in the National Football League (NFL).

In total, the Raiders have won 3 Super Bowl titles, the last of which was Super Bowl XVIII in 1984.

In its efforts to boost global branding, AirAsia has also partnered other popular sports entities. It is currently a partner of the AT&T Williams Formula One team and was previously the official low cost airline for the Manchester United Football Club.

AirAsia is also committed in supporting local teams and athletes such as the Olympic Council of Malaysia, UPB MyTeam FC, Neesha Thiru (Malaysia’s number 1 junior female tennis player), Axle Motorsport (competing in the Asian Touring Car Championship), Kimberly Yap (Malaysian tri-athlete) and the upcoming Borneo International Marathon 2009.

We have also supported the Malaysian Hockey Confederation by being the title sponsors of the previous 8th AirAsia Men’s Asia Cup held in Kuantan and the Women’s World Table Tennis Championships 2008 in Kuala Lumpur.

AirAsia’s latest effort is extending support to a Malaysian media sepak takraw team for an upcoming friendly match against the Thai media selection, in conjunction of the 24th World Championship Sepak Takraw King’s Cup in Thailand.

Cradling ‘Xcellence’: Oakland Raiders owner Mark Davis holds a model of ‘Xcellence’, the Airbus A340 dedicated to the Oakland Raiders presented to him by AirAsia Group CEO Dato’ Sri Tony Fernandes (with helmet) and AirAsia X CEO Azran Osman-Rani. With them are (from L-R) Raiders legends Cliff Branch, Rod Martin, Ted Hendricks and AirAsia Deputy Group CEO Dato’ Kamarudin Meranun.

From L-R: AirAsia Director Mr. Fam Lee Ee, AirAsia Deputy Group CEO Dato’ Kamarudin Meranun, AirAsia Group CEO Dato’ Sri Tony Fernandes, Oakland Raiders owner Mark Davis, AirAsia X CEO Azran Osman-Rani and AirAsia Chairman Dato’ Aziz Bakar. Behind them are Raiders legends Ted Hendricks and Rod Martin and Thai AirAsia CEO Tassapon Bijleveld. At the background is ‘Xcellence’, the Airbus A340 dedicated to the Oakland Raiders.

AirAsia X launches daily service to Kuala Lumpur

29 June 2009

Travellers from London Stansted Airport can now fly to Kuala Lumpur on a daily basis with AirAsia X.

The low-cost, long haul carrier brings its daily service to Stansted along with its 'Xcellence' aircraft, decked out in the colours of the Oakland Raiders NFL team. AirAsia X has recently linked up with the NFL franchise to promote both brands to a global audience.

Nick Barton, Stansted's commercial and development director, said: "AirAsia X's service between Stansted and Kuala Lumpur has been a fantastic success story so far, and the arrival of this striking new aircraft will enable them to go from strength to strength by offering flights every day of the week from now on.

"This is a great boost for everyone connected with the airport, and a real vote of confidence by AirAsia X in Stansted as it demonstrates we are delivering the high levels of service they demand from us. And it's even better news for our passengers and the region as it provides even greater choice and opportunity, and proves that demand between Stansted, Europe's point-to-point airport of choice for low-cost travel, and AirAsia's Kuala Lumpur hub and onward connections to Australia, China and India remains strong despite the current challenging economic conditions.

"I fully expect 'Xcellence' to be the talk of Stansted whenever it's at the airport - I'm sure its very eye-catching livery will ensure we all become big fans of the Raiders too!"

For further information on AirAsia X services to Kuala Lumpur and beyond, visit www.airasia.com.

Monday, July 6, 2009

Indonesia AirAsia to launch Jakarta-Manila flights

29 June 2009

SEPANG, Malaysia - Indonesia AirAsia is all set to commence daily flights between Jakarta and Manila in September, competing against the lone budget carrier servicing this route, a top official of the airline said at the sidelines of a partnership unveiling with the Oakland Raiders here on Friday.

"We are just finalizing some things but we are ready to begin our Manila service in September," Indonesia AirAsia president director Dharmadi told abs-cbnNEWS.com, noting that the new service signifies their optimism that demand for low-cost travel will be sustained this year.

Dharmadi said they are hoping to capture a substantial share of the volume of passengers traveling back and forth Jakarta and Manila, a route currently dominated by Philippine budget carrier Cebu Pacific.

The Philippines is just one of the new destinations Indonesia AirAsia is adding in an effort to grow its regional services. The airline is also flying to Denpasar-Perth, Australia starting July, and Saigon, Vietnam beginning September.

It is also boosting services on existing routes. Its Jakarta-Singapore and Denpasar-Singapore flights, for instance, would be doubled to 4 times a day while its Kuala Lumpur flights would be increased from 2 to 3 per day, according to Dharmadi.

While airlines worldwide cut capacity and ground planes to cope with the economic crisis, Dharmadi said Indonesia AirAsia continues to expand to take advantage of travelers' growing preference for budget carriers in order to trim costs.

"I think the crisis has affected long-haul flights. But for short-haul, the growth is stable in terms of capacity and load factor. Passenger volume is still growing," he said.

Dharmadi noted that they also remain unfazed by the spread of the A(H1N1) influenza virus across Asia Pacific where, based on data from the International Air Transport Association, a 14.3 percent drop in passenger air traffic was recorded in May.

"We are still expecting our passenger volume across the region to grow 5 percent this year," he said.

Dharmadi said Indonesia AirAsia is determined to bolster ticket sales through several measures such as scrapping administrative fees and surcharges to further reduce air fares.

"Lowering fares is the only way to get volume and encourage traveling these days," he explained.

AirAsia To Launch Kuala Lumpur-Chengdu Scheduled Flights

29 June 2009

According to Chengdu Shuangliu International Airport, the Malaysia-based airline AirAsia Berhad will soon launch scheduled flights from Kuala Lumpur to Chengdu and Xi'an.

There will be four flights each week by Airbus A330. The flight will take five hours and 20 minutes from Chengdu to Kuala Lumpur.

AirAsia is the fourth foreign airline to launch scheduled flights in Chengdu — following Asiana Airlines, KLM Royal Dutch Airlines, and Thai Airways International. The flight is expected to enhance the exchange of trade and tourism, and to strengthen the economic development of Kuala Lumpur and Chengdu.

The route was formerly operated by Malaysian Airlines but was canceled in 2006. AirAsia applied for a landing slot in Chengdu at around 14:00, but the specific time has not been approved yet.

In addition, Kunming Airlines will open regular Kunming-Chengdu flights; Spring Airlines has also signed a ground services agreement with Chengdu Shuangliu International Airport.

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 abs-cbnNEWS.com 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.

CEO: AirAsia keen to fly to US destinations

27 June 2009

SEPANG: AirAsia Bhd, which has just signed a sponsorship deal with National Football League’s (NFL) Oakland Raiders, is keen to fly to US destinations.

Group chief executive officer Datuk Tony Fernandes said the budget airline would fly to North America once it sorted out the legal issues and obtained clearance from the respective countries. However, he did not give a timeline.

Datuk Tony Fernandes (left) and Mark Davis at the briefing to announce AirAsia's sponsorship of the Raiders team.

“It (the United States) is a market that we’re very keen on,” Fernandes told a press conference to announce its sponsorship of the Raiders yesterday.

AirAsia also unveiled the Raiders’ aircraft livery. Also present at the event were Raiders owner Mark Davis and legends Ted Hendricks, Rod Martin and Cliff Branch. The team’s official cheerleaders Raiderettes were also present.

Its associate long-haul, low-cost carrier AirAsia X currently flies to several destinations in the region, Europe and Australia.

AirAsia X chief executive officer Azran Osman-Rani said the carrier was very “keen to secure rights” to the United States.

“The aircraft donned with the Oakland Raiders brand symbolises our ambition to open up the US market as our future growth area.

“We’ll be flying this aircraft into Oakland at the start of this coming NFL season,” Azran said.

Fernandes said the airline was looking at New York City, Los Angeles and San Francisco, and one day it would like to go to Hawaii.

“America is a new chapter for us. We’re reaching out to a new market. The partnership with Oakland Raiders is expected to be the catalyst in promoting the AirAsia brand in the United States,” he said.

He added that the partnership was part of its strategy to develop AirAsia into a global brand.

To a question, Azran said it had been discussing with the NFL team for about six months before the deal was concluded.

However, he declined to reveal the cost of the partnership but said it was a “long-term” plan.

“By promoting Malaysia in North America, we hope to bring more travellers from that part of the world to Malaysia, which will help boost tourism and the local economy,” Azran said.

On criticism that AirAsia only sponsored overseas sports team, Fernandes said it was among the top four local corporates to sponsor local sports teams.

“We have just sponsored the Malaysian Hockey Federation by being the title sponsor and the Women’s World Table Tennis Championships 2008,” he said.

In a separate press conference, AirAsia chairman Datuk Abdul Aziz Abu Bakar said it had been making monthly payments to Malaysia Airports Holdings Bhd (MAHB).

“However, there is a portion outstanding, pending decision on AirAsia’s requests for MAHB to review its charging mechanism,” he said.

Abdul Aziz said some Members of Parliament who brought up the issue had misconstrued that AirAsia had not paid MAHB since 2002.

“We have been paying MAHB on a monthly basis. For the first five months of this year, we’ve paid over RM40mil. AirAsia has, since 2003, paid MAHB a total of RM404mil. In 2008, we paid RM117mil.”

Abdul Aziz said AirAsia had been overcharged by about RM100mil by MAHB.

“Since moving to the low-cost carrier terminal in March 2006, AirAsia had been overcharged by no less than RM12mil.

“There are also growth incentives on the increase in the number of passenger throughput and landings worth no less than RM90mil, for which both parties have been in discussion but yet to reach a conclusion,” he said.

The issue was not about AirAsia not making payments to MAHB, Abdul Aziz stressed, adding that he welcomed the Prime Minister’s announcement on the appointment of a consultant to resolve this and other outstanding issues between the two parties.


S'pore-M'sia air route soars

25 June 2009

KUALA LUMPUR: Despite a grim outlook for the global aviation industry, airlines plying the Singapore-Malaysia route remain upbeat about their prospects.

While carriers around the world are suffering, the Singapore-Malaysia sector is enjoying a boom, with several airlines set to expand and increase flight frequencies from next month.

Air services between Malaysia and Singapore have hugely increased this year, and many more flights are due to be launched from Singapore to various towns in Malaysia.

You would forgive AirAsia - the airline running the most number of flights between the two countries - if it should start to feel nervous as yet another player, Malaysia Airlines subsidiary Firefly, enters the market next month.

The newcomer will be the seventh carrier to fly the much-coveted Singapore-Malaysia sector.

But AirAsia chief executive Tony Fernandes said he was confident about the airline's staying power.

'I am not concerned about Firefly. It is not an arrogant statement,' he told The Straits Times in an interview.

He explained that both airlines are different and reach out to different target markets.

Mr Fernandes said he believes that Firefly, which operates smaller turboprop aircraft and flies from Subang - nearer to the city centre than Sepang, site of Kuala Lumpur's low-cost carrier terminal - is unlikely to offer airfares lower than AirAsia's.

'We're also different from other airlines (like Malaysia Airlines and Singapore Airlines),' he added.