Friday, August 14, 2009

AirAsia profit surges 1,378% in Q2

13 August 2009

KUALA LUMPUR (AP): Budget carrier AirAsia said Wednesday its net profit surged 1,378 percent in the second quarter from a year ago, as passengers sought cheaper flights amid the global economic downturn.

AirAsia recorded a net profit of RM139.2 million for the quarter through June, up from RM9.4 million in the same three months of 2008, the airline said in a statement.

Revenue increased 8 percent to RM657 million, buoyed by robust passenger growth and increased contribution from ancillary income, it said. The higher profits were thanks partly to ancillary income from new products and services, which jumped by 89 percent to RM95 million in the latest quarter, according to AirAsia chief executive Tony Fernandes.

"Our results stand in stark contrast to those of most legacy carriers in these troubled economic times," Fernandes said in a statement.

"While major legacy carriers are cutting flights, grounding planes, retrenching staff and reporting massive losses, AirAsia is, on the contrary, seeing rising demand, adding more routes, increasing frequency and securing higher profits," Fernandes said.

He said the airline carried 3.5 million passengers during the period, up 24 percent from a year ago, after it lowered fares and boosted its marketing strategies to weather challenges such as travel jitters over swine flu.

AirAsia expects to achieve strong passenger growth in the third quarter, although demand might be affected by the Islamic fasting month, Fernandes said.

AirAsia shares down despite bullish outlook; Jet Airways continues to lose domestic market share

12 August 2009

AirAsia's shares were weaker yesterday, down 1.4%, despite the carrier providing a positive outlook upon the release of its 2Q2009 financial results. According to CEO, Tony Fernandes, “the current economic climate is well-suited for a low cost airline as consumers have become more price conscious and look for the best value”.

During the three month period, AirAsia reported an operating profit of USD36 million (+328% year-on-year) with a profit after tax of USD39 million (+1,378%). The carrier’s Thai and Indonesian affiliates were also profitable in the period (AirAsia X financial data was only provided for 1H2009, with the long-haul LCC also profitable in this period).

AirAsia plans to continue its expansionist plan and stated that it expects 3Q2009 passenger growth rates to be similar to the 22% growth experienced in the first half of the year - a point that is worrying investors. See related article: AirAsia’s operating profits up 328% in second quarter. Can the hot streak continue?

Jet Airways' shares were also weaker yesterday, slipping 2.1%, as the carrier continued to lose domestic market share in Jul-2009, with passenger numbers slipping 5.0% to 681,000, against an overall industry increase of 18.1%. The Indian share market has dropped more than 5% in the previous five days of trading, on concerns that poor monsoon rains will slow economic growth.

Shares in the Chinese carriers were also mostly down yesterday, led by Shanghai Airlines, which slipped 4.9%. China Southern (-4.7%), China Eastern (-4.5%), Air China (-4.0%) and Hainan Airlines (-3.8%) were also weaker, as Shanghai’s main stock index fell 4.7% for its lowest close in four weeks, on concerns that the year's 71% market surge has outrun the economic recovery rate.

Virgin Blue jumped 5.0%, following Tuesday’s 5.3% gain. Also up yesterday was Qantas (+2.8%) and Cathay Pacific (+1.2%), with Asiana and Korean Air also stronger, despite the Korea Composite Stock Price Index finishing down yesterday.

Asia Pacific selected airlines daily share price movements (% change): 12-Aug-09

Travel ‘dirt cheap’ on AirAsia with latest sale

12 August 2009

PETALING JAYA: Three million passengers can now travel for as low as RM9 for domestic flights and RM49 for international destinations, with the launch of AirAsia’s “Big Sale” promotion yesterday.

AirAsia Group commercial regional head Kathleen Tan said the sale offered greater value than its previous “Free Seats” promotion.

“Guests can now save on administration fees and fuel surcharges. This means they only have to pay for a low fare and the relevant airport tax,” she said in a press release.

She said guests would enjoy savings of 50% to 70% during the sale because of the abolished charges, adding that while guests paid RM53.50 for a flight to Penang during the “Free Seats” offer, the flight would cost only RM9 for one-way travel now.

International destinations like Bali now costs RM69 when it used to cost RM142.50, while a flight to Gold Coast, Australia, costs RM149 instead of RM354.

“We also encourage our guests to purchase food, baggage (allowance), and hot seats through to enjoy more discounts and savings,” she said, adding that early booking was encouraged as the promotional seats would be snapped up quickly.

The booking period for domestic and international flights is until Aug 16.

Seats booked will be for the travel period of Jan 11 to July 31, 2010 and bookings can be made online at and

AirAsia profit surges on high passenger volume

12 August 2009

PETALING JAYA: Low-fare carrier AirAsia Bhd posted a net profit of RM139.2mil in the second quarter ended June 30 compared with RM9.4mil in the previous corresponding period.

This was achieved on the back of higher passenger volume, better contribution from ancillary income as well as write-back on certain over provisions made previously.

In a filing with Bursa Malaysia yesterday, the airline said turnover in the same quarter rose 8% to RM657.4mil against RM608.4mil a year ago while earnings per share improved to 5.9 sen from 0.4 sen previously.

AirAsia’s core operating profit was a whopping 328% jump to RM128mil versus RM30mil in the second quarter last year. Core operating profit margins stood at 19.5% for the period, compared with 4.9% achieved in 2008.

The improvement was attributable to stronger ringgit against the US dollar, which led to a translation gain of RM12mil.

This, however, was partly offset by the non-recurring item related to the cost of unwinding derivative structures and disposal of assets during the quarter, which amounted to over RM6mil.

Passenger volume surged 24% in the second quarter from the year before, although average fare was lower by 19% at RM160 versus RM198 in the same period last year. Load factor was constant at 75% as a year ago.

The carrier said its strategy to continuously conduct aggressive promotions, remove administrative fees from ticket prices and enhance customer service had driven the strong traffic growth.

“The group continues to expand market share as more people switch from full-service carriers and fly with AirAsia,” it said.

AirAsia said based on the current forward booking trend, the underlying passenger demand for the third quarter was still positive.

“The group is purchasing fuel on the spot market. All other cost items are expected to remain low due to efficiency initiatives implemented and benefits of economies of scale,” it said.

It cautioned that the local currency had weakened against the greenback since end-June and if this were to continue, it might impact the company negatively.

While AirAsia remained optimistic of the prospect for the third quarter, it noted that the period was also seasonally weakest due to the fasting month.

Elsewhere, Thailand’s outlook was positive for the third quarter, with the number of passenger growth satisfactory and the operation had continued to gain market share.

AirAsia’s Thai operations enjoyed the cost benefits of the increased number of Airbus A320 planes while in Indonesia, the outlook was positive with strong passenger growth.

“The Bali-to-Perth route, which was launched in July, is enjoying strong support and the frequency has been increased from once daily to twice daily,” AirAsia said.

An aviation analyst said the results were above his core net profit forecast, mainly due to better load factor and higher ancillary income.

In a separate announcement, CIMB Investment Bank, on behalf of AirAsia, said the exchange had approved the listing of 481.1 million AirAsia shares, which arose from the proposed private placement, subject to compliance of certain conditions and regulations.

MASwings denies forcing AirAsia out of route

12 August 2009

PETALING JAYA, MALAYSIA - MASwings has denied AirAsia's allegation that it forced the budget carrier out of the Kota Kinabalu-Sibu route, claiming that it is merely following the rural air services agreement that is in place.

MASwings managing director Mohd Salleh Tabrani said it is a breach of agreement to allow AirAsia to fly the route.

AirAsia, through its subsidiary FAX, took over the rural air services from Malaysia Airlines in 2006 but handed the services back to the national carrier 13 months later.

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MASwings protested when AirAsia started providing Kota Kinabalu-Sibu flights in May this year.

Mohd Salleh said in a statement that when FAX operated the rural air services AirAsia demanded exclusive rights to almost all air routes within and intra Sabah and Sarawak.

"AirAsia was given the choice to operate it in 2006 and it got more subsidy than MASwings for the same scope of air services. It then quickly surrendered the services back to Malaysia Airlines when they realised how unprofitable the routes were. Later, they want to cherry pick and operate only on profitable routes," he said.

"This is not acceptable as taxpayers' money is involved," he said.

MASwings would need to review the current commitment it has given to the Government, said Mohd Salleh.

AirAsia chief executive officer Datuk Tony Fernandes said last week the airline was asked to cease operations from Oct 25 as the sector came under the exclusive right of the rural air service operator.

Wednesday, August 12, 2009

Blazing a trail for AirAsia in China

12 August 2009

Kathleen Tan almost quit after three weeks on the job but she persevered

'TONY, I don't think I'm cut out for the low-cost carrier business. Am going home,' Kathleen Tan told her boss by SMS just three weeks after arriving here.

Dynamic duo: Ms Tan joined AirAsia 'because of Tony (Fernandes)' and has since helped the airline to grow into an Asean, and possibly global, carrier

Tony is Tony Fernandes - her recruiter and former counterpart at Warner Music, and the man who asked her whether she would like to work with him while bopping to a Linkin Park concert in Kuala Lumpur in 2005.

Seldom around after she arrived to work with AirAsia - immersed as he was in an impending public share sale of his new budget carrier - he immediately responded: 'Don't leave, you can do the job,' adding as an after-thought: 'Go to China and see if you can cut a deal with the airports.'

Energised by the challenge and determined not to throw in the towel when all her friends were expecting her to fly high at the new airline, Ms Tan spent three weeks researching China and the budget airline business on the Internet and buying all the books she could.

But little prepared her for the reception. 'My first visit to China was so horrible I could write a book,' she said. In halting Mandarin she did her best to introduce the unknown carrier to a room of 15 chain-smoking executives at Kunming airport, who were bent on holding their own side conversations. 'I never felt so short on confidence in my life,' she told BT in an interview.

The former divisional head of marketing at FJ Benjamin, Singapore, Warner Music regional marketing director for Asia-Pacific and later Singapore managing director knew she had to up the ante.

Leveraging on her marketing, networking and negotiation skills - as well as 'super-rhino skin' - she landed AirAsia's first Chinese destination on her third approach, Xiamen airport, convincing the airport chairman in just one meeting that a Bangkok-Xiamen route would be profitable for the airport.

Now that AirAsia has 160 flights a week to China - and Chinese and global airports knocking on its door - Ms Tan can laugh at those days spent with airport executives and the Chinese mai tais - 'My record is 22' - to clinch a deal.

Now considered the face of AirAsia in China, she recalls with considerable satisfaction how she - with a bit of help from Macau station manager Cecilia - blazed a trail in a difficult market that some multinationals with far bigger teams have taken years to penetrate.

'You have to strategise, know what they want. I told them about the low-cost carrier business and what we could do for them,' she said.

Being a huaqiao (overseas Chinese) helped culturally, but she was also prepared to invest time and energy to get to know the Chinese better and build the guanxi (relations) that would propel her to other deals.

She had known her calling from young, but it was only after she successfully launched Guess on an annual budget of $75,000 - 'peanuts even in those days' - that her love of branding and confidence took off.

Now in her 40s, she says 'marketing is about creating a latent demand - just as AirAsia has done with low fares'.

Because he had worked with her, the super salesman that is Mr Fernandes recognised similar attributes in her. Upon acquiring the airline, he phoned her. 'Kat, guess what? I just bought an airline. (Long pause) Kat, Kat, are you there?'

'I was stunned because music is his life and we had always thought he would start a new label,' she said, but in jest remarked: 'Don't forget if you ever have something good.'

She followed the airline's path over the next 18 months, during which she also saw that the writing was on the wall for the music business as it was shrinking because of the Internet and new distribution channels.

Ultimately, she joined AirAsia 'because of Tony'. 'I think he won me over because he works very, very hard,' she said. 'But it's an equal relationship, otherwise I wouldn't work with him.'

Still, the adrenaline junkie confesses that going from full expat benefits to zero frills was such a culture shock she almost threw in the towel on numerous occasions.

Despite having to deal with difficult clients in her advertising days, and later egoistical pop stars and music pirates during her Warner stint, she could count on the perks.

The 'good life' - a BMW cabriolet, golf membership, personal assistant, business class travel and everything that comes with being a managing director for a multinational company - ceased overnight. AirAsia was not beyond expecting one of its top executives to take the public bus from Macau to Guangzhou.

'I'd never had to take a public bus since I was 13. You live and breathe cost management every day,' she said, recalling that her 'I quit' SMS was made after her high heels broke for the umpteenth time during a daily 20-minute walk across a burning tarmac to the tiny room - 'more like an engineering room' - that then served as AirAsia's office.

A graduate of the school of hard knocks, Ms Tan recently celebrated her fifth year with the airline - five exciting but challenging years, with the Bali bombing, regional haze and oil price shocks thrown in for good measure.

External challenges aside, she observed: 'Working here is like working on a Grand Prix track' - an experience the carrier's 6,000-plus staff would attest to.

From a two-aircraft start-up in 2001, AirAsia has become South-east Asia's largest low-cost carrier, and with its long-haul unit, AirAsia X, flies 130 routes to more than 65 destinations and counting.

It now owns 74 aircraft and last year carried almost 19 million passengers. The sub-economy it has created has earned it a strong following.

Despite her official title of AirAsia group regional head of commercial, Ms Tan's responsibilities include revenue management, strategy and route planning, marketing, sales and distribution, e-commerce, goHoliday and communications.

As an Asian, the self-described 'independent spirit and not your typical Singaporean' derives great satisfaction from seeing the 'little (Malaysian) airline' grow into an Asean, and possibly global, carrier. Is it too much, too fast?

Rapid decision-making is a must. And so are guts, she said, echoing Mr Fernandes' view that a slowdown is the best time to carve out a larger slice. Already, the airline has registered a database of two million customers, almost half from Malaysia.

Ms Tan seldom needs to do 15-hour days now, and every Friday hops on an AirAsia flight to Singapore where she 'chills' before returning on Monday morning. In time to come, with technology and a succession plan in place, she sees herself back in Singapore, perhaps heading the company's operations there.

Even then, the constant marketer will be hatching new plans to keep the brand fresh and the airline relevant.

AirAsia stays ahead of competition with increased ancillary businesses

12 August 2009

KUALA LUMPUR: With the aviation sector still riding turbulent skies, carriers are looking at new ways to stay ahead of the competition.

Budget carrier AirAsia is spreading its wings, after a new share issue worth over US$172 million attracted strong investor interest.

It is pumping up its ancillary services to extract maximum value from its assets.

Tony Fernandes, CEO of AirAsia, said: "Ancillary businesses is really monetising the data base that we have and looking at assets in totality and seeing what businesses we can extract from our assets.

"So it's selling more insurance, it's selling more goods, its maybe selling duty-free online to our guests. And I think it's a very good buffer for oil price.

"You know, we generate 29 ringgit per passenger on ancillary. That's equivalent to 30 dollars of oil. My target is 60 dollars of ancillary. And hence if oil goes up to 100, I can keep my prices where they are."

As part of the effort, AirAsia has launched an express Redbox courier service.

Overall though, there are concerns that its new low-cost terminal in Kuala Lumpur may not be ready by 2011, thereby clipping its wings.

AirAsia has already deferred the delivery of eight A320 aircraft by four years to 2014 because of constraints at its current terminal.

Fernandes said there is a strong possibility there may be more such deferments. Its 2011 aircraft deliveries may also be deferred, with a final decision to be made in a few months.

Meanwhile, its long-haul carrier AirAsia X is setting up a virtual hub in Abu Dhabi to tap into the European and Middle Eastern markets.

The Centre for Asia Pacific Aviation views this as an important move if the carrier is to have a cost advantage over its rivals as high aircraft utilisation rates are crucial to the viability of the long-haul LCC's business model.

There has been talk of merging the two carriers for greater synergies.

Fernandes said: "An airline is about having more passengers and growing profits from airline operations and I think sooner rather than later would make sense. Maybe we'll look at it again at the end of the year."

The budget carrier's business in Asia has grown exponentially in recent years. It now has a 16 per cent market share, with some industry experts predicting this will hit 20 per cent in the next two years.

Tuesday, August 11, 2009

AirAsia launches Big Sale Promotion

11 August 2009

AirAsia has launched a regional “Big Sale” promotion with 3 million seats up for grabs. Flights are available under this new promotion from AirAsia’s eight hubs: Kuala Lumpur, Johor Bahru, Penang, Kota Kinabalu, Bangkok, Jakarta, Bali and Bandung.

Travellers could fly from Kuala Lumpur to domestic destinations such as Penang, Johor Bahru and many more from as low as RM9. Popular international destinations such as Jakarta, Yogyakarta, Bangkok, Phuket are being offered from as low as RM49.

Ho Chi Minh, Phnom Penh, Bali and Bandung are are available from RM69 and the highly in demand “Kangaroo Routes” in Australia such as Gold Coast, Melbourne and Perth start from RM149.

AirAsia’s recently launched routes such as Colombo, Taipei, and London are also included in this promotion from RM89, RM99 and RM479 respectively.

Kathleen Tan, Regional Head of Commercial, AirAsia Group said, “This Big Sale promises to be the Sale of the Year for AirAsia. I dare say that it is even better than the Free Seats offered in the past as guests now save on Administration Fees and Fuel Surcharges as we have abolished both charges. Guests can now enjoy greater savings from 50% to 70% from this Big Sale. For example, with the past Free Seat offer, guests paid RM53.50 for Penang now they only pay RM9, Kuching was RM78.50, now RM29. For international sectors, guests paid RM142.50 for Bali, now RM69. Singapore used to be RM122.50, now RM29, Gold Coast was RM354, now $149.”

The “Big Sale” campaign for domestic sectors is NOW available for booking until 16 August 2009. The international sectors are bookable between 12-16 August 2009 for travel from 11 January 2010 - 31 July 2010.

Promotional seats are limited and available on first-come, first-served basis. Terms and conditions apply.

AirAsia gets 'neutral' rating at OSK

11 August 2009

OSK Research has recommended a "neutral" stock rating on budget carrier AirAsia with a target price of RM1.48.

The research outfit also expects AirAsia's upcoming quarterly financial results scheduled for release tomorrow may be weaker than the preceding quarter following the escalating fuel costs.

OSK noted that AirAsia has scrapped a plan to partner Vietnam Shipbuilding Industry Group (Vinashin) to set up a budget carrier in Vietnam.

The latest development is likely to bode well for market sentiment, OSK said.

AirAsia terminated a letter of intent (LOI) signed by both parties almost two years ago. The company has through a letter dated August 10, “09 informed Vinashin that the LOI is now of no further effect save for confidentiality provisions which the parties had agreed to upon signing the LOI."

AirAsia turns Singapore into a virtual hub

11 August 2009

Despite the fact that AirAsia does not have an airline based in Singapore, the City State is turning now into one of the busiest gateways for the red-and-white, low-cost carrier. “Singapore['s] position has changed a lot over the last two years with authorities also realizing the benefits of a strong development for low cost airlines,” explained Azran Osman-Rani, CEO of AirAsia X, AirAsia’s long-haul subsidiary.

For years, Singapore was only served out of Bangkok by Thai AirAsia thanks to a very liberal bilateral agreement between Singapore and Thailand, which provided free capacities between both countries to any Singaporean or Thai carrier. It was then followed by a slight relaxation of rules between Indonesia and Singapore, providing the opportunity for Indonesia AirAsia to link Singapore to Pekanbaru. The big boom came, however, with the decision of Malaysia and Singapore to free capacities between both countries. AirAsia now flies eight times a day from Kuala Lumpur to Singapore, turning this route into the group’s busiest international route. The AirAsia group today offers flights from Singapore to 14 destinations - 2 to Thailand, 5 to Indonesia, and 7 to Malaysia - a number to be compared with Jakarta, AirAsia's third-largest air base, with flights to 16 destinations…

Newest additions to the Singapore network are Miri (Sarawak) and Tawau (Sabah), which has gained, for the first time, a non-stop international flight. In total, the AirAsia Group offers a total of over 400 weekly frequencies from Singapore, the equivalent of 13 daily returns. Last March, AirAsia Group CEO Tony Fernandes, shared its vision to offer up to 50 return frequencies a day at Changi Airport. Meanwhile, AirAsia this year expects to transport some two million passengers from and to Singapore. “Our current strength in Singapore relies more and more on business travelers who are switching their travel habits because of the recession. Up to 30 percent of our passengers on our global network are business travelers,” added Osman-Rani.

Could AirAsia’s next big step then be the set-up of its own subsidiary in the City State? It is still too early to speak about it. “But Singapore authorities are becoming more and more flexible," said Osman-Rani. Beyond Singapore, the AirAsia Group will continue to strengthen its domestic network in Indonesia and add more destinations to India and China out of Malaysia and Thailand. “We have [a] plan to serve at least 9 cities in India and 5 more cities in China,” added AirAsia X CEO. In the longer term, AirAsia X is likely to expand to the Gulf area before opening a new destination in Europe.

AirAsia scraps plan for Viet budget carrier

11 Aug 2009

LOW-COST carrier AirAsia Bhd has scrapped a plan to partner Vietnam Shipbuilding Industry Group to set up a budget carrier in Vietnam.

It terminated a letter of intent (LOI) signed by both parties almost two years ago, it said in a statement to Bursa Malaysia yesterday.

“As a matter of formality, AirAsia has through a letter dated August 10 2009 informed Vinashin that the LOI is now of no further effect save for confidentiality provisions which the parties had agreed to upon signing the LOI,” said AirAsia.

Airport administrator reprimands Air Asia

11 August 2009

Polonia Airport management has filed a report against low-cost airline Air Asia with the Directorate General of Air Transportation and the Minister of Transportation for alleged poor services which sparked violence on Sunday.

Airport administrator Rajali Abubakar said Monday he had suggested that the government take action against the Malaysian-based airline company.

“They have violated aviation regulations, specifically concerning flight delays and cancellations,” Rajali said.

Hundreds of passengers vandalized a number of chairs and trolleys at Medan’s airport on Sunday as they vented their anger at Air Asia for delaying their flight to Jakarta until noon on Monday. The passengers, who mostly work in Jakarta, also detained a member of the company’s ground staff, Imron Roni Harahap, for hours.

Rajali said an Air Asia representative had apologized for the delay, but the airport operator would proceed with administrative measures against the airline.

Brunei Travel Agents Welcome More AirAsia Flights

10 August 2009

Bandar Seri Begawan - Local travel industry has welcomed a suggestion to added more AirAsia services here. At the moment AirAsia operates a daily service to Kuala Lumpur, which the local travel agents think is not enough.

Haji Thani bin Haji Hamid, proprietor, Tenaga Travel said, "Air Asia should operate also in the morning out of Brunei. The current evening daily flights are popular especially during school holidays. But there a need for more flights.

"Not only that, AirAsia should also look into return flights out of Brunei to Singapore and to other Asean capitals," he added.

Other travel industry members and members of the public also expressed similar sentiments.

Meanwhile Debbie Teo reports that Dato Tony Fernandes, group chief executive officer, AirAsia, as saying that AirAsia would like to increase flights to and from Brunei, however he said that he needs the assistance of the government of Brunei in order to do so.

"We would really like to do more, but it is up to the Brunei government to give us the freedom to do that. We've had hundreds and hundreds of letters asking for permission for us to do it, but I understand that it is always a tough battle for governments to protect national carriers," he said.

In an exclusive interview, Dato Fernandes told The Brunei Times that by allowing more flights by AirAsia, they wouldn't be taking away market share from Royal Brunei Airlines.

Dato Fernandes said that Malaysia has gone through a very successful experiment where Malaysia Airlines had record results recently and AirAsia also had record results and people have benefitted tremendously.

"Generally, the message of us is lost because the incumbent national carriers have a lot of power, so it's up to the people to try to do it. I mean, I'm trying to get a second flight serving Kuala Lumpur-Brunei route and we're having a very tough time."

He said that it is his hope and his vision to be able to expand the routes so that everyone will be able to travel. "It has been my vision from day one, and I want to take away the national boundaries, hence, we shouldn't be looking at getting route rights, we should be able to fly to Brunei whenever we want to. It would be great for Brunei and it would be great for Asean."

"Imagine seven years ago before AirAsia and imagine now, and imagine if we had the flexibility to do what we want. I don't think that Royal Brunei Airlines would lose out, there's a market for them," he said. "I don't think that going to fly Brunei-London, and there's a five-star market for them. They should move up the food chain," he said.
"We are helping the common man travel to Brunei," he said.

Asked about the boost in business due to the ongoing economic crisis, the group chief executive officer said that AirAsia has done well but that the airline product is "as good as most of the products of the full service carriers".

He added that he is not particularly worried should the economy start to improve or stay the same. "We're not hoping for the recession to carry on, just because we think we will do better. I think we will do better, down or up," he said.

In just under eight years, the budget-airline has gone from two planes to 80 aircraft, and has the widest network coverage of the Asean region than any other airlines.
He said that he has plans to push further and to get more flights and that it will be less of a challenge than when he started. "Honestly, it is more difficult to go from two planes to 80 than it is to go from 80 planes to 150 aircraft," he said.

Dam Fernandes recently had plans to develop his own airport and to expand his fleet however, that has changed due to there not being anymore land around the airport for this to happen. "1 tried and I failed, but that's ok." -

AirAsia flies direct from Bangkok to Taipei daily

10 August 2009

AirAsia, the world’s best low-cost airline, is expanding its network with a new daily direct service from Bangkok to Taipei starting on Sept. 25, 2009.

The latest network expansion reinstates the airline’s commitment to foster economic growth and stimulate tourism in the region.

To celebrate the new service, AirAsia will be offering an all-in-fare from as low as NT$690 one-way between Taipei and Bangkok which will be exclusively available online via AirAsia’s website at

The ultra low fares are offered for the Booking period from August 6-11, 2009 for travel from September 25, 2009 to January 9, 2010.

AirAsia Regional Head of Commercial, Kathleen Tan said: “We are very thrilled with the announcement of Thai AirAsia’s launch of Bangkok-Taipei route. The announcement could not have come at a better timing with AirAsia heading towards peak season travel."

Tan is confident that with Air-Asia’s direct connection serving Taipei would stimulate new travel demands and further tap new markets, especially the young working adults and families to Thailand where this vibrant country has much to offer holiday goers.

Thailand is a highly popular holiday destination among Taiwanese who has strong appetite to travel. Last year, over half a million visitors visited Thailand.

Monday, August 10, 2009

AirAsia building Asean airline image

SEPANG, MALAYSIA : Despite its extensive Southeast Asia coverage and a foray into China and India, the budget airline group AirAsia is strenuously expanding its network in Asean.

Airasia’s A320 with the Asean livery is seen at Kuala Lumpur international airport.

"I think we just scratched the surface. I think there are 100 (more) places (in Asean) where to grow," AirAsia group chief executive Tony Fernandes said on Saturday.

With a population of 600 million in the 10 Asean nations and their huge economic development, the region offers AirAsia "huge" opportunities to expand its network by introducing new routes and boosting frequencies on existing routes, the Malaysian executive noted.

"Asean is twice the size of America (in terms of population) and the market is huge, there is no reason why AirAsia or other airlines in this region can't be 500-600 planes."

AirAsia and its sister carriers in Thailand and Indonesia have connected all the capital cities of Asean and provided flights to towns hosting the region's heritage sites, beaches, environmental landmarks and entertainment centres.

The no-frills airline group operates 130 routes, flying to more than 65 destinations, with over 400 flights daily being served by 84 jetliners.

Mr Fernandes underscored Asean as the airline's core market whose business potential has been overlooked by many investors and companies when they think of investing in Asia.

"It's a constant battle to say that AirAsia's growth and success really came out of Asean and that will be the majority of our future growth," he added.

The bulk of AirAsia's passengers, at 24 million a year, are indeed originating from Asean.

Many of the seven-year-old carrier group's recent strategies are geared towards developing secondary routes, linking cities or towns in one Asean state to neighbouring country which had not been in the flight plans.

Mr Fernandes pointed out that AirAsia has introduced 42 new routes which were non-existent in Asean's 42-year history - routes such as Kuala Lumpur-Bandung and Kuala Lumpur-Aceh.

AirAsia now has eight regional hubs in three Asean countries - Malaysia in Kuala Lumpur, Penang, Kota Kinabalu and Johor Bahru; Indonesia in Jakarta, Bali and Bandung; and Thailand in Bangkok. Phuket will soon be added.

AirAsia, Asia's largest budget airline group and the fifth largest airline in Asia in terms of passenger numbers, is aligned itself more with Asean, by portraying itself as an "Asean" airline rather than an airline born out of Malaysia, Thailand and Indonesia.

To convey such a message, it has an Airbus A320 aircraft repainted in Asean livery with a large Asean emblem of 10 paddy stalks and a "Truly ASEAN" in big bold font featuring on both sides the fuselage.

On Saturday, AirAsia flew the 180-seat jet with Asean Secretary General Surin Pitsuwan, diplomats, the airline's management, executives and media representatives from across Asean on board on a "three cities in one day" celebration to mark the 42nd Asean Day.

But the chartered flight (AK9959) with more than 100 guests, starting from Jakarta, with a stopover in Kuala Lumpur and ending in Bangkok, aimed more to proclaim its association and commitment to Asean.

AirAsia said the specially liveried aircraft will also act as a promotional tool to project Asean to the world.

"With our extensive network, millions of people fly with us each year. By waving the Asean flag in all the places we go, AirAsia will be doing its part to promote the region," Mr Fernandes said.

Tassapon Bijleveld, chief executive of Thai AirAsia, told the Bangkok Post that the airline group will continue to strengthen its "Asean" brand visual with a series of image building by advertisement and activities.

Thai AirAsia's 18th aircraft, the brand-new A320 due to join the fleet in December, will come with the Asean livery.

Transport Ministry To Look Into Kk-sibu Flight Issue

09 August 2009

KOTA KINABALU -- Following requests for consideration from various parties, Transport Minister Datuk Seri Ong Tee Keat has assured that the ministry would look into the issue involving scrapping AirAsia's Kota Kinabalu-Sibu route.

He said two groups -- Foo Chow Association here and Chinese Chamber of Commerce from Sibu -- had personally met him on the matter.

Ong said he had promised the groups that he would come up with an announcement soon.

"I told them that it involved an agreement between the government and MASwings and that it came into being before I took over the (transport minister) portfolio.

"So, I have to look into the delicate points contained in the agreement because that might involve perhaps, not just one sector, but we must always bear in mind, 'people first'.

"The people's voices must be given due consideration," said Ong, who is also MCA president, after opening the MCA state convention here Sunday.

He was asked to comment on AirAsia's appeal to retain its KK- Sibu flights, following a directive from the government for the low-cost carrier to stop flying the route from Oct 25, this year.

AirAsia began its daily KK-Sibu flights only in April, this year.

On Thursday, its chief executive officer, Datuk Seri Tony Fernandes, was reported as saying the decision was because MASwings had exclusive rights to service rural air routes, and so they were appealing to the government to open up rural routes to commercial airlines.

Asked whether Fernandes had spoken to him on the matter, Ong replied:

"I have received his letter, but what is more important is that we don't just look at the business interest of industry players and the operators, but also the woes of the public, and also the legality of any existing agreement signed between the government and specific industry player."

AirAsia boss seeks more budget terminals

09 August 2009

SEPANG: More Asean countries need to provide low-cost carrier terminals and reduce other costs to enable budget airlines to thrive.

AirAsia Group chief executive officer Datuk Seri Tony Fernandez said regional air travel showed great growth potential.

He said only Malaysia and Indonesia now offered low-cost carrier terminals in a region which has a population of 600 million.

Warm reception: Asean Secretary-General Dr Surin Pitsuwan (right) arriving in Sepang with other guests on Saturday. The group arrived from Jakarta onboard the special AirAsia flight

“Airlines in the United States can have up to 500 planes plying various routes and they have only 300 million people, so the Asean region not only offers a huge opportunity for AirAsia to expand but I believe there is enough room for other low cost carriers to come in and compete too,” he told a press conference upon arriving in Jakarta on board a flight chartered for the Asean 42nd Birthday celebrations.

The celebration is being held in three cities and the chartered flight will take AirAsia and Asean officials from Jakarta to Kuala Lumpur and then on to Bangkok.

AirAsia defers delivery of eight Airbus A320

08 August 2009

KUALA LUMPUR -- Southeast Asia's biggest budget carrier AirAsia will defer delivery of eight Airbus A320 aircraft by four years to 2014 due to “infrastructural constraints” at Kuala Lumpur's airport.

“AirAsia foresees infrastructural constraints with the current airport facilities and until the new LCCT (low cost carrier terminal) is constructed,” the airline said in a statement late Thursday.

The plan to defer the aircraft delivery would allow AirAsia to avoid the costs associated with leaving aircraft idle, hence avoiding having to incur depreciation and interest expense without earning revenue, it said.

AirAsia said Airbus had agreed to the revised delivery schedule and “no penalties” would be imposed on the budget carrier.

“With the above deferment, the original delivery of 24 aircraft in 2010 shall be reduced to 16 aircraft,” it said.

AirAsia said it could exercise the right to postpone delivery of another eight aircraft in 2011 to 2014 if it informs Airbus before the end of October.