Saturday, August 21, 2010

AirAsia X eyes public listing in 2011

08 June 2010

SEPANG, June 8 — AirAsia X is eyeing a public listing in the second half of 2011 subject to market conditions the airline said today.

AirAsia X will restructure itself to become a stand -alone airline and take over employment of its own wide body pilots, cabin crew and ground staff.

“The new model will allow both AirAsia Berhad and AirAsia X to pursue a clearer and more focused business strategy,” AirAsia said in a press release today.

The announcement today will allay the concerns of AirAsia’s investors that the company is funding the growth of the unlisted AirAsia X and in the process take on more debt.

AirAsia group CEO Datuk Seri Tony Fernandes acknowledged today that investors were concerned over speculation that AirAsia and AirAsia X would be merged and wanted to make it clear that AirAsia would not be funding AirAsia X.

“There has been an overhang on AirAsia and whether AirAsia is going to take on the financing of the aggressive expansion of AirAsia X,” he said in a press conference. “This is a very clear line and will give clarity to the investment community,”

No further details as to the planned IPO were made available but AirAsia X CEO Azran Osman Rani said that funds raised from the IPO would be used to fund the fleet expansion.

AirAsia deputy group CEO Datuk Kamaruddin Meranun will also take on a greater role in the running of AirAsia X while Fernandes will focus on AirAsia.

AirAsia X’s gearing stands at 260 per cent and according to Fernandes, the total debt is about RM1 billion.

The airline made RM720 million in audited revenues last year and aims to double the figure this year. Net profit last year was RM87 million and the airline is targetting a net profit margin of 7 per cent this year. It recorded a load factor of 77 per cent in 2009.

AirAsia X also just completed an RM100 million rights issue which will help reduce its debt.

“The rights issue is a precursor to the IPO,” said Fernandes. “We solved this issue of lack of focus.”

He added that AirAsia and AirAsia X may profit share on some routes although AirAsia will focus on destinations below four hours of flight time.

“We’re doing things that people are asking us to do and we’re also doing things that people didn’t ask us to do and now they’re seeing the reason for why we did it,” he added. “Would investors have supported AirAsia supporting AirAsia X? But now AirAsia X is going to really contribute. In the months to come you will see Thai AirAsia and Indonesia AirAsia really contribute to our bottom line.”

Fernandes also defended AirAsia’s gearing saying that it was necessary to fund expansion. AirAsia has a net gearing ratio of 2.25 and is looking to slow down aircraft delivery to maintain its gearing levels and transfer the debt for its Thai and Indonesian operations back to the respective countries.

“If I had listened to analysts and had five planes a year, Tiger (Airways) would crush us by now, But now I can slow down our growth because we have reached a size where no one can touch us,” he said. “So we’ve listened where we think it makes sense and we haven’t listened where we think it doesn’t. Now I think it’s all coming together in very strong cocktail.”

Azran said that AirAsia X received approval from the Malaysian authorities to fly to Tokyo but is still waiting from approval from Japanese authorities. He added that the airline is also evaluating the possibility of flying to either France of Germany early next year as well as restarting some middle east routes.

He said that AirAsia X hopes to start flying to Seoul by the fourth quarter of the year.

Fernandes said that AirAsia X and AirAsia combined could eventually be as large as Singapore Airlines.

“If you look at Cathay and Singapore Airlines, they do not have the connections that AirAsia provides (to AirAsia X),” he said.

AirAsia X currently operates a fleet of eight aircraft - six A330s and 2 A430s. It will be taking delivery of three more A330s by the end of the year. It has also ordered another 17 A330s and 10 A350s to be delivered from next year till 2020.

Azran said that AirAsia X is not looking at buying any A380s.

AirAsia has a 16 per cent stake in AirAsia X with an option to increase it to 30 per cent.

The other shareholders of AirAsia X are Aero Ventures Sdn Bhd with 48 per cent, the Virgin Group with 16 per cent, while Bahrain-based Manara Consortium and Japan-based Orix Corp hold the remaining 20 per cent.

Aero Ventures is owned by Fernandes, Kamarudin, Datuk Kalimullah Hassan, Lim Kian Onn and former Air Canada chairman and CEO Robert Milton.

Fernandes and Meranun are the controlling shareholders of AirAsia with a 30.7 per cent stake via Tune Air Sdn Bhd.

While AirAsia X is pursuing the strategy of becoming a stand-alone airline, the airline will continue to use the AirAsia brand as part of its 30-year brand licence agreement and the ticket booking website which will allow single ticketing of AirAsia and AirAsia X flights from July.

“People flying from Perth to Bangkok can now buy one itinerary,” said Fernandes.

Kamaruddin cuts his birthday cake, flanked by Azran, with Fernandes (centre) looking on. - Picture by Lee Wei Lian

By Lee Wei Lian


AirAsia X to inaugurate service to Tokyo Haneda?

07 June 2010

AirAsia X will inaugurate three times weekly Kuala Lumpur-Tokyo Haneda service “after October 2010”, using midnight slots, with fares from JPY14,000 (USD153) per sector, according to reports in the Yomiuri Shimbun.

Further details were not disclosed, including how AirAsia X (which has been in negotiations with Ibaraki Airport north of Tokyo) is responding to the high landing charges at Haneda, which are JPY2,400 (USD26) per ton.

AirAsia X launched sales for its Kuala Lumpur-Delhi service on 03-Jun-2010 and offered 1,000 free seats on the route online on 05-Jun-2010, for travel between 04-Aug-2010 to 31-Aug-2010. The carrier plans to launch the daily service on 04-Aug-2010. AirAsia X has earmarked USD5 million for advertising its services in India having also launched services to Mumbai in May-2010. The carrier has also confirmed plans recently to increase frequency on Kuala Lumpur-Melbourne (Australia) service from daily to twice daily, effective 01-Jul-2010. See more information at CAPA’s AirAsia X profile.

Shares in AirAsia Bhd rose 3.1% on Friday, while Malaysia Airlines dropped 1.5%. Elsewhere, Virgin Blue gained 1.6%, Singapore Airlines 0.7% and Cathay Pacific 1%, while Qantas eased 1.6%.

Asia Pacific selected airlines daily share price movements (% change): 04-Jun-2010

Source: Centre for Asia Pacific Aviation & Reuters

AirAsia Offers 1,000 FREE SEATS for New Delhi – Kuala Lumpur Route

07 June 2010

Riding high following the successful launch of operations across seven markets in India, AirAsia, the World’s Best Low Cost Airline announced the launch of services of its long haul low fare affiliate; AirAsia X to New Delhi at a media gathering today with a “1,000 FREE SEATS” bonanza for online bookings made on 5 June, 2010 on the New Delhi – Kuala Lumpur sector, for the travel period from 4 to 31 August, 2010. This one day offer will allow guests to fly to Kuala Lumpur at an all-in-fare from as low as Rs. 1862/-*.

AirAsia X’s inaugural flight from New Delhi to Kuala Lumpur will commence services from 4th August 2010 onwards.

Mr. Azran Osman-Rani, Chief Executive Officer, AirAsia X said, “New Delhi is an ideal and exciting choice as X’s 10th long haul destination as it is a popular destination amongst Asians with first-class offerings of notable historical sites such as the India Gate, the Rashtrapati Bhawan, the Humayun Tomb, the awesome Qutab Minar and the famous Taj Mahal at Agra, that will cater to families and young adventurous adults. The launch of this 2nd destination for AirAsia X in India, alongside our super low fares, is testament to AirAsia X’s goal to make international travel accessible and a reality for all travelers. We also look forward to welcoming people from New Delhi to visit Kuala Lumpur, home to one of the tallest skyscrapers in the word, the Petronas Twin Towers, premier shopping complexes, magnificent outdoor parks and varied entertainment outlets. Our country is also well-known for its beautiful beaches, delectable cuisine and unique cultural heritage.”

“The daily service between Kuala Lumpur and New Delhi will add significant thrust to the existing traffic between the two cities and provide great options for travelers looking for that quick weekend getaway. The revolutionizing fares offered by the airline are also expected to further stimulate travel amongst the business and corporate segments, which has since dip after the global slowdown. AirAsia X is also able to draw international and regional passengers which are progressively using Kuala Lumpur as a connecting gateway to over 132 routes across 70 hot destinations in South East Asia and beyond. Furthermore, the direct daily service will give guests better connectivity by reducing transit times when connecting to further destinations from the Kuala Lumpur hub to other popular holiday destinations in the AirAsia network such as Penang, Kota Kinabalu, Singapore, Bali, Hong Kong and beyond as the flight arrives Kuala Lumpur from New Delhi at 4:35am,” Azran added.

New Delhi will be AirAsia X’s second long haul destination after Mumbai in India. AirAsia X is committed to offering X-citing low fares, X-emplary levels of safety and care, and an X-traordinary in-flight and service experience to all guests. The cost savings that it passes on to guests through low fares are derived from maintaining a simple aircraft fleet and a route network based on low-cost airports, without complex code-sharing and other legacy overheads that weigh down traditional airlines.

Guests flying on this New Delhi – Kuala Lumpur route will have the chance to experience the new comfortable ‘flatbed Premium seats’ on the brand new A330 aircraft. The flatbed seats are standard business class specifications of 20” width, 60” pitch and stretches out to 77” in full recline position. The seats feature universal power sockets, adjustable headrests and built-in personal utilities such as tray table, drink holder, reading light and privacy screen. The new improvement is set to distinguish the world’s most successful low-cost long-haul airline as a distinctive leader in the market, further bolstering the brand as the advocates of innovation and excellence.

AirAsia was recently recognized as the World’s Best Low Cost Airline, for the second consecutive year at the 2010 Skytrax World Airline Awards. This recognition is a testimony of AirAsia passengers to the quality, safety, reliability and performance of the airline in recent times.

AirAsia’s operations are anchored in its mission to democratise travel, encapsulated in its tagline “Now everyone can fly”. It has ferried more than 92 million guests to date, establishing itself as the Truly ASEAN (Association of Southeast Asian Nations) airline, with its unmatched connectivity in the region and its “sky bridges” – routes – that link the capitals and communities of Southeast Asia and beyond.

AirAsia has a strong domestic high frequency network that enables the people from India to connect to Malaysia and visit beautiful places like Langkawi, Sabah, Sarawak and tap on our incredible network using Kuala Lumpur hub as a gateway to the many points served by AirAsia and AirAsia X to ASEAN destinations and beyond such as China (Hangzhou, Guilin, Tianjin, Chegdu, Haikou, Hong Kong, Macau, Guangzhou, and Shenzhen) Australia (Gold Coast, Melbourne and Perth), Taiwan (Taipei), Europe (London) and many more.

Jointly, the AirAsia Group will have a total of 120 flights weekly to the various points in India which include Tiruchirappalli, Hyderabad, Kolkata, Kochin, Trivandrum, Bangalore, Mumbai, New Delhi, Chennai (to Kuala Lumpur and Penang).

AirAsia is also offering great hotel rates and exciting packages under AirAsia Go, its one stop travel portal at Guests can benefit from greater savings and value for money on their accommodation in addition to the low fares that AirAsia offers. Currently AirAsiaGo has a wide range of over 70,000 hotel partners to cater to the budget of travellers, a wide array of activities, tour packages, care rentals, transfers and many more new exciting products.

AirAsia and Virgin Blue shares jump; RBS warns of continued challenge to Virgin Blue profitability

04 June 2010

AirAsia’s share price gained 6.7% yesterday, as the market continued to react positively to the carrier’s positive first quarter earnings report, a stock upgrade from OSK Research (from “neutral” to “trading buy”) and the extension of the carrier’s tax allowance by the Malaysian Government.

The allowance means that 60% of AirAsia’s qualifying capital expenditure incurred from 01-Jul-2009 to Jun-2014 will enjoy permanent tax savings.

Also gaining yesterday was Virgin Blue, with a 7.1% gain (following a 6.6% fall on Wednesday and a 7.6% reduction on Tuesday).

Royal Bank of Scotland commented that, following a meeting with new Virgin Blue CEO, John Borghetti on 03-Jun-2010, it remains “underwhelmed, given the short-term challenges facing the business”. RBS added that it expects profitability to remain “challenged” over the next 12 months, adding, “we believe short-term momentum is against the stock and may push the share price lower”. However, on a more positive note, RBS commented, “we don’t view the business as a going-concern risk”.

Also in the Australian market, shares in Qantas gained 2.4%. Merrill Lynch has maintained its “buy” rating on Qantas, with a target of AUD3.00, but warned that Qantas, like Virgin Blue, is suffering in the current market conditions, but noted it is "far less exposed" with its Jetstar product.

Asia Pacific selected airlines daily share price movements (% change): 03-Jun-2010

Source: Centre for Asia Pacific Aviation & Reuters

AirAsia X to spend $5 million on advertising in India

03 June 2010

NEW DELHI: AirAsia X, the low fare Malaysian airline, has earmarked a budget of $5 million for advertising in India. The publicity campaign will coincide with its flight being introduced to Delhi and some other Indian airlines.

AirAsia X CEO Azran Osman Rani told that he preferred print and online publicity to television commercials. The airline's marketing manager Steven Lee said while the publicity in north India will be in online and print, the airline may take to hoardings and other outlets in south India.

He said the airline is succeeding because of its aggressive marketing, creative branding, and aggressive advertising.

The airline, which claims to be the world’s best low cost airline, announced the launch of services of its long haul low fare affiliate AirAsia X to New Delhi with a "1,000 Free Seats" bonanza for online bookings made on 5 June, 2010 on the New Delhi – Kuala Lumpur sector, for the travel period from 4 to 31 August, 2010.

This one day offer will allow guests to fly to Kuala Lumpur at an all-in-fare from as low as Rs 1,862. The daily Delhi-Kuala Lumpur flight will commence from 4 August.

Jointly, the AirAsia Group will have a total of 120 flights weekly to the various points in India which include Tiruchirappalli, Hyderabad, Kolkata

, Kochin, Trivandrum, Bangalore, Mumbai, New Delhi, Chennai (to Kuala Lumpur and Penang).

AirAsia is also offering great hotel rates

and exciting packages under AirAsia Go, its one stop travel portal at

Najib: Govt to ask AirAsia to look into adding another destination to Laos

03 June 2010

VIENTIANE: The Government will ask budget carrier AirAsia to look into adding a second destination to Laos, following a request from the Laotian Transport Ministry, said Prime Ministry Datuk Seri Najib Tun Razak.

Najib said the minister had made the request to him for direct flights to the world heritage town of Pakse, during a delegation meeting at Laos Prime Minister Bouasone Bouphavanh's office here Thursday morning.

"Increasing destinations for direct flights is a commercial decision that has to be made by the airlines involved and the Government can only forward the request," he told a press conference here.

AirAsia is the only Malaysian airline offering three weekly direct flights to the capital Vientiane, although there has been talk that Malaysia Airlines (MAS) was also looking into offering direct flights to the country.

"I do not know if MAS will be interested (in flying to Pakse) but better connectivity is something they (Laos) will like and welcome," he said when asked if the national carrier might be interested in flying to the destination.

Najib, who is on a two-day official visit to Laos, earlier received a red-carpet welcome at the Laotian Prime Minister's office here before attending a delegation meeting.

The Prime Ministers later also witnessed the signing of the Agreement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion, Memorandum of Understanding (MoU) on Cooperation in the Field of Higher Education, and MoU on Cooperation in the Field of Sports.

Najib said his first official visit to the country was a very significant one in view of efforts by both sides to further enhance the good relations between them.

"I have brought with me a number of Malaysian business people who are keen to tap into opportunities in your country," he told the delegation meeting.

By Dharmender Singh

The Star

AirAsia gets tax break extension

02 June 2010

AIRASIA Bhd has been granted a further five year extension of an investment allowance, which entitles it to claim an income tax exemption of 60 per cent on qualifying capital expenditure.

This must be incurred between July 1 2010 and June 30 2014.

The amount can be set off against 70 per cent of statutory income for each year of assessment.

The approval is subject to the condition that the capex will exclude any aircraft not based in Malaysia; and should any aircraft be sold or leased within five years.

In such a case, there will be a clawback of the investment allowance used on the aircraft.

Business Times

Virgin Blue bounces and Kingfisher extends gains as Asian stocks have a good day

01 June 2010

Asia Pacific airline stocks were mostly higher yesterday, with Qantas (+2.0%), Singapore Airlines (+1.6%) and Cathay Pacific (+2.7%) among the gainers.

Virgin Blue bounced back 6% after a horror 28% fall on Friday related to its profit warning, while Kingfisher Airlines extended its gains after its FY2010 earnings report in which it disclosed it is budgeting for a profit in FY2011.

SpiceJet surged 5.9% and China Airlines gained 4.2%. AirAsia rose 4.3% after it disclosed a 10% increase in revenue and net profit in 1Q2010. See related report: AirAsia’s profits hit by rising fuel costs: Near term outlook solid, squeeze in 2011?

At the other end of the scale, Hainan Airlines (-5.8%) and Skywest (-5.2%) fell heavily, while Air New Zealand (-1.7%) lost further ground.

Asia Pacific selected airlines daily share price movements (% change): 31-May-2010

Source: Centre for Asia Pacific Aviation & Reuters

AirAsia seeks to slow down A320 deliveries

31 May 2010

AirAsia is looking at reducing rollout to match cash flow as it wants to maintain its current gearing level, says chief executive officer Datuk Seri Tony Fernandes

AIRASIA Bhd (5099) is in talks with aircraft manufacturer Airbus to slow down delivery of its A320s.

"We are looking at reducing rollout to match cash flow. We want to maintain our current gearing level," AirAsia Bhd chief executive officer Datuk Seri Tony Fernandes told analysts in a teleconference of its first quarter results yesterday.

He said 12 per year is an ideal number for the airline to receive.

Net gearing ratio as at March 31 2010 stood at 2.25 times.
So far, AirAsia has received 70 of its A320 aircraft on order, with another 105 aircraft to be delivered through to 2015.

According to this timeline, AirAsia would be looking at delivery of an average of 22 aircraft per year.

Fernandes said no penalty would be incurred with the reduction in rollout.

AirAsia has already deferred delivery of its aircraft twice so far.

The airline is also currently looking at ways to fund its Thailand and Indonesian associates' operations independently, and to transfer the debt of the two operations from Malaysia into the respective countries.

Fernandes said listing the respective companies in its home base is an option.

"In the next few months, there will be some announcements which will give much more clarity on AirAsia and its position with its associates as well as AirAsia X," Fernandes said.

The airline saw a 10 per cent jump in its first-quarter net profit, thanks to foreign exchange gains.

It recorded a net profit of RM224.1 million for the quarter ended March 31 2010 compared with RM203 million the year before.

The carrier expects to see another three strong quarters for the rest of the year.

Revenue for the quarter was 10 per cent higher thanks to growth in passenger volume of 17 per cent for the quarter.

However, average fare was 13 per cent lower at RM173 compared with RM198 achieved in the first quarter of 2009.

This resulted in profit from operations to fall by almost a third to RM299.8 milion compared with RM410.7 million in 2009.

The other major highlights of the quarter were the turnaround in the group's Thailand and Indonesian operations, with both making profits, and a 31 per cent jump in ancillary income.

Ancillary income contributed 16 per cent to the group's total revenue, with its best-ever performance that easily surpassed the contributions in each of the previous four quarters.

By Presenna Nambiar

Business Times

Malaysia's AirAsia posts 1Q profit of $69 million

31 May 2010

Budget carrier AirAsia said Monday it posted a net profit of 224 million ringgit ($69 million) in the first quarter of 2010, thanks to strong passenger growth and rising income from in-flight services.

Profit for the three months through March grew 10 percent from 203 million ringgit a year earlier, AirAsia said in a statement. Revenue also jumped 10 percent year-on-year, from 797 million ringgit to 878 million ringgit.

Southeast Asia's largest no-frills carrier reported a 17.1 percent increase in passengers to 3.7 million people for the three months, as well as a 31 percent jump in income from charging for services including in-flight food and checking larger baggage.

AirAsia chief executive Tony Fernandes voiced optimism on the outlook for 2010, saying advance bookings were good and the carrier plans to add new routes to India and various parts of Southeast Asia.

AirAsia has partially hedged fuel requirements through December 2010, helping to mitigate oil price volatility, Fernandes said.

AirAsia chief pushes for budget carrier hub at Don Mueang

31 May 2010

AirAsia group chief executive Tony Fernandes has urged Thai authorities to dedicate Don Mueang Airport as a hub for low-cost carriers (LCCs).

Fernandes: AoT airport tax is too high

Mr Fernandes renewed his call for Airports of Thailand Plc (AoT) to establish a terminal devoted to no-frills airlines in Bangkok, complete with lower operating charges than at the main terminal.

Building an LCC terminal at Suvarnabhumi would take time. Mr Fernandes said turning Don Mueang into a base for budget carriers offered a quick solution that would help Thailand woo back foreign tourists whose numbers have plunged as a result of the deadly civil unrest in the capital.

"Maybe now is the chance to do something quick, by turning Don Mueang into a low-cost airport," Mr Fernandes told the Bangkok Post.

The leader of Asia's largest budget airline has said the failure of Thai authorities to set up such a terminal has hampered the growth of the country's tourism industry.

A terminal for budget carriers with lower charges would enable LCCs to bring in more foreign tourists quickly as they would have greater scope for lowering fares due to the increased savings.

Mr Fernandes said AoT's passenger service charge, or airport tax, must be reduced from 700 baht per head to make visiting Thailand more attractive during the current time of poor travel sentiment.

"I strongly feel that 700 baht is too high," he said.

AoT's international travel PSC is among the highest in Asia. The AirAsia chief said it should be slashed for budget carriers to 250 baht, the same price as in Malaysia.

Kuala Lumpur International Airport (KLIA) significantly increased its earnings from budget travellers when it built the Low-Cost Carrier Terminal (LCCT), said AirAsia executives. AoT could emulate this success, they said.

AirAsia Group moved 12.6 million passengers through the LCCT last year, contributing about 43% of total passenger traffic at KLIA.

The group was also the largest contributor of domestic and international traffic at the LCCT last year.

It is also the second largest carrier at Suvarnabhumi in terms of passenger numbers. The eight-year-old airline now operates 973 flights per week through Suvarnabhumi. Last year, Thai AirAsia carried 6.2 million passengers and has the same target this year.

But building an LCC terminal at Suvarnabhumi or dedicating Don Mueang as an LCC airport are not currently on AoT's agenda.

Don Mueang has been heavily underutilised, serving only a few dozen flights operated by two budget carriers, Nok Airlines and One-Two-Go Airlines, and a couple of charters each day.

The majority state-owned airport operator is pursuing a new plan to construct a satellite passenger terminal and related facilities including an automated people mover linked to Suvarnabhumi's current main terminal.

It was revised earlier this year from the previous plan calling for the construction of a domestic passenger terminal and a third runway, which are now seen as lower priorities.

Bangkok Post

AirAsia reaps global award for excellence in technology

31 May 2010

AirAsia, the world’s best low cost airline, reaped a prestigious global award for its outstanding use of information and communication technology (ICT) to advance business.

AirAsia received the Global ICT Excellence Award in the private sector category from the World Information Technology and Service Alliance (WITSA) in an awarding ceremony on Wednesday in Amsterdam. The ceremony was held during WITSA’s 17th World Congress in Information Technology, which attracted some 2,000 delegates from 80 countries.

Of the seven winners, AirAsia is the only one from the ASEAN region.

WITSA, whose members make up over 90 percent of the global ICT market and are from 74 countries, gives the Global ICT Excellence Awards every two years.

“The success of AirAsia as the region’s leading budget airline is reflected not only in its fast growing passenger volume but also from the ICT perspective,” WITSA said.

“A very high majority of AirAsia’s passengers book online, partly because of AirAsia’s ICT-based business model, and partly because of the motivation of the population to secure free or very cheap seats through online booking. In this sense, AirAsia succeeded in creating a compelling reason to use e-commerce through this ICT business model,” WITSA added.

Tony Fernandes, AirAsia Group CEO, said, “AirAsia has always believed in the power of technology and communication to drive business. Our services are technology-backed – from booking and payment to check in. This year, we’ll get even more aggressive in our use of technology to improve our guests’ experience with AirAsia.”

Tony also thanked Malaysia-based PIKOM for nominating AirAsia for the award. PIKOM, or the Association of the Computers and Multimedia Industry in Malaysia, counts among its members over 1,000 companies engaged in the whole range of ICT products and services. PIKOM’s member companies account for 80% of Malaysia’s ICT trade.

AirAsia has invested heavily in technology to grow the business across all fronts. ICT has allowed AirAsia to offer cutting edge products and to continuously offer quality service to its rapidly expanding passenger base. All areas of AirAsia’s operations are supported by ICT.

AirAsia, represented by AirAsia X Operations Manager for the UK Jinda Bisran (left), receives the Global ICT Excellence Award in the private sector category from the World Information Technology and Service Alliance (WITSA) in an awarding ceremony on Wednesday in Amsterdam. Also in the photo is Looi Kien Leong, WITSA Board Member and PIKOM's Chairman for International Affairs . AirAsia received the award for its outstanding use of information and communication technology to advance business.

Travel Blackboard

AirAsia Plans Thai Listing by 2011

27 May 2010

BANGKOK—Malaysian budget carrier AirAsia Bhd said Wednesday that a dual-listing on the Stock Exchange of Thailand is expected to take place around the end of this year or next year, despite worries over political turmoil that have scared many foreign investors away from Thailand.

"That's always our target and I don't see that changing at the moment," Chief Executive Tony Fernandes said in an interview.

After acquiring a stake in VietJet Aviation recently to brings its brand to Vietnam, the Malaysian carrier isn't working on any more acquisition deals at the moment, Mr. Fernandes said.

The company is looking to increase its hedging position in the short term from around 30% of fuel usage currently hedged. "Anything between $80 and $85, we'd do a hedge," he said.

AirAsia plans to start flying to Maldives this year, while its long-haul affiliate AirAsia X expects to commence services to Seoul and Tokyo from Kuala Lumpur by the end of this year, he said.

Separately, Thai AirAsia, 49% owned by AirAsia, also plans to list on the Thai bourse in the first quarter of next year as part of its fund-raising plan to strengthen its financial position and prepare for expansion, Thai AirAsia Chief Executive Tassapon Bijleveld said.

"We are no longer looking for other financial options like bond issuance or anything, as we're now gearing up toward the listing plan," he said.

Despite the adverse effect on passenger traffic from political unrest in Bangkok in recent months, Thai AirAsia still expects to post more than one billion baht ($30.7 million) in 2010 net profit, thanks in part to robust first-quarter earnings of several hundred million baht.

The Thai firm also expects to achieve its passenger and revenue targets of 6.2 million and 12 billion baht, respectively, set for this year. Traffic volume is projected to bounce in the third and fourth quarters when the political situation improves.

"It's worth noting that the unrest occurs in the low season, so the effect on our traffic isn't that severe. Imagine the same incident happened in the first or the fourth quarter, during the high season, we would be in a much more difficult situation," Mr. Tassapon said.

The Thai budget airline's passenger load factor in May has fallen to around 60% to 65% from around 78% in April and 82% in the first quarter, he said.

Air traffic dropped sharply in recent weeks amid deadly political confrontations that had caused many countries to issue travel warnings against Thailand.

A total of 86 people were killed since major violence in Bangkok broke out on April 10, when the military started clashing with protesters. Troops last week launched a crackdown in the central Bangkok area where anti-government protesters had been camped out since April 3, forcing upmarket shopping malls and five-star hotels to close. The military campaign cleared the area, but dispersing protesters rampaged through the Thai capital, setting fire to landmark buildings and looting shops.

By Phisanu Phromchanya


AirAsia seat give-away to revive demand

27 May 2010

AirAsia is giving away 10,000 free airline seats, costing at least 10 million baht, to help resuscitate the Thai tourism industry battered by political turmoil.

The give-away is the first of a series of aggressive campaigns the no-frills carrier intends to stage over the next two months to woo back international tourists.

The Tourism Authority of Thailand (TAT) will subsidise the tickets in exchange for a firm commitment from the airline to bring in a set number of tourists.

Tassapon Bijleveld, chief executive of Thai AirAsia, said the need was two or three times greater than for a similar scheme that the airline and the TAT used two years ago after yellow-shirt protesters closed Bangkok's two airports in late 2008.

In that case, the TAT extended 30 million baht to the airline to cover advertising and subsidising the air tickets.

He suggested that subsidising air tickets would be considered on the case-by-case basis if carriers commit to bringing in a certain number of travellers.

The 10,000 free AirAsia seats, which exclude fees such as airport taxes, are for non-Thais only and available for booking on the airline's website from tomorrow, and good for travel between June and August.

Bangkok Post

Phuket air routes dropped

26 May 2010

Thai AirAsia has suspended flights from Phuket to Ho Chi Minh City (HCM) and Medan as traffic demand has been lower than expected.

The suspension seems to weaken the budget carrier's drive since late last year to make the southern resort island its second hub in Thailand after Suvarnabhumi Airport.

The no-frills airline quietly ended daily Phuket-HCM services on May 15 and Phuket-Medan services, at thrice a week, on May 1. These flights began in December.

Chief executive Tassapon Bijleveld said the suspension was temporary and the airline was prepared to restore the flights back to its network once demand returns.

Vietnam's order prohibiting its citizens from visiting Thailand during the Kingdom's political turmoil in recent months contributed to the slump in demand.

"Honestly, I don't know when the demand will return but we will continue to monitor it," he said.

The airline, part of Malaysia-based AirAsia, is shifting the capacity from the suspended flights to other routes with stronger demand.

Beginning on June 21, Thai AirAsia will double the frequency on Phuket-Chiang Mai to twice daily, while ramping up Phuket-Udon Thani services, now at four flights a week, to daily.

Daily services from Phuket to Hong Kong, Phuket to Jakarta and Phuket-Singapore remain unchanged.

The airline has been looking at linking Phuket with Bali and Macau, he said.

"These are potential routes, but it is premature to say when we would launch them," he added.

The fallout from Thailand's deadly political clashes on the tourism industry is hurting the airline's network and flight expansion, he said, which is prompting the airline to redouble its marketing efforts.

On Monday, the airline put its 13th and 14th new Airbus A320s into regular service.

by Boonsong Kositchotethana

Bangkok Post

AirAsia launches one-stop online travel portal

26 May 2010 Group CEO AirAsia, Dato Sri Tony Fernandes (center), explains  AirAsiaGo portal, while Regional Head of Commercials  Kathleen Tan (left) and AirAsiaGo's Darren Goh (right) look on. Group CEO AirAsia, Dato Sri Tony Fernandes (center), explains AirAsiaGo portal, while Regional Head of Commercials Kathleen Tan (left) and AirAsiaGo's Darren Goh (right) look on.Malaysia's low-cost airline AirAsia has introduced an one-stop online travel portal,, which offers travel services such as flight bookings, tours, hotel reservations, car hire and transfers in one place.

The travel portal, with more than 70,000 hotel partners and over 5,000 tour & activities, was launched on Tuesday at Westin Hotel, Kuala Lumpur.

“ is the online travel portal which offers the widest range and variety of hotels, tour and activities in the Asia region, coupled with ultimate convenience for guests as a one-stop online services,” said Kathleen Tan, the Regional Head of Commercials, AirAsia Group.

She also concluded that travel demands change according to people’s lifestyle and trends.

“ We see that we need to adapt and innovate as well. We receive 25.5 million unique visitors in our site last month, with more than 65 million visits. “

Thursday, August 19, 2010

AirAsia to proceed with plan to list in Thailand

21 May 2010

KUALA LUMPUR: Low cost carrier AirAsia Bhd will continue with its plan for a dual listing in Thailand despite the political crisis in that country, said its group chief executive officer (CEO), Datuk Seri Tony Fernandes.

“A crisis will come and go. But our listing plans are still afoot,” he told reporters at the Sixth World Islamic Economic Forum (WIEF) here yesterday.

He said the listing would happen once the political environment in Thailand showed recovery.

Fernandes, however, said there was no time frame or schedule for the listing.

On its operations in Thailand, he explained that the airline had a good sales period but obviously, sales had fallen in the last two months.

“We will bounce back. The power of recovery in Asia is strong as we have undergone many crises before,” he added.

Earlier during the Global CEO Panel session, Fernandes said there was a need to spend on branding, as it was an important aspect of company performance and achievement.

“It is important to innovate and create a better environment. At AirAsia, we have spent a lot for branding,” Fernandes said. In order to build branding worldwide, AirAsia had maximised its sponsorship programme, he said.

The airline recently sponsored the Formula One Team and also became the official low cost carrier for English Premier League team, Manchester United.


Tony Fernandes receives prestigious Nikkei Asia prize

21 May 2010

AirAsia Group CEO Tony Fernandes was awarded the prestigious Nikkei Asia Prize in Tokyo today for his contributions to the growth of Asia.

The prize, given by leading Japanese newspaper publisher Nikkei Inc., recognizes Tony's role in democratizing travel in Asia. Tony, in helming best low-cost airline AirAsia, removed air travel from the clutches of the elite by offering low fares affordable to everyone. He also created a massive network of mostly Asian destinations, promoting travel and tourism in the region and contributing to economic growth.

"Under his leadership, AirAsia revolutionized the air travel industry in the region by pioneering the discount carrier phenomenon. As a result, air travel became widely accessible to people from all walks of life, boosting travel in the region," Nikkei Inc. said.

The awarding body also recognized Tony's "achievements in remaking the company into one of the most successful international airlines in Southeast Asia despite the recent economic slowdown of the airline industry."

The award is a timely recognition for AirAsia, which is hoping to start Malaysia-Japan flights in 2010. AirAsia plans to make Kuala Lumpur the premier gateway to ASEAN for Japanese tourists. It is also hoping to offer low-fare flights to Japan to the 600-million strong ASEAN population.

"We're here to link more communities and to grow travel and tourism in Asia. We look forward to providing more links between the ASEAN region and the rest of Asia, including Japan. Links between countries play an integral part in strengthening Asia economically, socially and politically, and we are committed to helping achieve this," said Tony.

Tony is the only airline executive to have received the award. He is also the first Malaysian individual to be given the award since the launch of the annual Nikkei Asia Prizes in 1996.

Tony has tirelessly championed the ASEAN region, where AirAsia is based, as a premier travel and tourism destination. Through AirAsia, Tony created "sky bridges" that link the communities of ASEAN and that link the region to many more cities in Asia, Australia and Europe. AirAsia's "sky bridges," utilized by more than 92 million guests to date, have greatly contributed to the economic growth and social integration in the region.

Tony grew AirAsia with the slogan Now everyone can fly. In eight years, AirAsia grew from an airline with two aircraft, one destination and 250 employees to an airline with 92 aircraft, approximately 70 destinations and a staff of 7,000. AirAsia is now widely regarded as THE ASEAN airline, and it is the largest and most successful low-cost airline in Asia.

Tony's contributions to the region also extend to his launch of regional sports development initiatives such as the ASEAN Basketball League; AirAsia ASEAN Driver Development Program, which provides training support for would-be professional race car drivers from the region; and the AirAsia MotoGP program, which supports regional motorsports talents.

Travel Blackboard

Asiana tops annual airline rankings

21 May 2010

South Korean carrier Asiana has topped the 2010 airline rankings survey conducted by Skytrax.

Runner-up was Singapore Airlines, with Qatar third. The annual rankings reflect a 10-month long study taking into account almost 18 million air travellers from 100 nationalities.

The study ran from July 2009 to April 2010. Skytrax is an independent airline quality monitoring organisation.

AirAsia was named the world’s best low cost airline for the second year in a row.

Air New Zealand was voted best carrier in Australia-Pacific region and rose to fifth in the overall rankings. As the world’s 36th largest carrier it’s punching well above its weight.

The biggest loser was Cathay Pacific, falling from first to fourth.

Australia’s Qantas continued its descent as passengers reacted to slipping customer service standards and aircraft reliability issues.

Three years ago it was ranked the world’s third best carrier, last year it fell to sixth and this year to seventh, two places behind Air New Zealand and one behind Etihad. It just beat Emirates. But Qantas did earn recognition for its premium economy cabin and premium economy seats.

Significantly, not one US carrier won any category in the Skytrax rankings - even the best North American airline title went to Air Canada, reflecting just how far behind international standards the world's larger, US airlines like United and American Airlines are performing.

Praising Asiana’s success, Skytrax chairman Edward Plaisted said the award was the result of its focus on customer service.

“Asiana Airlines is clearly meeting and exceeding their customers' expectations,” he said.

Tony Fernandes, AirAsia Group CEO, said Air Asia was proud to be recognised as the low cost leader for the second successive year.

“The Skytrax award is very special to us because it is voted on by passengers. It reaffirms once again that we are the People’s Champion.”

The full list is as follows:
1. Asiana Airlines
2. Singapore Airlines
3. Qatar Airways
4. Cathay Pacific
5. Air New Zealand
6. Etihad Airways
7. Qantas Airways
8. Emirates
9. Thai Airways
10. Malaysia Airlines

A host of other awards were announced:

Best Low-Cost Airline Worldwide - AirAsia
Most Improved Airline - Garuda Indonesia
Best Cabin Staff - Singapore Airlines
Best Inflight Entertainment - Emirates
Best Airport Services - Thai Airways
Best Economy Class - Malaysia Airlines
Best Premium Economy Class - Qantas
Best Business Class - Qatar Airways
Best First Class - Etihad Airways
Best Airline: Transatlantic - Virgin Atlantic
Best Airline: Transpacific - Cathay Pacific
Best Airline: Australia/Pacific - Air New Zealand
Best Airline: Europe - Lufthansa
Best Airline: India/Central Asia - Kingfisher Airlines
Best Airline: Middle East - Qatar Airways
Best Airline: North America - Air Canada
Best Airline: South East Asia - Singapore Airlines
Best Airline Lounge - Business Class - Virgin Atlantic
Best Airline Lounge - First Class - Thai Airways
Best Airline Seat - Business Class - Singapore Airlines
Best Airline Seat - Economy Class - Kingfisher Airlines
Best Airline Seat - First Class - Etihad Airways
Best Airline Seat - Premium Economy Class - Qantas Airways
Best Low-Cost Airline Australia/Pacific - Virgin Blue
Best Onboard Catering - Business Class - Qatar Airways
Best Onboard Catering - Economy Class - Turkish Airlines
Best Onboard Catering - First Class - Etihad Airways
Best Airline Alliance - oneworld

The honour is another feather in the cap for the Malaysian-based carrier, which took out the prestigious title in 2009. Last October, AirAsia and AirAsia X were also awarded jointly the Centre for Asia Pacific Aviation (CAPA) Airline of the Year Award for 2009.

AirAsia X CEO Azran Osman-Rani said the award further bolstered Air Asia’s global reputation for providing excellent and value-for-money services.

“We are honoured to have been awarded this title, not once, but now twice,” he said.

"This is validation from our guests and peers that with our stunningly low air fares, new fleet, growing network, outstanding service, and constant innovations such as our new flatbed Premium seats, we are a truly global and great airline worthy of recognition.

“The fact that AirAsia has experienced continued growth in a tough economic climate over the last 12 months makes the win even sweeter.

"Being a low-cost airline should never have to mean delivering a low-quality service. Air Asia is proof of the fact that affordable travel and extremely high service standards can operate hand in hand.”

AirAsia’s network extends across 130 routes covering 70 destinations.

Its long haul affiliate, AirAsia X, flies to Australian destinations from Kuala Lumpur including Melbourne, Perth and the Gold Coast.

AirAsia Indonesia also operates a Perth to Bali service.

Mr Osman-Rani said AirAsia had experienced strong growth on all of its Australian routes, helping contribute to the 2010 World’s Best Low Cost Airline award.

“The three Australian routes have all been extremely successful and have helped make AirAsia the success it is today,” he said.

“But we won’t rest on our laurels. Now that we’ve reinvigorated our fleet with more comfortable new seats, we’re going to focus next on further improving our customer contact points, making it easier to purchase multiple flight sectors, and livening up our food and
beverage selection.

“AirAsia will undoubtedly continue to face challenges but there is a very positive outlook for 2011.

“We hope next year will prove third time is a charm for AirAsia by scoring the World’s Best Low Cost Airline award again.”

Asia Pacific LCCs finding the going tough in international markets

20 May 2010

Asia Pacific LCC stocks dropped back yesterday, led downwards by SpiceJet, which reportedly stated it has been unable to proceed with plans to raise USD75 million to support its international expansion, due to differences in valuations of the carrier. Live Mint reports up to six financial groups have submitted term sheets to invest in the carrier, but no agreements have been reached.

Virgin Blue (-3.2%) fell again on concerns about the domestic Australian outlook. But comments by Tiger Airways CEO, Tony Davis, that the Australian unit is examining international destinations within a five-hour flying range from Australia for its A320 aircraft would not have helped Virgin Blue’s short-haul international outlook. Tiger is considering destinations in Indonesia, New Zealand and the Pacific islands, but is yet to announce any specific plans, which would be subject to government approval.

AirAsia’s (-2.3%) Thai offshoot is operating amidst the massive social disruption in that country, although its strong brand and low costs make it well positioned to benefit from a future rebound in demand, once calm is restored to Bangkok and provincial areas.

AirAsia yesterday launched a one million "Free Seats" sale to major destinations including Thailand, available until 23-May-2010 for travel from 03-Jan-2011 to 08-May-2011. More discounting of near-term travel is expected to/from Thailand to help rebuild volumes.

Selected LCCs daily share price movements (% change): 19-May-2010

Centre for Asia Pacific Aviation

AirAsia launches Kuala Lumpur - Bangalore Flights

20 May 2010

AirAsia today launched flights between Bangalore in India and the capital of Malaysia, Kuala Lumpur.

Bangalore is the seventh destination for AirAsia in India after Trivandrum, Kolkata, Chennai, Kochi Tiruchirappali and Mumbai.

To celebrate, AirAsia is offering all in fares from as low as RM 25 to guests traveling from Bangalore as part of its offer of one million free seats. Bangalore, as part of AirAsia’s global network will be part of the free seats campaign, which are available for potential travelers to the city.

AirAsia will be operating its brand new Airbus A320 aircraft on the route.

Speaking about the launch, Ms. Kathleen Tan, Regional Head of Commercial, AirAsia said, “We are excited to launch our services between Kuala Lumpur and Bangalore. The daily service is expected to cater to significant traffic including business and leisure travelers as well as students to and from the tech-hub in Southern India. In addition to this, the service is also expected to cater to and promote medical tourism in the city of Bangalore. AirAsia foresees a huge demand from the health sector with patients seeking medical assistance from institutions based in Bangalore.”

On its inaugural flight from Kuala Lumpur, AirAsia carried 15 children with Congenital Heart Disease requiring open heart surgery. The children will be operated upon at Narayana Hrudayalaya Heart Institute, Bangalore, one of the largest heart hospitals for children in the world.