AirAsia aims to beef up cargo revenue

28 September 2009

Low-cost carrier AirAsia wants to increase its cargo business by targeting clients that are more price sensitive and less time sensitive, the Business Times reported.

The airline predicts it will be able to grow its cargo revenue by half in 2009 from the US$11.5 million recorded last year.

While cargo revenue represents roughly 1.5 percent of the group's topline in 2008, the airline hopes to increase the contribution to 10 percent by 2011.

The airline, which utilises less than 20 percent of the aircraft belly space for cargo now, has the potential to utilise up to 40 percent of its cargo space for core routes including Kuala Lumpur to Kota Kinabalu, Tianjin, Guangzhou, Hangzhou, Melbourne, London, Bangkok and Jakarta.

While the shipment amount remains small, frequent flights, such as eight flights daily between Kuala Lumpur and Bangkok, allow the carrier to provide more competitive rates in the market due to under utilised cargo capacity.