New $540 million terminal to ease AirAsia's worries

Malaysia’s government officials announced on Wednesday that a new low-cost terminal costing 2 billion ringgit ($540 million) will be built by 2011.

The new terminal will be constructed near the main Kuala Lumpur International Airport and will handle up to 30 million passengers annually, according to Bashir Ahmad, Malaysia Airports Holdings Managing Director.

"We've found the location and will be announcing it at the right time” said Ahmad.

This is no doubt good news for budget carrier AirAsia who has been stressing that its expansion plans will be limited by the current size of Malaysia’s airports.

The carrier plans to grow its fleet to 184 by 2013, bringing in up to 30 million people in passenger traffic.

Currently the existing terminal does not have a sufficient amount of aircraft parking bays and can only handle up to 15 million people annually according to the International Herald Tribune.

Last month, the government rejected AirAsia’s proposal to build and operate a budget terminal costing 1.6 billion ringgit ($432 million).

The 2 billion ringgit now allocated by the government to build the low-cost terminal is part of its recently announced 60 billion ringgit ($16.2 billion) economic stimulus package.

Pleasant flight for travellers

Former Manchester United defender David May (left) and former Liverpool fullback Phil Babb (right) arriving at the Low-Cost Carrier Terminal in Sepang from London yesterday.

KUALA LUMPUR: Former Manchester United defender David May and former Liverpool fullback Phil Babb were among 216 passengers onboard yesterday's return flight from London on AirAsia X.

They are scheduled to make a special appearance at the Sunway Lagoon Amphitheatre tomorrow for the stadium- viewing party of the Manchester United and Liverpool English Premier League match.

On hand to welcome them was Tourism Malaysia International/marketing Division (Americas/Europe/Oceania) senior deputy director Maizan Ahmad.

For 70-year-old Anne Fern, her flight to Malaysia was a surprise.

Her family had booked the holiday to celebrate her birthday at a secret location here.
She and her family were rewarded with an upgrading to XL class for being the first customers in the queue.

"It's a fantastic surprise indeed," said Fern, who was travelling with her grandchildren Katie and Ben Myers, daughter Elaine Baxter as well as Agustinus Nieuwenhuisun who had flown in from Holland.

The family will also celebrate Nieuwenhuisun's 69th birthday. They will join Fern's grandson, who is in Penang.

From here, they planned to fly to Ko Samui, Bangkok, and Singapore, all on AirAsia.

Prince Andrew greets inaugural flight from Kuala Lumpur to Stansted

LONDON: AirAsia X’s inaugural flight from Kuala Lumpur touched down at Stansted Airport at 2.36pm on Wednesday, marking Asean’s first low-cost carrier connecting Asia and Europe.

The Airbus A340 aircraft carrying 286 passengers made the historic landing 24 minutes ahead of schedule.

The passengers on board flight D7 2006 broke into applause as the pilot, Captain Adrian Jenkins, guided the plane to a soft landing after the 13-hour flight.

As the aircraft was being taxied to stand A12, the Duke of York Prince Andrew spoke briefly to the pilot via radio from the airport’s departure lounge.

When the engines were turned off, the captain and his crew proudly displayed the Malaysian flags and Union Jack from the port and starboard windows.

Happy landing: Prince Andrew greeting cabin crew members followed by Fernandes at London’s Stansted airport yesterday.

Later, Prince Andrew, accompanied by AirAsia Bhd Group CEO Datuk Seri Tony Fernandes, British Airports Authority (BAA) Stansted managing director Stewart Wingate and BAA Stansted commercial & development director Nick Barton, to tour the aircraft.

Among the VIPs were Asean secretary-general Dr Surin Pitsuwan, British High Commissioner to Malaysia Boyd McClearly, AirAsia X chairman Datuk Seri Kalimullah Hassan and its CEO Azran Osman-Rani.

Also present was AirAsia deputy Group CEO Datuk Kamarudin Meranun.

Fernandes said the airline was at the beginning of realising its ambition of creating a daily shuttle between Europe and Asia. He also said there were 33 Malaysians and 90 Britons among the 240 passengers returning to Kuala Lumpur later that day.

The remaining passengers were from countries such as Estonia, Sweden, Austria, Slovakia, Australia and Holland.

Meanwhile, in Sepang, DHARMENDER SINGH reported that former Manchester United player David May and former Liverpool player Phil Babb, were among passengers on board the first AirAsia flight from London to Kuala Lumpur that arrived here yesterday afternoon.

“It is a 13-hour flight from London but I have no complaints over the level of comfort or the service. It was all great,” Babb said when met at the Low Cost Carrier Terminal (LCCT) here yesterday.

Babb and May are here to appear as special guests at the Stadium Viewing Party to be held at the Sunway Lagoon Amphitheatre tomorrow.

Tourism Malaysia International Marketing Division deputy director Maizan Ahmad and AirAsia officials were on hand to give them a warm welcome.

First AirAsia Travellers From London Fly In

SEPANG-- The first group of travellers on board AirAsia X's maiden flight from London arrived at the Low Cost Carrier Terminal (LCCT) here.

The AirAsia X flight departed London's Stansted Airport at 6.00 pm (UK time) and touched down at Sepang at 3.00 pm.

This makes AirAsia X Sdn Bhd, the first low-cost,long haul service provider to connect the United Kingdom and Europe to Asia.

Former Manchester United player David May and ex-Liverpool star Phil Babb were among the 216 guests onboard AirAsia X flight D7 2007.

May and Babb are scheduled to make a special appearance at the "Stadium Viewing Party" of the Manchester United versus Liverpool match at the Sunway Lagoon Amphitheatre on March 14.

Yesterday, the inaugural AirAsia X flight between Kuala Lumpur and London took off at 9.00am and reached Stansted at 2.40pm (UK time).

The service will initially feature five direct flights per week.

The Kuala Lumpur-London-Kuala Lumpur route has received an overwhelming response from travellers between Australia and Europe.

Dubbed the 'Kangaroo Route', AirAsia X provides very affordable connectivity from London to the Australian cities of Perth, Melbourne and the Gold Coast, with Kuala Lumpur as the hub.

AirAsia now flies between Dhaka and Kuala Lumpur

AirAsia is set to launch its inaugural Dhaka-Kuala Lumpur flight today, making history by being the first low-cost air carrier on the route.

“We’ll continue our efforts to woo passengers with cheaper fares and other attractive facilities than any other airlines on the route,” Chief Executive Officer of AirAsia Bangladesh Noman Chowdhury told Xinhua news agency today.

The budget carrier from Feb 9 to Feb 15 offers fares as low as 2,000 taka (about RM107) for Dhaka-Kuala Lumpur one way excluding tax and fuel charge to attract passengers, Chowdhury said.

About normal fare rate of the airline, he said the standard fare with return ticket has been set at 20,000 taka which is nearly 40 per cent lower than other airlines operating on the route.

Chowdhury said the airlines will carry passengers every day by its airbus A320 aircraft, which has 180 seats, offering no food on board and charging fees for carrying baggage.
“Despite offering low cost fares, we are not a threat for existing market players as our target is basically tourists of Malaysia and Bangladesh, not labour traffic which accounts for 90 per cent of passengers of the Dhaka-Kuala Lumpur routes,” he said.

However, other airlines said the operation of AirAsia pose a threat to other airlines on the same route.

“Obviously it’s a threat for us. When we’re worried about falling air traffic, such an offer by AirAsia poses threat to our business,” a senior official of state-owned Biman Bangladesh Airlines said.

Local aviation industry sources said Biman and Malaysian Airlines control a combined share of 70 per cent of the market while other airlines occupied the rest.

They said an estimated 10,000 passengers used to travel on the Dhaka-Kuala Lumpur route a week but that number dropped by nearly 50 per cent since July last year after Malaysia downsized recruiting workers from Bangladesh.

AirAsia X Opens The Market For New Passenger Segment

LONDON - AirAsia X's route to London opens the market for new passenger segments, said British High Commissioner to Malaysia Boyd McCleary.

"AirAsia is opening a brand new passenger segment, you see people from Asean who have never travelled before are now doing so," he said.

The United Kingdom welcomes any type of traveller.

"We are happy to take any (type of) Asian traveller. This is an open country and it offers variety," he said when asked if the United Kingdom was concerned about budget travellers flocking to the country after the celebration of AirAsia X's first flight to Stansted Airport, London Wednesday.

AirAsia X is an affiliate of AirAsia Bhd.

AirAsia's chief executive officer, Datuk Seri Tony Fernandes, who was euphoric about the inaugural flight, said it was a major step for AirAsia in realising its European aspirations.

It also strengthens Kuala Lumpur as the regional aviation hub, he said.

"Since Sir Freddie Laker's Skytrain, no airline has ever managed to carry passengers this far at such a low fares. With this global platform, we are making the world much smaller and cheaper for everyone to connect to each other," he said.

Sir Frederick Alfred Laker, was a British airline entrepreneur, best known for founding Laker Airways in 1966.

Laker was one of the first airline owners to adopt the "no-frills" airline business model that has since proven to be very successful worldwide with companies such as easyJet, JetBlue, Ryanair, Southwest Airlines, AirAsia and Virgin Blue.

AirAsia X's chief executive officer, Azran Osman Rani said it hopes to carry 120,000 passengers on the Kuala Lumpur-London route by the end of this year.

AirAsia X' hopes to carry one million passenger and make RM1 billion in revenue in the current year from its entire routes.

AirAsia X To Finalise Leasing Of Another A340 By End-march

LONDON,- AirAsia X, an affiliate of low-cost carrier AirAsia Bhd, is in advanced negotiations to lease another Airbus A340 in order to increase its frequency of the just-launched Kuala Lumpur-London route.

"We want to have the KL-London route on a daily basis from July onwards," said AirAsia X's chief executive officer, Azran Osman Rani.

Launched yesterday with the inaugural flight from KLIA to Stansted Airport outside London, the company would mount five direct flights per week.



He said after a six-year lease of the aircraft model, the airline might consider buying the next generation Airbus A350 for its long haul services.

"The A350 is still at the design stage, we will wait for it to be more at the advanced stage before deciding," he told Malaysian media on board the KL-London inaugural flight.

Stansted Airport is Britain's third busiest airport, with 22.8 million passengers passing through and many leading low-cost airlines making it their base.

In London, the passengers were received by the Duke of York, Prince Andrew, AirAsia Bhd's chief executive officer, Datuk Seri Tony Fernandes, British Airports Authority (BAA) managing director Steward Wingate and BAA's commercial and development director Nick Barton.

AirAsia X, also aims to expand into to Central and Eastern Europe, said Azran.

"Countries like Russia and Poland are emerging markets, it will be interesting to tap into it," he said, adding that, Germany and Italy could also be attractive destinations.

However, for now, AirAsia X will concentrate on London and add another route only next year, he said.

Despite the economic downturn, AirAsia X remained upbeat about the aviation industry as there was still a lot of demand in what he said was relatively an untapped market.

"It is easier to take up market share when we go into the market at a time when other airlines are cutting back," he said.

Although the low-cost carrier might see a decline in certain segments of passenger traffic as they can't afford to travel anymore, it was gaining from the business segment.

"A lot of companies that are on cost cutting measures choose to travel with low-cost carriers," he said.

AirAsia X has also benefited from airline companies cancelling some of their aircraft purchases.

"We only had two slots for 2009 for the A330 that was ordered but because some airline companies cancelled their orders we got a third slot in Sept 2009, which means we will receive our new aircraft faster," he said.

The airline would want to expand its destinations from five now to 11 by the end of this year, possibly to Sydney, New Delhi, Chengdu and the Middle East.

"I just came back from Abu Dhabi and Dubai. Things are promising. We have to finalise discussions with the airports," he said.

Family off to London, thanks to airline offer

SEPANG: A lifelong dream came true for 52-year-old Bhagwan Kor.

Now she can afford to visit her relatives in London and see Europe with AirAsia X’s RM499 return fare.

She was one of 286 passengers who took the low-cost carrier’s inaugural flight to London, thanks to her daughter Jagjit Kaur, who also bought tickets for father Laban Singh, 59, and brother Jasmair Singh, 25, when it was launched on Nov 25.

Dream come true: (From left) Jasmair Singh, Jagjit Kaur, Bhagwan Kor and Laban Singh are all smiles before boarding AirAsia X’s inaugural flight from KL to London at KLIA-LCC terminal.

“I waited with my laptop logged on to AirAsia’s website at 7.45pm and waited for the promotion to start at 8pm,” Jagjit Kaur said when met just before her flight at 9am on the Airbus A340-300 yesterday.

She said it was a good tactic to avoid website congestion by logging on to the website just as the promotion started.

A junior manager for IT firm CSC Malaysia, Jagjit Kaur, 28, said it was a great feeling to be able to buy return air tickets to London for her whole family for just over RM6,000.

British couple Sarah Brook, 28, and Simon Mahood, 27, jumped at the chance to fly back to London to get married with the low fare from their adopted home of Hanoi.

“It was good timing that we received the promotion for the flight at £99 in my e-mail from AirAsia just as we were planning for our wedding,” Sarah said before boarding.

The route also proved popular among travellers between Australia and Europe. The airline flies from Kuala Lumpur to London five times a week.

Asean secretary-general Dr Surin Pitsuwan, who took the same flight yesterday, said member countries could do with more affordable intra-Asean flights to promote better integration between their citizens.

He said he hoped the airline could expand its flights to cover more destinations in the Asian region, especially to southern China, to encourage trade between the regions.

“Many provincial capitals in southern China are seeking to connect with Asean countries. They are going to be the new growth centres, away from the coastal regions,” he said.

AirAsia X chief executive officer Azran Osman-Rani said the airline’s next move would be to open more flights to China in addition to its existing Tianjin and Hangzhou routes.

He added that the 50% reduction in landing fees for airlines was good for the regional air travel industry, adding that it would be passed on to AirAsia X’s passengers in terms of lower fares.

AirAsia X flies to London’s Stansted Airport from the LCCT

SEPANG: AirAsia Bhd’s long-haul airline, AirAsia X, finally took off to London from the Low Cost Carrier Terminal (LCCT) yesterday with 289 passengers on board, 1½ years after the plan was first announced.

The maiden flight on an Airbus A340-300 was scheduled to land at Stansted Airport, Britain’s third busiest airport.

AirAsia X chairman Datuk Seri Kalimullah Hassan, chief executive officer Azran Osman Rani, Asean secretary-general Dr Surin Pitsuwan and British High Commissioner to Malaysia Boyd McCleary were present at the launch of the flight.

Azran said the 50% rebate for landing charges would present an opportunity to lower cost and lower fares to passengers.

From left: Malaysia Airports Holdings Bhd MD and CEO Datuk Seri Bashir Ahmad Abdul Majid, Dr Surin Pitsuwan, Kalimullah Hassan and Azran at the launch on Wednesday.

“As cost becomes lower, we will be passing through in terms of lower fares to our passengers. When we offer low fares, more people will fly.

“We are not afraid of competition because when we have the low-cost structure, it is the best place to offer low fares,” he told reporters.

Azran also said AirAsia X was looking at expanding further in Asia-Pacific, and to more destinations in China and Australia.

He said it was also interested in India and the Middle East. London is AirAsia X’s fifth international destination after Gold Coast, Perth and Melbourne in Australia and Hangzhou in China. AirAsia X will be launching a new route from Kuala Lumpur to Tianjin, China, next month.

KLIA East: AirAsia's boss explains why

AirAsia X Lauds 50 Pct Rebate For Landing Charges - Azran Osman

KUALA LUMPUR -- AirAsia X, Malaysia's long-haul budget carrier, sees the 50 percent rebate for landing charges as an opportunity to lower cost and lower fares to passengers, chief executive officer Azran Osman-Rani said today.

"As cost comes lower, we will be passing through in terms of lower fares to our passengers. When we offer low fare, more people will fly," he said when asked to comment on the 50 percent rebate for landing charges.

Under the RM60 billion second stimulus package announced by the government yesterday, rebates will be given for two years, effective April 1, to all airlines that operate from Malaysia.

"We are not afraid of competition because when we have the low-cost structure, you are the best place to offer low fares," he told reporters at the launch of AirAsia's inaugural KL-London flight that took off from the Low Cost Carrier Terminal in Sepang today.

London is AirAsia-X's fifth international destination after Gold Coast, Perth and Melbourne in Australia and Hangzhou in China.

AirAsia X will be launching a new route from Kuala Lumpur to Tianjin, China, on April 2.

Tianjin, located in northern China and 120km from Beijing, is connected to the Chinese capital via a 30-minute high-speed Beijing-Tianjin Intercity Rail service.

"We are looking at expanding further to Asia-Pacific, more destinations in China and Australia. India is also very interested and the Middle East," he said.

AirAsia X, an associate of AirAsia with shareholders including the Virgin Group and AirAsia Bhd, is a low-cost long-haul airline launched in January 2007. It commenced commercial services in November 2007.

AirAsia X’s first London-KL flight set to take off

LONDON – Britain’s first long-haul, no-frills flight to Asia will take off from Stansted today at 5.30pm (1.30am tomorrow, Malaysian time), courtesy of AirAsia X. Passengers will spend 12 hours in seats that are smaller than on other planes, have less legroom, and do not recline. If they want to watch an in-flight movie, they will have to pay.

It is like a Ryanair flight – just one that lasts much longer. However Tony Fernandes, the flamboyant entrepreneur behind the airline, said no one was complaining. The reason: about a fifth of the passengers are only paying £99 for the flight to Kuala Lumpur in Malaysia, with the average fare a dirt-cheap £175, compared with a typical cost of about £500.

Fernandes admitted the five-day-a-week service would not be luxurious, but said this observation missed the point.

“As a backpacker I sat for 12 hours on a bus,” he said. “We are trying to stimulate a new market.”

Many have tried, and failed, to make low-budget, long-haul air travel profitable. The start of the new low-cost airline comes at a challenging time for the industry, which is in the grip of a global recession and a slump in demand.

“There is a fine line between brilliance and stupidity,” Fernandes said, but he remained undaunted. “I have always been a contrarian. I bought AirAsia for one ringgit [about 20p] three days after 9/11. Every calamity known to mankind has happened since I came here – record oil prices, SARS, bird flu, terrorist attacks, a tsunami.”

AirAsia’s low-cost, long-haul subsidiary AirAsia X, in which Richard Branson’s Virgin Group holds a 20% stake, already runs flights from Kuala Lumpur to Australia and China. Fernandes said his Stansted gamble had a better chance of success because travellers could fly on to these other destinations from Kuala Lumpur with his airline.

He said that three passengers due on the first flight from Kuala Lumpur to Stansted tomorrow had also flown with AirAsia X from Melbourne.

He admitted that encouraging low-cost, long-haul travel was not good for the environment, but argued that AirAsia X’s streamlined operation had a better record than most.

“We have a younger [more fuel-efficient] fleet, we fit more passengers on board than anyone else. We do make an effort but we can’t run away from the fact that there are emissions.”

Airline seats are typically more than 16 inches wide, but AirAsia X’s are just 15.8 inches. The pitch between rows of seats is a snug 30 inches, compared to about 32 inches on other planes. The seats do not recline, but there is a “slide-down facility” instead, allowing passengers to stretch out.

There is no business class, but passengers can pay an “XL supplement” for a larger seat. Meals, costing about £7, also have to be ordered before the flight to cut down on the amount of catering equipment which has to be taken on board.

Fernandes saids he admired the efficiency of Ryanair, but insisted AirAsia X was “much nicer”.

“It doesn’t cost anything to be nice,” he said.

Najib: Rebate for landing charges

A 50% discount on landing charges will be given to all airlines operating from Malaysia for two years effective April 1, said Deputy Prime Minister Datuk Seri Najib Tun Razak.

StarBiz has learnt that the recommendation was put forth by airport operator, Malaysia Airports Holdings Bhd (MAHB).

The International Air Transport Association (IATA) said the 50% rebate was a welcome relief for airlines, which are currently facing a slump in air travel due to the global economic slowdown.

“We appreciate the efforts of the Malaysian Government and MAHB to support the airline industry as 2009 is going to be one of the toughest years ever for international aviation,” IATA manager for corporate communications Asia Pacific Albert Tjoeng said from Singapore.

Idris Jala

“Airline losses were at least US$5bil in 2008 and projected to be US$2.5bil this year.

“Asia Pacific carriers alone will lose US$1.1bil – the largest losses among the regions,” he continued.

“International passenger demand fell 5.6% in January – the fifth consecutive month of contraction – while cargo demand has fallen off a cliff with a 23.2% decline in January. So every measure will help airlines weather the challenging environment in the year ahead.”

The total amount that MAHB earns in landing charges a year is about RM169mil, according to an analyst with Maybank Investment Bank.

MAHB will lose half of that with the discount but a government official who requested anonymity said the airport operator would be compensated by the Government.

The country’s two airlines – Malaysia Airlines (MAS) and AirAsia group (AirAsia and AirAsiaX) – are expected to each save about RM38mil a year in landing charges with the 50% discount, the government official said.

MAHB declined to comment when contacted but MAS managing director Datuk Seri Idris Jala said: “This is wonderful news.”

“It’s great that the Government is simulating demand in areas such as aviation that has a high multiplier effect on the country’s economy,” he continued.

“A study done by Khazanah Nasional Bhd and Bain Consulting shows that aviation has a multiplier effect of 12.5 to the Malaysian economy (i.e. every ringgit spent on aviation generates RM12.50 in the economy). This is positive for the economy.”

AirAsia Bhd group chief executive officer Datuk Seri Tony Fernandes, speaking from London, thanked the Government for the discount.

“It is a good move and something we have been advocating for a long time. We continue to expand and invest in routes and aircraft and recruit people and last month we recruited 150 people,” Fernandes said.

Najib, who is also the finance minister, also announced that the new low cost terminal at KLIA will be built by MAHB and be ready by 2011 at the cost of RM2bil.

Responding to this, Fernandes expressed hope that MAHB would charge fair landing and parking charges.

“The charges should be based on the RM2bil investment and not any arbitrary figure,’’ Fernandes said.

AirAsia boss happy with promise of new LCCT

AIRASIA chief executive officer Datuk Seri Tony Fernandes is a happy man with the confirmation that a new low-cost carrier terminal (LCCT) will be built by 2011.

He feels it is a step forward.

»We hope MAHB will still do more on its part« DATUK SERI TONY FERNANDES

Deputy Prime Minister Datuk Seri Najib Tun Razak announced in the mini-budget that Malaysia Airport Holdings Bhd (MAHB) would build and operate a new LCCT at the KL International Airport at an estimated cost of RM2bil.

“It’s a good step, but we hope MAHB will still do more on its part.

“We can’t rest on the airlines and the Government to do all the work,” Fernandes said yesterday.

He added that he hoped MAHB would impose fair charges commensurate with the RM2bil investment.

Asked if AirAsia had been affected by the economic crisis, he said, “No”.

“On the contrary, we’ve been having good growth. We’re taking a positive stand on this and reducing our cost structure.

“Value is key for our customers and what we’re doing is giving them better value and lower fares,” he said.

Asked if he thought the measures announced in the mini-budget would help AirAsia, he replied: “What the Government has done, it’s good.

“Now we have to ask MAHB to play its part in lowering the cost structure for the consumers as well. They should also give incentives for all airlines to promote growth.”

Fernandes added that he had no plans to lay off workers. Instead, he was hiring more people.

Linfox sees Avalon set for take-off

MELBOURNE could have its second international airport as early as next year, with Avalon operator Linfox saying it is "90 per cent sure" of receiving approval to start building by the end of the year.

If the decision is given the green light by the Federal Government, Linfox says 500 jobs would be created in the initial stages of the project.

Linfox's decision to re-submit its proposal to build the terminal, worth up to $50 million, comes after the Government's surprise rejection of its original application last June.

Managing director David Fox said planning issues had derailed the proposal but only after the airport had signed a deal with Malaysian budget carrier AirAsia X to base its international operations out of Avalon.

"We struck a deal with AirAsia and we were relying on the Federal Government and the State Government to support us. That didn't happen, so we lost (AirAsia X) to Tullamarine," he said.

"There were several issues last time with customs, quarantine, immigration … this time we have crossed off the t's, dotted the i's."

The development would give Melbourne an edge over Sydney, which is still to decide on a site for a second international airport decades after the proposition was first raised.

Melbourne Airport has experienced strong growth. The latest figures mark 27 consecutive months of international passenger growth at Tullamarine, while Sydney's traffic has been in decline since September.

Avalon Airport, which is now hosting the Australian International Airshow, is the home of Qantas' budget carrier, Jetstar, and records more than a million passenger movements a year.

Mr Fox believes that number could triple if the international terminal is approved.

"The Victorian Government is happy to say that it wants a second airport - it is good for the economy, especially in these tough times," he said.

"There are other airlines out there that want to use the low-cost model that we can offer at Avalon."

Linfox is talking to international carriers, including India's Kingfisher Airlines, about using Avalon Airport as an Australian base.

"There are opportunities out there," Mr Fox said.

It is estimated the 7300-square-metre terminal, to the east of the domestic terminal, would take up to a year to build.

"The international terminal would put about 400-500 jobs in straightaway. I can truly say to you, I believe we can see 3000 to 4000 more jobs created here on this facility in relation to maintenance, international (operations)."

Linfox founder Lindsay Fox said airlines would save about $3.4 million a week in costs such as landing fees by basing themselves at Avalon compared with Tullamarine.

"The international airport will eventually happen. The cost differential between landing at Avalon and landing at Tullamarine is just enormous," he said.

AirAsia plans more stops in India soon

AirAsia and AirAsiaX still expanding while other airlines downsizing

Kuala Lumpur: While many airlines in the world are grounding airplanes and cutting down on frequencies, AirAsia Bhd and its sister airline AirAsiaX are still expanding and plan to fly to several destinations in India this year.

“There is a slowdown but people are still travelling. Many are also switching from premium travel to low-cost travel and that is why we are just expanding,’’ said AirAsia group chief executive officer Datuk Seri Tony Fernandes.

“AirAsia and AirAsiaX have been expanding to China and this year our focus will be India. We started off with flights to Trichi in Tamil Nadu at the end of last year and have seen high load factors. Now we want to expand further into several destinations in India,’’ he told StarBiz in an interview.

The destinations on the India list include Hyderabad, New Delhi, Mumbai, Chennai, Bangalore, Kochi, Madurai and Calcutta.

AirAsiaX would begin flights to Hyderabad in October, he said.

But flights originating from Bangkok to India will come online earlier.

“We will fly the Amritsar and Calcutta routes even sooner but out from Bangkok,’’ Fernandes said without elaborating. “India is a huge market and we want to be in that market.’’

AirAsia takes on routes whose durations are four hours and below while AirAsiaX plies routes beyond five hours.

The only thing that could slow down the group’s plans is landing rights but Fernandes remains positive that the airlines will get the rights to fly into the destinations they want this year.

Passengers boarding an AirAsia plane in its inaugural flight to Trichi in Tamil Nadu.

The International Air Transport Association (IATA) said on Monday that air traffic for Asia declined 13.5% in December 2008 with premium travel showing the greatest degree of weakness.

Demand fell faster at 8.4% and the load factor was down 3.3%.

Business travel slumped 13.3% while that of economy dropped 5.3%.

“We are still going ahead with our expansion as low-cost travel is what consumers want,’’ Fernandes said.

The AirAsia chief said even Colombo and Maldives are on the cards this year but he would not reveal the schedule dates for the flights.

Both AirAsia and AirAsiaX fly to six destinations in China besides Hong Kong.

AirAsia flies to Guanzhou, Guilin, Haikou and Shenzhen.

AirAsiaX services the Hangzhou (Shanghai) route and will start plying the Tianjin route soon.

The airlines are also considering flying to Chengdu and Xian in the future.

AirAsia and AirAsiaX fly 114 routes covering 64 destinations.

AirAsiaX is currently gearing for its inagural flight to London via Stanstead on March 11 while Dhaka is next on AirAsia’s list.

Thai AirAsia pushes Phuket

09 March 2009

Thai AirAsia is planning direct flights between Phuket and Hong Kong in June and will push Phuket as a second hub in Thailand.

An executive of the budget airline said daily flights between the two cities would use new A320s, scheduled for delivery in June.

Phuket will be given more links with major destinations in Thailand and neighbouring countries.

"We will beat rivals Silk Air of Singapore and Dragon Air of Hong Kong," the executive said. The number of tourists from Hong Kong to Phuket has been increasing as tourism recovers.

Phuket is crowded with tourists, and Thai AirAsia usually has full cabins.

Tassapon Bijleveld, chief executive officer, said the company was eyeing emerging markets such as China and India and planned to add flights to second-tier cities there.

Tassapon said average load factor during the first two months had reached 78 per cent, up from 76 per cent in the same period last year, showing a tourism rebound after numbers sharply dropped due to airport closures in November and early December.

Thai AirAsia pushes Phuket

09 March 2009

Thai AirAsia is planning direct flights between Phuket and Hong Kong in June and will push Phuket as a second hub in Thailand.

An executive of the budget airline said daily flights between the two cities would use new A320s, scheduled for delivery in June.

Phuket will be given more links with major destinations in Thailand and neighbouring countries.

"We will beat rivals Silk Air of Singapore and Dragon Air of Hong Kong," the executive said. The number of tourists from Hong Kong to Phuket has been increasing as tourism recovers.

Phuket is crowded with tourists, and Thai AirAsia usually has full cabins.

Tassapon Bijleveld, chief executive officer, said the company was eyeing emerging markets such as China and India and planned to add flights to second-tier cities there.

Tassapon said average load factor during the first two months had reached 78 per cent, up from 76 per cent in the same period last year, showing a tourism rebound after numbers sharply dropped due to airport closures in November and early December.

AirAsia X offers saucy deals to make the world your oyster

9 March 2009

AirAsia X is making the world your oyster with saucy deals for low-cost airfares from each of its Australian destinations to Kuala Lumpur.

As part of the World’s Your Oyster Sauce sale, AirAsia X has released special one way fares, including taxes and surcharges, to Kuala Lumpur start from $90* departing Perth, $190* from Melbourne and $250* from the Gold Coast.

Oyster sauce fares are available online only for sale until March 15, 2009 or until sold out and for travel March 23 2009 to September 11, 2009.

AirAsia X flies to Kuala Lumpur directly from Perth, Melbourne and the Gold Coast and then on to more than 60 destinations across Asia, the UK and beyond.

Connecting AirAsia flights from Kuala Lumpur to Penang are priced from $13*, from Kuala Lumpur to Thailand from $26* and to Hong Kong from $57*.

AirAsia X flights to London are selling for an incredibly low $251* one way, which means travellers from Western Australia can grab a flight to the UK for as little as $341*.

For bookings or further information visit www.airasia.com. or www.goholiday.airasia.com

Request for daily Singapore-Langkawi flight

LANGKAWI: The Chinese associations here have called on the Transport Ministry to allow AirAsia to fly direct between Singapore and Langkawi to boost tourist arrivals.

Langkawi MCA division chief Datuk Chen Liau Weng said the associations felt that such a direct route was crucial to help Langkawi weather the current economic storm.

“The state government has done nothing to boost tourist arrivals to this resort island that is heavily dependent on tourism revenue.

“That is why we are now turning to the Transport Ministry for help, as the situation is quite gloomy with businesses dropping by at least 30% so far this year,” he said.

The 15 Chinese associations have submitted a letter to Transport Minister Datuk Seri Ong Tee Keat, requesting the ministry to look into the possibility of allowing AirAsia to make direct flight between Langkawi and Singapore.

The letter was handed over to the minister’s aide after a dialogue with the Chinese community leaders here late on Saturday.

“Such direct flights will help boost tourist arrival. Right now, only Silk Air provides direct flight between Singapore and Langkawi but it is only once a week. We are requesting for daily direct flights,” he said.

Asked why the associations did not request for MAS to service the proposed route, Chen said AirAsia offered more attractive packages.

“We hope our request will be fulfilled soon as the situation is getting gloomier by day,” he said.

London, here we fly

08 March 2009

It will be history in the making on Wednesday when AirAsia stamps its mark as the world’s first low-cost carrier connecting Asia and Europe.

BARELY 72 hours to AirAsia X’s inaugural flight from Kuala Lumpur to London Stansted, Datuk Seri Tony Fernandes is keeping his fingers crossed that his dream will finally come to fruition.

After all, it had taken a lot of hard work for the no-frills airline boss and his team to dispel scepticism about the phenomenal hype surrounding their promise of low-cost, long-haul travel.

With over 50,000 seats snapped up – including 5,000 at only £99 (RM520) – for this route, the journey ahead for long-haul budget travel seems unstoppable.

What’s more, it will be history in the making as AirAsia stamps its mark as the world’s first low-cost carrier connecting Asia and Europe.

Yet, it is a nightmarish wait for Fernandes, as the clock ticks towards the arrival of Flight D7 2006 carrying 280 passengers from Kuala Lumpur on Wednesday.

As any airline chief executive will readily confess, the first flight is often fraught with uncertainty. Anything can happen, such as the engine doesn’t start or other minor hiccups.

“Of course, that’s always at the back of my mind. A lot of things can go wrong,” said the 45-year-old group CEO of AirAsia Bhd.

Fernandes, however, said he was in no state of anxiety as far as the economics were concerned because the people wanted such flights.

“For me, it’ll be a momentous occasion, a very special day. But it hasn’t really sunk in yet,” he said, adding that he would be among the Malaysian and British VIPs who will welcome the passengers at a special reception that day.

For Fernandes, flying to London will never be the same again. At least, he doesn’t need to take Qantas or Cathay Pacific – which gave him a good deal – any more.

Kangaroo Route

Excitement surrounds the maiden flight, which is scheduled to carry an eclectic mix of passengers. They range from VIPs, celebrities and the media to backpackers, students, avid shoppers and first-time fliers.

Of particular interest will be five Austra­lians who will be flying from Melbourne/Gold Coast to Kuala Lumpur and then to London, touted as the longest, low-cost, long-haul flight. The fact that those from Down Under had chosen to fly to London via KL showed the airline’s success in making transcontinental travel a whole lot easier and more affordable.

“The Australia-to-Europe via KL connectivity (and vice-versa) will provide untold benefits to both travellers and stopover cities,” said the airline’s regional head of commercial Kathleen Tan.

Apart from opening up new vistas for travellers, the so-called Kangaroo Route is seen as reinforcing the airline’s goal of transforming Kuala Lumpur into a key hub in South-East Asia.

With the KL-London sector, AirAsia and AirAsia X can now feed guests from their other routes into the Malaysian capital for onward connections to Europe.

As Tan put it: “Imagine someone from Ban­dung or Hangzhou can now fly to London sim­ply because we offer the connectivity and low, low fares that make long-haul travel affordable.”

She said AirAsia X would continue to offer more connections between Europe and the Asia Pacific while AirAsia as a group linked communities through their sky bridges.

Tan said she was proud that an Asean low-cost long-haul airline could compete successfully with global players, which had been in the business for so much longer.

“I feel this would be one of those moments that would unite South-East Asians and spur us to think more about how we can better promote our region,” she added.

Indeed, the KL-London story unfolded when AirAsia X took to the skies in January 2007. This was followed by sheer hard work in securing the right to fly the route as soon as possible.

The rest, as they say, is history. Within a week of the sale last November, some 5,000 seats offered at £99 were snapped up, a testament to the popularity of rock-bottom fares.

Cloud Nine

Despite the typical no-frills extras – between £4 (RM21) and £22 (RM115) for checked-in baggage and £5 (RM26) for a comfort kit comprising a blanket, pillow and sleeping mask – the much-trumpeted fares are still way below those of other airlines.

For £7 (RM37) a meal, passengers can also order a variety of in-flight food. They range from Malaysian and international to vegetarian and kid’s meals that come with bottled water and chocolates.

Tan insisted that the no-outside-food policy prevalent among low-cost airlines was more in ensuring food safety and passenger comfort than compelling the people to buy in-flight meals. In any case, the airline’s passengers need not worry about having to pay for using its toilets. (It has been reported that Irish budget airline Ryanair had proposed a £1 or RM5.25 toilet fee for passengers.)

“That’s pushing the definition of ancillary income too far,” she said.

Come Wednesday evening, Fernandes and his team will probably be on Cloud Nine as they celebrate the first ever, low-fare, long haul flight from Kuala Lumpur to London.

Quite aptly, they’ve chosen to party at Altitude 360 – London’s ultimate event venue in the sky. Perched on the 29th floor of Mill­bank Tower, it commands a stunning view of the city’s landmarks.

Well, the die is cast. And the time has come for this new kid on the block to prove to the world that low-cost, long-haul travel can work.

Tourism Ministry Pushing For More Flights To Langkawi

07 March 2009

LANGKAWI,-- The Tourism Ministry is working with the Transport Ministry, Malaysia Airport Holdings Berhad (MAHB) and airline operators to have more flights to this resort island, which is seeing a tourism boom.

Its deputy minister, Datuk Seri Sulaiman Abdul Rahman Taib said there were not enough flights while the existing flights to the island were always full.

"We (ministry) held talks on this problem with the Transport Ministry, MAHB, the heads of the various state tourism committees, Malaysian Airlines, AirAsia and Firefly two weeks ago," he told reporters after closing a squid fishing competition here today.

He added that the problem needed to be resolved in order to meet the ministry's tourism goals.

Airfreight weighed down by crisis

7 March 2009

THE plummeting cargo traffic across the board – be it land, sea or air – is a direct reflection of the current state of global trade that has come to a near standstill as a result of the global slowdown.

Airfreight or the air cargo industry is particularly vulnerable to the current downturn simply because it is the most costly mode for the movement of goods between countries. It also explains why producers worldwide have not wasted any time substituting air cargo services to cut costs to survive during this slowdown.

According to recent data from the International Air Transport Association (IATA), air cargo volumes in January fell at a staggering rate of 23.2% year-on-year (y-o-y) after posting a shocking decline of 22.6% y-o-y in December last year.

Obviously, the critical Christmas peak did not occur as traditionally expected.

Asia-Pacific carriers, which represent 43% of the market, led the cargo decline with a 28.1% y-o-y drop in January, followed by European carriers (-23%) and North American carriers (-19.3%).

The current performance of the air cargo industry, which carries about 35% of the value of goods traded internationally, is closely linked to the challenges faced by one of its key customers, that is, the semiconductor industry.

Reports from the US-based Semiconductor Industry Association indicate global chip sales declined 29% y-o-y in January and 22% y-o-y in the month before.

IATA says global airfreight volumes have typically grown quite closely in line with world trade volumes of manufactured goods.

With production and demand for electronic goods and garments having dropped dramatically over the past few months, IATA says the prospects for the air cargo industry in 2009 is indeed worrying.

Most air carriers are expected to report further losses in their cargo divisions this year. And airlines from Asia, whose key cargo-revenue driver is the Trans-Pacific market, are expected to continue leading such losses.

Slicing capacity

Given the gloomy prospects, capacity reduction will be more intense among the major operators this year in an effort to maintain their load factors and yields. However, IATA expresses its concern that the demand for cargo services is collapsing faster than airlines could reduce their capacity. Hence, it believes most airlines will not be able to hold up their load factors and yields this year.

The management of Malaysia Airlines (MAS) had earlier alluded to at least another 20% reduction in cargo facility this year, following a cut of 23% y-o-y since the fourth quarter (4Q) of financial year (FY) ended December 2008.

The aggressive cut in capacity had actually helped to hold up MAS’ cargo load factor at 65.6% in 4QFY2008, with yield at 90.4 sen per load tonne km, compared with the load factor of 64% and yield at 91.8 sen per load tonne km in the corresponding period a year ago.

Nevertheless, the capacity cut and the declining demand for air cargo services have resulted in the decline of MAS’ cargo revenues for 4QFY2008 by 22% y-o-y and 12% q-o-q to RM517mil.

The cargo division of MAS also reported an operating loss of RM14.1mil for 4QFY2008, compared with an operating loss of RM75.4mil in the preceding quarter and an operating profit of RM64.8mil a year ago.

Recently, Malaysia Airlines Cargo Sdn Bhd (MASkargo) – the wholly owned subsidiary of MAS through which it offers its cargo services – told StarBiz that the company would focus on controlling costs and improving efficiency, besides reducing its cargo capacity to deal with the current downturn.

It added that the company’s emphasis is on protecting its bottom line rather than pursuing market share.

Opportunities in crisis

AirAsia group does not have a designated cargo business, but it has the capacity to carry cargo in its passenger aircraft.

With the inception of AirAsia X’s maiden flight between Kuala Lumpur and London very soon, the group will commence cargo services to and from Europe.

AirAsia X CEO Azran Osman-Rani tells StarBizWeek that he believes cargo could be another area of growth for the low-cost carrier. There are still businesses that need to use air-cargo services to ship their products to their clients overseas, Azran explains, adding that the cargo business is expected to contribute 5% to the company’s revenue.

An analyst from a foreign brokerage says AirAsia group has a unique business model and tends to benefit from the failure of other airlines.

Hence, he believes that the air cargo is another opportunity that the budget airline could tap into with encouraging results due to its price competitiveness.

Analysts say even with the decline in global trade, air cargo is still an important component of international trade logistics networks and it is an essential mode of transportation for goods that are time-sensitive.

The dismal outlook aside, analysts believe intra-Asia air cargo services could be the silver lining for the industry.

They are hopeful that the stimulus plans implemented by the Chinese government could translate into actual spending by the local people there; and hence, revive the huge and once-booming consumer market in the third-largest economy in the world. With a population of 1.3 billion people, China offers vast opportunities for trade and has the potential to lead the revival of trade in the region.