AirAsia X looking to have services to North America using A340s

18 June 2009

Malaysian long-haul low-cost carrier AirAsia X is considering destinations in North America and new destinations in Europe, possibly using Airbus A340-300s.

"(It is) too early to get into specifics, but for Europe we would be keen on a central European destination and an eastern European destination," AirAsia X CEO Azran Osman-Rani says in an email to ATI. "For North America, maybe one on the east coast and one on the west coast."

While he gave no timeframe for the possible new routes, he says the airline will continue monitoring trends within the lease market for A340-300s.

"We will not be actively looking for A340s until next year," he says.

"We want to get comfortable with A340 operations and economics with the two that we have leased, but we will keep monitoring the trends in the lease market for the A340-300."

Azran says: "We would only be looking at the A340-300 model, and ideally with the same CFM engines."

In an email to Malaysian publication The Business Times, Azran says - with regards to the lease market for A340s- "we expect the lease market to soften further as the Boeing 787s come on stream."

"It is not difficult to find A340s; it's just that we're choosy and patient, waiting to pounce on a lease only when it is very favourable," he adds.

At the Paris air show yesterday, AirAsia X announced it would buy ten Airbus A350-900s, each with 400 seats in a two-classten-abreast cabin layout. These are to be delivered from early 2016, it says, adding that the deal includes five options.

AirAsia X and AFI KLM E&M Sign Agreement

PARIS, FRANCE – AirAsia X signed a contract with Air France Industries KLM Engineering & Maintenance (AFI KLM E&M) covering component support for its fleet of Airbus A330s. To drive its expansion, the Malaysian carrier has ordered 25 aircraft from the European airframer. It has already taken delivery of two aircraft and the remainder will go into service between now and 2013.

The contract includes repairs, pool access, and the corresponding logistics services for A330 components. It follows a first contract signed in 2007 for an A330 that AirAsia X used under an operating lease. AFI KLM E&M submitted at that time a proposal. Since then, the group has maintained a close commercial relationship with AirAsia X.

To further enhance its support, AFI KLM E&M will examine the possibility of developing local capabilities supported by growth at its Singapore logistics centre. Expanding the Singapore facility will also help sustain AFI KLM E&M operational activities on similar strategic contracts throughout the region, notably with the carriers Indigo and Kingfisher.

"We are very honored that AirAsia X chose us for such a significant support," says Alain Bassil, Air France Industries President. "This success clearly gives us an edge on the A330 segment throughout the region. The expansion of our Singapore logistics center will allow us to deliver high service level and to further expand our support to other operators in this important region of the world."

"At AirAsia and AirAsia X, we work with world class partners to ensure the best possible maintenance and services are provided for our fleet," says Azran Osman-Rani, AirAsia X CEO. "This is crucial in our low cost operations environment where aircraft utilization is high. We are confident that our collaboration with AFI KLM E&M will be for both parties' mutual benefit."

Yes, everyone can fly

18 June 2009 WHEN AirAsia’s popularity was on the rise a few years ago, rumours were aplenty about how some of its cabin crew was made pilots and the sort.

Although it was the butt of jokes for many, little did people realise that there was much truth behind those rumours.

AirAsia employee Ong Sook Min’s career progress is a fine example.

She began her career at the low-cost airline as a flight attendant before she was accepted into its training academy to be trained as a cadet pilot.
But Sook Min is no plain Jane with a secondary school qualification. The engineering degree graduate turned up at the AirAsia cabin crew interview only to be asked to apply for the cadet pilot position instead.

She agreed and while waiting for an acceptance letter from AirAsia to join the cadet pilot programme, she took up the cabin crew job for six months.

“I’ve always dreamt of being a pilot. Later I learnt that neither our national carrier nor neighbouring Singapore Airlines employ any female pilots.

“I put that ambition aside to focus on becoming an engineer instead. Today, thanks to AirAsia, which is the only low-cost airline in the region to employ female pilots, I have achieved my dreams,” said the contented-looking young woman.

Her journey into was no easy task.

The preliminary selection process for the cadet pilot programme consists of a qualifying exam on physics, mathematics, English and IQ.

The second interview is a psychomotor and aptitude test. This is followed by an oral interview where two captains would ask the interviewee mental calculations.

“You won’t be allowed to use your fingers, either to count or even calculate in the ‘air’ as you sum up the equations,” said Sook Min.

That arduous filter is only for a qualifying round.

“Only when you pass those three interviews and the exams, it’s then off to the flying academy,” said Sook Min.

She was sent to the Malaysian flying academy in Malacca for her 18-month course.

After graduating from the flying academy, she was back at the AirAsia Academy for the Airbus A320 Type rating, which is a ground school where the cadet pilot learns everything about flying the Airbus A320.

“I learnt about the Maintenance Flight Training Device and went through seven simulator sessions. Having passed this, I had to sit for a skills test and then, an endorsement test. Only after passing the endorsement do you get to fly the Airbus 320,” she said.

With more than 2,700 hours of flight time logged so far, Sook Min is just 800 hours away from becoming a captain. The senior flight officer has to sit for another set of tests before she earns the title captain.

“I hope I’ll be promoted to captain by the middle of next year,” she said.

AirAsia has 19 female pilots and three are in line to becoming pilots soon. Sook Min is one of them.

“AirAsia eliminates stereotypes and prejudices, so it has given me an opportunity to realise my dream. I’m thankful for the opportunity and its wonderful work culture,” she said, reflecting on the “everyone’s important” and “stay humble” credo that was put in place by its CEO, Datuk Tony Fernandes.

Another interesting people-development story at AirAsia has to be the career growth of Azhar Jaffri.

This flight attendant started his career as a ramp agent, loading and unloading bags, tagging them and even latching on the pax steps, those passenger steps that enable passengers to board and leave a plane easily.

From a back-end or backroom job in which he served for five years, Azhar was asked by his boss if he would like to try for a cabin crew job when it was offered internally first.

“I was initially reluctant but decided to give it a try. I attended the interview and was accepted into the AirAsia Academy to start my training as a cabin crew,” he said, adding that he now enjoys flying around the region, an exposure that has opened up his world to a breadth of knowledge.

Even the cabin crew are required to undergo a series of training modules and tests before they get to become a part of the Airbus A320 cabin crew.

His next aim is to become a senior flight attendant and move on to the bigger A330 and long-haul flights.

Azhar looks contended with his present job that rewards him four times more than what he earned as a ramp boy.

Flight attendant Thasikala’s life couldn’t have taken a better turn, too, if it had not been for her employer’s focus on people development.

She started her career at the LCCT as a contract wheelchair worker before she was offered a job as a Guest Service Assistant, doing check-ins and printing boarding passes.

She enjoyed her job there for 5½ years. Seeing her good customer service skills, her boss suggested that she apply for a cabin crew position.

Enjoying similar career advancement in the same workplace is Samantha Wong.

The former financial department assistant has moved on from her rather mundane number-crunching job to taking to the skies with much enthusiasm.

“Meeting all sorts of people was something I couldn’t experience at my desk job. I love my job now,” she mused.

Sook Min has realised her dream of becoming a pilot at AirAsia.

How will Airasia X pay US$2.2b for the 10 Airbus ordered?

18 June 2009

Azran Osman-Rani ... 'We have forward cash'.

PETALING JAYA: AirAsia X’s latest fleet purchase has raised concerns among analysts that it is following the high debt-leverage route of AirAsia Bhd, expanding the risks to its bankers.

The long-haul, low-cost airline company’s CEO, Azran Osman-Rani, said there was a fundamental difference between the business model of AirAsia X and that of traditional airlines.

“For AirAsia X, most of its tickets are sold through the Internet and bought by customers months before their flights.

“As for traditional airlines, tickets are mainly bought through agents and paid by customers just two weeks before the flights.

“The agents may even pay the airlines after the flights,” he told StarBiz in a telephone interview yesterday. The airline has a similar business model as AirAsia as both are low-cost carriers.

“We have forward cash. In this business, what is important is cashflow. We’re holding the forward cash,” he added.

It was announced on Tuesday that AirAsia X placed a firm order for 10 Airbus A350 aircraft which carried a list price of US$2.2bil.

This follows an earlier order for 25 Airbus A330 planes for delivery between last year and 2015.

On the company’s debt leverage, he said AirAsia X’s gearing was about 200% and was not expected to increase.

The 10 planes in the latest order will only be delivered from 2016.

“It’s not like we’re buying all the planes at the same time. But it is important to place the deposits now. This is to ensure we’ll have the delivery slots. The deposit is just US$10mil, we’re not paying US$2.2bil yet,” he added.

Progressive payments will start 36 months from delivery but the bulk of payments will be made when the planes are delivered.

By the time the A350 planes are delivered from 2016, most of the borrowings taken for the A330 planes would have been repaid.

Azran said some equity analysts did not understand AirAsia X’s business model, but that was not important.

“What is important is what the banks do. If the banks are worried with our gearing, wouldn’t they be the first to run away?

“But the banks are saying they’ll fund all our deliveries this year,” he said.

AirAsia X will take delivery of three Airbus A330 planes between September and December. Financing has been obtained for these planes.

Currently, the airline flies five planes to London, Melbourne, Perth and Gold Coast (Australia), and Tianjin and Hangzhou in China.

Its most profitable routes are Gold Coast and Hangzhou because these were the first two routes flown by the airline.

“They’re more matured markets for us than London or Melbourne. It’ll take us a year to build brand awareness for the newer routes and, initially, the pricing has to be aggressive,” he said.

US$2b Airbus jets for AirAsia X

17 June 2009

PETALING JAYA, MALAYSIA - AirAsia Bhd has announced a firm order for 10 Airbus A350 XWB aircraft with an option for five more by its low-cost long-haul carrier AirAsia X, a deal valued at US$2.2 billion (S$3.2 billion).

Deliveries were scheduled for between 2016 and 2018, the company said in a statement yesterday after the announcement was made by AirAsia and Airbus at the Paris Air Show.

It said AirAsia X had selected the A350-900 variant for its fleet, which would be configured to seat 425 in a two-class layout.

AirAsia group chief executive officer Datuk Seri Tony Fernandes said: 'Business is all about timing and long-term strategy. At AirAsia, we have always planned for the long term.'

The new deliveries would further complement AirAsia X's fleet of A330, he said in the statement.

The airline has ordered 25 A330s which are due for delivery through 2015. Two of the aircraft have been delivered so far since October 2008.

AirAsia, on the other hand, is the largest customer for Airbus A320 aircraft. It has a firm order, signed in 2005, for 175 A320s and an option for 50 more. It has taken delivery of 60 of the aircraft and the balance will be delivered by 2014.

'The purchase indicates AirAsia X's ambition to fly farther afield and to serve more destinations than it currently serves, including London, Melbourne, Perth and Gold Coast (Australia) and Tianjin and Hangzhou (China),' Fernandes said.

Fernandes, who is also director and founder of AirAsia X, added that during the current global economic uncertainties, where airlines were cutting routes and grounding staff and aircraft, AirAsia and AirAsia X were determined to fulfil and realise their potential.

'The economic downturn presents AirAsia with an opportunity to gain market share with our low-fare, high-quality business model,' he said.

AirAsia X CEO Azran Osman-Rani said it selected the A350 XWB for the step-change it offered, in terms of operating economics and its exceptional passenger appeal.

'We believe the A350 aircraft will be an industry game changer that will allow us to dramatically operate with unprecedented unit costs for long-haul flights to Europe and North America, opening up new tourism markets and exciting destinations.

'With the A350 XWB in our fleet, we will be able to set new standards in the low-cost long-haul market, making it possible for more people to fly farther in comfort at ever more affordable prices,' he said.

AirAsia's passenger volume grew by 21 per cent year-on-year to 3.1 million in the first quarter of 2009. It has so far carried over 70 million guests.

An analyst from a local research house said the purchase of 10-plus-five Airbus A350 was in line with AirAsia X's expansion.

He said this showed the commitment of the management to grow the company. 'We do not see any immediate impact on the company's financial performance but the only concern is the gearing level of the company,' he told StarBiz.

AirAsia X leads way with Airbus order

16 June 2009

AirAsia X, the pioneering low-cost, long-haul airline, placed the first significant order for long-range jets during this week’s Paris air show, in a rare sign of encouragement for the world’s leading commercial aircraft makers.

After a series of strong years, new orders to Boeing and Airbus from the world’s airlines have almost dried up this year, leaving the aircraft makers to rely on existing order backlogs to support current production.

By the end of the first week of June, Boeing had booked only seven net new orders this year – 66 cancellations and conversions almost equalled the 73 gross new orders won – while Airbus had booked only 11 net new orders by the end of May.

New orders announced in the first two days of the Paris air show have been modest compared with the big numbers achieved in recent years and so far they have all fallen to Airbus.

AirAsia X, the long-haul affiliate of the Malaysian-based AirAsia, said it had placed firm orders for 10 A350-900s for delivery from the first quarter of 2016, an order valued at about $2.4bn at list prices before discounts.

The jets will be configured to carry more than 400 passengers on a network linking AirAsia’s hub in Kuala Lumpur with destinations worldwide.

Tony Fernandes, AirAsia founder and chief executive, said the group was aiming to “make low-cost travel available to the world … there is a tremendous amount of business to be done, it is not all doom and gloom”.

The orders represent a big gamble by AirAsia X on its strategy for building the first low-cost, long-haul carrier in the modern era.

To date the low-cost airline business model has been exclusively used on short-haul routes, but the Malaysian airline believes it can expand to challenge the world’s big network carriers also on long-haul routes.

AirAsia, along with its long-haul affiliate, has rapidly become one of Airbus’s most important customers with total orders for 210 aircraft. It has already grown from two to 84 short-haul aircraft in operation in seven years.

Separately, Vietnam Airlines yesterday ordered 16 Airbus A321 short-haul jets and signed a memorandum of understanding for two A350s. On Monday, Qatar Airways signed a contract for 24 Airbus A320 jets, while on Tuesday Abu Dhabi’s Etihad Airways placed an order worth more than $5bn for 123 areoplane engines from GE Aviation.

AirAsia launches Colombo – Kuala Lumpur route

14 June 2009

Picture from left -- Bo Lingam, Regional Head of People, Quality and Excellence, AirAsia , Kathleen Tan, Regional Head of Commercial, AirAsia; Rosli Ismail, High Commissioner of Malaysia to Sri Lanka and Bernard Goonetilleke, Chairman of Tourism Sri Lanka.

AirAsia, the leading and largest low-cost carrier in Asia, is launching a Colombo – Kuala Lumpur route, set to begin on August 15. At a media briefing in Colombo this week, AirAsia’s Regional Head of Commercial Kathleen Tan said the airline, which has seven hubs, chose the perfect time to launch the route given the low fares the carrier is offering amidst the global economic downturn.

Ms. Tan said the Colombo – Kuala Lumpur route is part of AirAsia’s expansion plans for the year. She added that while other airlines are cutting down operations amid financial difficulties in the current economic climate, AirAsia is expanding and registering growth.

In the first quarter of 2009, AirAsia’s passenger volume grew by 21% year on year to 3.1 million. The new Colombo – Kuala Lumpur route will begin with direct daily flights between the two capital cities. Promotional all-in fares are offered from as low as Rs.4090 one way and exclusively available online via AirAsia’s website at www.airasia.com. Booking for promotional seats ends June 14 for travel between August 15, 2009 and April 30, 2010.

Ms. Tan said 75% of the airline’s ticket sales are via the Internet, adding that 15,000 tickets had been purchased in the first week of the promotion, most through the Internet. Ms. Tan said Internet usage may not be high in Sri Lanka but the airline has call centres and sales offices and that tickets can be purchased through travel agents in Sri Lanka.

The biggest challenges in launching the route are creating greater awareness on low-cost flying and getting the right to fly, Ms. Tan said. She noted that aviation regulators in Asian governments tend to be more protective of their national carrier.

AirAsia has projected an increase of 24 million passengers for this year along with 200 new Airbus aircrafts. The airline already has a network with 122 routes covering more than 65 destinations which include cities in Australia, India, Taiwan, Vietnam, Cambodia Indonesia, China, Thailand and Bangladesh. In seven years of operation, AirAsia has carried over 65 million passengers.

Its low cost long-haul affiliate carrier, AirAsia X, currently flies to destinations in China, Taiwan, Australia and the UK. The airline was co-founded by Malaysian entrepreneur Tony Fernandes. Ms. Tan said the low fares AirAsia is offering will create new demand and stimulate travel. AirAsia’s entry into Sri Lanka is good timing as the country enters a new era of peace. “We are working closely with Sri Lanka Tourism to boost the market because low fares will allow more people to travel,” she said.

Ms. Tan said several media outlets from the Asian region will cover the August 15 launch and that Malaysian television crews have been here this week to cover the press conference and gather promotional material. The AirAsia website has a page on Sri Lanka containing information on hotels as well. Ms. Tan added that a few hundred hotel rooms in Sri Lanka have been booked as well. She also brought a team to Sri Lanka to meet hotel management.