AirAsia To Resume JB-Bangkok Flight

17 July 2009

JOHOR BAHARU -- Low cost carrier AirAsia is resuming it's Johor Baharu-Bangkok flight beginning July 21, three weeks after it stopped the service.

And the resumption of the two-hour long flight from the Senai airport here has met with approval from the State tourism authority and travel agents alike.

But the question which still trouble them is whether AirAsia would commit themselves to continue servicing the route or put a stop to it like the previous two occasions where they decided that the JB-Bangkok route would no longer be part of their operations.

The AirAsia JB-Bangkok flight was first introduced in 2005 but it was stopped a year later, and in February 2008 the flight resumed only to be stopped again in the beginning of July this year.

Johor executive councillor in charge of tourism Hoo Seong Chang welcomed AirAsia's latest decision but he cautioned against the disruption of the service in future.

"It's the state goverment's policy to make the Senai airport into a passenger hub and therefore we welcome any airlines which want to fly or land here.

"AirAsia has been supportive but I can also understand the situation they are caught in sometimes. They told us that the low load factor is one reason why they sometimes stop certain flight.

"Maybe the situation now with the spread of the HIN1 virus is preventing people from travelling but I urge AirAsia to be more patient. When the situation improves more people will travel," said Hoo.

The resumption of the flight has also been welcomed by the Tourism Authority of Thailand (TAT) which sees the JB-Bangkok flight as very convenient for travellers from Johor.

Infact Thailand or rather Bangkok in particular remains a favourite holiday destination for Malaysians with arrival at 1.82 million for the year 2008, an increase of 18 percent from the previous year's arrival of 1.54 million.

"The figures are encouraging but at the same time, to go on a holiday to Thailand also means value for money," said Richard Lim, the TAT marketing manager for Malaysia and Brunei.

AirAsia soars on Bali demand

17 July 2009

Bali’s popularity among Perth holidaymakers seems set to continue as AirAsia’s first flights on its new Bali-Perth route were packed to capacity this morning.

The low-cost airline announced last week that because of high demand, it would add a second daily flight on the route from August 19.

“The demand for Perth-Bali route has been phenomenal; we’ve sold over 70,000 seats since last May when we opened for sale,” said regional head of commercial of AirAsia group Kathleen Tan.

Perth is the first Australian destination serviced from Indonesia by AirAsia Indonesia and it is the fourth international route operated from the Bali hub after Kuala Lumpur, Bangkok and Singapore.

Chief executive officer of AirAsia Indonesia Pak Dharmadi said the route would also service the growing number of Indonesians that work and live in Perth.

“Bali is a prime holiday destination for Australians (and) … we are very keen to position Bali as the gateway to Indonesia and other Asean cities as the airport also offers strong domestic and international connections,” Mr Pak said.

The number of Australian tourists visiting Bali in the first quarter of this year rose 24.85 percent to 71,970 from the same period last year, according to AirAsia figures. Australian tourists accounted for 14.67 percent of the total number of tourists visiting the island in the first quarter.

CEO of Westralia Airports Corporation Brad Geatches said the new route would allow more competition and better prices for WA travellers.

“This new service not only offers great value flights to Denpasar, it also opens up the entire Asia region to travellers who can use Bali as a stop-over to other destinations. We expect both our inbound and outbound traveller numbers to continue to grow over the coming months.”

Airlines tighten baggage rules to help trim costs

17 July 2009

ATA says every 1% improvement in fuel efficiency across industry can cut fuel costs by US$700mil annually

PETALING JAYA: Most airlines, in trying to mitigate the impact of fuel price volatility, have resorted to stringent baggage restrictions as part of measures to achieve better fuel efficiency.

According to the International Air Transport Association (IATA), every 1% improvement in fuel efficiency across the aviation industry can lower fuel costs by US$700mil annually. This is unsurprising since fuel cost is the second-largest cost for airlines after labour.

Passengers on AirAsia flights are encouraged to travel light, like using carry-on luggage, to minimise checked-in baggage. They are allowed to have one carry-on luggage of up to 7kg, plus free 15kg allowance for checked-in baggage.

In comparison, Malaysia Airlines (MAS) allows for hand luggage to have a maximum combined weight of 5kg and free 20kg allowance for checked-in luggage for economy class (see table).

MAS general manager for corporate safety, security, health and environment, Ooi Teong Siew, said reducing weight was one of the static techniques, which include ensuring aircraft are well trimmed and engines cleaned regularly.

Dynamic techniques, meanwhile, are factors that have an impact on the flight path like direct routings, economical speeds, continuous descents and optimum altitudes.

“These efforts, without compromising on safety and quality, have reduced our fuel burnt rate and enabled us to contribute to cost reduction of RM2.3bil from 2006 to 2008,” Ooi said in an e-mail reply to StarBiz.

AirAsia Bhd group chief executive officer Datuk Seri Tony Fernandes noted that for every flight hour, an additional 1,000kg of take-off weight would burn up 90kg fuel.

AirAsia also achieved greater fuel efficiency with its new fleet of A320 planes, as they offered higher unit fuel consumption per flight while high dispatch ability and operational efficiency contributed to lower maintenance expenses, Fernandes said.

“We adhere to a quick turnaround of 25 minutes, which leads to high aircraft utilisation, lower costs as well as greater airline and staff productivity. Fuel consumption-wise, the quick turnaround means less time spent by an aircraft idling on the ground, which reduces unnecessary fuel consumption and harmful emissions,” he said.

Such practices kept costs down and ensured minimum aircraft weight, Fernandes said, adding that savings and benefits would translate into low fares for passengers.

Ooi said MAS also minimised the use of auxiliary power unit on ground, ensured faster connection of ground power, chose the best flight profile as well as adopted a continuous descent approach at applicable airports, and regular airframe and engine maintenance.

“Other examples include replacing the heavy unit loading devices with those which are 40kg lighter and using nearer alternate airports.”

MAS is anticipated to achieve greater fuel efficiency when it takes delivery of 35 B738 late next year and the A380 in 2011.

Meanwhile, FlyFirefly Sdn Bhd managing director Eddy Leong said the airline did not practise overzealous efforts in enforcing one hand luggage and checked baggage limits.

“Firefly’s business model was designed to be light from the beginning because we chose a very fuel efficient and modern ATR72-500 aircraft,” he said.

The focus then is on eliminating hassles, enriching the travel experience and optimising costs.

“For example, our full complimentary food and beverage on board includes serving muffins on paper cups and ensuring that we cater exactly to the passenger count. Any extras would be given to passengers.

“In the end, there is no waste to offload, no wastage to worry about. Our ultimate gain is in the revenue side and loyalty from passengers,” Leong added.

Emirates Airlines, in contrast, increased the free baggage allowance across its network effective May 4, with the exception of countries that apply one-piece concept for checked-in luggage.

Economy class travellers are now given 30kg from 20kg previously.

An analyst with a local brokerage said the impact of strict baggage terms was unlikely to have a huge impact on bottomline.

Airlines also tried to carry the correct amount of jetfuel and to power planes by ground power units during waiting periods instead of jetfuel to achieve better fuel efficiency, he said.

IATA, on its website, indicated efforts being taken with air navigation service providers, air traffic controllers, airlines and other key stakeholders to save one minute per flight via better airspace design, procedures and management.

“If successful, this initiative could reduce total industry operating costs by over US$1bil a year and significantly reduce environmental emissions,” the association said, noting that on average, airlines spent US$100 per minute per flight in total operating costs.

AirAsia plans to sell three B737 aircraft

17 July 2009

PETALING JAYA: AirAsia Bhd plans to sell the three B737 aircraft it owns as part of a plan to have a fleet comprising only A320s, says group chief executive officer Datuk Seri Tony Fernandes.

The airline’s 16 B737s are used by its associate companies in Indonesia and Thailand for their operations. Of the 16, three are its own with no financial obligations while 13 are leased from GE Commercial Aviation Services (GECAS).

The plan is to replace the entire fleet of B737 with new A320-200s by selling three and returning the rest to GECAS.

However, the leased aircraft have different leasing tenures. If AirAsia can find a buyer for its aircraft and get “replacement” lessors for the 13, it would not have to worry about keeping the B737s for the full tenure.

If it decides to return the leased aircraft sooner, there may be a penalty but finding a new lessor would help. AirAsia is therefore working out arrangements to minimise its liability by helping to find a new lessor but this is subject to GECAS’ approval.

That is why AirAsia has started talks on both the sale and leasing arrangements for the B737s.

“We are currently in negotiations with several parties, both potential lessors and buyers,’’ said deputy CEO Datuk Kamarudin Meranun.

But as he pointed out: “AirAsia is not in a rush to sell the planes and certainly not at fire-sale prices. We will only dispose of them if the price is right.’’

Both Fernandes and Kamarudin said no timeline had been set for the aircraft disposal.

AirAsia ordered 175 aircraft with an option for 50 more from Airbus SAS in December 2007. Thus far, it has taken delivery of 61 A320-200 and will receive a further nine this year. It is slated to take delivery of 24 aircraft this year and another 24 in 2011.

Recently, the low-cost carrier decided to delay the delivery of eight aircraft scheduled for next year and negotiations are under way to delay a further eight for 2011.

That means it will only take delivery of 16 aircraft next year. This year it has received five of the 14 new aircraft, of which three will be used for the Malaysian operations, seven for Indonesia AirAsia and four for Thai AirAsia.

With the A320-200 fleet slowly but surely taking shape, the pressing question is whether AirAsia would be able to dispose of its B737s given the lack of demand for air travel and airlines are contracting capacity.

“There is a market for the aircraft but it depends on pricing, quality of aircraft and its maintenance record,’’ Kamarudin said.