Airline’s additional flight to S’pore

DUE to overwhelming response from its guests, AirAsia will be adding one more frequency to Singapore from its Kuala Lumpur hub.

Tan.... AirAsia building up presence in singapore.

With this addition, the largest and leading low-cost carrier in Asia will now have a total of seven daily direct flights from Kuala Lumpur to Singapore commencing Dec 1.

To celebrate this new frequency, AirAsia is offering free seats and waiving the fuel surcharges (terms apply), so guests will have to bear the taxes and administration fee only.

The offer is available exclusively online at AirAsia’s website www.airasia.com for the travel period from Dec 1 till July 31.

"We have been steadily building up our presence in the ‘Lion City’, having only recently announced four additional frequencies from Kuala Lumpur and new daily flights from Kota Kinabalu and Kuching to Singapore in October alone," said AirAsia commercial regional head Kathleen Tan.

"There are robust demands between the two major cities and tourist gateways in the region. Since its inception last February, we have recorded over 90% passenger load.

"We are confident that this additional flight will do just as well. We have over 108 routes and 60 destinations – the most extensive network compared with other budget carriers in the region.

"Our guests could benefit from our vast network to travel to other regional Asean cities or connect the long-haul sectors serviced by AirAsia X to Gold Coast, Perth, and Melbourne in Australia or to Hangzhou, China," she added.

In total, the AirAsia group will have 101 flights weekly to Singapore from various points in the region.

It includes 49 flights weekly from Kuala Lumpur, seven flights weekly from Kota Kinabalu, seven flights weekly from Kuching, seven flights weekly from Phuket, 28 flights weekly from Bangkok and three flights weekly from Pekanbaru, Indonesia.

On the contrary ...

For AirAsia boss Datuk Seri Tony Fernandes, a recession is the best time to build, an uncommon opinion to say the least.

DATUK Seri Tony Fernandes is a man who has built his business on being contrary.

When the global airline industry was recording losses in the aftermath of September 11 2001, Fernandes and compatriot Datuk Kamaruddin Meranun were busy trying to get their brainchild AirAsia (5099) off the ground ... which they succeeded in doing, recording a profit in 2002.

When the media and analysts continued to prophesise doom for the airline, Fernandes and his team put in an order for 60 A320s from Airbus in March 2005.

Three years later, with every industry (in particular the airline industry) bracing itself for a long and painful recession, he hasn't changed.
"We (AirAsia) are very bullish and very optimistic (about the future), all the newspapers in Malaysia had wanted me to be negative in the last seven years.

"You are a depressing bunch, but I'm optimistic, my load factors are good, people want to travel, they are not killing themselves every day ... you have to be innovative," Fernandes told Business Times in Kuala Lumpur last week.

For him, a recession is the best time to build, an uncommon opinion to say the least.

"My gut feeling says the best thing to do now is to grow ourselves out of a recession. I think we have enough people to fly with us. By opening up new markets, we are constantly getting new people on our flights," Fernandes said.

His optimism is backed by the fact that AirAsia has seen record bookings for December, with seats sold out in two weeks.

Fernandes said the group also expects its Thai and Indonesian subsidiaries to be "very profitable" in the fourth quarter of the year.

Thai AirAsia recorded an unrecognised share of loss of RM21.7 million, while Indonesia AirAsia registered a loss of RM12.2 million for the quarter ended June 30 2008.

Thai AirAsia is a jointly controlled entity of the budget carrier while Indonesia AirAsia is an associate company.

Fernandes said the Sepang hub also stands to benefit from the growth in passenger movement on its Thai and Indonesian flights.

Despite his optimism, one might say that this time around the odds are stacked against it, what with the International Air Transport Association expecting further losses in 2009 and Centre for Asia Pacific Aviation expecting no Asian airline to make a profit a next year.

Fernandes would probably say, "When has it ever been different?"

How low can the fare go?

AirAsia X is set to launch its London Stansted-Kuala Lumpur route amid rife speculation about how low the fare will be.

WITH 48 hours to the sales launch of AirAsia X’s much-touted London Stansted-Kuala Lumpur route, the burning question has been how much the opening fare would be.

Speculation has been rife of a £300 (RM1,613) return economy fare – or even lower – as against a proposed £350 (RM1,882) following the fall in fuel prices.

What a world away all this is from the hyped-up RM9.99 Kuala Lumpur-Manchester extraordinary deals that got the Malaysian community in Britain all excited last January.

Then again, AirAsia Bhd group CEO Datuk Seri Tony Fernandes is capable of springing a surprise or two during the official announcement of the fare in London on Tuesday.

As the airline’s regional head of commercial Kathleen Tan puts it: “Our opening fare will definitely create a storm.

Declaring that “right now, low air fare is King,” she said their fare would undoubtedly be the most aggressively low, in line with their low fare commitment.

The much-anticipated launch will mark a significant breakthrough for AirAsia X, the long-haul affiliate of AirAsia, as a leading low-cost carrier that serves the most extensive network in South-East Asia.

It will also be the first step in realising its European aspirations and strengthening Kuala Lumpur’s position as the biggest low-cost gateway to Asean, Indo-China and Australia.

The London Stansted-Kuala Lumpur sales launch comes hot on the heels of AirAsia X’s inaugural flights to Melbourne and Perth earlier this month.

For the latest route, the airline is expected to procure the Airbus A340-300 that will carry 386 passengers, including 58 in a premium economy cabin to offset the lower-priced economy seats.

Low-Cost Culture

Indeed, AirAsia X’s foray into Europe – long noted for its strong low-cost culture – generated a lot of buzz during last week’s four-day World Travel Market in London.

As expected, there were numerous trade enquiries from European travel agents who were keen to sell the London-KL sector that was expected to kick off in March.

Tan said many of them were anxious to know the targeted sales launch date as well as the type of aircraft and seat configuration.

“Once AirAsia X lands in Stansted, there will be brand recognition when the people see our red planes,” she said of the no-frills airline’s trademark logo “Now Everyone Can Fly Xtra Long”.

The latest route is likely to work in the airline’s favour following MAS’ reduction of its London Heathrow-Kuala Lumpur twice daily flights to once recently.

With the current depressing market, the airline’s debut appearance at the global travel market received an overwhelming response.

“We couldn’t have arrived in London at a better time,” said Tan in reference to many corporate businesses down trading to find alternative air travel.

In fact, Tourism Minister Datuk Seri Azalina Othman Said had recognised that low-cost travel could help to stimulate and open up new market segments, especially during the economic crisis.

She had driven home the message that budget airlines such as AirAsia and Firefly played a crucial role under the government’s efforts to encourage budget travelling.

Brand Recognition

Despite the economic uncertainty, AirAsia appears to be pressing ahead with its expansion plans. It was reportedly close to finalising a deal worth close to RM3.5bil to fund the purchase of 37 new aircraft over the next two years.

A firm believer of long-term brand investments, it has since 2005 signed sponsorship deals with Manchester United, EPL Referees and the AT&T Williams F1 Racing team.

Getting into brand sponsorship of these high-profile sports and brands has enabled the airline to reach millions of fans via sports marketing where football has a huge following in Europe.

Tan remained upbeat about AirAsia X’s branding among Europeans, who had long been attracted to the appeal of exotic Asia.

On the airline’s “See the best of Asia with us from £5” deals that were promoted at the fair, she said the response had been tremendously positive.

She said they were aimed at introducing the airline’s extensive network in Asia to Europe where low-cost travel was a big concept.

“We’re confident of helping to shape the dynamics of travel to Asia, especially among the younger Internet-savvy generation and the hugely new target of baby boomers,” she added.

There’s no doubt the airline’s participation at the fair helped to introduce and promote the airline’s network, product and services to the European travel trade market.

And AirAsia appears to have succeeded not just in reinforcing its brand recognition but also in engaging the travel industry with an alternative choice of air connection to Asean and beyond, China and Australia.

AirAsia Shares Rise on Management Buyout Plan Report

Nov. 20 (Bloomberg) -- AirAsia Bhd., Southeast Asia's largest low-cost carrier, rose the most among Kuala Lumpur benchmark index companies after the Star said shareholders may announce a buyout offer next week.

The carrier rose 2.7 percent to 1.16 ringgit at 11:48 a.m., after earlier gaining as much as 4.4 percent. The Kuala Lumpur Composite Index fell 1.8 percent.

Tune Air Sdn., controlled by AirAsia Chief Executive Officer Tony Fernandes, may make a buyout offer of between 1.30 ringgit and 1.35 ringgit a share, the Star said today, citing unidentified people. The company had previously said it may make a 1.35 ringgit bid, if it could secure the financing.

``There is very significant likelihood of a general offer,'' Paul Dewberry, a Merrill Lynch & Co. analyst, wrote in a report today. The announcement may come alongside the company's third-quarter results next week, he added.

Dewberry upgraded the carrier to ``buy'' from ``underperform'' on the buyout plan. He set a target price of 1.35 ringgit.

CIMB Bhd. may lead the group of banks financing the buyout, the Star said.

AirAsia plans to fly to Tashkent next year

JOHOR BARU, MALAYSIA: AirAsia will begin flights to the Uzbek capital of Tashkent by the end of next year, said chief executive officer Datuk Seri Tony Fernandes.

He said the budget airline felt that Central Asia and Eastern Europe were huge potential markets and his company had already conducted initial studies in Uzbekistan and Kazakhstan.

"We can do Uzbekistan next year. With the huge Asian network, many people from South-East Asia would want to go to Uzbekistan," he said.

He said the leg would open up new lines of tourism and business.

He pointed out that the historic city of Samarkand was world famous and attracted tourists.

Fernandes said AirAsia had always been about opening up new areas and markets and felt proud that the company was recognised as providing a service to the country.

He said AirAsia would probably start with three to four flights a week.

When asked about the rates, Fernandes said that it was still too early to decide but would probably around RM800 to RM900.

On Monday, Prime Minister Datuk Seri Abdullah Ahmad Badawi, who is on an official visit to Uzbekistan, said he had asked Fernandes to consider flying to Tashkent.

AirAsia stock jumps

AIRASIA Bhd (5099) jumped as much as 3.5 per cent, its second-biggest gain this week in Kuala Lumpur trading, after a newspaper reported that the carrier’s largest shareholders may announce a buyout offer next week.

At close, the stock rose 4 sen, or 3.5 per cent, to RM1.17, the most since September 12 and the third-biggest gainer on the benchmark Composite Index.

Tune Air Sdn Bhd, which owns 31 per cent of AirAsia, will probably offer the buyout at a price of RM1.30 (36 US cents) to RM1.35 a share, the paper said, citing people it didn’t identify.

CIMB Bhd may lead the group of banks to finance the buyout, the newspaper said, citing people it didn’t identify.

Return money of those who booked tickets before fuel surcharge waiver, AirAsia urged

BUDGET carrier AirAsia has been urged to look into the possibility of refunding the fuel surcharge to passengers who made their flight bookings before the surcharge was waived, reported Sinar Harian.

Federation of Malaysian Consumer Associations adviser Chua Kim Tee welcomed the airline’s move to waive the surcharge on Nov 11, but said the benefits should also be extended to passengers who made advance payments for their flights prior to the announcement of the waiver.

“In this context, maybe AirAsia can return the fuel surcharge which had been paid earlier as the passengers had not used the service,” he said.

“When the global oil prices go up, we have no choice but to pay the surcharges.

“But with the current market situation, abolishing the surcharge is the right way to go.”