AirAsia X plans to quadruple revenue in 2009; expects tenfold increase by 2010

31 March 2009

AirAsia X stated it plans to increase revenue to USD273 million in 2009, after slightly more than two years of operations, an increase from approximately USD68 million in 2008. The carrier also expects to report a profit in 2009.

AirAsia X reported a net profit margin of 35% and 30% in Dec-2008 and Jan-2009, respectively, with yields for pre-sold tickets for 2009 reportedly improving 20% year-on-year (off a low base). AirAsia X also stated it is targeting a tenfold increase in annual revenue to by the end of 2010.

Targeting 1 million pax in 2009; 5 million within five years

Traffic wise, AirAsia X stated it has so far weathered the global economic crisis by tapping into a market segment that has not yet curtailed travel. Average load factors have increased 4 ppts. The LCC is aiming increase its passenger numbers from 250,000 to 1 million in 2009, as its increases its network from four to 11 destinations.

The long-haul LCC also stated it expects to be among Malaysia's leading companies within five years, with CEO, Azran Osman-Rani stating, "we can definitely achieve more than USD1 billion revenue with 25 planes carrying 5 million passengers a year, and become a top 20 company in Malaysia".

Pressing ahead with network expansion plans

AirAsia X has continued to emphasize that high fuel costs and external pressures would not deter the carrier from further route expansion. According to AirAsia Group CEO, Tony Fernandes, "when everyone cuts back there is a gap for operators like us to capitalise on. In the immediate term business looks good... I'd rather be a low cost airline in a recession than a premium airline because I think people look for value".

In the long-term, AirAsia X plans to grow its network to approximately 30 destinations across the Asia Pacific region by 2013, with its foundation fleet of 25 A330s, including between eight and ten cities in India in the next five years.

AirAsia X planned network expansion

Source: AirAsia X

Core focus to remain in Asia Pacific

In the short-term, AirAsia X stated its core focus would continue to be expanding its network in the Asia Pacific region. Plans are currently under way for the low-cost long-haul carrier to commence services from its Kuala Lumpur hub to Tianjin on 02-Apr-09 and possibly to Chengdu, Taipei, Amritsar and New Delhi later in 2009. Currently, AirAsia X operates to the Gold Coast, Perth, Melbourne, Hangzhou and London.

Air Asia and AirAsia X (in red) Route Network: Mar-2009

Source: Air Asia

AirAsia X also stated it plans to add Sydney to its network in 2009, expanding by 10-15 new routes this year. AirAsia X has also previously stated it hopes to launch services to at least three destinations in Japan (Hokkaido, Osaka and Fukuoka) by the end of 2009, after the Japanese Government relaxed its visa requirements for Malaysians.

The introduction of new destinations is planned to coincide with the delivery of three new A330-300 aircraft, in Sep-2009, Nov-2009 and Dec-2009, respectively. The aircraft are among 25 A330-300s the airline has ordered for delivery through 2013, of which two are already in service. The airline currently operates three A330-300s (including one leased A330) and one leased A340-300s.

AirAsia X fleet plan: 2009 to 2012

Source: Centre for Asia Pacific Aviation & Ascend

... but looking at further Europe and US options

Looking further afield, AirAsia X plans to increase the frequency of its London services to daily by Jul-2009, if the London services prove viable, the carrier "may consider covering Germany and Eastern Europe". Mr Osman-Rani previously stated that "Moscow is of big interest to me, as is Germany and some of the central European destinations.

AirAsia X is leasing a second A340 to support the increased London frequencies, while a third A340-300 could be leased if the carrier decides to expand its European network.

AirAsia X is also considering launching services to the US market by the end of 2009. The carrier, which has finalised a lease agreement for its second A340-300 from Air Canada, will either operate from Kuala Lumpur to Los Angeles or New York.

According to Mr Osman Rani, "there has been a lot of interest from JFK (New York), while airports in California have also contacted us...If we have one plane, at most we can do is fly five times a week to Los Angeles. The challenge is to secure the rights from the governments".

AirAsia celebrates trainee graduation

31 March 2009

AirAsia held a graduation ceremony for its latest batch of students at the AirAsia Academy multi-purpose hall here. A total of 100 flight attendant trainees together with representatives of the guest service cadets and ramp agents received their graduation certificates from Group CEO Dato’ Sri Tony Fernandes.

“This marks a new chapter in the history of AirAsia as this is the first time that we have a large number of trainees graduating simultaneously. Besides, this is our inaugural graduation held in this great hall since the Phase 2 of the Academy was completed. We want our graduates to feel special and this special graduation ceremony is an acknowledgement of their success after completing an intensive training programme at the Academy,” said Fernandes.

Among the 100 graduating flight attendants, 8 were Vietnamese while the rest were Malaysians. While the majority of AirAsia’s flight attendants are either Malaysian, Thai or Indonesian, the Asean carrier has a good mix of nationalities serving its extensive route network. Apart from Vietnamese, there are Singaporeans, Filipinos, Cambodians, Laotians, Myanmarese, Japanese and Chinese nationals on its crew list.

“As a truly Asean airline, AirAsia is committed to growing local talents in the countries we are operating in. Having a multi-national mix of crew has not only helped us to understand local cultures better in order to provide superior service to our guests, but on a macro level, it also promotes integration among Asean member countries,” he added.

The AirAsia Academy, located barely 2 kilometres from the Low Cost Carrier Terminal where AirAsia headquarters is located, was set up in 2005 with the objective of meeting the human capital requirements of the rapidly growing airline. AirAsia has grown its aircraft fleet from just 2 in 2001 to 76 today, while its staff strength grew from 200 to over 6,000 presently. Apart from Kuala Lumpur as its main hub, AirAsia’s other major hubs are Bangkok and Jakarta.

AirAsia Academy provides initial and recurrent training courses for pilots, flight attendants, guest services agents, ramp agents and engineering, as well as an induction programme for all new AirAsia employees.

The Academy is equipped with 6 flight simulators comprising 4 Airbus A320s, 1 Airbus A330 and 1 Boeing 737 which are run and maintained by CAE, a leading provider of integrated training solutions and advanced simulation and control technologies to the aviation industry.

The Academy is staffed by instructors who are experts in their respective fields to provide required training that meets international and the respective countries’ civil aviation standards.

"AirAsia is ever committed to develop more skilled home grown pilots, by investing and having started our very own cadet pilot training programme that not only provides the opportunity, but also to nurture Malaysians who are keen to contribute to the nation’s aviation sector. Our partnership with world class players such as CAE further strengthens AirAsia’s goals to create an excellent training centre that serves as a training ground for our pilots and crew, and potentially to train pilots from other airlines in the region," Fernandes added.

AirAsia Academy is touted to have the most advanced aviation training facilities in Asia.

AirAsia X seeks aircraft names

30 March 2009

AirAsia X wants wordsmiths from every corner of the globe to help them name their planes. The airline currently operates three aircraft and has a further 23 A330s and one A340s on order. It is calling on the global community to come up with some 'X-treme' names as part of a naming competition for the new aircraft.

Candidates who submit names chosen by AirAsia X receive free return airfares to anywhere on the AirAsia X network, which now includes Stansted London as well as Gold Coast, Perth, Melbourne and Hangzhou routes.

Winning wordsmiths will have their personal names immortalised on the aircraft - inside the body and outside the cabin.

AirAsia X CEO Azran Osman-Rani wants AirAsia X aircraft names to reflect the airline’s ‘X’ factor.

AirAsia X this year expects to take delivery of three new A330s and staff have put forward Xploration, Xpedition and Xcursion as possible names for the aircraft.

The airline’s first two A330’s were called Xuberance and Xhileration, while the plane that services the Kuala Lumpur to London route is called Xcalibur.

Many aircraft spotters and enthusiasts will already know the airline’s official call-sign is Xanadu.

Entries can be submitted at blog.airasia.com/index.php/xanadu-calling-name-a-plane-and-get-your

AirAsia sees brand value in Asean flag

30 March 2009

The brand value of the Asean flag is about to be exploited by a private company. The budget carrier AirAsia believes that the trading bloc's flag, featuring 10 paddy stalks, is something that can create a good brand identity and a sense of belonging among nearly 600 million consumers in the region.

AirAsia is now aiming to turn itself into an ''Asean'' carrier, replacing the Malaysian, Thai and Indonesian flags on the planes of its three affiliated airlines.

Ironically, the move comes at a time when the effectiveness of ''Visit Asean'' as a regional tourism slogan is being debated.Consultants recently recommended that the group adopt ''Visit Southeast Asia'' instead.

AirAsia has received approval from the Asean directors-general of each state to paint the Asean flag, marque and slogans on its planes and other products.

Asean secretary-general Surin Pitsuwan said the low-cost carrier group was qualified to carry the Asean identity largely because its operations extend across the 10 member states.

The flagship AirAsia, is based in Malaysia. Together with its sister carriers, Thai AirAsia and Indonesia AirAsia, it covers more capitals and cities in Asean than any other national airline in the region.

''So they can rightly claim to be an Asean carrier,'' said Dr Surin. ''I believe AirAsia wants to sell the potential of Asean, be identified as an Asean firm and raise the profile of Asean in the world, which is good and should be supported.''

The AirAsia group currently operates 114 routes covering 64 destinations.

While cockpit and cabin crews on each of its airlines are dominated by nationals from the countries where they are based, the group is now taking steps to ''Aseanise'' its onboard services.

For instance, the Malaysian cabin crew on AirAsia X, the long-haul operator, greet and send off passengers on Kuala Lumpur-London flights with a Thai-style ''wai''.

''We want to Aseanise pilots, cabin crews, languages, entertainment. We are starting a new trend,'' said AirAsia X chief executive Azran Osman-Rani.

''We want to make our customers feel we are their airline as well. I don't want them to think they are taking a foreign airline. That is why we want to make our crew more Asean.''

He added that, from a business perspective, ''the sexiness of Asean is 600 million people''.

However, the Asean identity does not mean that AirAsia airlines will abandon the national flags under which they are registered by each government.

Dr Surin said Asean would like other big corporations in Asean _ PTT, Siam Cement and Charoen Pokphand in Thailand for example _ to associate themselves with the Asean identity.

But he added that Asean would only welcome companies that have a business presence in most, if not all, of the 10 Asean states. No fee is imposed.

AirAsia signs deal with OnAir

27 March 2009

KUALA LUMPUR -- AirAsia Bhd has sealed a Mobile OnAir Agreement with OnAir, which has its headquarters in Geneva, Switzerland for the provision of inflight telephony services for use by its passengers.

The move is part of the airline's continuing efforts to increase the variety and improve the quality of its services to passengers in the course of business, AirAsia said in a filing to Bursa Malaysia today.

OnAir is owned by SITA, the airline-owned provider of IT solutions and communications services to the air transport industry, and Airbus, one of the world's leading aircraft manufacturers. It has operations in Seattle, London and Montreal.

The agreement is not expected to have a material effect on the consolidated net assets of AirAsia and the consolidated earnings of AirAsia for financial year ending Dec 31, 2009. --

No Job Cuts In AirAsia, Says Group CEO

27 March 2009

SEPANG-- Low-cost carrier AirAsia Bhd is on a hiring spree and has no plans to reduce its work force, group chief executive officer Datuk Seri Tony Fernandes said today.

"We have about 6,000 employees, with the bulk from Malaysia and we expect the number to grow to 6,600 by end of this year," Fernandes said.

The carrier's staff strength when it was first established was only 200, he said after AirAsia Academy's graduation ceremony here.

On the Penang-Singapore route, Fernandes said the route was important for AirAsia but no approval has been received as yet and "it is a missing link for us".

Once secured, the route will have two daily flights, he said.

On financial performance, Fernandes said: "Looking at our passenger numbers, we are happy with our performance at the moment. Business remains quite strong."

At today's event, a total of 100 flight attendant trainees together with their representatives of guest services cadets and ramp agents received their graduation certifications.

Fernandes said AirAsia has invested about RM300 million in the academy, which is equipped with six flight simulators comprising four Airbus A320s, one Airbus A330, and one Boeing 737.

The academy also provides trainning for staff of 15 other airlines, he said.

"So, what was built for AirAsia's training has become a profit centre," he added.

AirAsia Academy, which is touted to have the most advanced aviation training facilities in Asia, is committed to developing homegrown pilots, he said.

Airasia X Eyes US Market By Year-end

27 March 2009

SEPANG -- AirAsia X, the low-cost long-haul carrier, is eyeing the US market by year-end following its successful launch of the Kuala Lumpur-London route, chief executive officer Azran Osman Rani said today.

"There has been a lot of interest from the John F. Kennedy International Airport (in New York) and airports in California have also contacted us," he said.

Azran said the US airport operators realised that the air-travel traffic growth was coming from Asia and the premium airlines were also cutting back on their capacity to the West Coast and East Coast of the United States.

AirAsia X, which has already finalised the leasing of its second A340-300 from Air Canada, will either fly the Kuala Lumpur-Los Angeles route or Kuala Lumpur-London-New York route, he told reporters after AirAsia Academy's graduation ceremony here.

"If we have one plane, at most we can do is five times a week to Los Angeles. The challenge is to secure the rights from the governments," he said, adding that this would be a new market for AirAsia X.

On the Middle East, Azran said the possibility of the airline flying there could also materialise within this year.