AirAsia To Launch Kuala Lumpur-Chengdu Scheduled Flights

29 June 2009

According to Chengdu Shuangliu International Airport, the Malaysia-based airline AirAsia Berhad will soon launch scheduled flights from Kuala Lumpur to Chengdu and Xi'an.

There will be four flights each week by Airbus A330. The flight will take five hours and 20 minutes from Chengdu to Kuala Lumpur.

AirAsia is the fourth foreign airline to launch scheduled flights in Chengdu — following Asiana Airlines, KLM Royal Dutch Airlines, and Thai Airways International. The flight is expected to enhance the exchange of trade and tourism, and to strengthen the economic development of Kuala Lumpur and Chengdu.

The route was formerly operated by Malaysian Airlines but was canceled in 2006. AirAsia applied for a landing slot in Chengdu at around 14:00, but the specific time has not been approved yet.

In addition, Kunming Airlines will open regular Kunming-Chengdu flights; Spring Airlines has also signed a ground services agreement with Chengdu Shuangliu International Airport.

AirAsia inks deal with sports team amid negotiations for US route

28 June 2009

SEPANG, Malaysia – While leading Asian low-cost carrier AirAsia has yet to fly to the US, it is already boosting its brand among Americans by announcing a partnership with football team Oakland Raiders.

As the Raiders' sponsor in the National Football League playoffs, AirAsia considers the deal as one of its catalysts in promoting the AirAsia brand, particularly in the US.

AirAsia Group chief executive officer Tony Fernandes said, "We are very excited to associate ourselves with a great, iconic team like the Oakland Raiders as they reflect our own endeavor for excellence. This is the latest step we are taking to boost our brand globally."

"The main benefit of this partnership is reaching a large market. We see California as a big market for us. In the east coast of US, there is New York. This is also a great stepping stone to do flights to San Francisco and Hawaii," Fernandes added, noting that AirAsia always has a long-term plan.

Highlighting the sponsorship deal was an AirAsia A340 airliner called "Xcellence" which sports the Raiders logo, a picture of some of its players and other trademarks such as the team's shield (on the plane's tail fin) and an eye patch (on the plane's nose).

The new plane will fly into Oakland in September for a kick-off game but it will take a while before AirAsia actually makes regular landings in the US.

Azran Oman-Rani, CEO of AirAsia X, told abs-cbnNEWS.com that they might fly to the US by next year although this will depend on the progress of negotiations.

"We target to fly to the US starting next year but we don't know yet where and when exactly. We have to see which airports would be willing to work with us and we have to ask for approval from the US government," he said.

According to him, AirAsia X's new A340 plane, which currently plies the London-Kuala Lumpur route, "symbolizes our ambition to open up the North American market as our future growth area."

AirAsia services the most extensive airline network in Asia, with 122 routes covering over 70 destinations. With operations based in Malaysia, Indonesia, Thailand and in Clark in Pampanga, it has carried over 70 million passengers to date, and has grown its fleet from just 2 aircraft to 80.

AirAsia X is its low-cost, long-haul carrier that flies to destinations in China, Australia and the United Kingdom.

Bucking the trend

Despite the ongoing global economic slump and the growing swine flu scare that have taken out many other airlines, Azran said AirAsia will remain aggressive in expansion and will continue to buck the downturn.

He added that amidst the crisis is one silver lining: "It's easier to catch a bigger market share because other airlines are cutting back, stopping their operations and reducing flights."

"We've seen many crises from 2001---SARS, bird flu, tsunamis, earthquakes. Throughout, we have been flying. We believe that if we stop flying, it would be harder to catch up when things recover."

Azran noted that they remain true to their commitment to keep airfares low.

"We are not interested in increasing fares even when times are good. Our strategy is to keep fares affordable so more people could travel."

To do this, Azran said they will continue to bring down their operational costs and seek ways to earn extra money.

The partnership with Oakland Raiders is a good example. "We expect to earn from the sale of model airplanes, jersey caps, etcetera. If we earn extra, then we can offer cheaper fares," he said.

CEO: AirAsia keen to fly to US destinations

27 June 2009

SEPANG: AirAsia Bhd, which has just signed a sponsorship deal with National Football League’s (NFL) Oakland Raiders, is keen to fly to US destinations.

Group chief executive officer Datuk Tony Fernandes said the budget airline would fly to North America once it sorted out the legal issues and obtained clearance from the respective countries. However, he did not give a timeline.

Datuk Tony Fernandes (left) and Mark Davis at the briefing to announce AirAsia's sponsorship of the Raiders team.

“It (the United States) is a market that we’re very keen on,” Fernandes told a press conference to announce its sponsorship of the Raiders yesterday.

AirAsia also unveiled the Raiders’ aircraft livery. Also present at the event were Raiders owner Mark Davis and legends Ted Hendricks, Rod Martin and Cliff Branch. The team’s official cheerleaders Raiderettes were also present.

Its associate long-haul, low-cost carrier AirAsia X currently flies to several destinations in the region, Europe and Australia.

AirAsia X chief executive officer Azran Osman-Rani said the carrier was very “keen to secure rights” to the United States.

“The aircraft donned with the Oakland Raiders brand symbolises our ambition to open up the US market as our future growth area.

“We’ll be flying this aircraft into Oakland at the start of this coming NFL season,” Azran said.

Fernandes said the airline was looking at New York City, Los Angeles and San Francisco, and one day it would like to go to Hawaii.

“America is a new chapter for us. We’re reaching out to a new market. The partnership with Oakland Raiders is expected to be the catalyst in promoting the AirAsia brand in the United States,” he said.

He added that the partnership was part of its strategy to develop AirAsia into a global brand.

To a question, Azran said it had been discussing with the NFL team for about six months before the deal was concluded.

However, he declined to reveal the cost of the partnership but said it was a “long-term” plan.

“By promoting Malaysia in North America, we hope to bring more travellers from that part of the world to Malaysia, which will help boost tourism and the local economy,” Azran said.

On criticism that AirAsia only sponsored overseas sports team, Fernandes said it was among the top four local corporates to sponsor local sports teams.

“We have just sponsored the Malaysian Hockey Federation by being the title sponsor and the Women’s World Table Tennis Championships 2008,” he said.

In a separate press conference, AirAsia chairman Datuk Abdul Aziz Abu Bakar said it had been making monthly payments to Malaysia Airports Holdings Bhd (MAHB).

“However, there is a portion outstanding, pending decision on AirAsia’s requests for MAHB to review its charging mechanism,” he said.

Abdul Aziz said some Members of Parliament who brought up the issue had misconstrued that AirAsia had not paid MAHB since 2002.

“We have been paying MAHB on a monthly basis. For the first five months of this year, we’ve paid over RM40mil. AirAsia has, since 2003, paid MAHB a total of RM404mil. In 2008, we paid RM117mil.”

Abdul Aziz said AirAsia had been overcharged by about RM100mil by MAHB.

“Since moving to the low-cost carrier terminal in March 2006, AirAsia had been overcharged by no less than RM12mil.

“There are also growth incentives on the increase in the number of passenger throughput and landings worth no less than RM90mil, for which both parties have been in discussion but yet to reach a conclusion,” he said.

The issue was not about AirAsia not making payments to MAHB, Abdul Aziz stressed, adding that he welcomed the Prime Minister’s announcement on the appointment of a consultant to resolve this and other outstanding issues between the two parties.

S'pore-M'sia air route soars

25 June 2009

KUALA LUMPUR: Despite a grim outlook for the global aviation industry, airlines plying the Singapore-Malaysia route remain upbeat about their prospects.

While carriers around the world are suffering, the Singapore-Malaysia sector is enjoying a boom, with several airlines set to expand and increase flight frequencies from next month.

Air services between Malaysia and Singapore have hugely increased this year, and many more flights are due to be launched from Singapore to various towns in Malaysia.

You would forgive AirAsia - the airline running the most number of flights between the two countries - if it should start to feel nervous as yet another player, Malaysia Airlines subsidiary Firefly, enters the market next month.

The newcomer will be the seventh carrier to fly the much-coveted Singapore-Malaysia sector.

But AirAsia chief executive Tony Fernandes said he was confident about the airline's staying power.

'I am not concerned about Firefly. It is not an arrogant statement,' he told The Straits Times in an interview.

He explained that both airlines are different and reach out to different target markets.

Mr Fernandes said he believes that Firefly, which operates smaller turboprop aircraft and flies from Subang - nearer to the city centre than Sepang, site of Kuala Lumpur's low-cost carrier terminal - is unlikely to offer airfares lower than AirAsia's.

'We're also different from other airlines (like Malaysia Airlines and Singapore Airlines),' he added.

Cheaper AirAsia tickets; it scraps administration fee

25 June 2009

It stands to lose up to RM400mil in revenue yearly

KUALA LUMPUR: AirAsia Bhd stands to lose up to RM400mil a year at the group level with the abolishment of its administration fee from its fare structure but the airline says it will replace lost revenue with income from higher passenger growth and its ancillary business.

“Reducing the cost of fares is the only way to get people to travel. We believe this will help increase our load factor and make us even more competitive,” group chief executive officer Datuk Seri Tony Fernandes said.

There are also other ways of generating income, such as hotel, food (onboard) operations and priority booking, he added.

From left: AirAsia X CEO Azran Osman-Rani, Datuk Aziz Bakar (middle), regional head of commercial Kathleen Tan and Datuk Seri Tony Fernandes at the media conference

Speaking at a news conference yesterday to announce the administration fee abolishment – a first for a major airline – Fernandes said scrapping the charges would create savings for passengers who now only have to pay the seat fare and airport taxes.

The administration fees range from RM22.50 to about RM43 per route (one way).

“We scrapped fuel surcharges last year and still managed to make record profits. We feel the same way about this ,” he said

AirAsia Bhd returned to the black with a net profit of RM203.15mil in the first quarter of 2009, after two consecutive quarterly losses previously.

Revenue increased 33% to RM714.2mil due to better ancillary income and stronger passenger growth.

“The past six months were tough for airlines all over and AirAsia has only grown stronger.

“None of our targets have been changed despite the economic conditions and outbreak of the A(H1NI), we are not affected by the recent flu scare; we are doing well and growing our capacity,” Fernandes said.

“Next week, we are expected to let go of all of our 16 Boeing 737s.

“We will then focus on a brand new A320 fleet which will help lower fuel costs,” he said. Currently, the carrier has 62 A320s.

He added that AirAsia was on target to fly more than 20 million passengers this year against about 18 million last year.

Fernandes also urged airports worldwide to reduce charges to further encourage air travel.

“The only other charge that is not controlled by us is the airport charge,” he said.

Meanwhile, AirAsia chairman Datuk Aziz Bakar said the carrier was withholding the RM65mil arrears in airport tax owed to Malaysia Airport Holdings Bhd as discussions over the settlement of the airport tax debt between the parties were still ongoing.

Currently, passengers pay RM6 in airport tax for domestic flights and up to RM51 for international flights.

Fernandes said the RM6 airport tax for domestic flights was “all right”.

However, he said the RM51 for international flight at the low-cost carrier terminal should be reduced to RM10.

AirAsia Says It Has Been Paying MAHB Monthly

26 June 2009

KUALA LUMPUR-- AirAsia Bhd said it has been making monthly payments on the money owing to Malaysia Airport Holdings Bhd (MAHB) for using its airport services.

However, there is a portion that has remained outstanding, pending decision on AirAsia's request for MAHB to review its charging mechanism, AirAsia chairman Datuk Abdul Aziz Abu Bakar said in a statement today.

He said this in response to statements made in the Parliament recently that the company has not paid MAHB since 2002.

"These (outstanding sum) include the high airport terminal charges and tariff which are the same as those applied to the KL International Airport (KLIA) Main Terminal Building which we feel is too high considering the very basis for facilities at the Low Cost Carrier Terminal (LLCT)," he said.

Transport Minister, Ong Tee Kiat had on May 20 told the Parliament that AirAsia owed about RM110 million to MAHB for its use of airports in the country from March 2002 to March 31, 2008.

"AirAsia is in a strong financial position and able to meet its financial obligations as and when due," the statement said.

The company abided by the government's directive to move to the LCCT from the Main Terminal Building on March 23, 2006 in support of the government's effort to boost the LCC industry in Malaysia and to turn Kuala Lumpur into the regional LCC hub.

"We received indications that MAHB would review for a contract as well as a service level agreement but three years on after the move, neither a commercial agreement or a service level agreement had been prepared and presented to MAHB," Abdul Aziz said.

With the increasing aircraft fleet, increased passenger numbers brought into Malaysia via LCCT and substantial landings due to higher flight frequency and aggressive route expansion, the company has helped MAHB recover its investment in terminal buildings, runway and supporting infrastructure much earlier than expected, he said.

This is the company's contribution to improve the efficient and effective utilisation over some of these charges and that dispute needs to be resolved.

"Contrary to claims made, the current management of AirAsia has paid MAHB on a monthly basis.

"The issue is not one of AirAsia withholding payments to MAHB but the issue is that there is a dispute over some of these charges and that dispute needs to be resolved," Abdul Bakar added.

He, however said that the company welcomed the government's move to appoint a consultant to resolve the issues between AirAsia and MAHB.

"We hope the government's intervention in this matter will help bring about a swift resolution that will be beneficial to all parties concerned," he said.

Since moving to the LCCT in March 2006, AirAsia has been overcharged by no less than RM12 million.

There are also growth incentives on the increase in number of passenger throughput and landings worth no less than RM90 million, for which both parties have been in discussion but yet to reach a conclusion.

AirAsia has since 2003 paid MAHB a total of RM404 million.

In 2008, it paid RM117 million, while in the first five months of this year, over RM40 million has been paid.

LCC stocks mixed: AirAsia and Southwest down, easyJet and Ryanair up, Air Berlin surges

24 June 2009



LCC stocks were mixed yesterday (23-Jun-09). Among the North American carriers, Allegiant, Southwest, WestJet, JetBlue and AirTran’s shares all slipped, in the range of -0.9% to -3.8%. Asia Pacific LCCs were also down, reflecting general weakness in Asia Pacific markets.

Elsewhere, in Europe, SkyEurope (+13.3%) regained some but not all of Monday’s 34.8% share price slump as it requested protection from creditors as it restructures. Air Berlin, Dart Group and Vueling also gained yesterday, by 7.8%, 3.6% and 3.1%, respectively.

Clickair CEO, Alex Cruz, on Monday stated the carrier’s branding would be scrapped in mid Jul-2009, following its merger with Vueling. The new carrier plans to focus initially on traffic originating in the Spanish market, although the airline would remain committed to maintaining its UK services.