29 July 2009
KUALA LUMPUR: AirAsia X Sdn Bhd, a long-haul budget airline and related company to AirAsia Bhd, is looking to set up its first ever virtual hub in the Middle East next year.
AirAsia X chief executive officer Azran Osman-Rani told reporters Wednesday that this hub would serve the region and beyond and was part of the airline’s expansion strategy.
He said the hub would be used for flights from Malaysia to Middle Eastern destinations as well as from the Middle East to Europe.
Details of TTSB TTSB was incorporated on 13 January, 2006 and is principally engaged in business as providers of telecommunication services and other related services. TTSB is 35.75% owned by Tune Ventures Sdn Bhd (“TVSB”) in which both Dato’ Sri Tony Fernandes (“DSTF”) and Dato’ Kamarudin Bin Meranun (“DKBM”) are substantial shareholders.
Salient terms of the Agreement Under the terms of the Agreement, the Company will:
(a) Become the Launch Partner of TTSB; (b) Purchase 200,000 units of TTSB SIM Cards worth RM860,000 (“Purchase Price”) that will bear AirAsia’s branding along with TTSB’s branding;
(c) Satisfy the Purchase Price by way of 5,059 e-gift Voucher in RM200 denomination less 15% discount;
(d) Be offered free of charge advertising in the various advertising platforms of TTSB in the value of the Purchase Price;
(e) Further, the Company will market TTSB’s Top Up Vouchers and will be remunerated with a 5% sale commission on total top-up sales;
(f) Any unsold TTSB SIM Cards will be disposed off in a manner to be mutually negotiated and agreed upon by Parties.
4. Rationale for entering into the Agreement The rationale for entering into the Agreement is as follows:
(a) To generate extra revenue through sales of TTSB SIM Cards and Top Up Voucher;
(b) To generate additional online ticket sales via distribution of e-gift voucher by TTSB through its loyalty programs;
(c) To enhance and further boost AirAsia’s branding through various advertising platforms made available by TTSB free of charge;
5. Financial Risks The downside financial risks associated with the Agreement are expected to be very limited because the Company does not need to make extra investment to market or sell the TTSB SIM card or Top Up Voucher, which will be sold on board all AirAsia’s flights by the Company’s existing manpower. In addition, the Company will be able to generate more online sales via the e-gift vouchers and additional revenue from selling TTSB’s SIM Card and Top Up Voucher.
6. Directors’ and major shareholders’ interests DSTF and DKBM are Interested Directors by virtue of their directorships in both the Company and TTSB respectively. DSTF and DKBM are also Interested Major Shareholders by virtue of their shareholdings in both TVSB (a major shareholder of TTSB) and Tune Air Sdn. Bhd. (a major shareholder of the Company). Save for the Directors and major shareholders as disclosed below (respectively known as “Interested Director(s)” and “Interested Major Shareholders”), none of the Directors and/or major shareholders of AirAsia and/or persons connected to them have any interest, direct or indirect, in the Agreement. The shareholdings of DSTF and DKBM in AirAsia as at 28 July, 2009 are as set out in the table below.
DirectIndirect
No. of Shares%No. of Shares%
DSTF2,627,0100.11(1) 729,458,382 30.71
DKBM1,692,9000.07(1)729,458,382 30.71
Note:
(1) deemed interested by virtue of Section 6A of the Companies Act, 1965 through a shareholding of more than 15% in Tune Air Sdn Bhd
Accordingly, the Interested Directors have abstained from all Board and management deliberations in respect of the Agreement and provision of the services.
7. Statement By The Board Of Directors
Save for the Interested Directors, the Board having considered all the relevant factors in respect of the Agreement is of the opinion that entering into the Agreement is in the best interest of the Company.
8. Financial effect of the Agreement
This Agreement will not create any material financial impact nor will it have any effect on the share capital and substantial shareholders’ shareholdings of AirAsia in the current financial year. It is also not expected to have a material effect on the consolidated net assets of AirAsia and the consolidated earnings of AirAsia for this financial year ending 31st December 2009.
9. Approval required
AirAsia does not require the approval of its shareholders or any authorities to enter into the Agreement.
10. Document available for inspection
The Agreement is available for inspection at the registered office of the Company at 25-5, Block H, Jalan PJU 1/37, Dataran Prima, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia during normal business days from Mondays to Fridays (except public holidays) for a period of 3 months from the date of this announcement.
29 July 2009
PETALING JAYA: AirAsia Bhd yesterday signed a cooperation agreement with Tune Talk Sdn Bhd aimed at generating extra revenue and further boosting the AirAsia brand.
Incorporated on Jan 13, 2006, Tune Talk is principally involved in providing telecommunication services and other related services.
The company is 35.75%-owned by Tune Ventures Sdn Bhd, in which AirAsia group chief executive officer Datuk Seri Tony Fernandes and AirAsia deputy CEO Datuk Kamarudin Meranun are substantial shareholders.
In a filing with Bursa Malaysia, AirAsia said the rationale for the agreement was to generate extra revenue through sales of Tune Talk SIM cards and Top Up Voucher.
It was also to generate additional online ticket sales via distribution of e-gift vouchers by Tune Talk through its loyalty programmes as well as to enhance and further boost AirAsia’s branding through various advertising platforms made available by Tune Talk free of charge.
AirAsia said under the agreement, it would become the launch partner of Tune Talk and purchase 200,000 Tune Talk SIM cards (worth RM860,000) that would bear AirAsia’s and Tune Talk’s branding.
“The downside financial risks associated with the agreement are expected to be very limited because the company does not need to make extra investment to market or sell the Tune Talk SIM card or Top Up Voucher,” it said.
The products would be sold on board all AirAsia’s flights, it added.
AirAsia said it did not require the approval of its shareholders or any authorities to enter into the agreement with Tune Talk.
It also said the agreement was not expected to have a material effect on its consolidated net assets and consolidated earnings for the current year ending Dec 31.
29 July 2009
PETALING JAYA: AirAsia X will today announce some new destinations it will be flying to in the coming months in its quest to expand.
“We are not going to slow down just because we have not get approval yet to fly into Sydney and Seoul. We will add more flights and services and continue with our expansion,’’ AirAsia X chief executive officer Azran Osman-Rani told StarBiz yesterday.
Several weeks ago, AirAsia X had asked for rights from the Government to fly into Sydney and Seoul as these markets offered good growth potential for the carrier.
However, in an interview with StarBiz which was published yesterday, Azran said “the Government decided to defer granting us the approval. They want (AirAsia) to settle (its) dues with Malaysia Airports Holdings Bhd (MAHB).’’
“It is unfortunate that we are brought into the AirAsia issue but we have written (to the Government) and explained that our accounts are all current,’’ he had said. AirAsia owes MAHB RM65mil in airport service charges. AirAsia and AirAsia X have common shareholders.
Maybank Investment Bank senior analyst Khair Mirza said it was unusual for the Government to withhold approval for the reasons quoted.
“It suggests that there may be more issues than those quoted and there could be reciprocation issues as well,’’ Khair said.
Another analyst said AirAsia X should just go ahead with its expansion into other markets as there were many more destinations that offered equally exciting opportunities as Seoul and Sydney.
The likely markets that AirAsia X will fly to with the three new aircraft it will be taking delivery of this year are speculated to be the Middle East, particularly Abu Dhabi, and China. It is likely to increase frequency on its flights to Melbourne, Perth, Gold Coast, Taipei and Hangzhou.
28 July 2009
SEPANG: AirAsia X’s expansion into Sydney and Seoul will be delayed as it has failed to get the nod from the Malaysian Government to fly to the two cities, forcing the long haul low-cost carrier to formulate a back-up plan to utilise some of the new aircraft that will be delivered later this year.
“We had asked for rights to fly to Sydney and Seoul and the Government decided to defer granting us the approval. They want (AirAsia) to settle (its) dues with Malaysia Airports Holdings Bhd (MAHB),’’ AirAsia X chief executive officer Azran Osman-Rani told StarBiz in an interview recently.
“It is a high profile issue and needs a lot of justification but we are AirAsia X and not the ones that owe MAHB money for airport services. Every invoice that we receive is paid within 30 days.”
“It is unfortunate that we are brought into the AirAsia issue but we have written and explained that our accounts are all current,’’ he said.
About RM65mill payment due to MAHB from AirAsia is in dispute.
Azran reiterated that “the dispute is between the two (AirAsia and MAHB) but delaying us from flying into these two destinations will not help travellers who have limited choices and we lose opportunities of the multiplier impact (that) tourism has.”
“We know the Koreans are keen to have us and both the airports – Sydney and Seoul – welcome us,’’ he said.
The delay may be seen as a setback in its expansion plans as with so much capacity coming onstream, AirAsia X has to work fast to secure rights for other markets so that its planes are not grounded for too long.
“We believe the two markets are big enough for more players. MAHB has been trying hard to get Qantas and Jetstar back and here we are waiting to fly to Sydney,’’ Azran added.
Whether it is AirAsia or AirAsia X, there are common shareholders in both companies and allowing AirAsia into newer markets will certainly heat up competition and drive fares down as seen from its flights to Gold Coast, Melbourne, Perth and London.
“Fundamentally, we do not fly to a destination and take passengers away. We create a new market which even other players can tap into,’’ the AirAsia X chief said.
AirAsia X is set to take delivery of three A330 this year – one each in September, November and December.
It needs to utilise these aircraft and Azran said he was now busy trying to come up with a plan so that the aircraft would be fully utilised since the Sydney and Seoul routes would be delayed.
“We will look at the near term first since we will take delivery of an aircraft in September. We may add capacity on our existing routes to Gold Coast, Hangzhou and Taipei. The new destinations that we are considering include Chengdu. We are hoping to get the time slots soon and the Transport Minisntry has been really helpful in all this,’’ he said.
AirAsia X might fly into either Sharjah or Abu Dhabi sometime this year as part of its plan to venture into the Middle East, he said, adding that Baharin was also on the cards but Teheran would be delayed.
India is a market that AirAsia X wants to look at in 2010 but Amritsar may come earlier if it manages to get the rights, but via Bangkok.
As for the US, the airline liked New York, San Francisco and Los Angeles but formal submissions had not been made, although the process had begun, Azran said, adding that AirAsia X hoped to cover the US by next year.
28 July 2009
PETALING JAYA: Good news for those who travel to Tiruchirapalli often. Low-cost carrier AirAsia will launch a second daily flight to the Indian district from Sept 1.
To celebrate the introduction of the flight, AirAsia will be offering an all-in fare of RM129 for the travel period between Sept 1 and April 30.
The booking period for the flight will be from today to Aug 2.
AirAsia Group commercial regional head Kathleen Tan said the airline was proud to be servicing an underserved route and opening up this market to the world.
“Tiruchirapalli is a highly popular and desired destination among Hindus in Malaysia as it has an abundance of temples, which are popular for pilgrimage,” she said in a statement yesterday.
She said that there was an increase in visiting travellers from the district in Tamil Nadu who were progressively using Kuala Lumpur as a connecting gateway to over 130 routes in South-east Asia and beyond.
“In fact, within the first month of flying to India, we have enjoyed a load factor of 100% on this route,” Tan said.
She added that it was timely to add a second frequency.
Tiruchirapalli was AirAsia’s first destination in India since its inception on Dec 1 last year.
