AirAsia’s entry may reduce airfares to India

28 January 2010

PETALING JAYA: A decline in airfares is a given with the entry of AirAsia and AirAsia X on the major routes to India, some of which were once tightly held by the incumbent.

Previously, Indian Airlines operated certain routes but it ceased over a year ago, following which Malaysia Airlines (MAS) has been the sole carrier for some of the points.

Now things will change and it is “normal to expect a drastic drop in airfares” with competition coming from the low-cost carrier, said an analyst.

How low fares could go is not clear but as a promotional offer, AirAsia is offering a one-way fare of RM199 and analysts believe the incumbent will also drop fares very soon in response to the RM199 offering.

A check on the respective airlines’ websites revealed that a round trip from KLIA to New Delhi on August 5 to 15 is RM719 on a low-cost carrier; AirAsia X is more than 50% lower than MAS, whose online fare was RM1,592, but MAS is a full service carrier.

“The incumbent will not drop fares to RM199 but a reasonable discount can be expected as it would want to safeguard its market share. Initially, the drop will be bigger but in the longer term and prices will stabilise. However, yields will come under pressure,” an industry source said.

The RM199 offer is for a limited period only.

The cutting of airfares to combat competition is nothing new as this was seen when AirAsia X began mounting flights to Melbourne and Perth.

It has became a trend and initially the incumbent may lose some market share but over some months there would be stability and “MAS would have to adjust its pricing and marketing strategy for this market now that it has competition,” the source said.

AirAsia and its sister airline, AirAsia X, finally got the nod to fly to New Delhi, Mumbai, Bangalore, Hyderabad and Chennai beginning April.

This will set a new wave of competition which is necessary for the Indian routes and gives more choices to consumers.

The low-cost carrier will fly from Penang to Chennai on April 28 and from Kuala Lumpur to Mumbai (May 6), Chennai (May 17), Bangalore (May 20), Hyderabad (July 20) and New Delhi (Aug 4).

Unlike the other sectors, fares are very competitive on the Chennai and Hyderabad routes as the routes are currently serviced by MAS, Jet Airways and Indian Airlines.

India is not a new market for AirAsia as it has carried 237,367 passengers to the four India cities of Trichy, Kochi, Trivandrum and Kolkata, but the major routes are the busiest and airlines need to be on the main trunk routes if they want to penetrate a particular market.

“The opportunities are out there for AirAsia and AirAsia X to provide connectivity for the 1.3 billion Indian and 600 million Asean population.

“AirAsia X will also gain by carrying passengers from Australia to India and vice versa and once its opens new routes, there is opportunity for greater connectivity,” a source said.

While fares will come under pressure on the flights to India, Middle Eastern airline Emirates will add more competition to the already competitive KLIA-Melbourne route by mounting direct flights from KL to Melbourne beginning Feb 1, offering fares of RM1,880 for an all inclusive return flight.

By B.K.Sidhu

The Star

AirAsia expands flights to five Indian cities

27 January 2010

KUALA LUMPUR: AirAsia is expanding its “coverage” of India with flights to five more cities, including the capital, New Delhi, from April.

The budget carrier’s other new routes are to Chennai, Bangalore, Hyderabad and Mumbai. All flights will take off from the Low-Cost Carrier Terminal (LCCT).

AirAsia will also commence flights to Chennai from Penang beginning April 28. Flights from LCCT to Chennai will commence on May 17 (daily); Bangalore on May 20 (daily); Hyderabad on July 20 (daily); Mumbai on May 6 (Tuesday, Thursday, Saturday and Sunday); and New Delhi on Aug 4 (daily).

The airline already flies to Trichy, Kochi, Trivandrum and Kolkata. Transport Minister Datuk Seri Ong Tee Keat said the new routes would further open up the Malaysian business and tourism market to India.

“This tie with India will become increasingly more important, having enjoyed a long relationship with India and subsequent to the visit of our Prime Minister to India last week, it will gear us to further improve our political, trade and economic cooperation with India.

“I hope the increased accessibility into India coupled with low fares will stimulate the interest of SMEs in India and Malaysia to further invest and expand their business beyond their native shores, which will result in the growth of trade between Malaysia and India,” he said at a ceremony to mark the official announcement here.

Also present were AirAsia group CEO Datuk Seri Tony Fernandes, Malaysian Associated Indian Chambers of Commerce & Industry vice-president Datuk Ramesh Kodammal and Tourism Malaysia deputy director-general Azizan Noordin.

Ong said India was Malaysia’s 12th largest global trading partner last year and Malaysia was India’s second-largest trading partner in the Association of South-East Asian Nations.

Besides business and economic ties with India, Ong said tourists from India offered significant potential to Malaysia.

“In the year 2009, the total number of tourists from India to Malaysia numbered 589,838,” he added.

The minister also said response to AirAsia’s destinations in India had been very encouraging, with the airline carrying 237,367 passengers to the four cities it currently flew to.

Fernandes said AirAsia’s additional flights to India was “a timely effort in response to the Prime Minister’s call to strengthen Malaysia-India bilateral relations.”

To mark the opening of sales for the new routes, AirAsia is offering fares as low as RM199 for the booking period from Wednes-day to Sunday.

By Ng Si Hooi

The Star

AirAsia X to launch Coast to NZ route

26 January 2010

LOW-COST carrier AirAsia X wants to start flying direct from the Gold Coast to New Zealand this year, further cementing the Coast's position as an international hub.

The Kuala Lumpur carrier's chief executive Azran Osman-Rani -- in Australia for the official opening of the Gold Coast Airport yesterday -- said one of the company's 2010 objectives was to start flights to Christchurch.

From KL, AirAsia X's parent company AirAsia flies to about 60 destinations.

AirAsia X flies to China, London and the Middle East.

Already there are 18 flights to Auckland from the Gold Coast weekly and three to Christchurch from airlines including Jetstar, Virgin Blue and Air New Zealand.

Mr Osman-Rani said the upgraded airport now provided more scope for the international carrier, which flies seven days a week to KL, to increase its presence here.

"We have a lot more growth plans in this area," said Mr Osman-Rani.

"The Gold Coast works as an effective gateway and international hub," he said.

"We want to look at getting people flying here and then on to New Zealand.

"I think there can be more opportunities within that market."

He said the Gold Coast-New Zealand paths continued to offer strong passenger numbers -- up 51 per cent in December -- and when the company officially announced flights, airfares would be 'AirAsia style prices'.

"People from KL can choose to get off here or wait in the transit lounge to go to New Zealand. Gold Coasters can use us to fly over there and vice versa," he said.

He added that he wanted to work with the airport on improving check-in experiences and decrease the 'pain points' for passengers.

"One of the things we are looking at is how we can get the international transit to work here and decrease the pain points when arriving and departing from an airport," he said.

"As an airline we are doing what we can to help make it a smoother process, like online and phone check-ins. We also are working on upgrading our booking site so people can book direct from London to Christchurch or Gold Coast to Phuket.

"At the moment they have to make two bookings."

GoldCost.com.au

100PLUS and Coca-Cola to be sold on AirAsia flights

26 January 2010

SHAH ALAM: Fraser & Neave Holdings Bhd (F&N) through soft drinks unit F&N Beverages Marketing Sdn Bhd has signed a strategic beverage distribution agreement with AirAsia Bhd in its bids to grow the 100PLUS brand further.

Chief executive officer Tan Ang Meng said the agreement would see 100PLUS and Coca-Cola being sold on board all AirAsia flights departing from Malaysia beginning Feb 1.

“While this signing is just the first step, we look forward to growing and extending our relationship with AirAsia. We hope to generate cross-marketing activities and promotions that would be mutually beneficial and rewarding to both parties.

“Above all, we hope AirAsia passengers too can benefit from this partnership,” Tan said at the agreement signing ceremony yesterday.

From left: F&N Beverages Marketing MD James Teo, Tan Ang Meng, Datuk Aziz Bakar and AirAsia director Datuk Fam Lee Ee after the signing.

Tan said the group was also looking forward to extending the agreement to cover its entire portfolio of beverages.

“We’re working very hard with AirAsia. I’m sure they will ask us to put more drinks on their flight,” he said.

To a question, Tan said F&N was “trying to extend distribution reach”. “We want a wider market exposure for our products. It is also an opportunity to cross market our products,” he said.

He said 100PLUS had been consistently voted the number one Malaysian brand in various surveys since its introduction in 1983.

AirAsia chairman Datuk Aziz Bakar said the low-cost carrier would initially offer its passengers F&N’s two most popular beverages.

He said the agreement was for a one-year period with further options.

“We are targeting to sell 24,000 cans of 100PLUS and Coca-Cola each per month,” Aziz said, adding that AirAsia hoped to increase its anciliary income with the partnership.

AirAsia raked in RM38mil from food and beverages in 2009. This year, the low-cost carrier is anticipating it to increase to RM48mil.

Aziz said in the second half of 2009, AirAsia recorded RM20mil sales from food and beverages.

The Star

AirAsia joins hands with Unicef for Haiti

23 January 2010

KUALA LUMPUR: AirAsia has joined hands with the United Nations Children’s Fund (Unicef) in an effort to raise RM438mil (US$128mil) for children and families in earthquake-hit Haiti.

Its group chief executive officer Datuk Seri Tony Fernandes said AirAsia had established a dedicated link on its website to allow guests to contribute to the fund called Haiti Earthquake Children’s Appeal 2010.

“The AirAsia family wanted to help when we first heard about the tragedy in Haiti. When Unicef asked us to join them, we readily agreed.

"Our website receives about 20 million visitors every month and we carried an estimated 25 million guests last year,” he said in a statement here Saturday.

Guests can contribute to the fund by visiting www.airasia.com and click on the link to make donations.

Meanwhile, the Muslim communities in the United States are raising funds to help Haitians.

“The Zakat Foundation of America is another Muslim-American organisation aiding the Haitian population.

“Impoverished Haiti is a familiar territory for the Zakat Foundation,” the United States Embassy said in a statement.

It said that Muslim Americans at the local level are donating aid to Haiti through the Islamic Society of North America and other Muslim-American organisations.

Haiti was struck by a devastating earthquake on Jan 12, which killed over 100,000 people.

-- BERNAMA

CEOs and MDs of Air Asia X, Abacus, Google Travel and Microsoft to address travel industry in Asia

22 January 2010

Leading senior executives from Air Asia X, Abacus, Google Travel, and Microsoft are set to address Asia’s travel industry and discuss key strategies for the upturn at EyeforTravel’s Travel Distribution Summit Asia http://events.eyefortravel.com/tdasia/ , which will take place in Singapore, April 28-29. The event is Asia’s largest meeting place for senior travel professionals with 55 expert speakers confirmed and over 800 leading brands expected attend.

Top on the agenda for 2010 is an analysis of how the Asian travel industry can prepare for recovery. After a tough year, the key to rebuilding the foundations of a recovering market will be innovation and a clear understanding of how new technologies will drive future change and create lucrative opportunities for online travel.

Heading up the debate will be Timothy Hughes, VP of Orbitz, Hotelclub, and founder of the Business of Online Travel along with Mark Inkster, GM, Microsoft Online Services Group Asia. They will be joined by Google’s managing director of travel, Rob Torres, who will be coming all the way from Mountain View, California, to share his unique visions for the future of online travel.

Robert Bailey, president and CEO of Abacus International; Azran Osman-Rani, CEO of Air Asia X; and John Koldowski, deputy CEO and head, Office of Strategy Management at PATA, will present the new trends, key issues, and challenges that will shape the industry in 2010 and beyond.

Recent research from the UNWTO and STR Global revealed that growth has returned to international travel and tourism markets, and Asia in particular is enjoying slow but steady growth in both business travel and long haul, two sectors that were hit hardest by the global softening of demand.

Event director, Marco Saio, reported: “It’s been a tough year for the Asian travel market. The industry playing field has changed dramatically. We’re seeing now that those companies who intelligently prepare for the upturn will be those who reap the rewards.”

“This event comes at an opportune moment. Packed full of insightful case studies from top travel brands, as well as ample time to network and secure successful partnerships, TDS Asia 2010 is an essential date for every Asian travel professionals diary,” said Saio.

With recovery as the central theme of the summit, it will bring together leading executives from Asia, Europe, and North America for two days of insightful presentations, heated debate, and powerful networking opportunities to arm online travel professionals with essential strategic tools and knowledge for a successful 2010.

BreakingTravelNews.com

Airasia Sees Increase In Cargo Revenue

21 January 2010

KUALA LUMPUR -- Low-cost carrier, AirAsia, has target to increase cargo revenue by more than 40 per cent over last year's performance.

In a statement Thursday, AirAsia said its cargo segment would be a major area of growth for 2010, with South Asia being of particular interest to the airline.

As demand for cargo picks up, AirAsia said it was aggresively growing its markets and utilising Special Prorate Agreements (SPA) with various airlines to achieve the 2010 target.

It is also reaching out to markets beyond current routes to more cities in South Asia, East Asia, the Middle East, Africa and Europe, through other airlines via the SPA agreements.

AirAsia is also tying up with more cargo agents and large import-export firms in the markets it flies to.

"We've been signing up more key players in the cargo industry. Our competitive prices allow us to also increase business with individual senders," AirAsia's regional head of cargo, Sathis Manoharen said.

In line with the growth, he said domestic cargo operations are also expected to receive a boost, especially from the seafood industry.

This industry is currently among AirAsia's significant cargo revenue sources.

-- BERNAMA