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Wednesday December 27, 2006

AirAsia embarks on 2nd chapter


Fernandes, an avid Star Wars fan, likens the no-frills airline's struggle to grow its network and deliver on its low-fare promise to a battle in the immensely popular sci-fi movie series. 

“It’s almost like Star Wars. Part one is over, and AirAsia has established itself in the industry,” he said, adding that the airline could now reap the benefits of its hard labour. 

He said the airline was now moving on to the second chapter, during which he would have to fight two more battles.  

“My first battle will be for lower airport charges; gaining entry into Singapore will be my last,'' he told StarBiz

“I just have to go in there like Luke Skywalker who walks in to destroy the last Darth star, Changi. If we get Singapore, we will have all the routes we wanted.'' 

Fernandes said AirAsia was pushing for lower airport charges to encourage more people to travel and attract tourists to Malaysia. 

“We have to make Malaysia Airports Holdings Bhd realise that lower charges means more travellers. It is a volume game but we are getting there. It's a start,” he said, adding that the charges had been holding them back from exploring and delivering to its customers. 

Fernandes said it was timely for a cut in airport charges as the low-cost carrier terminal (LCCT) with its basic facilities was designed for budget airlines. 

“However, budget travellers are currently paying about the same airport tax as those who are using premium facilities at the main terminal,” he said. 

Fernandes pointed out that LCC airports in the US and Europe did not charge airport tax while Singapore's Changi Airport had very low airport charges for travellers using the LCCT. 

“Lowering the airport tax would attract more travellers and more money could be made from ancillary services such as the food and shop outlets,” he added.  

On his last “battle'', Fernandes said it was “just a matter of time'' before AirAsia was allowed to fly the Singapore route.  

“I think we could have something next year. I think the only reason in not giving us Singapore is to protect Malaysia Airlines (MAS) and it is about time that ends,” he said, adding that the carrier was confident of taking “a lot of hard traffic'' from Singapore over to Kuala Lumpur. 

“I do not believe stopping us from getting the Singapore route will help MAS at all. MAS became a better airline because of competition and I don't think anyone can deny that. So don’t protect them anymore. Allow us to grow, allow us to bring in people from Singapore. I am sure the 3 million people who are bored in Singapore want to come to Malaysia,” he added. 

Fernandes said AirAsia's goal over the next five years was to “keep increasing frequency as we connect more dots.'' 

“The first five years was about putting our flags on as many destinations as possible and now on our focus is to increase flight frequency,” he said, adding that the airline would enhance its route network and connectivity in the region over the next five years.  

“We will further expand in Indochina, Indonesia, southern China and India.''  

Fernandes said the airline would develop its hubs in Thailand and Jakarta through its sister companies, Thai AirAsia and Indonesia AirAsia. 

“We will soon have 12, 16 and 20 flights a day to Bangkok, Kota Kinabalu and Penang respectively. With more frequency, we will have more and more low fares,” he added. 

AirAsia expects passenger volume to hit 18 million by end-2007, backed by an increase in the number of aircraft and destinations. 

“We have built our brand to number 71 over the last five years, beating other brands that have been in the industry longer than us. 

“Going forward, we will continue to build our brand and hope we will become a global brand of the size of Coca-Cola and Nike. I believe it is achievable,'' he added. 

Fernandes said AirAsia planned to introduce more Internet products in the future. The airline is in the midst of introducing electronic check-in whereby passengers would be able to check in from their homes and print out their boarding passes. It is also trying to cut down on queues by increasing check-ins via personal digital assistants. 

AirAsia, which is celebrating its fifth anniversary this year, has ordered 100 A320s with an option for 30 more. 

Fernandes said that given AirAsia’s aggressive network expansion plan, the 100 aircraft might not be sufficient to support its growth. The airline, he said, was considering placing more orders with Airbus. 

AirAsia, currently in the process of phasing out its B737-300s, would become the largest A320 operator in the Asia Pacific region by 2012.  

The carrier received its 50th A320 aircraft last week, which to Fernandes is a milestone of sorts. 

“It has been a fantastic year for us. What better way to end the year than by getting our 50th aircraft,” he said.  

The A320s currently make up 75% of AirAsia's fleet in Kuala Lumpur, and by July next year, its Kuala Lumpur hub would be fully operated by the A320s. 

“As I said earlier, chapter one is over. It is now about chapter two of the AirAsia story. Star Wars has six parts and, hopefully, I will be around for five. I will leave chapter six to someone else,” Fernandes said. 

 
AIRASIA :  [Stock Watch]  [News]

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