AirAsia progresses towards becoming an Asean airline

AirAsia Group CEO Tan Sri Tony Fernandes is excited that China has allowed AirAsia to be the first low-cost carrier to set up shop in the Middle Kingdom.

KUALA LUMPUR: AirAsia is continuing its expansion in the region to become a truly Asean airline, group chief executive officer Tan Sri Tony Fernandes said.

He said the expansion continued with the impending joint venture (JV) in Vietnam and interest expressed by the Cambodian government for AirAsia to venture into the country.

“So, the Asean story goes from strength to strength,” he said in a video message on the overview of the airline’s performance last year and outlook in Kuala Lumpur on Monday.

AirAsia Bhd chief executive officer and executive director Aireen Omar said outside of Asean, the company’s newly set-up Japanese subsidiary was expected to start operations in the second half of this year.

She said in addition, the airline recently signed a memorandum of understanding for a JV to establish a low-cost carrier in China.

“To facilitate AirAsia’s growth, we have established a fleet delivery plan that runs up to 2028.

“This year, the group fleet size is expected to increase by 29 aircraft, which will bring it to 203 A320s by year-end,” she added.

Aireen said apart from the passenger service business, the airline would also focus on increasing ancillary income such as revenue from seat selections, inflight WiFi service, food and beverage, baggage fees, fly-thru flight transfer and duty free products.

“Ancillary income is a high margin business and fuels growth for the company. It is making more meaningful contribution to our earnings and provide an additional source of revenue to buffer against uncertainty,” she added.

She said that last year, ancillary income grew more than 10% to RM48 per passenger.

Meanwhile, to keep AirAsia running at low cost, Aireen said, the airline was centralising many processes to reduce redundancies and optimise cost.

“By centralising many of our functions across the group, we will be able to achieve economies of scale and reduce our unique cost further.

“Our focus is on being cost disciplined while we grow, and improve further, as we integrate all resources throughout the group and become truly one AirAsia,” she added. - Bernama
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