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ESTABLISHED IN 1993 AND STARTED OPERATIONS IN 1996. 2ND NATIONAL CARRIER. DOMESTIC, REGIONAL, & INTERNATIONAL, PASSENGER, JET AIRPLANE SERVICES.
LOT NO N1
LEVEL 4 MAIN TERMINAL BUILDING
KUALA LUMPUR INTERNATIONAL AIRPORT
64000 SEPANG, SELANGOR, MALAYSIA
LEVEL 1, ASIA PACIFIC AUCTION CENTRE
SULTAN ABDUL ASIS SHAH (SAAS) AIRPORT
47200 SUBAN, (SELANGOR), MALAYSIA
Malaysia (Federation of Malaysia) was established in 1957, it covers an area of 329, 749 sq km, its population is 21 million, its capital city is Kuala Lumpur, and its official language is Malay.
NOVEMBER 1996: AIRASIA (ASW) INITIALLY OPERATES AS "PACIFIC EAGLE." IT IS 85% OWNED BY HICOM HOLDINGS, WITH THE REST BY MOFAZ AIR (FLYING SCHOOL).
SERVICES TO TAIWAN VIA KOTA KINABALU (EAST MALAYSIA). PLANS TO EXPAND TO THAILAND, AND PHILIPPINES, AND ACQUIRE +2 WIDEBODIES.
INAUGRAL FLIGHT OF 737-300, (GUI) LEASED, TO PATTAYA, THAILAND. 2ND 737 IN FEBRUARY 1997.
DECEMBER 1996: PLANS TO OPERATE TO USA & EUROPE WITHIN 5 YEARS.
JANUARY 1997: 1 737-300 DELIVERY, (GUI) LEASED (2ND IN FEBRUARY 1997 (PQ972)
FEBRUARY 1997: 1 737-300 (CFM56-3C1), (GUI) LEASED.
APRIL 1997: HIRED GELLMAN RESEARCH ASSOCIATION (GRA) CONSULTANTS TO HELP DRAW UP A STRATEGIC PLAN FOR DEVELOPMENT.
TO JAKARTA, AND CONSIDERING SHANGHAI, FUKUKOA, JAPAN, XIAMEN, KAZAKHSTAN, & UZBEKISTAN.
JUNE 1997: RETURNS 1 737-242C (19847) TO EUROPEAN CAPITAL.
SEPTEMBER 1997: ADVERTISES IN "FLIGHT INTERNATIONAL," FOR EX-PATRIOT, CEO.
PLANS TO ACQUIRE 15 TO 20 JETS OVER NEXT 5 YEARS, INCLUDING UP TO 5 WIDE BODIES.
NOVEMBER 1997: PLANS TO ACQUIRE 2 A310-300'S LEASED, EARLY NEXT YEAR, FOR SERVICE TO BEIJING AND SHANGHAI.
JUNE 1998: HIT BY REGION'S ECONOMIC CRISIS, REDUCES SERVICE, AND LAID OFF -100 EMPLOYEES.
TO KEEP FLYING TO PATTAYA, LANGKAWI ISLAND, TAIPEI, AND KOTA KINABALU.
AUGUST 1998: FORMS ALLIANCE WITH TRANSMILE (TML), TO OFFER PASSENGERS A WIDER CHOICE, & HIGHER FREQUENCY OF FLIGHTS, TO DOMESTIC, & REGIONAL DESTINATIONS. BOTH OPERATORS ARE BASED AT SULTAN AZIZ SHAH AIRPORT (25 KM FROM CITY, VS 60 KM TO INTERNATIONAL AIRPORT).
JANUARY 1999: HAD PLANNED TO LEASE 2 A310'S FOR LONG HAUL OPERATIONS FROM AIRBUS (EDS), BUT RECENTLY IMPOSED GOVERNMENT CURRENCY CONTROLS HAVE PUT THIS ON HOLD.
FEBRUARY 1999: KUCHING TO KOTA KINABALU/MIRI.
GOVERNMENT REJECTS INTERNATIONAL FLIGHTS, FOR (ASW), MALAYSIA'S, 2ND DESIGNATED NATIONAL CARRIER. CURRENTLY USES 2 LEASED 737-300'S FOR DOMESTIC SERVICES TO LANGKAWI ISLAND, KUCHING, KOTA KINABALU, MIRI, & LABUAN.
2 MD-11'S, WORLD AIRWAYS (WLD) WET-LEASED FOR HADJ UNTIL END OF APRIL 1999.
APRIL 1999: 210 EMPLOYEES (INCLUDING 20 FLIGHT CREW (FC), 70 CABIN ATTENDANTS (CA), & 26 MAINTENANCE TECHNICIANS (MT).
(http;//www.airasia.com). SITA: KULKDAK.
GOVERNMENT OK'S INTERNATIONAL FLIGHTS FROM SULTAN ABDUL AZIZ SHAH AIRPORT, KUALA LUMPUR.
JANUARY 2000: 2 747'S, TOWER (TOW) WET-LEASED, FOR HADJ FEBRUARY TO APRIL 2000. 747-200 (JT9D-7J) (21162; 21316). 1 737-300, AIR ROSE (RSE) LEASED FOR 6 MONTHS.
APRIL 2000: 210 EMPLOYEES.
JANUARY 2001: WAN HASMAR AZIM WAN HEAD OF ENGINEERING.
1 747-312 (JT9D-7R4G2) (23244, /85), EX-SINGAPORE AIRLINES (SIA), AIR ATLANTA ICELANDIC (AID) WET-LEASED FOR HADJ TIL END OF APRIL 2001.
APRIL 2001: 212 EMPLOYEES (INCLUDING 20 FLIGHT CREW (FC), 54 CABIN ATTENDANTS (CA), & 25 MAINTENANCE TECHNICIANS (MT)).
MAIN BASE: SUBANG (SULTAN ABDUL AZIZ SHAH).
JUNE 2001: TO BANGKOK (737-300, 2X-WEEKLY) AND PHUKET (737-300, 3X-WEEKLY).
AUGUST 2001: 230 EMPLOYEES. (email@example.com).
SEPTEMBER 2001: LOCAL COMPANY TUNE AIR BUYS AIR ASIA (ASW) FOR $0.30, AND 50% OF ITS NET LIABILITIES, TOTALING $54.05 MILLION, A LARGE PORTION OF WHICH IS OWED TO MALAYSIA AIRLINES (MAS) FOR MAINTENANCE OF ITS AIRPLANES.
ALTHOUGH IT SECURED RIGHTS FOR INTERNATIONAL FLIGHTS TO TAIPEI, JAKARTA, BANGKOK, & PHUKET, AS WELL AS MAJOR DOMESTIC TRUNK ROUTES, IT FAILED TO MAKE AN IMPACT WITH ITS INTERNATIONAL SERVICES, AND EVENTUALLY DROPPED TAIPEI & JAKARTA SERVICES SHORTLY AFTER LAUNCHING THEM. DOMESTICALLY, IT TRIED TO COMPETE WITH (MAS) ON THE LUCRATIVE, KUCHING, KOTA KINABALU, & LABUAN ROUTES.
NEW OWNER OF "TUNE AIR" WILL RETAIN THE "AIR ASIA" NAME AND LIVERY, BUT WILL OPERATE AS A "NO-FRILLS" AIRLINE. THE TUNE AIR TAKEOVER IS BY TONY FERNANDEZ, FORMER VP OF WARNER MUSIC INTERNATIONAL, WHO ESTABLISHED THE TUNE GROUP.
OCTOBER 2001: WILL OPERATE OUT OF SUBANG INTERNATIONAL AIRPORT UNTIL IT CLOSES, AND THEN MOVE OPERATIONS TO JOHORE BAHRU.
WILL PHASE OUT 737-300'S, AND ADD 5 ORDERS (DECEMBER 2001) 737-200'S, (GECAS) (GEF) LEASED. 5-YEAR PLAN IS TO ACQUIRE 17 737-200'S.
NOVEMBER 2001: 2 ORDERS (DECEMBER 2001) 737-3Q8'S, (ILF) LEASED.
JANUARY 2002: AIR ASIA (ASW) BECOMES THE 1ST "NO-FRILLS" BUDGET CARRIER IN ASIA.
NEW LIVERY, WITH WHITE FUSELAGE, WITH "airasia.com" IN RED, AND "NOW EVERYONE CAN FLY" IN BLACK, WITH A STYLIZED RED AND WHITE TAIL.
2 737-3Q8'S, (ILF) LEASED.
MARCH 2002: (firstname.lastname@example.org).
APRIL 2002: 212 EMPLOYEES (INCLUDING 20 FLIGHT CREW (FC); 54 CABIN ATTENDANTS (CA); & 25 MAINTENANCE TECHNICIANS (MT)).
MAIN BASE: SUBANG - SULTAN ABDUL AZIZ SHAH AIRPORT (SZB).
1 ORDER (JUNE 2002) 737-3L9 (24570), EX-CHINA EASTERN (CEA), SALE (SIL) LEASED.
July 2002: Relocates its operations to Kuala Lumpur International Airport (KLIA), Sepang. There will be approximately 17 million passengers using (KLIA) while the number of flights/week will increase from 354 to 585.
Plans to acquire 5 or 6 more airplanes to expand its low-fare, domestic service in 2003 to regional destinations such as Jakarta, Medan, Palembang, Bangkok, Pattaya, Phuket, Manila, & Subic Bay, as well as China.
Plans to increase its passengers to 1.2 million this year, from 280,000 in 2001.
Owner Tony Fernandez (CEO) who owns 99.25% of the company through Tune Air, plans to sell a 30% stake with the state government of eastern Sarawak reported as a potential buyer.
September 2002: To Tawau in Sabah (Malaysia) (2x-daily).
October 2002: In November 2002, to Sibu and Sandakan in Sabah, a Malaysian province, on the island of Borneo (daily). Plans to use Sabah's capital Kota Kinabalu (KKIA) as its 2nd hub, and base for international operations. In April 2003, from (KKIA) & Kuala Lumpur, to Bangkok, Denpasar, Jakarta and Surabaya. Flights to Guangzhou, Hong Kong, Manila, Shenzhen and Xiamen will follow. The 3rd hub will be the Malaysian town of Johor Bahru close to neighboring Singapore.
The government of Malaysia has granted (ASW) approval to service equal routes as Malaysia Airlines (MAS) to allow a competitive market to exist in Malyasia.
+6 orders (June 2003) 737-300's, 5 year leased for international operations.
November 2002: To Kuala Terengganu (6x-weekly) (9th destination after Penang, Kota Baru, Kota Kinabalu, Kuching, Langkawi, Miri, Tawau, and Labuan.
December 2002: 3 747-220's wet-leased for Hadj pilgrims to Mecca, January 2003 til March 2003 from Kuala Lumpur International Airport, Bayan Lepas, Senai, Kuching and Kota Kinabalu.
January 2003: $7.5 million contract to Singapore Technologies Aeospace to provide complete rotable component management and support services for (ASW)'s 5 737-300's, which could be expanded to support 20 airplanes.
1 737-33A (24096, 9M-AAF), ex-Kenya Airways (KEN), Ansett Worldwide (AWW) leased. 1 737-3L9 (27061, 9M-AAG), ex-Aegean (CRM), Tombo (TOM) leased. 747-267B (22149, TF-ATC), Air Atlanta Icelandic (AID) wet-leased for Hadj.
February 2003: Expects to operate regional international services within 12 months. Plans to acquire +8 airplanes. Will have fleet of 15 by end of 2003, mainly for domestic expansion. Considering flights to Semarang, Surabaya, Bandung, and Medan in Indonesia, as well as Phuket and Chiang Mai in Thailand. Air Asia (ASW) wants to avoid confrontation with major airlines by flying to secondary cities. For example, instead of flying to Singapore, it is developing Senai, just north of Singapore, as its hub.
March 2003: In April 2003, Kuala Lumpur to Sandankan, and to Siru.
2002 = +11.8 million ringgits.
Plans to sell 25% to 3 investors for about MYR 50 million/$13.2 million, to acquire +6 airplanes and add +4 destinations.
April 2003: 320 employees.
June 2003: In 2002, AirAsia (ASW) secured 10% of the Malaysian domestic market with 1.1 million passengers (PAX). (ASW) has received landing rights for destinations in Indonesia, the Philippines, and Thailand.
11 orders (October 2003) 737-300, 4 (GECAS) (GEF) leased.
July 2003: 230 employees.
Appoints Singapore Technologies Aerospace (ST Aero) for $62.6 million to provide modifications and maintenance support for its fleet of 4 737-300's, including maintenance checks and Airworthiness Directive (AD) compliance, avionics installations, & single class interior conversions and painting, plus power-by-the-hour services over 10 years for the (CFM56-3) engines.
August 2003: A few days after AirAsia (ASW) announced plans to expand internationally to India, Malysia Airlines (MAS) hired +800 cabin crew (CA) and may also add airplanes as part of its Asian expansion drive.
Plans to add Phuket and the Langkawi to Phuket route in January 2004.
September 2003: In October 2003, Kuala Lumpur to Johor Bahru (Senai) (on the S tip of the Malay peninsular, just a short drive from Singapore) (2x-daily).
October 2003: 2 737-300's, (GEF) leased.
November 2003: In December 2003, opens a new base at Senai Airport in the state of Johor Bahru, and will base 2 737's there offering 2x-daily to Penang, & Kuching, and 1 daily flight to Langkawi and Kota Kinabalu. Also, Kuching to Kota Kinabalu (daily). Also will launch 1st international flight from Kuala Lumpur to Phuket. In February 2004, Senai to Bangkok (daily).
Is interested in operations to India: Kuala Lumpur/Penang to Chennai (Madras), Thiruvananthapuram (Trivandrum), Madurai, and Delhi.
The (ASW) fleet will grow to 10 737's with opening of Senai Base. In October 2003, carried a record 200,000 passengers, and currently 60% of the bookings come via the Internet.
(ASW) joint venture with Thailand's Shin Corporation to form AirAsia Aviation Co Ltd to operate as Thai AirAsia (THA), which will commence operations in 2004 with 3 737-300's to Bangkok, Chiang Mai, Khon Kaen, Phuket, Hat Yai and Nakhon Ratchasima.
December 2003: Plans to sell about a 3rd of its shares to the public around August 2004 to raise some $300 million to increase the size of its fleet.
Kuching to Kota Kinabalu (daily), Senai to Kota Kinabalu (daily) /Kuching (2x-daily)/Langkawi (daily)/Miri (daily)/Penang (2x-daily). In January 2004, Kuala Lumpur to Bangkok.
737-3M8 (25071), Aviation Capital Group leased.
February 2004: To spend S$115 million/$68.7 million to set up a joint venture in Singapore. Has applied for an Air Operators Certificate (AOC) from the Civil Aviation Authority of Singapore (CAAS) which will take 6 to 9 months to process.
AirAsia Aviation (Thai AirAsia) (THA) had its inaugural 737-700 flight from Bangkok to Chiang Mai make an emergency landing because of a malfunctioning flap indicator and was forced to return 20 minutes after takeoff. Half of the passengers (mostly (VIP)s & reporters) opted out of continuing. Thai AirAsia (THA), Bangkok to Singapore (daily, non-stop).
737-3TO (23365), (GEF) leased.
March 2004: Inaugral flight to Bandung, Indonesia. In April 2004, Johur Bahru to Jakarta (daily); Kuala Lumpur to Bandung (daily); and Kuala Lumpur to Surabaya (daily).
Now operating >100 domestic and international flights daily from hubs at Kuala Lumpur, Johor Bahru, and Bangkok.
2 737-301's (23257, 9M-AAU; 23552), (GECAS) (GEF) leased.
April 2004: Plans to expand service to Macau, from Kuala Lumpur and Bangkok by July 2004.
737-3YO (24547, 9M-AAX), Orix (OXA) leased.
May 2004: Thai AirAsia (THA) (AirAsia Aviation), in June 2004, Bangkok to Macau (daily).
17th 737-300 delivery, 737-3TO (23367, 9M-AAP), (GEF) leased. 737-301 (23233, 9M-AAM), (GEF) leased.
June 2004: In July 2004, Jakarta to Kuala Lumpur (daily nonstop). Bangkok to Macau (daily).
Lufthansa Cargo (LUB) subsidiary "time:matters GmbH" signed a 3-year strategic agreement with AirAsia (ASW) to commercialize its cargo capacity.
July 2004: In August 2004, Kuala Lumpur to Bali and Medan. Kuala Lumpur to Bintulu, Sarawak (737-300).
Air Asia (ASW) affiliate, Thai AirAsia (THA) launched Bangkok to Macau.
August 2004: Hat Yai to Kuala Lumpur (daily). Kuala Lumpur to Denpasar (Bali); to Bintulu.
To add +3 airplanes in 2004.
2 737-3TO's (23357, 9M-AAS; 23358, 9M-AAR), (GEF) leased.
September 2004: In November 2004, Thai AirAsia (THA), Singapore to Phuket.
2 737-301'S (23233, HS-AAM; 23234, HS-AAN) wet-leased to (THA).
October 2004: AirAsia (ASW), Malaysia, has acquired the Airplane Operating Certificate (AOC) of Awair International (AWR) for a token $2 and awaits an operating license from Indonesian authorities to establish a local subsidiary in cooperation with an Indonesian partner, who would have a majority stake in the airline. Initially 2 or 3 airplanes would be based in Indonesia.
Plans to raise MYR 800 million/$210.5 million in its Initial Public Offering (IPO), representing 30% of its enlarged share capital, with Tune Air reducing its stake from 74% to 44.8%. A price of MYR 1.4 /$0.37 has been set for 117 million shares available to individuals. Another 560 million will be offered to professional investors at a higher price, with 23 million shares allocated to its own staff.
Discusses with Malyasia Airlines (MAS) possible cooperation through sharing of Engineering, distribution channels, cost-sharing, and co-promotion.
In November 2004, Kuala Lumpur to Padang.
737-301 (23554, 9M-AAW) (GEF) leased.
November 2004: 1,132 employees.
Rumors that AirAsia (ASW) will order 80 A320 family airplanes for expansion and to replace its 737-300 fleet. 2 737-301's (23236 HS-AAK; 23235 HS-AAL) leased to Thai AirAsia (THA).
December 2004: Pays a token $2 to acquire a 49% stake in (PT) AWAir International (AWR) and re-launches service Jakarta to Medan (737-300, AirAsia (ASW) wet-leased, 148Y). Later adds a 2nd service and introduces Jakarta to Balikpapan (daily nonstop). AWAir (AWR) is modeled after (ASW) and will "adhere to a low-cost business model" operating point-to-point flights within a 3 hour radius.
737-3S3 (24059, G-STRA), KG Leasing leased. 2 737-301's (23357; 23511) transferred to Thai AirAsia (THA). Memo of Understanding (MOU) for $2.5 billion, 40/40 orders (January 2006) A320's.
January 2005: 2 737-301'S (23257; 23552), transferred to Awair International (AWR).
February 2005: In May 2005, Thai AirAsia (THA) expansion to China with flights Bangkok to 5 destinations including Chengdu, Kunming & Xiamen.
+20 orders A320's for total 100.
March 2005: 737-3L9 (23718), ex-Bulgaria Air (BUL), (CIT) (TCI) leased.
April 2005: Kuala Lumpur & Kota Kinabalu to Manila (daily).
Jean Chang, VP Greater China & North Asia.
May 2005: Johor Bahru to Sibu, Sarawak (3x-weekly, Tuesdays, Thursdays & Saturdays).
Situated some 130 km from the South China Sea, Sibu is a Chinese town founded by Foochow immigrants at the turn of the century. It is now Sarawak's 2nd largest town after Kuching and the main port and commercial center for the Rejang. In recent years it has mushroomed thanks to the wealth from timber and the business acumen of its local entrepreneurs.
Johor is the southern most state of Peninsula Malaysia, known also as the Southern Gateway to Malaysia. It is linked to Singapore via the Causeway. Johor is one of the most developed states in the country with a flourishing economy and many interesting places.
July 2005: Qantas's (QAN) ambitions to establish a low-cost beachhead in Asia appear to be hanging in the balance after its JetStar Asia (JSA) joint venture confirmed it is in alliance talks with another Singapore-based Low-cost Carrier (LCC), Valuair (VLU). In the 1st major consolidation move in the Asia market, Ken Ryan (CEO) (JSA), which is 49% owned by (QAN), said (QAN) and (VLU) "are exploring a variety of ways they can work together or cooperate with each other." The development reflects (JSA)'s frustrations at its inability to access rights to China and Indonesia and the heavy low-cost competition centered on Singapore, where 3 (LCC)'s are based including Singapore Airlines (SIA) subsidiary Tiger Airways (TGR), and a 4th operator AirAsia (ASW) is active.
(JSA) which launched last December 2004, has withdrawn from Singapore to Pattaya and reduced its fleet requirements in 2005 from 8 to 4 A320's. Privately owned (VLU) launched in May 2004 also is facing considerable pressures in its home market. However, it gained limited rights to serve Chinese destinations and also operates to Hong Kong, Jakarta, Bangkok, & Perth.
Later, alliance talks with JetStar Asia (JSA)) broke down, raising further questions about its future in the intra-Asia market. Later still from off-again to on-again, when (QAN) offered an additional S50 million into the merged airline. After (QAN) paid S$60 million/$36 million, both finally agree to merge into a new entity with (QAN) stake reduced to 45.5%, that will own and operate both airlines, managed by Geoff Dixon Chairman and Ken Ryan (CEO).
While (JSA) suggests that the 2 brands will continue, analysts believe it will absorb (VLU) and their networks will be consolidated.
(JSA) will gain routes to Jakarta, Chengdu, and Xiamen, which are considered (VLU)'s most important assets.
Talks are continuing with (ASW) about a possible tie-up that could see (ASW) buying into the enlarged (JSA). (ASW) offered to inject S$20 million into (VLU), and synergies exist for joint ground handling and terminal access at destinations around Asia as well as maintenance.
August 2005: AirAsia (ASW) launched what it claims is the world's 1st online booking service linking its Internet booking system with mobile phones and wireless devices. Developed by eSpherical.com, the offering allows mobile phone and Personal Digital Assistant (PDA) users with any (GPRS), (3G), (EDGE) or wireless facilities to view the airline's Web pages directly. The service provides (ASW) customers the ability to search for flights, book, use a credit card to pay and receive flight confirmation and itinerary details from anywhere in the world 24 hours a day.
(ASW) reported a profit attributable to shareholders of MYR111.6 million/$29.6 million for the fiscal year ended June 30, more than double the previous year's income of MYR49 million but 30% below the profit of MYR160 million in its float forecast. Earnings for the last quarter totaled MYR16.1 million, reversing a loss of -MYR2 million last year.
The lower results were attributed to a number of factors, among them a shortage of airplanes, higher fuel prices, "irrational competition" and the impact on air travel demand of the December tsunami disaster.
This was offset partially by a 2-point drop in load factor to 75% LF as capacity jumped +82% to 6.5 billion (ASK)s against a 72% increase in (RPK)s to 4.9 billion.
Staff cost totaled MYR79 million compared to MYR65.7 million last year, while fuel expense more than doubled to MYR226.2 million versus MYR102.7 million in 2004.
737-3S1 (24856), wet-leased to Awair (AWR).
September 2005: AirAsia (ASW) and loss-making Malaysia Airlines (MAS) are close to a wide-ranging agreement, according to (ASW) founder and (CEO) Tony Fernandes. Fernandes said, "we will have an announcement shortly as our relationship with (MAS) is improving rapidly, which gives us ways of potentially maximizing our revenue."
The airline group continued its spectacular growth in July, with passengers up 24.8% to 395,667 on (ASW) and 16.1% to 148,953 in Thailand. The Indonesian operation, AWAIR (AWR), which will be renamed "Indonesia AirAsia" in October, carried 56,256 passengers.
Separately, (AWR) announced that it will launch its 1st international route September 23 with a daily frequency between Jakarta and Kuala Lumpur. It began service to Surabaya September 9 and adds Batam on September 15.
(ASW) will launch service from its base at Kuala Lumpur to Chiang Mai and Phnom Penh on October 20 and November 1 respectively with a single daily round trip to each destination. To kick off the routes, it is offering 10,000 seats to each city at an introductory fare of MYR49.99/$15 each way excluding airport fees and taxes.
737-347 (23345) wet-leased to Awair (AWR).
October 2005: AirAsia (ASW) launched flights from its base in Kuala Lumpur to Chiang Mai, reconnecting the 2 cities after Malaysia Airlines cut flights after "9/11." (ASW) (CEO) Tony Fernandes said that the carrier "sold >12,000 seats for the route since opening for sale 2 weeks ago." Chiang Mai is the 4th major Thai city served by (ASW) after Bangkok, Phuket and Hat Yai.
With rival Indonesian airline AdanAir (DHI) getting the nod for operating flights to Singapore, (ASW) has criticized Singapore for “discrimination.” Indonesia’s AWAIR International (AWR), which is a stakeholder of (ASW), is waiting for the go ahead from Singapore authorities to commence its operations.
The development follows recent permission granted by Civil Aviation Authority of Singapore (CAAS) to Indonesia’s AdamAir (DHI) for 3 daily flights from Jakarta. (DHI) is expected to start its operations to Singapore from the end of this month.
Indonesia’s AWAIR (AWR) dropped its application for the same route after (CAAS) delayed giving it the greenlight in March, as per the information available. (AWR) is believed to have failed to provide additional documents in its bid to get approval, said a media report.
Singapore will be (DHI)’s 2nd international destination after Malaysia’s Penang, (DHI)’s Executive V, Dave Fikarno recently told media. “Suddenly, (DHI) gets the right to fly to Singapore which appears to be a decision that discriminates against us,” (ASW)’s (CEO) Tony Fernandes told the Financial Times newspaper.
As per the information available, (DHI) offers assigned seats and light snacks, sells tickets to Singapore that are significantly cheaper than full-fare carriers, and Fernandes accused the republic of trying to protect its own low-cost carriers by barring (ASW).
While (ASW) reported its net profit for the year to June as +111.63 million ringgit/+US$29.6 million, budget airline Tiger Airways (TGR), a unit of the state-owned Singapore Airlines (SIA), and JetStar Asia (JSA), in which the government has a stake, are unprofitable, according to a media report.
(ASW)'s 3rd-quarter passenger traffic increased +33.7% (RPK) over last year. 1st 9 months = 1,811 passengers.
(ASW) completed fuel hedging for the 2nd half of 2006 at $48 a barrel. "Fuel cost is the single largest cost item of the business and it constitutes approximately 60% of our total operating cost," AirAsia Group (CEO) Tony Fernandes said. "We took advantage of the recent dip in oil prices, in light that there might be more risk on the downside going forward." Further, a Hong Kong-based aviation analyst was quoted as saying, “A bigger presence of (ASW) in Singapore would represent a serious threat to Singapore's low-cost carriers. (ASW) has been able to achieve a successful pricing model that seriously undercuts its rivals.”
According to "Channel News Asia," the Civil Aviation Authority of Singapore says it is still unable to give approval for Indonesian low-cost carrier (AWR) to fly to Singapore. And it says that’s because Indonesian restrictions on foreign low-cost carriers are still in place. Transport Minister Yeo Cheow Tong said that Singapore doesn’t consider (DHI) a low-cost carrier based on its operating model. Mr Yeo said he would be meeting his Indonesian counterpart again at the end of this year to hopefully iron out the air rights issue on budget airlines. He reportedly said, “If you talk to (DHI), I think they will tell you quite clearly that they’re very different from a low-cost carrier. When I met with Indonesian Minister Hatta last month, we agreed that we will be reviewing this situation towards the end of the year, so I’m looking forward to our coming meeting.” He added, “Of course our local low-cost carriers would like to fly there just as the Indonesian low-cost carriers also want to fly to Singapore. So I think once that sector is opened up, we can look forward to increasing number of tourists coming into Singapore as well as going into Indonesia.”
Last month, (AWR) made its 1st international debut when its flight from Jakarta landed at Kuala Lumpur International Airport. (AWR) had earlier launched two new domestic routes in Indonesia; Surabaya and Batam from its hub in Soekarno-Hatta International Airport on September 9 and 15 respectively. Besides these 2 additions, (AWR) also flies to 4 other domestic destinations in Indonesia, namely Denpasar (Bali), Balikpapan, Padang, and Medan.
Lufthansa (DLH) Flight Training's e-learning programs will be used by (ASW) for further specialized training.
(ASW) said the Malaysia Ministry of Finance approved its application for an investment allowance incentive constituting an income tax exemption equating to 60% of qualifying capital expenditure incurred within the 5 years from July 1, 2004, until June 30, 2009. In conjunction with "the normal 100% allowance" for capital expenditures, "our future budgeted tax payments are minimal," noted AirAsia Group (CEO) Tony Fernandes.
November 2005: AirAsia (ASW) launched daily service from Bangkok and Kuala Lumpur to Phnom Penh, becoming the 1st Asian Low-Cost Carrier (LCC) to fly into Cambodia.
(ASW) will occupy 24 of the 30 bays available at the new terminal being built at Kuala Lumpur Airport.
737-3B7 (23378, HS-008), GECAS (GEF) leased.
December 2005: Kuala Lumpur to Solo and Balikpapan.
Malaysia Airports wants to lift passenger spending at its showcase Kuala Lumpur International by +50%. Speaking at the Centre for Asia Pacific Aviation (CAPA)'s 2006 Outlook Summit in Kuala Lumpur, Malaysia Airports Holdings Managing Director, Seri Bashir Ahmad unveiled a plan to improve retail offerings by finding new uses for underutilized assets, such as the possible construction of a theme park on vacant land adjacent to the airport, to boost nonaeronautical revenues. On the other hand, Airports Council International Director-Economics Paul Behnke called on governments and airport operators across the region for increased investment in airport capacity. According to Behnke, "with today's constraints and without more intelligent airport investment, by 2020, the worldwide airport system may be unable to comfortably accommodate >1 billion passengers of the 7 billion forecasted to demand air transport services." As a complementary measure to airport investment, he suggested that countries should adhere to (CAPA)'s "Manifesto for Growth," which calls on Asia/Pacific governments to grant foreign carriers access to secondary airports, alleviating congestion at hubs while benefiting secondary airports and cities.
AirAsia (ASW) outlined ambitious plans suggesting it eventually could have a fleet of 400 airplanes. Speaking at the Centre for Asia Pacific Aviation 2006 Outlook conference in Kuala Lumpur, (CEO) Tony Fernandes compared the carrier to Southwest Airlines (SWA), saying, " (SWA) started with 3 airplanes and now has about 400, and they're in a smaller market than ours." He said (ASW) has been investing in its network and "this year the investment begins to pay off." The 1st of 60 A320s arrived and the airplanes are expected to cut the (SWA)'s operating costs by -12%.
Separately, (ASW) announced that it is celebrating its 4th anniversary by giving away 2 million seats over the next 12 months throughout its E and SE Asia network.
(ASW) confirmed that it has submitted a proposal to the Malaysian government to operate all but three of Malaysia Airlines (MAS)'s domestic routes. The plan is part of the government's review of a domestic airline system that has been a continual loss-maker for (MAS). Earlier this month, (ASW) took delivery of the 1st of 100 A320s and announced an additional 8 destinations in Indonesia from Kuala Lumpur. (MAS) has deferred a decision on a replacement for its fleet of 737s, but if (ASW) is successful in its bid, which is highly likely, the order for up to 50 airplanes will be reduced greatly or scrapped.
737-301 (23259), (GEF) leased for Thai AirAsia operations. (ASW)'s 1st 2 A320-214's (2612, 9M-AFA; 2633, 9M-AFB), arrived in Kuala Lumpur after a 19-plus-hour journey from Toulouse.
January 2006: AirAsia (ASW) is adding Ipoh, Tawau, Kota Bharu and Sandakan to its network from its Johor Bahru hub at Senai International Airport. New services start on February 6. (ASW) will operate four weekly flights on Mondays/Wednesdays/Fridays/Sundays to Ipoh and Tawau, and thrice-weekly, Tuesdays/Thursdays/Saturdays to Kota Bharu and Sandakan. It also is upping frequencies from Johor Bahru to 10 flights per week to Kuching, 11 flights per week to Kota Kinabalu and 10 flights per week to Penang. (ASW) launched service from Johor Bahru on Malaysia's southern tip in 2003 and is carrying 1 million passengers a year with just one airplane. (ASW) will base a second 737-300 there to serve the new destinations and additional frequencies.
Thales (THL)'s "Repair by the Hour' avionics support package was selected by (ASW) for its 60 new A320s.
(ASW) will make its fares available in the Galileo Global Distribution System (GDS) through Galileo Flight Integrator, a Web-based service. The agreement also covers Thai AirAsia (THA) and Indonesia AirAsia (AWA). It marks the first time (ASW) has participated in a (GDS).
A320-214 (2656, 9M-AFC), delivery.
February 2006: Kuala Lumpur International Airport's new low cost terminal is set to open in early March, beating the rival facility at Singapore's Changi Airport by about three weeks. The (ASW) hub is expected to begin operations on March 6, meaning it will South-East Asia's first dedicated no-frills terminal. The low cost terminal at Kuala Lumpur is expected to house (ASW) along with Thai AirAsia (THA) and AirAsia Indonesia (AWR). A decision on whether a lower airport tax would be charged is expected to be made by early March.
The sale of Thailand's Shin Corporation, which owns 50% of (THA), to an investment group led by Singapore's Temasek Holdings sent shockwaves through (ASW). (THA) was a joint venture between (ASW) (49%) and Shin, the telecom giant founded by Thailand's controversial Prime Minister Thaksin Shinawatra, with 50%. The remaining 1% of the discount airline is owned by (THA) CEO, Tasapon Bijleveld.
Temasek, the investment arm of the Singapore government, has a portfolio valued at S$103 billion/$63 billion and is the controlling shareholder of Singapore Airlines Group (SIA) with 57%. It also is a partner in Tiger Airways (TGR) with an 11% stake and Jetstar Asia (JSA) with 19%. It is acquiring Shin Corporation in two stages, having spent THB73.3 billion/$1.85 billion for a 49.6% share with plans to invest THB79 billion for the remainder, according to "The Nation" in Bangkok.
Its acquisition of Shin Corporation pushes the foreign ownership component in (THA) above the 49% level permitted by law. According to sources at (THA), the airline has several Thai candidates lined up to buy the 50% stake from Temasek, although the latter has not indicated it is interested in selling the holding.
Later, details stated Temasek Holdings, the controlling shareholder of (SIA) and a major investor in two Singapore-based Low-Cost Carriers (LCC)s, Tiger Airways (TGR) and Jetstar Asia (JSA), will retain a sizeable stake in (THA) under a new ownership structure announced recently to keep the carrier in compliance with Thai laws on foreign ownership. Temasek acquired Thai telecom giant Shin Corp, which owns 50% of (THA). The other major shareholder is (ASW) with 49%. (THA) CEO, Tasapon Bijleveld holds 1%.
Under Thai law, foreign investors may not own more than 49% of an airline, an amount that was exceeded given that (ASW) is based in Malaysia and Temasek is based in Singapore.
Under the new shareholding structure, Shin's 50% stake is being sold for THB400 million/$10.2 million to a Thai company named Asia Aviation Company Ltd, which is owned 49% by Shin and 51% by Thai businessman Sittichai Veerathummnoon. (ASW)'s stake will remain at 49%.
Increases in revenue and traffic and "better capacity management on the domestic front" lifted (ASW)'s second fiscal quarter profit to +MYR53.4 million/+$14.4 million, an increase of +20.3% over the +MYR44.4 million earned in the three months ended December 31, 2004. Revenues increased +26.5% to MYR225.9 million as the number of passengers rose +19% to 1.3 million and average fare went up +2% to MYR156. The carrier's "cost of sales" climbed +22.2% to MYR139.8 million and it reported an operating profit of +MYR72.9 million, a +32.9% improvement over the year-ago quarter.
Passenger traffic in (RPK)s grew +25% to 1.53 billion against a +22% rise in capacity to 2 billion (ASK)s. Load factor improved +1 point to 76% LF. Yield was 3.91 US cents, up +2%, but unit cost climbed +14% to 2.42 cents. Still, that (CASK) "remains the lowest airline unit cost in the world," according to AirAsia (ASW). The increase was due to a higher number of "D" checks over the year-ago period but was mitigated by the carrier's fuel hedge and surcharges.
"The effective unit cost of fuel is above forecast and remains a concern to management," the airline said. Its current hedging structure provided a savings of $9.60 per barrel during the quarter. It said the addition of the A320 - - it now operates four - - will "contribute fuel cost relief."
(THA) posted a net profit of +MYR10.1 million during the quarter as passenger numbers increased +28%, fares went up +11% and unit costs "remained largely flat."
For the fiscal first half, (ASW)'s net profit was up +18.6% to +MYR65 million. (ASW) said an accurate forecast of its fiscal year results is difficult "given the increased level of challenges." It intends to add 5 - 7 routes in the next six months.
Said CEO, Tony Fernandes, "The competitive environment in Malaysia [has] intensified but we will continue to provide the lowest fare. Yields will likely drop with the added competition coupled with increased mix of developmental stage routes. The focus is to increase load factors in order to offset the effects of yield erosion. Even in light of this increased business risk, (ASW) remains the fastest-growing and one of the most profitable airlines by margins in the world."
A320-214 (2683, 9M-AFD), delivery.
March 2006: The Malaysian government ended the wrangling over domestic routes between Malaysia Airlines (MAS) and AirAsia (ASW), announcing that (MAS) will operate flights to more popular destinations like Penang, Kuching, Kota Kinabalu and others tied to its international network while (ASW) will fly the remaining routes, according to local press reports. Further details will be announced in the future. (MAS) has been losing money on its domestic operations on behalf of parent company PMB.
Industrial action is brewing at (MAS) over the government's recent decision to allow (ASW) to take over most of the national carrier's loss-making domestic routes. (MAS) unions are threatening picket-line action, which may escalate. The unions fear that up to 7,000 staff may lose their jobs. The move to allow (ASW) access to all (MAS) routes has been on the table for more than 18 months as (ASW) posts solid profits, while (MAS) struggles to find blue skies. Unions representing (MAS) employees are asking for time to turn the company around and claim they are victims of previous management's mistakes.
(MAS) later delivered the news its employees feared, announcing it will abandon all but 19 domestic routes to (ASW), take 19 airplanes out of service and lay off approximately -6,500 employees, or about -28% of its workforce. (ASW) will take over the remaining 96 routes and compete with (MAS) on the other 19, giving passengers the option of choosing a full-service or a low-cost carrier. The Malaysian government said it will stop subsidizing (MAS) from August 1, according to press reports, although (MAS) said in a statement that the government will compensate it for costs incurred in the restructuring of its domestic network.
The government decided two weeks ago that (MAS), which operates domestic services on behalf of Penerbangan Malaysia Berhad (PMB), will retain several popular routes while ceding most services to (ASW). (MAS) has been losing money on its domestic routes but said when it unveiled its Business Turnaround Plan, that it did not expect to make a definitive decision on layoffs until 2007. "Our original intention was to take back the P&L for the domestic sector from (PMB) in 2007 and build this out as a viable business unit. Having said that, we understand the government's vision to establish two national champions in the international aviation sector, one in full service and the other in low cost," (MAS) Managing Director, Idris Jala said.
The airline said each of the 19 routes it will continue to operate generates an annual average of 15,000 international connecting passengers and/or 13,000 business/first class passengers. It will operate seven routes between Kuala Lumpur and peninsular cities, six between (KLIA) and Sabah/Sarawak and six within Sabah and Sarawak. It said it has a "free hand" from the government to control capacity, frequency and pricing.
A320-214 (2699, 9M-AFE), delivery.
April 2006: A320-214 (2760, 9M-AFF), delivery.
May 2006: AirAsia (ASW) named Timothy Ross, Executive VP, Corporate Affairs & Strategy.
(ASW) is a major low-cost airline operating scheduled domestic and international, jet airplane flights.
(ICAO) Code: AK - 807. (IATA): AXM - ASIAN EXPRESS.
Parent organization/shareholders: Tune Air Holding Company (44.8%); privately held (31.7%); Crescent AirAsia Investments (6.3%); IBDF Malaysia Investments (4.8%); Raja Mohd Azmi Bin Raja Razali (4.4%); Crescent AirAsia Investments II (3.4%); Deucalion Capital II (2.9%); & Lembaga Tabung Haji (1.9%).
Owns: Thai AirAsia (THA) (49%); Indonesia AirAsia (AWR) (49%).
Main Base: Kuala Lumpur International airport (KUL).
Domestic, Scheduled Destinations: Alor Setar; Bintulu; Ipoh; Johor Bahru; Khota Bharu; Kota Kinabalu; Kuala Lumpur; Kuala Terengganu; Kuching; Labuan; Langkawi; Miri; Penang; Sandakan; Sibu; & Tawau.
International, scheduled destinations: Balikpapan; Bandung; Bangkok; Chiang Mai; Denpasar Bali; Hat Yai; Jakarta; Luzon Island; Macau; Medan; Padang; Pekanbaru; Phnom Penh; Phuket; Siem Reap; Solo City; & Surabaya.
June 2006: A milestone quarter that featured the Malaysian government's decision to shift the bulk of domestic operations to AirAsia (ASW) starting August 1 and the opening of the low-cost carrier (LCC) terminal at Kuala Lumpur International Airport, did not end with very good news on (ASW)'s bottom line, which showed a profit of +MYR22.8 million/+$6.3 million for the fiscal third quarter ended March 31, narrowed from earnings of +MYR40.7 million in the year-ago quarter. (ASW) said the decline "was mainly due to lower average fares arising from our aggressive promotions, competitive pressures and heavy maintenance checks due to the induction of the last batch of 737 airplanes." Its average fare fell -21.2% to MYR123 during the period.
Revenues rose +23% to MYR201.7 million, but expenses increased +32.2% to MYR146.8 million, dropping operating profit -3.6% to +MYR50.1 million. The promotional efforts did succeed in driving passenger growth as passenger traffic (RPK)s lifted +54% to 1.83 billion against a +39% rise in capacity to 2.3 billion (ASK)s. Load factor climbed +8 points to 80% LF. But unit revenues fell -19% to 2.95 cents.
(ASW)'s unit costs bode well for a spike in profitability should yields rise, as cost per (ASK) climbed just +1% to 2.14 cents and fell -16% to 1.16 cents, excluding fuel. Fuel costs jumped +26% during the period.
Thai AirAsia (THA) reported a net profit of +THB41.7 million/+$1.1 million, while Indonesia AirAsia (AWR) "continues to produce losses," the company said.
(ASW) said its fourth-quarter outlook is "positive relative to the third quarter." It said it has budgeted for higher oil prices and that the end of its Supersaver discount program will lead to a more "benign" yield environment. "[Delivery] of the new A320s, the cost and operational benefits from the low-cost terminal and the strengthening ringgit should continue to drive operating costs lower," it added.
(ASW) will develop Kota Kinabalu and Kuching into fully operational hubs by July, as part of its takeover of Malaysia Airlines (MAS)' domestic network. It will have four bases in Malaysia.
(ASW) also announced it will launch a daily Kuala Lumpur - Bandar Seri Begawan (Brunei) service from July 11. It said it will be the first low-fare carrier to fly into Brunei.
A320-214 (2816, 9M-AFG), delivery.
July 2006: AirAsia (ASW) will launch service at its new Kuching hub, its second base in eastern Malaysia after Kota Kinabalu and will start with daily flights to Kota and Miri and twice-daily service to Bintulu and Sibu, all aboard 737-300s.
(ASW) will subcontract rural turboprop services to Fly Asian Xpress, or (FAX), which intends to begin operations August 1. (ASW) is taking over the majority of domestic routes once operated by Malaysia Airlines (MAS) and will transfer operations of its six F50s and five Twin Otters to (FAX).
(ASW) will have the lift to match its ambition after signing a contract with Airbus (EDS) for 40 A320 family airplanes and 30 options, the manufacturer announced. The deal is worth approximately $2.7 billion, according to press reports. AirAsia Group, comprising (ASW), Thai AirAsia (THA) and AirAsia Indonesia (AWR), is replacing its 737 fleet. It currently operates 21 737-300s and seven A320s, with another 53 already on order. (THA) has nine 737-300s.
"The A320 has heralded a new era for (ASW). The sophistication of these airplanes has enhanced our image and brand and enabled us to capture a wider market segment than previously," Group CEO, Tony Fernandes said. The carrier will be taking over the vast majority of (MAS)'s domestic network in August and is hoping to expand its service into China.
2 A320-214 (2826, 9M-AFH; 2842, 9M-AFI), deliveries.
August 2006: AirAsia (ASW) reported net income of +MYR126.9 million/+$34.3 million for its fiscal year ended June 30, an increase of +14% over net income of +MYR111.6 million last year, on a +28% jump in revenues to MYR856 million. "The revenue growth was driven by a +30% growth in passengers carried, a -4% decline in average fares and a higher contribution mix from ancillary income," (ASW) said in statement. "The lower fares enticed strong traffic growth and improved load factors."
Passenger traffic was up +37% to 6.7 billion (RPK)s on a +32% capacity gain to 8.7 billion (ASK)s. Load factor climbed +3 points to 78% LF. Lower fares and a +14% increase in average stage length reduced yields -4%, while unit costs rose +6% to 2.33 cents per (ASK). (ASW) added 15 airplanes during the fiscal year, and plans to add 14 A320s in the current year started July 1. It took over most domestic routes previously operated by (MAS) from August 1 in a reconfiguration imposed by the government.
"The Malaysian aviation industry has taken a significant step forward; (MAS) no longer receives subsidies and (ASW) is now an equal status national carrier," CEO, Tony Fernandes said. "Apart from the price of oil, (ASW)'s prospects remain strong."
Fiscal fourth-quarter net income was +MYR39.1 million, more than double net income of +MYR16.1 million in the year-ago quarter, on a +21% rise in revenues to MYR241.8 million. Traffic increased +37% to 1.98 billion (RPK)s on a +25% lift in capacity to 2.39 billion (ASK)s.
(THA) posted a -THB36 million/-$954,140 net loss for the fourth quarter. (AWA) also recorded a net loss in the quarter, Fernandes said, but the exact figure was not disclosed. "We believe Indonesia is on track to achieve breakeven for Fiscal Year (FY) 2007," he claimed.
(ASW)'s shares have been sold down by -21% in the past month following the Malaysian government's decision to give (MAS) the green light to exercise pricing freedom on its domestic routes, allowing it to compete with (ASW) with cheaper fares. But some analysts say the market has been hard on the airline because its load factor was climbing above 80% LF, and they expect it to announce a good profit for the year ended June 30, when it releases results at the end of this month.
Meanwhile, (ASW)'s plans to fly to Singapore are expected to be challenged by both Tiger Airways (TGR), which announced its intention to enter the route, state-controlled Singapore Airlines (SIA) and (MAS). Currently, 97% of the 213 weekly flights between the two cities are operated by either (SIA) or (MAS). Malaysia is known to be particularly coy about liberalization, as it would give (TGR) access to numerous Malaysian markets while not offering significant returns to either (MAS) or (ASW).
September 2006: AirAsia (ASW) wants to operate up to 20 flights a day between Kuala Lumpur and Singapore (SIN), CEO, Tony Fernandes told reporters after a meeting with Singapore Transport Minister Raymond Lim, who reportedly indicated that the Singapore government is ready to open the doors to Southeast Asia's fastest-growing Low-Cost Carrier (LCC), which has been blocked from the route. Its Joint Venture (JV ) partner Thai AirAsia (THA) operates four flights a day to (SIN) from Bangkok.
(ASW) will inaugurate nonstop service from Kuala Lumpur to Hanoi on October 4th and operate a daily flight.
2 A320-214's (2881, 9M-AFJ; 2885, 9M-AFK), deliveries.
October 2006: A320-214 (2926, 9M-AFL), delivery.
November 2006: AirAsia (ASW) reported +MYR5.7 million/+$1.6 million in net income for its fiscal first quarter ended September 30, reduced from a +MYR8.7 million profit in the year-ago quarter, a -34.5% drop the airline attributed to more than MYR5 million in deferred taxation, that negatively impacted otherwise strong results.
Boosted by its takeover of most of the domestic network formerly operated by Malaysia Airlines (MAS), (ASW)'s quarterly revenues rose +29% year-over-year to MYR239 million. Costs climbed +11.3% to MYR167.8 million, producing an operating income of +MYR58.6 million, up +136.3% over +MYR24.8 million last year.
"This has been a very significant period in (ASW)'s history," CEO, Tony Fernandes said. "The domestic rationalization signals the first signs of deregulation in the Malaysian airline industry." He added that 100 A320s plus 30 options on order for delivery through 2012 "will enable (ASW) to significantly reduce our unit operating costs and substantially improve cash flow, while we accommodate a steady growth rate in passenger numbers."
Fiscal first-quarter traffic soared +59% to 2.2 billion (RPK)s on a +39% lift in capacity to 2.7 billion (ASK)s, producing a load factor of 79% LF, up +9 points. Yield fell -15% to 3.08 US cents, while (CASK) dropped -9% to 2.2 US cents, and (CASK), excluding fuel, declined -6% to 1.17 US cents.
(ASW) challenged the Singapore government to open its skies and "allow everyone to fly." CEO, Tony Fernandes, delivering a keynote address at the Centre for Asia Pacific Aviation's Outlook 2007 summit in Singapore, said the Low Cost Carrier (LCC)'s fares around (ASEAN) countries are "-90% less than the typical fare from Singapore to Kuala Lumpur." He told delegates that (ASW) has tried for five years to gain access to Singapore but the government has declined. "Our airfare from Kuala Lumpur to Johor Bahru [across the strait from Singapore] is just MYR60/$16.35 compared to the airfare from Singapore to Kuala Lumpur of MYR713. We are even cheaper than the bus or train."
Those cheap fares will mean more orders for the A320, which is an "outstanding airplane" and "way above our expectations," Fernandes said. He said that the airline will be accelerating deliveries and ordering more airplanes. (ASW) has 100 A320s on order or in service with 30 options. Despite the A320 introduction costs, and high fuel prices over the past two years, he said the airline's unit cost is just 2.33 cents with fuel and 1.32 cents without, adding, "We expect our capacity (ASK) cost to drop below 2 cents including fuel next year."
2 A320-214s (2944, 9M-AFM; 2956, 9M-AFN), deliveries.
December 2006: Kuala Lumpur - Macau, increased to 3/day, using 737/A320s.
AirAsia (ASW) announced its selection of the (CFM56-5B) to power the 40 firm A320s and 30 options it ordered five months ago. The engine order, which includes six spares, is worth about $500 million at list prices and includes an "OnPoint Solution" service agreement worth approximately $1.1 billion. By July 2009, (ASW) will operate an all-A320 fleet of 100 airplanes.
A320-214 (2989, 9M-AFO), delivery.
January 2007: AirAsia (ASW) could be the next major takeover target in Asia, according to the Centre for Asia Pacific Aviation (CAPA). "The Asian market is a fertile breeding ground for investor opportunities, with equal doses of liberalization and new travelers opening up massive traffic expansion opportunities," (CAPA) Executive Chairman, Peter Harbison said. "(ASW) has the attractions of a large and expanding market share, the lowest airline costs in the world, a brand name to die for, and unquestionable recent profitability."
(ASW) is planning to establish a long-haul budget airline (AirAsiaX (ASX)), according to local press reports, through regional affiliate FlyAsian Xpress (FSX)/(ASX), in which (ASW) CEO, Tony Fernandes holds 50%.
(ASW) Executive Director, Kamarudin Meranum holds a 30% stake in (FSX)/(ASX) and Raja Azmi, (ASW)'s former CFO and current (FSX) CEO, owns the rest. (FSX)/(ASX) flies throughout east Malaysia, using seven F 50s, 50Y passengers and five DHC-3 Twin Otters, 19Y passengers. For the moment, all of its flights are domestic, but according to its website, "it will extend services to international destinations in the future."
(ASX)/(FSX) is expected to form a strategic alliance with European carriers. Several newspapers mentioned that Fernandes would be teaming with Richard Branson of Virgin Group (VAA) and easyJet (EZY)'s Stelios Haji-Ioannou. Both Virgin Atlantic Airways (VAA) and (EZY) denied they were in talks with (ASW) or its owners to form a global low-cost alliance, "Reuters" said. "We are not joining any alliance," an (EZY) spokesperson told the news agency. "The whole low-cost carrier (LCC) business model is based on simplicity."
Fernandes is scheduled to unveil at a news conference "a revolutionary service that will change the face of aviation travel forever," (ASW) said.
The new low-cost, long-haul venture (ASX) reportedly would launch from Kuala Lumpur International's low-cost terminal to Manchester and Amritsar. In a second phase, it would operate to Hangzhou and Tianjin and either London Luton or Stansted.
Later, FlyAsianExpress (FSX)/(ASX) received approval from the Malaysian government to operate low-cost, long-haul service to Asia, Australia and Europe, the national "Bernama" news agency reported.
"In order to turn Malaysia into the most advanced hub for international budget flight services, the government has given traffic rights to (FSX)/(ASX) to operate long-haul budget flight services," Transport Minister, Chan Kong Choy said in a statement cited by the "Associated Press." "The destinations allocated do not include international flights currently handled by Malaysia Airlines (MAS)."
FlyAsianExpress (FSX)/(ASX) will operate flights to destinations in Asia and Europe as "AirAsia X (ASX)," a new long-haul, low-cost carrier launched by AirAsia (ASW) CEO, Tony Fernandes. "AirAsia X (ASX)"'s initial services will be to a UK city and to Guangzhou and Tianjin.
Fernandes said during a launch ceremony in Malaysia and in a statement, that the new carrier (ASX) is seeking to acquire up to 20 airplanes, either A330-300s or 777-300ERs, with an order decision coming within a month. Additionally, he confirmed that (ASW) is planning to increase its A320 orders, currently at 100, by as many as 100, as part of an effort to become Asia's largest airline within seven years.
He said (ASX) reached a 30-year agreement with (ASW) to use the brand name and (ASW)'s website for bookings, but that (FSX)/(ASX) will operate the flights independently. (ASW)'s board is considering buying a stake in (FSX)/(ASX), he added. In addition to Fernandes's 50% holding in (FSX)/(ASX), (ASW) Executive Director, Kamarudin Meranun controls a 30% stake and former (ASW) CFO, Raja Azmi owns the remaining 20%.
Fernandes said (ASX) will "bring independence to the long-haul low-cost" market by giving consumers broader choices. "Customers can expect exciting and unbelievably low fares for their long-haul travel, due to the significant cost saving opportunities within the long-haul low-cost business model," he said. He predicted (ASX) will carry 500,000 passengers in its first year of operations. Services are expected to start in July.
(ASW) said in a regulatory filing, that it plans to take an initial 20% stake in FlyAsianExpress (FSX)/(ASX), the small Malaysian domestic airline 50% owned by (ASW) CEO, Tony Fernandes, that will launch long-haul, low-cost service in July under the brand name "AirAsia X (ASX)." (FSX) won authority recently to operate long-haul routes not served by (MAS), and Fernandes said initial flights would be to a UK city, Guangzhou and Tianjin. (ASW) has the option to raise its stake to 30%, it said in the filing, widely cited by Malaysian media.
(ASW) is expected to place another large order for A320s. Sources confirmed that the airline will double its A320 fleet; it operates 15 and has 70 on order. Part of the pending buy will be the exercise of existing options. (ASW) also has 35 737-300s in service, which will all be replaced by A320s.
Airbus (EDS) is off to a fast start in 2007 with an order from (ASW) for 50 A320s plus 50 options valued at about $3.3 billion. The (ASW) order brings the number of its A320 firm orders to 150 plus 50 options. It currently operates 15 of the type. CEO, Tony Fernandes predicted (ASW) will be the largest operator of A320s by 2012, noting that the airplane type boosts the airline's efficiency and lowers operating costs.
737-3YO (24907), returned to Airplanes Holdings, leased to Kras Air (ZXD). 3,000th A320-214 (3000, 9M-AFP), delivered to (ASW) with "Amazing" livery - see photo.
February 2007: AirAsia (ASW) started four-times-weekly flights to Penang from Kota Kinabalu and Kuching, and a daily Kota Kinabalu - Macau service.
A320-214, (3018, 9M-AFQ), ex-(F-WWBR) delivered with "Visit Malaysia 2007" on fuselage and "Celebrating 50 years of Nationhood" on blue tail - see photo.
March 2007: AirAsia (ASW) is booming, enjoying its "best quarter ever," according to CEO, Tony Fernandes, and boosted its full-year guidance following yesterday's announcement that it posted a +MYR150.1 million/+$42.9 million profit in the second fiscal quarter ended December 31, about triple its +MYR51.3 million profit in the year-ago period. "We have outperformed our expectations on every performance metric," Fernandes said. "This exceptional performance was achieved during a period, whereby we are investing significant amounts of resources into the business," including launching two new bases and 15 new routes. The current quarter has been big for the airline as well, as it placed an order for up to 100 A320s and established a partnership with FlyAsiaExpress to operate low-cost, long-haul services. Second-quarter revenues leapt +62% to MYR400.6 million, including an +87% year-over-year increase in ancillary revenue to MYR28.4 million, as average fare dropped -5% to MYR164. Operating profit more than doubled to +MYR109.7 million from +MYR46.3 million in the year-ago period.
(ASW)'s fleet of 27 airplanes flew 2.51 billion (RPK)s during the quarter, up +64%, against a +52% increase in capacity to 3.06 billion (ASK)s. Load factor rose +6 points to 82% LF. Unit revenues climbed +11% to $0.036, despite the drop in fares and cost per (ASK) was down -1% to $0.027. The carrier credited new airplanes and savings realized at the low-cost terminal in Kuala Lumpur for the improvement. Excluding fuel, (CASK) climbed +12% to $0.016.
Thai AirAsia (THA) reported a +THB33 million/+$959,621 net profit for the quarter, despite problems at the new Suvarnabhumi Airport, while Indonesia AirAsia (AWR) reported +IDR2 billion/+$219,000 in net earnings.
For the fiscal semester, (ASW)'s net earnings soared to +MYR226.6 million from +MYR60.1 million in the year-ago period. Revenues were up +57% to MYR693.8 million and operating income more than doubled to +MYR133.4 million from +MYR58.3 million. The airline said its first-half performance was "better than management's expectations" and the current quarter "is looking better relative to the same period last year." (ASW) expects "robust profit growth for the financial year 2007" and adjusted its guidance accordingly. It earned +MYR126.9 million in the fiscal year ended June 30, 2006, and expects "double-digit growth" in pre-tax profit this fiscal year. Unit revenues are expected to climb 5% to 10% and unit costs should drop -1% to -3%.
(ASW)'s planned low-cost, long-haul AirAsia X (ASX) service, originally scheduled to start in July with flights to the UK, likely will be delayed until next year owing to lack of airplanes, according to press reports. "We are looking at the cost structure, the right airplanes," CEO, Raja Azmi Mohamad told Malaysian media, the "BBC" reported.
A320-214 (3064, 9M-AFR), delivery.
April 2007: AirAsia X (AAX) plans to place an order next month for up to 15 A330-300s, "The Financial Times" reported. (ASX), owned by FlyAsianExpress (FSX)/(ASX) and spearheaded by AirAsia (ASW) CEO, Tony Fernandes, had intended to launch in July, but said last month it would push its start date back until the fourth quarter at the earliest, owing to a lack of airplanes. It initially will operate flights from Malaysia to a UK city, and at least one Chinese city. It reportedly will lease airplanes so it can operate while awaiting A330 deliveries.
FlyAsianXpress (FSX), operator of (ASW)'s new long-haul, low-cost (ASX) subsidiary, confirmed its order for 10 A330-300s for delivery starting late next year. The deal also includes five options. The airline had evaluated the 777, but was unable to secure early delivery positions. (ASW)'s Tony Fernandes said (ASX) hopes to be flying 25 A330-300s in the next five years, according to "AFX News," which also reported that the airplanes will be configured in two classes.
A320-214 (3117, 9M-AFS), delivery.
May 2007: AirAsia's (ASW) high pace of growth and strong profitability continued in its fiscal third quarter ended March 31 with a net profit of +MRY86.9 million/+$25.6 million, more than >five times the +MRY14.1 million earned in the year-ago quarter, on a +53% surge in revenue to MRY396.2 million.
Operating profit more than doubled to +MRY119.2 million from +MRY50.1 million. "We continue to enjoy buoyant demand for our products," CEO, Tony Fernandes said. "We successfully managed rapid capacity addition and delivered consistent earnings growth." (ASW) added four routes in the quarter, bringing its network to 75 destinations, 19 more than on September 30, 2006, the end of its previous fiscal year. It was operating 33 airplanes by quarter's end, up +38% compared to 24 at the end of the year-ago period.
Traffic jumped +34% to 24.61 billion (RPK)s on a +40% lift in capacity to 32.15 billion (ASK)s, producing a load factor of 77% LF, down -3 points. (CASK) rose +6% to 2.91 USA cents, while (CASK) ex-fuel, increased +17% to 1.70 cents.
Fernandes noted that Indonesia AirAsia (AWR) "had a turbulent quarter" owing to February flooding in Jakarta, and posted a net loss of -MRY19 million for the period. Recent airplane crashes in Indonesia "have dented sentiment for air travel" in the country, he said. Thai AirAsia (THA) reported a net profit of +MRY6.5 million for the quarter, up +43%.
(ASW) said it will introduce a new service dubbed "Xpress Boarding" that offers passengers the first choice of seats on its airplanes. Cost is RM20/$6.50 one way. The carrier, which practices a free-seating policy, will extend the Xpress Boarding service to all airports within its network, including those serviced by its sister companies (THA) and (AWR).
(ASW) will transfer its airplane Maintenance Repair & Overhaul (MRO) from Singapore to the new Sepang Aircraft Engineering (SAE), which plans to launch in Malaysia in October, CEO, Tony Fernandes told reporters in Kuala Lumpur. The airline expects to save -15% to -20% off its maintenance bill. (SAE) CEO, Budriz Putra said the new (MRO) company, which has a two-hangar facility, hopes to lure other regional low-fare carriers, including ones from India, the "Bernama" national news agency reported.
A320-216 (3140, 9M-AFT), delivery.
June 2007: AirAsia (ASW) signed a Memo of Understanding (MOU) with General Sales Agent (GSA) Leisure Cargo for the management of cargo operations on regional routes originating in Kuala Lumpur. (ASW) projects the deal will generate +MYR1 million/+$292,575 in revenue per month.
(ASW) will equip its entire fleet of A320s with the OnAir inflight communications product. Passengers will be able use their mobile phones and Personal Digital Assistants (PDA)s to send and receive SMS text messages and e-mails and to make and receive mobile phone calls during flight. (ASW) Deputy CEO, Kamarudin Meranun said, "We have worked very hard to strengthen our network and enhanced connectivity in the (ASEAN) region, and we are now working equally hard to improve the services we offer our guests. We firmly believe that offering them the ability to communicate during flight is vital in this era of information technology (IT)." The OnAir services will be introduced by (ASW) in early 2009. A total of 150 airplanes will be equipped by 2013. AirAsia X (AAX), the latest long-haul low-cost airline, has signed a similar agreement for a minimum of 15 firm ordered A330-300s. (ASW) is the first customer in Asia to deploy the solution.
B/E Aerospace said that it has been selected to provide main cabin retrofit and new-buy seating programs for some 250 airplanes by US Airways (AMW)/(USA), Frontier Airlines (FRO), and AirAsia (ASW), in contracts collectively valued at more than >$70 million. The (AMW)/(USA) deal includes retrofitting A320s and equipping new-buy single-aisle airplanes with economy (Y) and first class (F) seating. The contract with (FRO) covers retrofitting A318s and A319s as well as equipping A320s with economy seating (Y). The (ASW) award is a follow-on order for economy seating (Y) for new-buy A320s.
Airbus (EDS) continued its strong Paris Air Show by signing firm orders for 15 A330-300s plus 10 options for (ASX). (ASX) founder, Tony Fernandes said the carrier, slated to launch in September, will stake its future on the A330.
737-301 (23510, HS-AAI) transferred to Thai AirAsia (THA). 3 A320-216s (3154, 9M-AFU; 3173, 9M-AFV; 3182, 9M-AFX), deliveries.
August 2007: Touting its persistence in bringing the low-cost model to Southeast Asia, its success in securing governmental support for more open competition and dedicated airport terminals and a brand that "is the most recognizable ASEAN airline," AirAsia (ASW) reported net earnings of +MYR498.1 million/+$142.1 million for the fiscal year ended June 30, more than double the +MYR201.7 million earned in the prior 12 months. "For the past five years we have maintained unconditional focus and discipline to the low-cost model," CEO, Tony Fernandes said. "We are committed to the short-haul, no-frills concept, which has been proven successful all over the world. In the process, we have invested significantly to build a solid foundation and to create a platform for sustainable growth." During the financial year, (ASW) opened bases in Kota Kinabalu and Kuching, launched 19 routes, and placed an order for up to 100 A320s.
The company's full-year revenue rose +52% to MYR1.6 billion and operating profit soared +139% to +MYR280.6 million from +MYR117.6 million in Fiscal Year (FY) 2006. It enjoyed a +53% lift in passenger numbers to 8.7 million, as traffic rose +47% to 9.86 billion (RPK)s and capacity climbed +43% to 12.39 billion (ASK)s. Load factor was ahead +2.1 points to 79.6% LF. While average fare dipped -2% to MYR171 "due to a 6% shorter stage length," ancillary revenue improved +77% and yield grew +11%. Unit cost rose +7% to $0.032, and fell -4% to $0.016, excluding fuel.
Fourth-quarter profit of +MYR185.1 million represented a +42% increase from the MYR130.8 million earned in the year-ago period. Operating profit was up to +MYR123.5 million from +MYR36 million.
In Fiscal Year (FY) 2008, (ASW) will take delivery of 23 A320s and return five leased 737-300s, operating 72 total airplanes by year end, comprising 44 A320s and 28 737-300s. It currently flies 33 737s and 25 A320s. It plans to launch 12 to 15 new routes this year, with China as the "core focus" as "demand for our services is robust, and we have developed our distribution channel to cater to the Chinese markets." (ASW) expects passenger boardings to increase +29% to 18 million this year, and fares to "improve slightly," with yield climbing +2% to +5% and pre-tax profit growing year-over-year.
Fresh from his trip to the USA for the launch of Virgin America (VUS), Virgin Atlantic Airways (VAA) Chairman, Richard Branson was in Kuala Lumpur to announce that his Virgin Group purchased a 20% share of Malaysia's FlyAsianExpress (FSX)/(ASX), which will operate low-cost, long-haul flights as (ASX). Price of the stake was not disclosed. (ASX) expects to launch service next month. The airline has three A330s on lease and has ordered 10 396-seat A330-300s, plus five options. Recently, it announced that it has secured rights to fly from Kuala Lumpur to Melbourne's Avalon Airport - - home of Low Cost Carrier (LCC) Jetstar Airways (IMU) - - and London Stansted. Chairman, Kalimullah Hassan told reporters he expected to launch Australian service at the end of September. No other destinations or details were revealed. Branson said he believed (ASW)'s success would be replicated by (ASX) in the long-haul market. "I am thrilled to be able to support them in this venture and look forward to seeing low-cost, long-haul travel being opened up from their base in Malaysia," he said.
Interestingly, Singapore Airlines (SIA), which may one day find itself competing with (ASX), holds a 49% stake in Branson's Virgin Atlantic Airways (VAA).
(ASW) launched daily Kuala Lumpur - Shenzhen A320 service.
2 A320-216s (3194, 9M-AFY; 3201, 9M-AFZ), deliveries.
September 2007: The Singapore and Malaysia governments stated that unlimited access to the Singapore - Kuala Lumpur route, which a number of carriers have expressed interest in operating, will not be allowed until at least the end of 2008.
AirAsia (ASW) followed Qantas (QAN) into Vietnam by signing a letter of intent (LOI) to launch a budget airline in the country, in partnership with Vietnam Shipbuilding Industry Group, one of the nation's largest state-owned corporations, according to (ASW). Last month, (QAN) took an 18% stake in Vietnam Pacific Airlines (PAH), that eventually will rise to 30%. The joint venture carrier will serve domestic, regional and international routes and will have initial capital of approximately $30 million, (ASW) said. The (LOI) was signed by (ASW) CEO, Tony Fernandes and VINASHIN Chairman & CEO, Pham Thanh Binh at an event hosted by Vietnamese Prime Minister Nguyen Tan Dung. "We are delighted to affiliate ourselves with VINASHIN as this scope delivers the initial momentum for both parties to begin our growth together. The growth potential in Vietnam's air travel market is significant, and we are very excited to be working with a colossal corporation in Vietnam to develop this opportunity," Fernandes said.
(ASX) officially announced its first long-haul, low-cost route and open bookings, said CEO, Azran Osman-Rani. The carrier is slated to meet with Australian regulatory authorities and "then we hope to confirm the destination," Osman-Rani said. Though he did not specifically confirm the route, previous reports have indicated it will be Kuala Lumpur - Melbourne Avalon. The route, scheduled to be launched in late October, initially will be flown four-times-weekly. Its first Chinese route, to be operated five-times-weekly, should commence in December pending regulatory approval by (CAAC) (CAC).
(ASX)'s first airplane, an A330 leased from (AWAS) (AWW), arrived in Kuala Lumpur and is undergoing final technical checks. "We anticipate the Malaysian government will issue the designation letter and issue our Airplane Operators Certificate (AOC)," Osman-Rani said. He added that the carrier actively is seeking two A340s to lease, until its 10 new A330s begin arriving late next year. The A340s "will have less seats but will allow us to fly direct from Kuala Lumpur to Europe," he said.
At the Paris Air Show, (ASX) said it was holding discussions with several airports in the Middle East, that could serve as technical stopovers so it could operate one-stop flights to Europe with A330s. "We are still not ruling out this alternative," Osman-Rani said. He said he hopes to secure an additional airplane soon, "but the market is tight." He expects to operate with just one airplane "in the worst case scenario" for no longer than one year. (ASX) will take out insurance to compensate passengers in case technical problems ground the plane. Despite its obvious startup challenges, (ASX) is confident about its future. Osman-Rani revealed that it is in talks with Airbus (EDS) regarding a possible A350 XWB order and with Boeing (TBC) for the 787 as "an alternate option." He declined to specify how many A350s/787s it is considering purchasing.
A330-301 (054), ex-Air Madrid (AMD) (EC-JMF) will commence (ASX) operations this month, initially to Australia and later to Kuala Lumpur, the UK, the Middle East, India, and China. Is looking for a second airplane while awaiting 10/5 orders in 2008. Discussions are ongoing with two cities in China and one in India on proposed new services.
2 A320-216s (3223, 9M-AHA; 3232, 9M-AHB), deliveries.
October 2007: Kuala Lumpur - Singapore service is set to see a major price war erupt after the Malaysian government decided to abandon its protection of the route and several others, well ahead of the originally scheduled January 2009 date. Malaysia Airlines (MAS) CEO, Idris Jala said, "Whilst we are all for fair competition, and we believe in the concept of open skies, we are disappointed that the Kuala Lumpur - Singapore route will be prematurely opened to limited flights." He added, "We needed time to put (MAS) strongly on the path of growth, as we are working on a number of major initiatives to ensure sustained profitability. We will now need to fast-track these plans."
The Centre for Asia Pacific Aviation said it expects traffic to treble in just three years, as (ASW), Jetstar Asia (JSA), and Tiger Airways (TGR) enter the route as early as December. The Singapore government is expected to rubber stamp Malaysia's change of heart on liberalization, which also includes routes between Singapore and Penang, Kuching and Kota Kinabalu.
A320-216 (3261, 9M-AHC), delivery.
November 2007: AirAsia (ASW)'s +MYR180 million/+$53.6 million profit in its first fiscal quarter ended September 30 represented a huge improvement over the +MYR70 million reported in the year-ago period and, according to CEO, Tony Fernandes, "shows the maturity of our marketing strategy, whereby we are able to turn the traditionally weakest quarter and deliver strong results." Despite a "very difficult economic environment," the company enjoyed a +39% year-over-year increase in revenue to MYR461.6 million and a +10% gain in average ticket price. Ancillary revenue rose +54% to MYR36.8 million. "Our new routes have performed beyond expectations," Fernandes said, citing the daily Kuala Lumpur - Shenzhen service launched last summer as the "best ever in the airline's history." Operating profit jumped to +MYR145.7 million from +MYR52.8 million and (EBIT) more than tripled to MYR82 million from MYR23.7 million.
(ASW) transported 2.4 million passengers during the quarter, up +25%, and traffic measured in (RPK)s grew +26% year-over-year to 2.71 billion. Capacity was up +34% to 3.65 billion (ASK)s, as eight new routes were introduced, but the airline claimed that load factor was steady at 79.3% LF, without explaining the incongruity. It has been calculated that load factor fell -5 points to 74.3% LF. Unit revenue rose +10% to 3.65 USA cents, while (CASK) was down -3% to 3 cents owing to fuel hedge benefits. Unit cost, excluding fuel, was flat at 2.24 cents.
(ASW) operated 37 airplanes at the close of the quarter compared to 30 on September 30, 2006. (ASW) took delivery of six new A320s during the quarter, placing them on Malaysian routes. Two 737-300s were shifted from Malaysia service to Thailand, one 737-300 was sent to Indonesia, and one returned to the lessor. The company plans to take delivery of six more A320s in the current quarter, and return one leased 737-300.
Second fiscal quarter yields "are expected to be ahead of the same period last year," (ASW) said, but a higher-than-budgeted fuel bill "will negatively impact" its effort to maintain the same profit margin achieved in the year-ago period.
(ASW) reached an agreement with Aviation Australia under which the latter will provide maintenance engineer (MT) training for (ASW), including training courses for its existing technicians (MT), that aim to ensure that the carrier fully complies with (EASA) regulations.
(ASW) intends to exercise at least 25 of its 50 A320 options and add 25 more options, CEO, Tony Fernandes told reporters last week in Singapore. (ASW) placed an order for 50 firm and 50 options in January.
A320-216 (3291, 9M-AHE), delivery.
December 2007: AirAsia (ASW) will launch daily Kuala Lumpur - Guangzhou service on January 16, its third route to mainland China. It already serves Shenzhen and Xiamen (and also Macau).
Asia's largest and most successful low-cost airline (ASW) appears set to become the largest A320 operator in the world as well. (ASW) placed an order for 25 firm A320s plus 25 options, bringing the commitment of the group (Malaysia AirAsia (ASW), Thai AirAsia (THA), Indonesia AirAsia (AWR)) to 175 firm airplanes and 50 options. The contract was signed at the Langkawi Airshow by (ASW) CEO, Tony Fernandes and Airbus (EDS) COO Customers, John Leahy. (ASW) placed its original A320 order for 60 airplanes in March 2005, with an additional 40-airplane buy announced at the 2006 Farnborough Airshow and another 50 announced last January. The first airplane was delivered to (ASW) in December 2005. Currently, it operates 31 A320s on a rapidly expanding domestic and regional network. During 2008, the AirAsia Group will become an A320-only operator as the 737 Classics used in Thailand and Indonesia are retired. Fernandes told media: "This purchase is an important step for us at (ASW), as it signifies our future aggressive route expansion plans in tandem to our expected traffic growth over the next decade." Leahy added: "We have been extremely proud to be part of (ASW)'s outstanding success and delighted that the confidence in the A320 has resulted in the airline now becoming the largest airline customer for this airplane in the world." He also said he expects an A380 order from Malaysia Airlines (MAS) to be finalized in the next 30 to 60 days, "Reuters" reported.
2 A320-216 (3327, 9M-AHG; 3338, HS-ABC), deliveries, and 3338 leased to Thai AirAsia (THA).
January 2008: 2 A320-216s (3353, 9M-AHF; 3370, 9M-AHG), deliveries.
February 2008: AirAsia (ASW) posted a +73% leap in net profit to +MYR245.7 million/+$76.7 million for its fiscal second quarter ended December 31, from +MYR142.1 million in the year-ago period, on a +43% lift in revenue to MYR632.7 million. Operating profit (EBIT) jumped +77% to +MYR154.9 million from +MYR86.8 million. "This has indeed been a fantastic year for our airline, highlighted by robust growth, record profits, industry leading performance and award-winning standards," CEO, Tony Fernandes said. "Our humble beginnings took flight six years ago, and after 24 consecutive profitable quarters, we are now the highest profit margin [38.8%] airline in the world."
Fiscal second-quarter traffic increased +29% to 3.22 billion (RPK)s on a +40% jump in capacity to 4.27 billion (ASK)s. AirAsia (ASW) said the results were achieved on the back of a +21% growth in passenger volume, +17% higher average ticket prices, and a +49% increase in ancillary income, which totaled +MYR42 million and now comprises 6.6% of revenue. (CASK) rose +7% to 3.43 cents, as fuel prices climbed +31%. Excluding fuel, (CASK) declined -3% to 1.66 cents, which the carrier attributed to introduction of more fuel efficient A320s to its fleet.
For 2008, (ASW) is predicting passenger growth of +20%, with the bulk of its new capacity to be injected on international routes. It stated that "barring any unforeseen circumstances," growth and profits will continue going forward.
(ASW) launched flights from Kuala Lumpur to Yogyakarta (daily) and Vientiane (twice-daily).
Kolej (TAFE) Seremban signed an (MOA) with (ASW) to support maintenance engineering training at the (ASW) Academy. The program includes (EASA) Part 66 module 1-17 training for (DCA) certification. The agreement offers (TAFE)'s workshop facilities for modules 6 and 7.
(ASW), Tiger Airways (TGR), and Jetstar Asia (JSA) launched service on the previously protected Singapore - Kuala Lumpur route, propelling the region's commercial aviation industry into a new era of liberalization. The Centre for Asia Pacific Aviation (CAPA) said the operations "signal a new direction in government regulation of air services." (CAPA) credited the Low Cist Carrier (LCC)s for instigating the change, noting that "government moves to liberalize aviation access in Asia have been catalyzed by the emerging (LCC) sector, as they seek new routes to grow their businesses." (ASW) will operate the route twice-daily, and (TGR) and (JSA) daily, with expansion to come when unrestricted services are allowed in December.
The prospect of a link-up between (ASW) and Australia's Virgin Blue (VOZ) appears to be gathering momentum, with the world's lowest-cost operator flagging the launch of a joint venture (JV) with (VOZ) to establish an "ultra-low-cost" carrier in Australia. (VOZ) has been searching for ways to counter low-cost entrants (IMU) and (TGR), as it focuses more on the corporate market. Speaking to "News Ltd" in Australia, Toll Holdings, which owns 62% of (VOZ), said it has received expressions of interest for its majority stake. "In the last three months, the (VOZ) board has initiated a detailed review to maximize shareholder value," Toll Managing Director, Paul Little told "News." "It is clear that the level of liquidity in the listed stock is not supportive of shareholder value. A number of expressions of interest have been received, designed to unlock value and these are currently being assessed.''
(VOZ)'s shares have slumped from a high of A$2.44/$2.24 in early 2007 to close at A$1.25. (VOZ) reported a +8.8% profit drop in the fiscal semester ended December 31 to +A$113.3 million.
AirAsia X (ASX) CEO, Azran Osman-Rani told media that while (ASW) is keen on the (JV), "a lot of that hinges on what happens with Toll Holdings and who is going to take control of (VOZ)." (ASW) will enter into the (JV) only if Toll sells down its 62.7% stake and Virgin Group chief, Richard Branson, who holds 16% of (ASX) and 25.5% of (VOZ), regains management control of the carrier he launched in 2000. Both Branson and (ASW) founder, Tony Fernandes will be in Australia next month for talks. Toll has been considering reducing its stake for some time, with various suitors, including Singapore Airlines (SIA) touted.
A320-216 (3404, 9M-AFW), delivery.
March 2008: 2 A320-216s (3427, 9M-AHH; 3448, 9M-AHI), deliveries.
April 2008: AirAsia (ASW) launched flights to Ho Chi Minh City from Kuala Lumpur (KUL) (daily) and Bangkok (four-times-weekly). Thrice-weekly, Kuching - Macau becomes daily May 15, and a new daily, (KUL) - Kuantan starts June 1.
(ASW) will introduce a fee for all checked baggage on flights booked from April 21. Passengers who pre-book their bag will pay MYR3/$0.94 for each piece up to 15 kg and those paying at the check-in counter will pay MYR5 per piece. Bags weighing more than >15 kg will cost extra, although there is no limit on the number of bags that can be checked, while the restriction to one piece of carry-on luggage will remain. "(ASW) believes that guests should be given the option to choose the services they require, and pay only for those services. This approach helps keep (ASW)'s basic fares low, which is our main priority," it said.
May 2008: Robust demand and a +10% increase in its average fare helped AirAsia (ASW) avoid the pitfalls plaguing most of the industry during the first quarter as (ASW) reported a +MYR161.3 million /+$49.7 million net profit that represented a +86% improvement over the +MYR86.9 million profit earned in the year-ago quarter. In fact, (ASW) claimed that the current industry downturn may even afford certain advantages. "A consumer slowdown is not necessarily a bad thing because low-cost carriers traditionally benefit from a consumer slowdown," it said. "Passengers who would normally take a full-service carrier are likely to trade down and fly with a low-cost carrier." (ASW) can point to first-quarter passenger growth of +21% and a +30% year-over-year rise in sales as a source of optimism. Overall revenue climbed +32% to MYR535.3 million and operating profit inched up +1% to +MYR73.4 million.
Traffic grew +21% to 2.97 billion (RPK)s against a +36% increase in (ASK)s to 4.36 billion, dropping load factor -4.4 points to 72.1% LF. Unit revenue fell -3% to 12.27 sen. Unit cost was up +5% to 10.58 sen but (CASK) excluding fuel, fell -13% to 4.38 sen owing to "productivity enhancements" and an increase in the A320 fleet, the airline said. Fuel hedges in the current quarter will result in an additional -$10 million in savings, although it said it is "essentially unhedged" in the second half.
(ASW) announced it will accelerate the retirement of its 737-300s and now plans to phase out 16 of the type this year, slowing down the growth of its (THA) and Indonesian (AWR) operations. Its overall fleet will increase by a net seven airplanes in 2008 to 55 A320s and 17 737-300s. It now has 39 A320s and 33 737-300s, with the Malaysian mainline (ASW) flying 39 of those airplanes.
While it admitted that "there is no doubt that fuel price will have an impact on our profitability," moving forward it is "confident" it will remain profitable throughout 2008. "We are confident of driving our cost down further through rationalization of our three airlines, the replacement of the 737 airplanes and negotiating the airport deals around the region," it said.
(ASW) launched four-times-weekly flights from Kota Kinabalu to Jakarta, and Bali.
(ASW) founder & CEO, Tony Fernandes hit back at suggestions that his airline is exposed to surging oil prices, with analysts souring on the company's stock as it hit its lowest level - - MYR1.02 ($0.32) - - since it listed in November 2004. He argued, "There are opportunities, in a slower economy, whereby travelers who might have flown on a legacy airline, will now choose a lower-cost, better-value option. People still need to travel." He was responding to a "Bloomberg News" report that cited Scott Lim, Chief Investment Officer at Kuala Lumpur's CMS Dresdner Asset Management, who said that "most of the airline's passengers are price sensitive holidaymakers, who may opt to defer travel if fares increase." Fernandes added, "I'm not here to manage stock price. I'm here to make profits and grow. And that is what we will do."
While fuel prices remain a challenge, (ASW) has proven its resiliency. It was launched and thrived just after "9/11" and then survived the (SARS) scare in 2003. Also working in its favor is the "incredible deal" it struck with Airbus (EDS) on the A320s it began purchasing in early 2005, according to one observer who declined to be named. (ASW) purchased its A320 fleet on extremely attractive terms with a very flexible delivery schedule, Fernandes said. The market's assessment may not have considered the fact that the A320s are driving down the airline's fuel requirement, while the weakness of the USA dollar also has a mitigating effect on fuel prices. For 2008, (ASW) is increasing service on international routes, where yields typically are higher.
2 A320-216s (3477, 9M-AHJ; 3486, 9M-AHK), deliveries.
June 2008: AirAsia (ASW) CEO, Tony Fernandes said (ASW) will be "comfortable," even if oil prices reach $200 per barrel, the "Associated Press (AP)" reported from Kuala Lumpur. "We have taken a very different approach in that we will market ourselves out of this problem," he said. "We think that just putting your head in the sand and crying about oil and cutting routes is not the solution." He said reduced competition will be the "silver lining" during the current downturn. (ASW) also will focus on boosting onboard sales, the (AP) reported. "We will sell washing machines if we have to," Fernandes said, adding that fuel hedges will result in a $10 million savings in the June quarter. There will be no further hedges, however. "Only a lunatic will hedge fuel. It's too volatile. We will have to ride it out until there is some stability," he said.
(ASW) reported a +MYR161.3 million/+$49.1 million first-quarter profit, up +86% year-over-year.
July 2008: AirAsia (ASW) will launch service from Kuala Lumpur to Guilin (four-times-weekly from September 3) and Manado (thrice-weekly from September 12), plus a thrice-weekly Singapore - Pekan Baru beginning August 14. Guilin received 1.3 million visitors last year. First flights to India (to Trichy, in the south), beginning in October.
August 2008: Rising revenue and demand were little match for soaring fuel prices and the reduced value of the Malaysian ringgit as AirAsia (ASW) posted a second-quarter profit of +MYR9.4 million/+$2.8 million that represented a -95% plunge from the +MYR185.1 million/+$57 million earned in the year-ago period. Still, CEO, Tony Fernandes called it a "commendable performance" and said that the company will continue to "grow the business and expand the route network."
Three months ago, (ASW) fended off dire profit warnings, with some analysts suggesting it was exposed to the whims of price-sensitive leisure travelers. However, passenger numbers climbed +20% year-over-year to 2.8 million - - Fernandes called demand "buoyant and distinctive" - - and average fare rose +16%. Instead, it was a +65% jump in fuel costs, and a MYR77 million charge related to the ringgit's decline that sealed AirAsia (ASW)'s fate.
Second-quarter revenue soared +41% to MYR608.4 million, and core operating profit lifted +2% to +MYR30 million from +MYR29.4 million in the year-ago period. Ancillary revenue was up +60% to MYR50.3 million, and Fernandes said a checked-bag fee introduced during the quarter, "has helped to recover some of the impact of the higher fuel prices without undermining passenger demand."
Traffic grew +20% to 3.29 billion (RPK)s, against a +33% surge in capacity (ASK)s to 4.51 billion, dropping load factor -4.3 points to 76.4% LF. Unit revenue rose +6% to 13.48 sen, and (CASK) climbed +3% to 11.49 sen, but fell -24% to 4.38 sen, excluding fuel. The group, including its Thai and Indonesian subsidiaries, operated 39 A320s and 33 737-300s at the close of the quarter.
Fernandes said (ASW)'s share of the Malaysian domestic market topped 56% and the airline made gains in the corporate market and launched 20 new routes in the six months ended June 30.
But he cautioned that the current quarter will be "a challenge," although "demand remains strong". He added, "This downturn will ultimately reward untold fortunes to (ASW). We continue to grow when others recoil, we enhance our service quality, when others are scaling back, introduce new routes, when others are canceling destinations, and continue to offer low fares, when others are raising them. As the turbulent industry unfolds, (ASW) will emerge as the market leader."
(ASW) will launch a second daily Kuala Lumpur - Hong Kong on August 27.
2 A320-216 (3568, 9M-AHO; 3576, HS-ABG), deliveries.
September 2008: AirAsia (ASW) is filling more than >80% of Gold Coast, Australia flights, and says bookings are "exceptionally strong."
(ASW) CEO, Tony Fernandes said the airline is "much closer to achieving our dreams of boosting the growth of Kuala Lumpur (KUL) as the low-cost hub in Asia" as (ASW) announced the addition of four additional daily, (KUL) - Singapore (SIN) flights beginning December 1. At that point, it will operate the route, six-times-daily, as its staged liberalization, which started in February, continues. Fernandes said that the current double-daily service has achieved a 90% LF load factor, and continuing his warning to competitors, he said (ASW) is "more importantly preparing Malaysia as the global hub for low-cost travel in the region."
The Centre for Asia Pacific Aviation (CAPA) said the (KUL) - (SIN) route is expected to be one of the fastest-growing in the world next year, and that Low Cost Carrier (LCC)s from both sides will "rush to take advantage of market liberalization."
In a report, (CAPA) said opening of the route "is merely a curtain raiser for the opening of the (ASEAN) capital cities liberalization initiative from January, which promises to unleash the next round of route development and traffic growth in the region." Airlines from 10 member countries will be permitted to operate unlimited frequencies between capital cities within the grouping, as a "preliminary step" toward (ASEAN) "open skies" by 2015.
Tiger Airways (TGR) and Jetstar Asia (JSA) have announced their own plans to increase (KUL) - (SIN) service significantly.
A320-216 (3582, 9M-AHP), delivery.
October 2008: AirAsia (ASW) majority shareholder Tune Air, which holds 30.9% of (ASW), said in a statement to Bursa Malaysia that it is "considering" privatizing the airline at an indicative price of approximately MYR1.35/$0.39 per share, according to press reports. AirAsia (ASW) has 2.36 billion shares outstanding, according to its website.
(ASW) will launch daily service to Singapore from Kuching and Kota Kinabalu on November 1. (ASW) is ending flights from Johur Bahru, near Singapore, to Macao.
(ASW) retired the final 737-300 used on its Malaysian network. It now operates A320s on those routes. (ASW) has 175 firm A320s on order plus 50 options and currently operates 42 in Malaysia, seven in Thailand and one in Indonesia. Seven 737s in Thailand and 10 in Indonesia eventually will be replaced by the Airbus (EDS) airplanes.
Jetstar Airways (IMU)'s new CEO, Bruce Buchanan, downplayed the impact of Tiger Airways (TGR) in the Australasian market (as Tiger Australia (TAU)), saying that his focus is on "bigger [low-cost] competitors with large fleets, that have a significant impact on the market. There is only one or two in the Asian region and I don't put Tiger (TGR)/(TAU) in that category."
Virgin Blue (VOZ) operates more than >50 airplanes and has local market presence, while Kuala Lumpur-based (ASW) has 70 airplanes and has been frank about its ambitions.
(TAU) currently operates just five airplanes in Australia, but last year, (TGR) ordered 50 A320s for Asian operations. It has been coy on where they will be deployed, but short-term Australian plans indicate a fleet of eight airplanes. "We do take them seriously and we welcome competition. It's good for the economy and it's healthy for us - - keeps us nimble," Buchanan said.
(IMU)'s fleet comprises 31 A320 family airplanes with 68 more deliveries planned through 2013. It now serves 20 Australian destinations and 29 internationally from Australia, and hubs in Singapore and Hanoi. Buchanan said it is "well placed to sustainably put more low fares into the marketplace." Passenger numbers in the year ended June 30 rose +32.3% year-over-year to 5.8 million, while (RPK)s traffic soared +47.5% to 6.41 billion, with load factor at 71% LF.
AirAsia X (ASX) hopes to announce its first UK service from its base at Kuala Lumpur International (KUL)'s low-cost-carrier terminal next month and commence the route in March, CEO, Azran Osman Rani said at the "Routes Leaders Forum" in the Malaysian capital. While declining to confirm Stansted (STN) as the destination, Azran said, "We prefer (STN) over Manchester airport, because of the connectivity" with Low Cost Carriers (LCC)s like Ryanair (RYR) and easyJet (EZY). Next month, (ASW)'s low-cost long-haul arm will launch flights from (KUL) to Perth (four-times-weekly) and Melbourne (six-times-weekly). It currently operates to Australia's Gold Cost and Guangzhou.
The current slowdown in demand and the uncertain economic climate are not affecting (ASX)'s expansion plans. "When everyone is retreating, it's time to expand for us," Azran said. The airline currently operates one leased A330-300 and will take delivery of its first new A330-300, part of an order for 25, later this month and a second in December. Three new A330s and one leased A340 will arrive next year, the latter to support the likely (KUL) - (STN) service.
Azran also said the demise of other long-haul, low-cost startups like Oasis Hong Kong Airlines (OHK) and Zoom Airlines (ZOM) is not affecting (ASX)'s confidence in the business model. "They operated old airplanes. They started from scratch and building a brand is expensive, and thirdly, operating long-haul point-to-point is difficult. You need feed. You need a network," he said.
(ASX) operates with its own Air Operator Certificate (AOC) and (IATA) (ITA) code, while selling tickets under the (ASW) brand through the latter's website. The airplanes carry the red (ASW) livery. "The need to connect reflects the traditional legacy model for long-haul," Azran said. "But I don't interline, which strips out a lot of operational complexity and costs. Because of the Internet and the passenger's independence, my passengers self-connect. They self-transit in (KUL)." Eighty-one percent of (ASX)'s current passengers do not stay in Kuala Lumpur, he said. Both (ASW) and (ASX) operate out of (KUL)'s low-cost terminal.
November 2008: AirAsia (ASW) will launch daily, Kuala Lumpur - Tiruchirapalli December 1, aboard A320s.
December 2008: Non-cash losses on fuel hedges and currency fluctuations dragged AirAsia (ASW) to its first quarterly loss since going public in 2004, a -MYR465.5 million/-$128.2 million third-quarter deficit, that represented a reversal from the +MYR180 million earned in the year-ago period. Principal charges comprised a -MYR215 million loss related to the unwinding of the carrier's fuel hedges, a loss it said it will recover "in less than three months," and a -MYR213 million translation loss resulting from the USa dollar's rise against the ringgit. It said its long-term forward contracts to purchase dollars could "potentially" result in a gain of +MYR366 million.
Third-quarter revenue rose +43% year-over-year to MYR658.5 million, a gain cited by CEO, Tony Fernandes when he said the period demonstrated (ASW)'s "resilience and strength." Core operating result swung to a -MYR75.9 million loss from a +MYR47.8 million profit in the third quarter of 2007. Ancillary revenue rose +88%, with per-passenger spend climbing +52% to MYR23.1. Ancillary income now represents 10.6% of (ASW)'s total revenue, and will "be the driver for strong profit margins going forward," Fernandes said. Passenger numbers were up +24% to 3 million on a +27% lift in (RPK)s traffic to 3.43 billion. Capacity grew +33% to 4.83 billion, as the airline added five new routes during the quarter, and load factor slipped -3.9 points to 75.4% LF. Yield was ahead +12%, and unit revenue increased +8% to 13.63 sen. Unit cost soared +30% to 13.54 sen, but fell -14% to 4.43 sen, excluding fuel.
The fourth quarter "is traditionally our strongest," (ASW) said, adding that "sustained strong demand for our services" continues. It expects its full-year fuel bill to be lower than budgeted, although the dollar's continued rise against the ringgit could offset those gains. It forecast a "satisfactory" fourth-quarter result.
(ASW) said that majority shareholder, Tune Air is "unable to secure financing" for its bid to acquire the remaining shares of the carrier and take it private, owing to "tight credit market conditions." Tune Air, which holds a 30.9% stake in (ASW), said in October it was "considering" the step. But the global credit crunch means that it "is unable to form a firm intention to proceed," (ASW) said in an announcement to the Bursa Malaysia.
(ASW) dismissed rumors that it is discussing a potential merger with Qantas (QAN) low-cost subsidiary Jetstar Airways (IMU), although the speculation remains an interesting development for (QAN), whose discussions with (BAB) collapsed last week. First reported in Malaysia's "The Star," the rumor was called "pie in the sky" by AirAsia X (ASX) CEO, Azran Osman-Rani. "It's the first time I have heard about it. We are just busy on our own plans," he told "The Sydney Morning Herald." (ASW) CEO, Tony Fernandes told "The Star" that his company is "always talking and looking at ways to strengthen (ASW) into a global brand," while a (QAN) spokesperson said, "We talk to airlines all the time about possible partnerships, relationships and cooperative agreements." (QAN) had an opportunity to do a deal with (ASW) in February 2004 when then-(QAN) CEO, Geoff Dixon met with Fernandes in Singapore. Fernandes rebuffed Dixon then because "(QAN) wanted control," according to sources close to the discussions. (QAN)'s deal with (BAB) reportedly fell apart over similar issues, and it also has been talking with (ASW)'s archrival Malaysia Airlines (MAS) about some sort of partnership.
January 2009: Disgruntled with what it believes is an overcrowded low-cost airline terminal at Kuala Lumpur International airport (KLIA), AirAsia (ASW) revealed plans to shift its operation to its own new airport just 30 minutes outside the capital. The plan has thrown into confusion (KLIA)'s plans to build a new low-cost terminal to replace the existing facility that opened in 2006. (ASW) founder & CEO, Tony Fernandes told "Agence France Presse (AFP)" that (ASW) needed to lower "our business costs," adding, "it is the key to our success." He told (AFP) that the new airport, known as "(KLIA) East," "will provide more capacity for airplanes and passengers and enable us to bring down fares." Costs could fall -30%.
Responding to arguments that (KLIA) has sufficient room for expansion, Fernandes said (ASW) is aware of its needs. "We are not silly. There is nothing here [at the old terminal] to add value to our passengers. Allow us to take our destiny in our own hands." He said that if the airline does not move by 2010, it "will lose almost a million passengers and about four million passengers by 2011" because of space constraints. By 2013, he estimated that (ASW) and AirAsia X (ASX) will serve a combined 60 million passengers and operate a fleet of 159 A320s and 25 A330s.
The new airport would be exclusively for (ASW)'s use, with construction to start in six months and completion scheduled for early 2011. Unlike the current airport, it would be linked to Kuala Lumpur by train. The proposed site is owned by Sime Darby, which would develop the airport with (ASW). Fernandes put construction cost at MYR1.6 billion/$451.8 million.
According to the "Bernama" news agency, Fernandes said "(KLIA) East" is an integral part of Sime Darby's plan for its Negeri Sembilan Vision City, part of its Central Vision Valley property development project spanning Selangor and Negeri Sembilan.
2 A320-216s (3729, HS-ABI; 3765, PK-AXF (for AirAsia Indonesia (AWR)), deliveries.
February 2009: AirAsia (ASW) reported a 2008 net loss of -MYR471.7 million/-$128.3 million, reversed from a +MYR697.6 million profit in 2007, but insisted its 2009 outlook is strong because its low-fare model is attracting new traffic and it has "unwound" fuel hedges that weighed down second-half earnings.
The third and fourth quarters of 2008 marked (ASW)'s first unprofitable reporting periods since it went public in 2004, but it blamed the losses on "exceptional charges" related to fuel hedging and airplane financing that it said will not apply going forward. CEO, Tony Fernandes explained that the company made the "bold decision" of unwinding remaining fuel hedges and interest rate swaps related to airplane term loans, taking charges that hurt 2008 earnings but allowed it to "begin 2009 with a substantially clean balance sheet." He added, "Many of our competitors have reported passenger traffic decline. Conversely, we continue to enjoy sustained traffic growth as more passengers switch from the legacy carriers to our premium low-cost services." He projected passenger growth of +15% to +20% this year, with most new capacity "injected to international destinations such as Singapore, India, Bangladesh and China." 4th quarter suffered a -$48 million loss.
Full-year revenue rose +36.8% to MYR2.64 billion, while expenses jumped +46.3% to MYR1.96 billion, producing operating income of +MYR684.1 million, up +15.1% from +MYR594.1 million in 2007. Traffic increased +21% to 13.49 billion (RPK)s on a +29% lift in capacity to 18.72 billion (ASK)s, producing a load factor of 75.4% LF, down -3.2 points. (RASK) rose +10% to 4.23 USA cents, while (CASK) fell -9% to 3.49 USA cents. (CASK) excluding fuel dropped -21% to 1.27 USA cents.
The Malaysian government's position on AirAsia (ASW)'s ambitious standalone airport project, which was floated last month, now is the subject of some confusion. (ASW) CEO, Tony Fernandes made a presentation to Deputy Prime Minister, Najib Razak and senior officials from the Finance Ministry and airports authority this month. "Agence France Presse" reported that Najib rejected the concept and quoted another unnamed government source who said officials thought the $460 million airport outside Kuala Lumpur was not viable and likely would require government money. However, Transport Minister, Ong Tee Keat told "The Star" that a decision would not be made for two or three weeks. According to the "New Straits Times" Malaysia Airports Holdings is looking at building a new budget terminal to replace the existing congested facility at Kuala Lumpur International.
(ASW) unveiled a new program called "Pick A Seat" that will offer assigned seating, pre-boarding and extra legroom beginning February 17. The Hot Seat variation will cost MYR25/$6.93 per segment and will grant access to seats in the first five rows and exit rows and pre-boarding. Standard Seat will cost MYR5 and allow passengers to pre-select their seats. Other passengers will continue to be assigned seats at random.
(ASW) began offering passengers an Internet check-in option for all flights.
(ASW) announced a deal with Barclays Capital to finance 15 new A320-200s. Three have been delivered so far.
A320-216 (3776, 9M-AHS), delivery.
March 2009: AirAsia (ASW) reported a 2008 net loss of -MYR471.7 million/-$128.3 million, reversed from a +MYR697.6 million profit in 2007, but insisted its 2009 outlook is strong because its low-fare model is attracting new traffic and it has "unwound" fuel hedges that weighed down second-half earnings.
The third and fourth quarters of 2008 marked (ASW)'s first unprofitable reporting periods since it went public in 2004, but it blamed the losses on "exceptional charges" related to fuel hedging and airplane financing that it said will not apply going forward. CEO, Tony Fernandes explained that the company made the "bold decision" of unwinding remaining fuel hedges and interest rate swaps related to aircraft term loans, taking charges that hurt 2008 earnings but allowed it to "begin 2009 with a substantially clean balance sheet." He added, "Many of our competitors have reported passenger traffic decline. Conversely, we continue to enjoy sustained traffic growth as more passengers switch from the legacy carriers to our premium low-cost services." He projected passenger growth of +15%to +20% this year, with most new capacity "injected to international destinations such as Singapore, India, Bangladesh and China."
Full-year revenue rose +36.8% to MYR2.64 billion, while expenses jumped +46.3% to MYR1.96 billion, producing operating income of +MYR684.1 million, up +15.1% from +MYR594.1 million in 2007.
Traffic increased +21% to 13.49 billion (RPK)s on a +29% lift in capacity to 18.72 billion (ASK)s, producing a load factor of 75.4% LF, down -3.2 points. (RASK) rose +10% to 4.23 USA cents while (CASK) fell -9% to 3.49 USA cents. (CASK) excluding fuel dropped -21% to 1.27 USA cents.
(ASW) discussed its still-aggressive 2009 route expansion plans during its earnings presentation. (ASW) will add at least 15 new routes this year, with an emphasis on China, including Taiwan and eastern India. Singapore will also get a lot of new service, including additional frequencies to Kuala Lumpur, Kota Kinabalu and Kuching, and brand new routes to Penang, Langkawi, Jakarta, Bandung, Bali and Yogyakarta. Also, Kuala Lumpur - Dhaka begins this month and is already showing high booked load factors.
(ASW) will increase its four-times-weekly, Kuala Lumpur - Guilin service to daily on May 1.
The Malaysian government finally agreed to fund the construction of a new low-cost terminal at Kuala Lumpur International costing MYR2 billion/$541 million. The promise to build the facility, scheduled to be completed in the second half of 2011, ends an impasse between the government and AirAsia (ASW), which had threatened to build its own exclusive airport just east of the capital in order to ease congestion at the current terminal that can handle only 15 million passengers per year. Malaysia Airports Holdings said the new terminal will have an annual capacity of 30 million passengers.
(ASW) is among the companies negotiating to replace (AIG) as the shirt sponsor for Manchester United, the world famous football/soccer team. CEO, Tony Fernandes informally broke the news on his personal
blog. Manchester United is hugely popular in the ASEAN region, not to mention within the UK, where AirAsia X (ASX) has recently touched down. Perhaps it will even fly to Portugal one day, providing another option for Cristiano Ronaldo to return home after vacationing in Malaysia.
April 2009: AirAsia (ASW) carried 3.1 million passengers in the first quarter, up +21% year-over-year, according to figures published by the "Centre for Asia Pacific Aviation." Traffic measured in (RPK)s rose +17% against a +19% increase in capacity, lowering load factor -2.4 points to 69.7% LF.
(ASX) plans to borrow MYR3 billion/$832 million in 2010 to buy 24 airplanes, Investor Relations Head, Mohshin Aziz told "Bloomberg News." He added that the financing is in addition to the MYR2 billion it lined up to finance 14 A320 deliveries in 2009 and 2010.
CEO, Tony Fernandes said Chengdu and Xi'an will be added to AirAsia (ASW)'s network later this year, bringing the number of routes it operates to China to 10.
(ASW) launched service from Singapore to Jakarta (twice-daily), Bali, Bandung and Yogyakarta (each daily).
May 2009: "Robust" growth in passenger numbers and ancillary revenue helped boost AirAsia (ASW) to a +MYR203.2 million/+$58 million first-quarter profit, up +26% from the +MYR161.3 million reported in the year-ago period. CEO, Tony Fernandes said the industry downturn "provides unique long-term opportunities for (ASW), as the lowest-cost producer, to grow rapidly, open new markets, win market share from competitors and speed up the pace of industry consolidation . . . Our strategy to continuously conduct aggressive promotions and enhance customer service has been successful in driving strong traffic growth."
Passenger numbers soared +21% year-over-year to 3.1 million, driving a +33% rise in revenue to MYR714.2 million. Ticket sale revenue climbed +26% to MYR622.9 million and ancillary revenue more than doubled to MYR91.2 million. Average ancillary spend per passenger was up +85% to MYR29, fueled by "strong support" of (ASW)'s "Supersize" baggage and "Pick a Seat" reserved premium seat and boarding program.
First-quarter traffic rose +17% to 3.49 billion (RPK)s against a +19% lift in capacity to 5.21 billion (ASK)s. Load factor fell -2.4 points to 69.7% LF. Average fare was up +5% to MYR198 and unit revenue increased +12% to MYR0.137. Unit cost fell -18% to MYR0.086 but rose +11% to MYR0.049, excluding fuel. (ASW) ended the period with 45 airplanes, up from 42 on March 31, 2008.
AirAsia Thailand (THA) posted a +MYR30.5 million operating profit and AirAsia Indonesia (AWR) suffered a -MYR11.5 million loss.
"Based on forward booking trend in the second quarter, the underlying passenger demand remains robust and the ancillary income is also growing strongly," Fernandes said.
Akamai Tech signed a 10-year deal with (ASW), to power (ASW)'s website with its Dynamic Site Acceleration solution.
June 2009: Air Asia (ASW) now operates 116 routes, 42 of which are uncontested. Its newest route is Bali - Perth, which (ASW) says is "record setting" in terms of profitability, with Bangkok - Taipei, and Kuala Lumpur - Colombo coming soon. Also coming soon ate new routes from Sin gapore - - to Penang, Langkawi, Sandakan, Miri, Medan, and Surabaya - - where (ASW) now has more daily service than even Tiger Airways (TGR) and Jetstar Asia (JSA) (now marketed as simply Jetstar (IMU)), which are both based there. Just five years ago, (ASW) served only about 30 routes systemwide.
(ASW) launched daily service from Singapore to Penang and Langkawi. (ASW) will launch daily, Kuala Lumpur - Colombo service on August 15. It will be (ASW)'s third destination in southern Asia after Dhaka and Tiruchirappalli.
July 2009: AirAsia (ASW) will launch daily, Denpasar - Perth flights July 17 aboard a new A320, increasing to twice-daily, August 19. (ASW) will launch daily, Kota Kinabalu - Brunei service from September 9. (ASW) will launch flights to Singapore from Miri (four-times-weekly on September 9) and Tawau (thrice-weekly on September 10).
(ASW) launched "RedBox," a Malaysian courier service that delivers packages in 2 to 3 days at prices (ASW) describes as "up to -50%" lower than other domestic delivery options. RedBox says on its website that it "leverages (ASW)'s extensive route network" to ferry packages between the country's central region (Kuala Lumpur, Selangor and selected parts of Negeri Sembilan) and the eastern cities of Kuching, Miri, Sibu, Kota Kinabalu, Labuan, and Sandakan.
August 2009: AirAsia (ASW) posted second-quarter net income of +MYR139.2 million/+$39.6 million, a nearly fifteen-fold improvement over a +MYR9.4 million profit in the year-ago quarter. (ASW) credited robust traffic growth stimulated by low fares, growing ancillary revenue and "substantially lower" fuel prices for the strong performance. CEO, Tony Fernandes noted that (ASW)'s results "stand in stark contrast to those of most legacy carriers" and pointed to its "three-prong strategy of lowering fares, stimulating travel . . . and capturing market share." He added, "Despite lowering fares by an average of -19%, we still managed to produce strong profit growth . . . With our low unit cost base, we have the flexibility to reduce our already low fares without hurting our bottom line."
Second-quarter revenue rose +8% to MYR657.4 million, including a +89% boost in ancillary income to MYR95.1 million. Traffic jumped +23% to 4.06 billion (RPK)s on a +22% lift in capacity to 5.5 billion (ASK)s, producing a load factor of 74.8% LF, up +0.4 point. (RASK) fell -12% to MYR11.91 cents, while (CASK) decreased -31% to MYR7.97 cents. (CASK) ex-fuel dipped -2% to MYR4.31 cents.
Fernandes said (ASW)'s passenger growth rate for the second half "should be similar" to the +22% growth achieved in the year's first six months. He projected that the company's positive "momentum" would carry through the remainder of the year despite the weak economy.
(ASW) announced its long-haul, low-cost affiliate AirAsia X (ASX) will launch its first service to the Middle East. Five-times-weekly, Kuala Lumpur - Abu Dhabi flights will start November 23 with an A330 "in time for the peak Haj and Eid-dul Adha travel season," (ASW)/(ASX) said.
(ASW) will defer delivery of eight A320s scheduled to arrive next year to January to August 2014 without penalty. It still plans to take 16 new airplanes next year. In a filing with Bursa Malaysia, (ASW) said it has until October 31 to defer eight more airplanes scheduled for delivery in 2011 to 2014. (ASW) said it expects "infrastructural constraints with the current airport facilities" that will not be remedied until a low-cost terminal is built at Kuala Lumpur.
A320-216 (3997, 9M-AHT), delivery.
September 2009: Amadeus announced what it called a "groundbreaking partnership" with AirAsia (ASW) that will enable the more than >102,200 travel agencies that subscribe to the Global Distribution System (GDS) to book travel on (ASW) and its affiliates "in the same way they would for a full-service carrier." In addition to (ASW) the partnership covers Indonesia AirAsia (AWR), Thai AirAsia (THA) and AirAsia X (ASX). Amadeus said the enabling technology is its Amadeus Ticketless Access solution "that allows real-time fare and flight information" for (ASW) "to be displayed alongside that of full-service airlines on a travel agent's Amadeus screen."
(ASW) raised MYR505.4 million/$144 million through the sale of 380 million new shares representing 16% of its existing share capital, "Reuters" reported.
October 2009: Air Asia (ASW) which already flies to Trichy (Kuala Lumpur - Tiruchirappalli route) in India, is now planning more routes including Kolkata, Kochi, and Trivandrum, which will begin at the end of the fourth quarter. (ASW) will launch daily service from Kuala Lumpur to Kolkata, Kochi, and Thiruvananthapuram in November. Next year, it also hopes to launch services to Bangalore, Chennai, Delhi, Hyderabad, and Mumbai. Longer term, (ASW) hopes to connect Amritsar, Delhi, and Kolkata from Bangkok. It is considering hubs at Kuala Lumpur, Penang and even Surabaya in Indonesia as gateways between China and India, which have little nonstop air service between them.
(ASW) said it will defer eight A320-200s scheduled for delivery in 2011 to 2014, bringing to 16 the number of 2010 to 2011 deliveries it is pushing back. It originally had 48 A320s slated for delivery in 2010 to 2011 but now will take only 32 during the time frame. (ASW) also plans to terminate leases with (GECAS) (GEF) on nine 737s and return them ahead of schedule in 2010. The moves were confirmed by CEO, Tony Fernandes to Malaysia's "The Star." He added that (ASW) is considering selling two 737s to Mexican carrier VivaAerobus (VVS). He noted that Indonesian and Thai services currently served with older 737s increasingly will be operated with newer, "hugely more efficient" A320s.
A320-216 (4098, 9M-AHW), delivery.
December 2009: AirAsia (ASW) will add a third daily, Kuala Lumpur - Hong Kong flight on January 21.
(ASW) CEO, Tony Fernandes hopes his AirAsia X (ASX) subsidiary will serve either New York (JFK) or Newark (EWR) next year, he told the "Bernama" news agency. Malaysia Airlines (MAS) pulled out of (EWR) and now flies only to Los Angeles in the USA. "We are very keen to enter the USA market, which has good business potential," Fernandes said.
Qantas (QAN) subsidiary, Jetstar Airways (IMU) and AirAsia (ASW) "have entered discussions regarding a potential cost-saving joint venture," (QAN) said in a statement. An (IMU) spokesperson told "Dow Jones" that the companies are "looking at ways we can further cut costs through economies of scale" via cooperation on airport operations and procurement. "We both compete for passengers from a growing pool, and that clearly will remain." A source told "Dow Jones" that no cross-ownership is involved. Both airlines operate majority-A320 family fleets.
2 A320-216s (4126, HS-ABL; 4147, PK-AXK), deliveries.
January 2010: AirAsia (ASW) and Jetstar Airways (IMU) will announce a far-reaching joint venture that will involve a host of backroom functions and joint purchasing, although it is unclear if code sharing will be included in the partnership. Sources in Malaysia confirmed the pending announcement and said the cooperation between the region's two largest Low Cost Carrier (LCC)s will be extensive and will help both carriers contain fares and benefit from economies of scale. The unveiling in Sydney will be the culmination of talks that started in late 2008. Discussions between the two airline groups date back to 2004.
AirAsia (ASW) operates 129 routes to 65 destinations with 82 airplanes from hubs in Malaysia, Thailand, and Indonesia. Jetstar (IMU) has 49 A320s and A330s and operates 1,900 weekly flights to destinations in 15 countries. It announced a significant domestic expansion last month.
The later announcement unveiled an alliance that will bring together the Asia/Pacific region's leading Low Cost Carrier (LCC)s, allowing two carriers with combined annual turnover exceeding >$3 billion to reduce costs, pool expertise and maintain lower fares. The key to the agreement, which the airlines said was the first of its kind, is "a joint specification for the next generation of narrow body airplanes," according to (ASW) (CEO), Tony Fernandes. (ASW) and (IMU) also will look into joint procurement of airplanes. The existing combined fleets, plus orders and options, equate to nearly 400 planes, making the pair an extremely powerful voice in shaping the A320 and 737 replacements.
Qantas (QAN) (CEO), Alan Joyce said the historic non-equity alliance will give the duo a natural advantage in one of the world's most competitive markets. "(IMU) and (ASW) offer unmatched reach in the Asia/Pacific region, with more routes and lower fares than their main competitors, and this new alliance will enable them to maximize that scale," he told media in Sydney. "Just as both carriers have pioneered the development of the low-cost, long-haul airline model, today's announcement breaks the mold of traditional airline alliances and establishes a new model for achieving reduced costs and increased efficiency. This partnership will ensure that both airlines can capitalize on these growth opportunities," Joyce said.
Principal terms of the agreement cover future fleet specification, airport passenger and ramp services, shared airplane parts and pooling, procurement of engineering and maintenance supplies/services and reciprocal arrangements to mitigate possible operational disruption across both networks.
(IMU) (CEO), Bruce Buchanan said the carrier "is reducing its controllable costs by up to -5% annually" and the partnership will "enable a further step-change in our cost position and ensure sustainable low fares."
Fernandes hailed the agreement as another step in "the airline's strategy to maintain its global leadership as the lowest-cost airline operator. It is key for us to keep our costs as low as possible. This is what enables us to provide the low, low fares that our guests have enjoyed, and will continue to enjoy."
Centre for Asia Pacific Aviation Chairman, Peter Harbison said the agreement could be the start of something bigger, with code sharing and equity exchanges at a later stage. "This is all about 'let's live together before we get married'," he mused.
(ASW) announced the following new seasonal service to India: Kuala Lumpur to Chennai (daily May 17 - October 30 aboard an A320), Bangalore (daily May 20 to October 30 aboard an A320), Hyderabad (daily, July 20 - October 30 aboard an A320), Mumbai (four-times-weekly, May 6 - October 30 aboard an AirAsia X (ASX) A330) and Delhi (daily, August 4 - October 30 aboard an (ASX) A330); Penang to Chennai (daily, April 28 - October 30 aboard an A320).
(ASW) has been getting 80%+ LF on all of its four current India routes, with Trichy being a "huge success!"
2 737-3YOs (24677, XA-VIJ; 26442, XA-VIK), sold to Viva Aerobus (VVS).
February 2010: AirAsia (ASW) earned a +MYR549.1 million/+$161.1 million profit in 2009, reversed from a restated -MYR496.6 million loss in 2008, as it opened four new bases and grew market share "in every market we serve," according to (CEO), Tony Fernandes.
(ASW)'s 2008 loss was its first since going public in 2004, and Fernandes said he does not anticipate a return to the red in the near future. "There are early signs that the global economy is stabilizing and the benefits are already visible in the aviation industry. Passenger traffic is growing, particularly in the Low Cost Carrier (LCC) segment. The supply-demand conditions are favorable to upward revision of fares in certain sectors."
Full-year revenue climbed +11.5% to MYR3.18 billion on a +24% surge in passenger numbers to 22.7 million. The cost of sales was reduced -10.3% to MYR1.8 billion and operating profit soared +59.2% to +MYR1.28 billlion from +MYR807.3 million in 2008.
Twelve routes were added last year and bases were established at Penang, Bandung, Phuket, and Surabaya. The Malaysian unit carried 14.3 million passengers, up +21%, as (RPK)s traffic rose +14% to 15.43 billion. Capacity climbed +17% to 21.98 billion (ASK) and load factor slipped -0.4 point to 75% LF. Average fare was down -17% to MYR168.2 but ancillary revenue per passenger rose +46% to MYR29.1. Unit revenue dropped -8% to 13.54 sen and (CASK) was cut -19% to 10.41 sen. It operated 48 airplanes at year end compared to 44 one year earlier.
AirAsia Thailand (THA) lost -THB808.9 million/-$24.4 million, widened -10% from a -THB735.4 million deficit in 2008, owing to a THB1.11 billion charge related to 737-300 redelivery. Its operating profit of +THB148.4 million compared to a -THB735.4 million loss the prior year. AirAsia Indonesia (AWR) lost -IDR189.3 billion/-$20.2 million, -34% worse than the IDR140.9 billion hit in 2008.
(ASW) reported a consolidated fourth-quarter profit of +MYR76.7 million compared to a -MYR201.7 million deficit in the year-ago period despite a -1.2% fall in revenue to MYR894.1 million. Operating surplus was down -24.4% to MYR321 million. The 2008 fourth-quarter loss resulted from one-time charges related to fuel hedges and airplane financing.
(ASW) expects passenger growth of +11% to +14% in 2010. It will retire its remaining 737-300s and become an all-Airbus (EDS) operator by the third quarter and reiterated its plan to launch operations in Vietnam this year in partnership with VietJet.
AirAsia (ASW) purchased a 30% share in "VietJet Air," a proposed Hanoi-based start-up that henceforth will be known as "VietJet AirAsia." VietJet originally planned to begin flying in the 2009 fourth quarter with either 737-800s or A320s, according to its website. The privately held carrier was launched with VND600 billion/$32.2 million in capital and is majority held by Sovico Holdings. (ASW) said the airline plans to operate both domestic and international flights and is "currently finalizing" a route network and launch plans. (ASW) also has airlines based in Malaysia, Thailand and Indonesia. It forged an alliance with Qantas subsidiary Jetstar Airways (IMU) last month. "The birth of VietJet AirAsia contributes to the diversification of the aviation market in Vietnam, providing more options to meet the air travel needs of people in Vietnam and in the region," VietJet said in a statement."
March 2010: (IATA) Code: AK.
(ICAO) Code: AXM (Callsign - ASIAN EXPRESS).
April 2010: AirAsia (ASW) will launch Penang - Chennai service from May 17.
May 2010: AirAsia (ASW) announced a +8% year-over-year increase in first-quarter net income to +MYR224.1 million/+$68.7 million on a +10% rise in revenue to MYR878 million.
Passengers carried lifted +17.1% to 3.7 million. (CEO), Tony Fernandes said the period's major highlights were the "sustained turnaround" of its Thai and Indonesian operations and an "astounding +31% jump in ancillary income." Ancillary revenue comprised 16% of the carrier’s total revenue.
"The results in Thailand and Indonesia and the contribution from ancillary [revenue] are an endorsement of the strategic shifts we put in place in 2009," Fernandes said. "Thai AirAsia (THA) is now the largest domestic carrier in Thailand, while Indonesia's improved performance is based on a realignment of its routes towards higher-yielding international flights."
(THA) recorded a +30% increase in revenue to THB3.1 billion/$95.6 million on a +25% increase in passenger volume. "It's an amazing performance and validates our strong belief that (THA) is more than capable of weathering whatever challenges come its way and still post impressive numbers," Fernandes said. "These efforts will also get a powerful boost with the transition to an all-Airbus (EDS) fleet in Thailand by the third quarter of this year."
He noted that AirAsia Indonesia (AWR)'s revenue grew +37% year-over-year.
June 2010: AirAsia (ASW) will launch daily, Kuala Lumpur - Yangon service July 20 with an A320.
AirAsia X (ASX) will be spun off into a standalone, publicly traded company with an Initial Public Offering (IPO) targeted for the second half of 2011, subject to market conditions, the AirAsia Group said. The long-haul arm was launched in November 2007 "and is now reaching sufficient scale economies to stand on its own instead of relying on services provided by AirAsia (ASW)," the company stated. AirAsia (ASW) also will seek separate listings for its Thailand- and Indonesia-based affiliates.
"After more than two years of operation, we have begun to notice some dilution of the (ASW) business model and recognize the need for AirAsia (ASW) and AirAsia X (ASX) to remain focused on their respective markets. Nevertheless, we are extremely pleased with how quickly (ASX) has grown in the two-and-a-half years since its birth," Group Chairman & (CEO), Tony Fernandes said. (ASX) booked a net profit of +MYR87 million/+$26.1 million on revenue of MYR720 million last year and is forecast to generate more than >MYR1 billion in revenue in 2010, according to the company.
Under the reorganization, AirAsia X (ASX) "will take over employment" of its own flight crew and ground staff, "as well as its commercial and marketing team." It is completing a MYR100 million rights issue "to achieve financial independence and fund its continued growth," AirAsia (ASW) said. It will continue to use the (ASW) brand and airasia.com website as part of its 30-year brand license agreement.
July 2010: AirAsia (ASW) in September will increase service from Kuala Lumpur to Kuala Terengganu (thrice-daily to nine-times-daily), Kota Bharu (six-times-daily to 12-times-daily), Langkawi (seven-times-daily to 11-times-daily), Solo (daily to five-times-daily), Yogyakarta (daily to thrice-daily), Medan (four-times-daily to six-times-daily) and Surabaya (four-times-daily to eight-times-daily).
(ASW) said it successfully migrated its reservation system from Navitaire's Open Skies to New Skies. The new system features a Low Fare Finder that provides customers the lowest available fare according to destination and dates of travel. It also will enable passengers to book seats for multiple-city itineraries such as Perth - Kuala Lumpur - Hong Kong, rather than requiring separate bookings for each leg, as was the case with Open Skies. "I am impressed with the hard work and commitment shown by the whole (ASW) team involved in ensuring the success of this brand new reservation system. We set a record of only nine months to complete this major migration, while other major airlines usually take 18 - 24 months," (ASW) Regional Head of Commercial, Kathleen Tan said.
August 2010: AirAsia reported second quarter net income of +MYR199 million/+$63 million, up +43% over a +MYR139.2 million profit in the year-ago period, and announced that it will defer delivery of seven A320s from 2011 to 2015.
"Capacity concerns … are one reason for the deferments," CEO, Tony Fernandes said in a statement. "Another is our strategy to lower our gearing ratio, ensure we have the sufficient revenue from our operations to fund the purchase of airplanes."
Second quarter revenue increased 26% to MYR941 million. (ASW) said the revenue total was its best ever for a second quarter, adding that the second half the year is "potentially dynamic."
Fernandes noted that ancillary revenue is providing a big boost, pointing out that the airline's average passenger is now spending MYR40 on ancillary services. "The numbers reaffirm our conviction that in ancillary [charges] we have unearthed a gushing revenue stream that can boost our bottom line and also serve as a buffer to rising fuel prices," he said.
Passengers carried in the second quarter lifted +11% year-over-year to 3.9 million. Load factor rose +2 points to 77% LF.
AirAsia Thailand (THA) posted +24% year-over-year growth in second quarter revenue to THB2.66 billion/$84.1 million and its net income heightened +161%, (ASW) said, but declined to provide an exact profit figure. Fernandes said (THA) could be publicly listed in Thailand as soon as "next year." AirAsia Indonesia (ASW) saw its pre-tax second quarter income jump +272% to IDR111.4 billion/$12.5 million, (ASW) said.
Fernandes expressed optimism regarding (ASW)'s full year results. "The fourth quarter, of course, is traditionally our strongest quarter," he stated. "To head into our strongest season on the back of a soaring first quarter and a record-breaking second quarter puts us in a fantastic position."
(ASW) claims to have set a new world record of selling over >538,000 seats in one day with its “Mind Blowing Fare” campaign, which offers fares from just MYR1/$0.31 for both domestic and international flights. (ASW)’s previous best record was 390,000 seats sold in a day, achieved when it ran its “Free Seats” campaign across the entire AirAsia Group of AirAsia (ASW), Indonesia AirAsia (AWR) and Thai AirAsia (THA) last November.
(ASA) also achieved its highest number of seat sales in an hour, selling 36,871 seats, a +47.5% increase from the previous record of 25,000. The seat sale is the first using (ASW)’s new upgraded reservations system.
(ASW) has deferred the delivery of seven A320 airplanes to 2015 from the originally planned 2011, citing infrastructure constraints at its hub in Kuala Lumpur. Last year, (ASW) announced a four-year deferral of the delivery of 16 airplanes scheduled for 2010 and 2011 for the same reason. (ASW) says, “The present infrastructure at the low cost terminal is not able to accommodate (ASW)’s fleet expansion in the number of airplanes originally scheduled to be delivered in 2010 and 2011.” Malaysia is building a new low-cost carrier (LCC) terminal due to open in the first quarter of 2012 with a handling capacity of 30 million passengers a year, twice as much as the current one.
With the delivery deferment, (ASW) will receive eight airplanes in 2011 and nine airplanes in 2015, with no penalties imposed by Airbus (EDS) for the changes.
2 A320-216s (4386, HS-ABQ; 4390, HS-ABR), ex-(F-WWDE & F-WWFK), deliveries.
September 2010: AirAsia (ASW) will launch thrice-weekly flights from Kuala Lumpur to Tokyo Haneda later this year, according to "Kyodo News."
A320-216 (4404, 9M-AQA), delivery, ex-(F-WWBG).
October 2010: 5 A320-216s (4426, HS-ABS; 4458, 9M-AQB; 4462, PK-AXM; 4477, PK-AXN; 4486, PK-AXO), deliveries.
November 2010: The AirAsia Group has posted what it terms an "outstanding" result of a net profit of +MYR447 million/+$141 million for the third quarter ended September 30 on revenue of MYR1.54 billion.
Individually, the profit after tax was up +152% for AirAsia (ASW) to +MYR327 million, up +231% for Thai AirAsia (THA) to +THB529 million/+$17.5 million and up +226% to +IDR191 million/+$21 million for Indonesia AirAsia (AWR). Revenue was up +34% for AirAsia (ASW), +46% for Thai AirAsia (THA) and +31% for Indonesia AirAsia (AWR).
One of the keys to the dramatic increases was the ability of all three airlines to lift fare levels by +22%, +24% and +20%, respectively. Another driver was ancillary income, which continued to rise to MYR44 per passenger, representing 18% of total revenue for AirAsia (ASW). Ancillary revenue was up +81% at Thai AirAsia (THA) and 31% at Indonesia AirAsia (AWR).
The airline group will phase out the last four 737-300s with Indonesia AirAsia (AWR) by the end of 2010. The group’s fleet stands at 90 airplanes with another eight set for delivery next year and up to 16 to be delivered in 2012. The average fleet age is under two years.
CEO, Tony Fernandes said that forward bookings are strong. "We are heading into our strongest quarter on the back of what is already an amazing performance this year," he said.
Looking ahead, Fernandes said the airline would continue to focus on its own strategy - - driving costs down, raising yields, improving productivity, expanding its route network and strengthening the emotional bonds with the region’s communities. "Our route connectivity and flight frequency with the (ASEAN) region is unmatched–and we will continue to ensure that it will continue to stay that way," he said, noting that AirAsia (ASW) is ideally positioned to take full advantage of (ASEAN)’s move toward implementing "open skies" in the region by 2015.
Earlier this month, (ASEAN) governments signed the (ASEAN) Multilateral Agreement of the Full Liberalization of Passenger Air Services, whereby designated airlines from (ASEAN) countries are able to fly to any city in a member nation with an international airport.
"We are already recognized as the truly (ASEAN) airline. With governments in the region - - and beyond - - all seeking to maximize revenues from tourism, we are confident that our unparalleled route connectivity, low fares and our branding puts us in a very strong position to capitalize on these developments vis-a-vis our competitors," Fernandes said.
AirAsia (ASW) will increase daily, Kuala Lumpur - Chennai service to 11-times-weekly on January 21 with an A320.
December 2010: AirAsia (ASW) will launch thrice-weekly, Kuala Lumpur - Balikpapan service on January 12.
January 2010: INCDT: An AirAsia (ASW) A320 skidded off the runway at Kuching in Malaysia during a heavy rainstorm on January 10. According to Ascend, the airplane veered to the right and ran off the side of the runway onto soft ground where its nose undercarriage apparently collapsed. There were no serious injuries reported among 124 passengers and crew aboard.
A320-216s (4557, HS-ABT) and (4571, PK-AXP; 4582, PK-AXQ), deliveries.
February 2011: Driven by record after-tax earnings of +MYR1.07 billion at AirAsia Berhad (Malaysia), the AirAsia Group posted a stunning +MYR1.52 billion/+$500.1 million net profit in 2010, well more than double +MYR359.5 million in net income earned in 2009.
Income for (ASW) more than doubled from +MYR506.3 million in 2009. Group "core operating profit," essentially operating profit before exceptional and one-time charges, soared to +MYR1.26 billion from +MYR462.5 million in the prior year. (ASW) credited double-digit passenger growth and increased ancillary revenue for the strong result.
Group CEO, Tony Fernandes hailed the performance as a “phenomenal achievement.” Full-year group revenue climbed +16.7% to MYR5.62 billion on a +13.1% surge in passenger numbers to 25.6 million. Group (EBIT) was MYR1.45 billion, raised from MYR634 million in 2009. Capacity (ASK)s were up +14% to 38.7 billion and traffic (RPK)s jumped +21.5% to 29.6 billion. (CASK) increased +24% to MYR0.0365 while the average fare heightened +5% to MYR177.
All airlines in the group were profitable and all recorded double-digit passenger growth. During the year the group carried its 100th million passenger.
The fleet numbers 90 A320s and four 737-300s operated by Indonesia AirAsia (AWA) that will be retired "upon completion of the runway upgrade in Bandung." The group has another 86 A320s on order and told media it is in discussions for the A320neo.
“What a year we’ve had,” said Fernandes. “Not only did we achieve record profits, but also breached the billion-ringgit mark in net profit.” He added that the company is in the “best position, financially, that it has ever been in—providing a strong foundation for further expansion and growth in 2011.”
Fernandes also emphasized the increased contribution from ancillary income to the bottom line. “Ancillary has been a tremendous revenue stream for us. It’s up in all three of our operations: Malaysia AirAsia (ASW) at MYR49 per passenger, up +99%; Thai AirAsia (THA), up +109%; and Indonesia AirAsia (AWR), up +108%.” Fernandes added that the performance of the two affiliate airlines “boded well for their potential listing in 2011 on the Bangkok and Jakarta stock exchanges.”
On the 2011 outlook, he said the challenge would be to build on, and exceed, the company’s 2010 performance. “I am confident we can hold our own. With our plans to further expand our route network and key routes supported with the delivery of eight brand-new A320s and the opening of three hubs in Kuching, Chiang Mai, and Medan, we can position ourselves to emphasize on increasing load factor and yields,” he said.
March 2011: AirAsia Inc, the Philippines-based affiliate of the AirAsia Group announced late last year it will be based at Clark’s Diosdado Macapagal International Airport, the former Clark Field air force base. The airline plans to start operating international flights from the airport in the fourth quarter. (ASW) initially said operations would commence in the 2011 third quarter.
“Our choice of Clark underlines (ASW)’s commitment to developing transportation and tourism hubs outside Manila," AirAsia Inc CEO, Marianne Hontiveros said in a statement. Selection of the airport will mean easy connectivity with Malaysia-based AirAsia Berhad, which has been flying to Clark from Kuala Lumpur and Kota Kinabalu since 2005. “We plan to make Clark the hub for flights to popular destinations including Singapore, Hong Kong, Taiwan, China, Thailand, Korea, and Japan. Travel will become much easier and more affordable for tourists and overseas Filipino workers,” Hontiveros added. The airline is 60% owned by Hontiveros, Antonio Cojuangco Jr and Michael Romero, with AirAsia Berhad holding the remaining 40%. ASW) will make Clark its 13th base after Kuala Lumpur, Kota Kinabalu, Kuching,
Penang, Bangkok, Phuket, Chiang Mai, Jakarta, Bandung, Surabaya, Medan, and Bali.
(ASW) and Expedia announced the launch of a joint venture (JV) to sell "a complete range of value flights, hotels and holiday packages" in the Asia/Pacific region. The companies called the (JV) "the first partnership of its kind globally between a low-cost carrier (LCC) and an online travel agent."
The new (JV) will hold exclusive online third-party distribution rights in the region for AirAsia (ASW) and AirAsiaX (ASX) flights and travel packages, allowing customers to book (ASW) inventory on any of Expedia's travel sites worldwide.
The new company will operate Expedia's branded businesses in Japan, India, Southeast Asia, and "other" East Asian markets, as well as AirAsia's AirAsiaGo and GoRooms businesses. "With few exceptions in the region, the only place to find and book (ASW) flights online will be http://www.AirAsia.com, http://www.AirAsiaGo.com and Expedia," the carrier explained. (ASW) serves approximately 139 routes to destinations in Asia, Australia, and Europe.
"There is a lot of focus on travel in Asia today and this collaboration allows our customers to connect to a great network here via (ASW)," said Expedia Chairman & Senior Executive, Barry Diller. "Combined with Expedia's global travel offerings and package technology, we think this partnership enables both companies to offer travelers world-class travel products at an unparalleled value."
(ASW)'s websites — and Expedia's existing Expedia-branded businesses in Japan, India, Singapore, Malaysia, and Thailand — will also be operated by the (JV).
(ASW) (ASW) launched thrice-weekly, Kuala Lumpur - Palembang service on March 10.
AirAsia X (ASX) has ordered three A330-200s with an option for two more, bringing (ASX)’s total orders for the A330 to 28. The airplanes are scheduled for delivery from 2014. Airbus (EDS) said the airplanes are the 238-tonne increased take-off weight version of the A330-200, which are capable of flying nonstop from Kuala Lumpur to Europe. (ASX) will configure the airplane in a two-class layout with 24 premium flatbeds and 264Y economy seats.
The AirAsia (ASW) Group has ordered more than >200 airplanes from Airbus (EDS), including 175 A320s, 28 A330s and 10 A350 XWBs.
May 2011: The AirAsia Group reported a +19% year-over-year increase in first-quarter passengers carried to 7.2 million. Load factor jumped +6 points to 81% LF. Capacity (ASK)s increased +12.5% to 10.58 billion, while traffic (RPK)s increased +25.9% to 8.52 billion.
The core Malaysian operation experienced a +17.2% increase in passenger boardings to 4.3 million, while Thai AirAsia (THA) enjoyed a +22.7% hike to 1.81 million. Indonesia AirAsia (AWR) posted a +22.4% increase in passenger boardings to 1.09 million.
AirAsia X (ASX) recorded a +56.5% increase in passengers to 640,000 for the first quarter. (ASX) added six new routes: — Mumbai, Delhi, Tehran, Seoul, Tokyo, and Paris — and increased its fleet from eight to 11 airplanes. (ASX)'s first-quarter (RPK)s rose +59.8% to 3.6 billion, making (ASX) the second-largest Low Cost Carrier (LCC) in Southeast Asia, after AirAsia Malaysia (ASW). (ASK)s increased +48% to 4.5 billion and load factor lifted +6 points to 81% LF.
AirAsia X (ASX) (CEO), Azran Osman-Rani commented, “Our continued rapid growth trajectory is testament to the breakthrough long-haul model that we have pioneered, which unlocks significant latent demand that exists between Southeast Asia and the major markets in North Asia, Australia, India, the Middle East, and Europe, which is under-served by traditional low-cost carriers (LCC)s. The longer range of our airplanes is perfectly suited for the geographically dispersed Asia/Pacific landscape.”
June 2011: A massive order from AirAsia (ASW) for 200 A320neos capped a record Paris Air Show for Airbus (EDS), bringing its total orders and commitments for the week to 730 airplanes from 16 customers.
The tally includes purchase orders for 418 airplanes (some of which had been previously announced as Memos of Understanding (MOU)s) valued at about $44 billion at list prices, and new (MOU)s for another 312 airplanes worth about $28.3 million at list prices. Airbus (EDS)’s biggest seller at the air show by far was the A320neo; it now has secured a total of 1,029 commitments for the re-engined airplanes since its launch in December 2010.
The order from AirAsia (ASW) for 200 A320neos, valued at $18.5 billion, tops a deal for 150 A320neos and 30 standard A320s placed by IndiGo (IGO), which had been previously announced. (ASW) is now the largest customer for the A320 family of airplanes, with a total of 375 ordered and 89 already in service.
(ASW), which has selected the (CFM) International's (Leap-X) engine for its neos, expects to take delivery of 12 to 15 airplanes each year beginning in 2016. First deliveries of the A320neo begin in 2015.
AirAsia Group CEO, Tony Fernandes said the deal for the new airplanes secures (ASW)’s ability to meet the huge growth potential offered by the Asian market. "Our decision to be one of the launch customers for the A320neo will ensure that we remain at the forefront of our business, with one of the world's youngest and most modern fleets,” he added.
July 2011: All Nippon Airways (ANA) and AirAsia (ASW) announced the formation of a joint venture (JV), "AirAsia Japan," a new low-cost carrier (LCC) to be based at Tokyo Narita (NRT). The new (LCC) will operate under the AirAsia brand, and will serve domestic and international destinations when it commences services in August 2012, subject to approvals.
(ANA) said that AirAsia Japan would take advantage Japan’s rapidly transforming aviation market, including the expansion of "open skies" agreements, and on the domestic side will look to counter growing competition from road- and rail-based travel. (ANA) also noted that (NRT) is seeking to increase capacity with the introduction of a new terminal and is expected to attract many (LCC)s and foreign airlines.
(ANA) said it had been seeking opportunities to launch a (LCC) based at (NRT) and concluded that partnering with an existing (LCC) is “the most efficient and strategically advantageous” option. “The formation of AirAsia Japan leverages AirAsia (ASW)’s successful business model and brings together the complementary strengths of the two companies, generating new demand with the aim of making affordable and quality travel available to all,” said (ANA).
(ANA) President & (CEO), Shinichiro Ito commented, “By combining AirAsia (ASW)’s business model and brand with (ANA)’s depth of knowledge of the Japanese market, we aim to bring new value to our customers and generate new demand. We believe that AirAsia Japan will make air travel more accessible and provide a convenient and efficient travel option for a wide range of people.”
AirAsia Group CEO, Tony Fernandes added, “AirAsia Japan will not only boost economic growth between (ASEAN) and East Asia by providing better access to markets around the region, but also enhance links within travel, trade and tourism.”
(ANA) will provide 51% of the capital to launch AirAsia Japan with AirAsia (ASW) putting up the remaining (49%) balance. It is still unclear how AirAsia Japan will impact Peach Aviation, the (JV) (LCC) formed by (ANA) and Hong Kong-based First Eastern Investment.
"Nikkei Business Daily" reported that (ANA) rival, Japan Airlines (JAL)/(JAS) will team up with Australia's Jetstar (IMU) to create a new (LCC).
"Nikkei Business Daily" reported that (ANA) rival, Japan Airlines (JAL)/(JAS) will team up with Australia's Jetstar (IMU) to create a new (LCC).
August 2011: The AirAsia (ASW) Group posted a slight increase of +0.06% in profit before tax of +MYR145 million/+$48 million for the second quarter ended June 30, compared to the year-ago period. The (ASW) group recorded a +15% increase in revenue to MYR1.08 billion. Each unit had numbers in positive territory.
“The second quarter is traditionally one of our weaker quarters. But despite the challenging environment in the industry, the team has come through again. Costs have gone up, but much less than among others in the industry. We’ve grown revenues, our cash balance is a healthy MYR1.9 billion, and our gearing level has been reduced to 1.48 times as compared to 2.27 times a year ago,” Group CEO, Tony Fernandes said.
Fernandes emphasized (ASW)’s “load active, yield passive” strategy was paying off, with lower average fares attracting higher numbers of passengers who, in turn, contribute to a higher take-up rate of ancillary services such as such as baggage supersize, pick-a-seat, cargo and courier, in-flight merchandise and meals.
“We’ve always maintained that instead of raising fares for higher yields (running the risk of dampening air travel) we’d rather keep fares at reasonable levels so as to attract higher passenger loads and boost revenue through ancillary services,” Fernandes said.
Load factor was 81% LF, up +4 points, while ancillary income was up +15% at (ASW), +30% at Thai AirAsia (THA), and +10% at Indonesia AirAsia (AWR).
(EBITDAR) margins for the (ASW), (THA) and (AWR) stood at 35%, 26% and 24%, respectively.
Fernandes said AirAsia Philippines was on track to launch its first routes by the fourth quarter, subject to regulatory approvals, and was bullish on the new joint venture with All Nippon Airways (ANA), AirAsia Japan, to be based at Tokyo Narita.
“Japan is a huge, huge market with a very low Low Cost Carrier (LCC) penetration rate. It’s our first venture outside of ASEAN, and we’re very excited about the prospects there,” Fernandes said.
Malaysia Airlines (MAS) and arch rival AirAsia (ASW) are reported to be planning a share swap that would give (ASW)'s parent a 20% stake in (MAS), according to "Reuters." The news wire reported that Malaysia's state investment arm, Khazanah Nasional, which owns nearly 70% of (MAS), would take a 10% stake in AirAsia (ASW). Analysts suggest the deal would enable (MAS) to focus exclusively on premium long-haul services and leave domestic routes and short-haul routes to AirAsia (ASW).
According to the report, (ASW) founder and CEO, Tony Fernandes and his deputy, Kamarudin Meranun will sit on the (MAS) board following completion of the transaction.
The development has fascinating ramifications for Qantas (QAN) and low-cost subsidiary Jetstar (IMU). In June, (QAN) announced it was sponsoring (MAS)'s entry into the Oneworld (ONW) Alliance and indicated the partnership would be a springboard for growth. In 2010, (IMU) and (ASW) entered into an alliance to reduce costs and pool expertise. At the time, the Centre for Asia Pacific Aviation Chairman, Peter Harbison said the agreement could be the start of something bigger, with code sharing and equity exchanges at a later stage. "This is all about let's live together before we get married," he said.
Later, (ASW), (ASX) and (MAS) announced they have entered into what is termed a Comprehensive Collaboration Framework (CCF), which includes a major share swap and a collaboration agreement to explore opportunities to cooperate on a broad range of areas.
The deal is the first major consolidation in the Southeast Asia region and creates a powerhouse that could set a model for further mergers and joint ventures. As part of the (CCF), six (MAS) Directors have resigned and have been replaced with six new Directors, including (ASW) CEO & Founder, Tony Fernandes. Two (MAS) executives will join the (ASW) board.
According to (ASW), under the (CCF) “all parties will work to complement each other’s businesses so as to leverage on their respective core competencies and optimize efficiency for the benefit of consumers.”
As part of the (CCF), (MAS) and (ASW) are issuing free warrants to each other’s shareholders. A (MAS) shareholder will be granted approximately one warrant in (ASW) for every (30) (MAS) shares held, while an (ASW) shareholder will be granted approximately one (MAS) warrant for every 10 (ASW) shares held.
In addition, Tune Air and Khazanah Nasional Berhad, the major shareholders of (ASW) and (MAS), respectively, have agreed to acquire from each other existing shares of both companies.
As a result, Tune will hold 20.5% of shares in (MAS), and Khazanah will hold 10% in (ASW). In addition, Khazanah proposes to acquire 10% of shares in (ASX) on terms and at a price to be mutually agreed upon later.
According to (ASW), the agreement enables (MAS), (ASW) and (ASX) “to respectively focus on business segments in which they are capable of developing the most value.” The airlines will now assess and review their network services to enhance their offering, which will include partial interlining and flights to new destinations currently not served by any of the airlines.
The first phase of the collaboration will focus on “immediate synergy opportunities, which can be realized without significant effect on any party’s operations.” The (CCF) will become effective immediately upon its execution and shall remain in force for five years, with an option for five more years.
(ASW) CEO and (ASX) Director, Tony Fernandes said “By focusing on core competencies, it will enable both parties to increase product offerings to our respective customers. (ASW) and (ASX) see growth opportunities in new routes and destinations. Our business model requires us to continue to reduce prices in order to increase volumes for consumers in the low-cost travel segment, which we can now focus on in a more significant way.”
(MAS) Chairman Nor Yusof added, “The signing of the collaboration agreement heralds an exciting new era of cooperation whereby the airlines involved will stand to gain significantly by tapping the benefits of working together. We believe that the joint collaboration will help (MAS) focus on our strengths in our core markets and work towards deriving higher loads and more efficient resource utilization. We will also be able to offer services in Engineering and other areas to both (ASW) and (ASX).”
September 2011: The following is an "AIRLINE WEEKLY" publication article on the state of airlines in the Philippines:
Not long from now, the remarkable AirAsia (ASW) will launch its latest joint venture (JV): AirAsia Philippines. In doing so, it enters a market with both promise and peril, one that’s already a theater of war between a high-flying Low Cost Carrier (LCC) and a struggling legacy carrier. To be sure, the Philippines has its problems as far as airlines are concerned. It’s hardly a wealthy country, with one in four people living on less than <$1.25 a day,
according to the World Bank. Infrastructure, including airport
infrastructure, is underdeveloped. Transparency International ranks it 134 out of 178 on its corruption perceptions index, tied with Nigeria and Bangladesh. Investment is low, income inequality high and tax collection weak. Among (ASEAN) nations, Thailand, Singapore and Malaysia receive far more overseas tourists. Terrorist threats keep visitors away from parts of the country’s south. Safety concerns dog the country’s aviation sector. And the Philippine economy certainly wasn’t helped by the crisis in Japan, its second largest trading partner after the USA.
All true, yes. But that’s not the whole story. If the Philippines was all bad news, AirAsia (ASW), for one, wouldn’t be so eager to enter. Nor would carriers as diverse as Cathay Pacific (CAT), Korean Air (KAL), Emirates (EAD) and Delta (DAL) be such active players in the market. And nor would the home-grown (LCC) Cebu Pacific (CEB) be as successful as it’s been. Indeed, the Philippines offers big opportunities for airlines (opportunities they are increasingly exploiting. Much of this opportunity is linked to the country’s flourishing if still underwhelming tourist sector. Last year, more than >3.5 million people visited the Philippines from other countries, +17% more than in 2009 and +12% more than in 2008, the previous peak year. Naturally, this growth is fueled by fast economic expansion throughout East Asia, fast enough to send arrivals up another +12% in the first half of 2011 (despite the Japan crisis and despite a massive -21% (y/y) drop in tourists from Hong Kong following an incident last summer in which eight Hong Kong tourists died in a Manila bus hijacking. Government officials expect 3.7 million visitor arrivals this year and roughly double that in the next five or six years. Helping their cause are the country’s relatively low prices (hotel costs are notably cheap, for example) and tourist draws like spectacular beaches and Spanish colonial cities. The visa regime is relaxed, airport fees are relatively low and northeast Asians in particular can’t seem to get enough of the country. Visitors from Japan are actually up +6% (y/y) so far this year despite the tsunami, and visitors from mainland China are up a bullish 17%. The volume of Taiwanese visitors is also way up, as are inflows from Australia and Singapore. Domestic tourism is growing too. But no country sends more tourists to the Philippines than Korea, the country’s largest source market by far. Koreans come to beach resorts like Boracay and Puerto Princesa, and at least as enthusiastically to attend English language schools in cities like Cebu and Baguio.
The warm-weather Philippines is also a popular retirement spot for Koreans. The USA, unsurprisingly, is the country’s number two source of visitors, reflecting the large number of Filipinos living in the USA. Of all foreign born residents of the USA, in fact, only Mexicans and Chinese are more numerous.
This raises another unique aspect of the Philippines that’s of great interest to airlines: the enormous number of overseas Filipino workers (OFWs) scattered throughout the world, most notably in North America and the Arabian Gulf. By some accounts, roughly a tenth of the entire Filipino population works abroad, contributing vital low-cost labor to their host countries and just as vital remittance money to their home economy. More than >1 million (OFW)s work in Saudi Arabia alone, many in the oil fields.
There are plenty of Filipinos back home too. The country’s total population is approximately 100 million, making it the 12th most populous country in the world and second in the (ASEAN) region behind Indonesia. What’s more, the nation consists of more than >7,000 islands, meaning heavy reliance on air travel. In addition to the capital Manila, centrally-located Cebu as well as Davao in the south are population and economic centers in their own right. And unlike much of the (ASEAN) region, major airports like Manila Aquino, Manila Clark and Cebu are within narrow body range of northeast Asian mega-cities like Tokyo, Beijing, Shanghai, and Seoul. Indeed, this is one major reason—along with the country’s large, mobile population and tourist potential (why Malaysia-based AirAsia (ASW) is establishing its new base at Manila Clark).
The Philippine economy has some bright spots too. Last year, it grew +7%, its highest figure in more than three decades. It was only mildly impacted by the recent global recession and might grow as much as +5% this year according to government estimates (it helps that many Filipino workers are employed in countries with booming oil exports). The new Aquino administration is inviting companies like Singapore’s Changi Airport to invest in infrastructure and attempting to improve the country’s fiscal health by pushing for greater tax compliance. One sector that’s thriving is call center outsourcing, with many USA companies, including several airlines like United (UAL), hiring Philippine companies to handle customer service inquiries. The Philippines is now trying to develop capabilities to handle calls from the USA and elsewhere for Spanish speakers.
For many years, the Philippine market, for all its ups and downs, was largely in the grip of Philippine Airlines (PAL), a carrier with a long history of union disputes and financial trouble. It emerged from a long stay in bankruptcy four years ago and did manage to make money in the 12 months to March 2011, earning a +$73m net profit and a 4% operating margin thanks to the economic boom that benefited nearly all airlines in the region. In the most recent April-to-June quarter, however, it slipped to a -$11 million net loss and negative -2% operating margin. One big problem: the USA (FAA)’s 2008 safety downgrade of the Philippines, which prevents (PAL) from deploying its new 777-300ERs to markets like Honolulu, Los Angeles, San Francisco and Las Vegas. Nor can it add new USA routes until the (FAA) removes the country’s category two safety status, and nor can it fly to Europe until the European Union (EU) removes Philippine carriers from its own safety blacklist. In the meantime, (PAL) is outsourcing non-core activities (prompting union strikes and resulting flight cancellations), launching new routes like Delhi, working with Sabre to upgrade its Information Technology (IT) systems and perhaps entertaining the notion of joining an alliance. It’s also been busy evacuating Filipinos from Middle Eastern and North African hotspots. (PAL)’s greatest nemesis now stems from the home market it once dominated. Cebu Pacific (CEB), which first launched in 1996 but became a (LCC) only in 2005, now commands a leading 45% domestic market share, compared to 24% for (PAL), or 43% including its low-fare Airphil Express (PHP) affiliate. (CEB)’s 2010 Initial Public Offering (IPO) capped off a year in which its operating margin reached an outstanding 20%, among the best in the world, although profits have cooled a bit so far this year. It’s now the only (ASEAN)-based (LCC) serving the giant Beijing and Shanghai markets and has a unique ability to serve both northeast Asia and the (ASEAN) region with narrow bodies, in its case A320s and A319s. In 2008, it purchased ATR turboprop airplanes to tap domestic airports with short runways, and this year, it placed orders for A321-NEOs. (CEB) gets 11% of its revenues from ancillaries, 48% of its bookings from its popular website and gives AirAsia (ASW) a run for its money when it comes to clever marketing (it recently won international attention for a YouTube video showing its flight attendants dancing the safety drill to a Lady Gaga tune.
In many markets, (LCC)s have played a pivotal role in taking people off of buses and onto airplanes. In the Philippines, Cebu Pacific (CEB) has taken people off of sea ferries and onto airplanes, driving strong domestic air travel growth that averaged about +10% a year during the last half of the 2000s. But it’s now growing even faster internationally, most recently launching a Manila - Busan route. It’s now eying Tokyo, Nagoya, and Bali, presenting more potential headaches for (PAL).
The low-cost carrier (LCC) phenomenon is spreading throughout the Philippines not just with Cebu Pacific (CEB) and AirAsia (ASW), whose Malaysian unit already serves Manila Clark from both Kuala Lumpur and Kota Kinabalu. SEAir, another Philippine carrier, is partnering with Tiger Airways (TGR), which itself flies from Singapore to Manila Aquino, Cebu, and Davao. Jetstar (IMU) is also in the mix, with Manila Aquino nonstops to Singapore and Darwin. So are Korean (LCC)s including Jeju Air (JJA) and the Korean Air (KAL) and Asiana (AAR) affiliates Jin Air (JIN) and Air Busan (ABN), respectively. When AirAsia Japan, Jetstar Japan and Peach start flying, the Philippines might be on their radar. And China’s Spring Airlines (CQH) could have markets like Manila and Cebu in mind as well, especially following a recent "open skies" policy adopted by the Philippine government, covering markets outside of Manila anyway. Zest Airways, (RIT) formerly known as Asian Spirit, is another Philippine carrier now serving many domestic cities from Manila Aquino while also linking Shanghai, Seoul, Busan, and Taipei nonstop to Kalibo, a gateway to the popular Boracay Island, and Seoul to Cebu as well.
The growing dynamism of the Philippine market doesn’t stop with (LCC)s, however. (OFW) traffic is a low-yielding but high volume prize for full-service long haul airlines like Singapore Airlines (SIA) and especially Cathay Pacific (CAT), which offer (OFW)s and tourists alike an alternative to Philippine Airlines (PAL). Ranked by capacity (ASK)s flying into and out of the Philippines, Emirates (EAD), Etihad (EHD), Qatar Airways (QTA) and Saudi Arabian Airlines (SVA) are the country’s four largest foreign airlines, carrying planeloads full of (OFW)s. Gulf carriers have in fact driven (PAL) from a number of Gulf markets in recent years, while adding insult to injury by poaching many of its pilots (FC) and other skilled workers. Korean Air (KAL) and Asiana (AAR) are of course big players in the Philippines, as are other East Asian carriers. Three USA airlines serve the market too: Delta (DAL) from Tokyo Narita and Nagoya; Hawaiian (HWI) from Honolulu, and United (UAL) from Guam.
For all of this airline activity, however, the Philippines still has a long way to go before reaching its potential — and in some ways even catching up to its past. (KLM) is now the only European carrier serving the country, with Air France (AFA), British Airways (BAB), Lufthansa (DLH) and Swiss (CSR) all having left. Tourism remains fragmented, with many destinations scattered throughout the country and arguably under-promoted — Boracay just doesn’t have the same global name recognition as competing destinations like Singapore, Bangkok, Phuket and Bali. None of the country’s airlines are airline alliance members. And the World Economic Forum recently ranked the Philippines 94th worldwide in its travel and tourism competitiveness index. Not good!
But AirAsia (ASW)’s upcoming landing marks a promising step forward. Even if Cebu Pacific (CEB) proves the Manny Pacquiao of this boxing match, the fight itself is a good sign that low fares are here to stay, and that the Philippines will yet become the red-hot market its potential suggests it could be.
October 2011: AirAsia (ASW) is adding more domestic frequencies from Kuala Lumpur to Kota Kinabalu, Miri and Langkawi, as well as more frequencies on the busy international route connecting Kuala Lumpur with Singapore. By mid-December, (ASW) will fly to Singapore 13 times a day.
A320-216 (4882, 9M-8QD), ex-(F-WWIO), delivery.
November 2011: AirAsia (ASW) is planning to launch a new premium airline to compete with Qantas' (QAN) boutique full-service airline, dubbed "RedQ."
According to the "Malaysian Sun," the airline will be called "Caterham Jet," after the UK Caterham Cars. It has reportedly secured Bombardier CRJ airplanes, to be fitted in a business (C)-only configuration, that typically operate from airports closer to city centers.
The name comes from the recent purchase by Fernandes of British sports car manufacturer, Caterham Cars. Fernandes car racing Team Lotus will also change its name to the Caterham brand.
Caterham Jet will be based in downtown Subang airport and will initially fly to Bangkok, Jakarta, and Singapore.
(QAN) is apparently battling to get approval to base its RedQ airline in Singapore; Singapore Airlines (SIA) is lobbying to block the deal.
AirAsia (ASW) is continuing to expand its short haul routes within the (ASEAN) region. With 5 new A320s coming this quarter, by the end of the year, (ASW) will launch new service between Kuala Lumpur and Danang in Vietnam, between Bangkok and Colombo in Sri Lanka, and between Bandung and Surabaya to Bali, and Kuala Lumpur to Singapore, Bangkok and several cities within Malaysia.
January 2012: AirAsia (ASW) received the inaugural Air Transport World (ATW) magazine award of "Value Airline of the Year for 2012." It cited that (ASW) continues to re-write aviation in Southeast Asia. Also (ASW) has paved the way for low cost carriers (LCC)s through innovation solutions, efficient processes and a passionate approach to the business of connecting people. The editors cited that AirAsia (ASW) delivers value to passengers by being a travel enabler for millions through lower fares, value to employees and to shareholders and/or investors. It was noted that since 2001, (ASW) has broken travel norms around the globe and has risen to become the world's best value airline with a route network that spans >20 countries.
February 2012: AirAsia (ASW) has added two new destinations from its Kuala Lumpur (KUL) hub. From Monday February 6, Asia’s biggest low-cost carrier (LCC) has added daily flights to Semarang (SRG) in Indonesia, and 3x-weekly flights to Surat Thani (URT) in Thailand. The airline group already serves Surat Thani 2x-daily from Bangkok, but this is the airport’s only scheduled international destinations. Semarang is a new destination for (ASW). Both routes will be operated by (ASW)’s growing fleet of A320s. This brings to 55 the number of destinations served non-stop from Kuala Lumpur by (ASW), with >160 daily departures.
AirAsia Japan, the joint venture (JV) between (ASW) and All Nippon Airways (ANA) has received its Air Operators’ Certificate (AOC) from the Civil Aviation Bureau of the Ministry of Land, Infrastructure, Transport & Tourism.
The new low-cost carrier (LCC), which will begin operations from August, will be based at Tokyo Narita. International services are scheduled to launch October 1. From 2013, it plans to offer A330 services to Thailand, Indonesia, and Singapore.
(ANA) Group (CEO) Shinichiro Ito said, “This is a start of a new age in Japanese aviation history with a full-fledged low-cost carrier (LCC) beginning operations in the largest aviation market in this country this year for the first time. We aim to generate new demand in this industry together as a whole. (ANA) believes that AirAsia Japan will make air transport more accessible and provide a convenient and efficient travel option for a wide range of people.”
May 2012: Air Asia (ASW) receives its 100th A320. (ASW) has gone from its origins as a 2-airplane airline carrying 200,000 passengers annually a decade ago to becoming the Association of SE Asian Nations (ASEAN) region’s leading low-cost carrier (LCC), with the goal of transporting 33 million passengers in 2012.
Air Asia (ASW) Group (CEO) Tony Fernandes said “Outgoing Airbus (EADS) (EDS) (CEO) Louis Gallois has played an enormous role in helping us achieve this growth, and naming the 100th airplane after him is one way to thank this friend of our airline for his warmth, friendship, patience, and especially his belief (which is a key element at Airbus (EDS)).” “What (EDS) did was believe 2 guys from the music industry who had a dream about making it easier to fly, and they have stayed with that belief in helping us deliver on that ambition and transforming travel in Asia forever.”
(ASW) currently has 375 A320s on order, including (EDS)’s A320neo (new engine option) version. Fernandes said (ASW)’s innovative route structure includes 50% of routes that were not previously operated by other carriers, with many of these segments using the A320’s operational flexibility (including opening access to many airports).
“The A320 delivers fantastic reliability, and we work these airplanes very hard: flying them almost 14 hours a day – conducting 8t landings and takeoffs, performing turnarounds in 25 minutes,” he added.
AirAsia (ASW) is considering ordering more A320s until its A320neo airplane arrive, (CEO) Tony Fernandes said.
(ASW) ended last year’s Paris Air Show with a massive order for 200 A320neos, which should be available from 2015.
Fernandes said he “has a sense to advance our order” but questions whether to buy or lease more A320s “because I don’t think our 175 airplanes are enough until the A320neo comes.”
In December, (ASA) will take delivery of an A320 manufactured at the Chinese Airbus facility in Tianjin, becoming the 1st non-Chinese carrier to receive an A320 from this facility.
Fernandes confirmed the airline will do a come-back to Europe when the A350-1000 arrives in 2015. “Hopefully it is not delayed,” he said.
(ASW) transports about 33 million passengers annually. “We have an 80% LF load factor and added +12% capacity last year. We operate 720 daily flights within the system excluding Air Asia X (ASX),” Fernandes said.
Regarding growth opportunities, he said (ASW) will add flights to Jeddah. “I think the Maghreb area is very good for us, like Libya or Egypt. We are looking at Baghdad. There are many places to go,” he said.
June 2012: AirAsia (ASW) Chief, Tony Fernandes said he was handing over his role as head of Malaysia operations to shift focus to oversee (ASW)’s regional expansion.
Fernandes spoke as he introduced his replacement as (CEO) of (ASW)’s Malaysia operations, part of a change that will see him move to Jakarta to oversee the (ASW) family’s fast-growing core Asian market.
In a news conference at (ASW)’s headquarters outside the capital Kuala Lumpur, Fernandes announced he would hand over responsibility for managing (ASW)’s Malaysia-based operation to the company’s finance chief, Aireen Omar.
Fernandes had run those operations since the former music executive plucked the ailing airline from bankruptcy a decade ago and steered it into an industry success story at a time when many other airlines had struggled.
The 38-year-old Aireen, whom Fernandes described as “tough”, said she would focus on keeping operational costs down and opening up new markets to prepare (ASW) for the Southeast Asian open-sky policy in 2015.
The policy will reduce barriers on regional airlines expanding their route networks to other countries and is expected to intensify competition.
Fernandes also confirmed an earlier company announcement that he would move to Jakarta to oversee all group operations.
He added that AirAsia’s Indonesian unit would launch an Initial Public Offering (IPO) in the 1st quarter of 2013.
“We are not abandoning Malaysia. Our homes are here. We do not want to overshadow Aireen. We want a good succession plan and to put our time to develop our regional affiliates,” he said.
He added the world economic slowdown weighing on most businesses is a growth opportunity for his cheap, no-frills carrier.
“Definitely, AirAsia (ASW) will always benefit from a slowdown. We are always growing when things are tougher,” Fernandes, whose maverick style has made him a rising star in the industry, told reporters. “We are now the beneficiaries of a slowdown. We are always growing when there is a slowdown.”
Despite recently abandoning unprofitable long-haul routes to Europe, the airline group’s prospects in Asia are hailed by analysts as bright, and it is refocusing on shoring up its presence in the region against a host of new competitors.
It has set up subsidiary budget carriers in Indonesia, the Philippines and Thailand, and is planning one that will serve the Japanese market.
Besides (ASW) and the other short-haul subsidiaries, the airline group also includes AirAsia X (ASX), which operates longer-haul routes of about 3 hours’ flying time or more.
Last month, (ASW) posted a 4.0% increase in 1st-quarter net profit to +168.0 million ringgit/+$53.4 million on record quarterly revenue of 1.17 billion ringgit.
The UK-based Virgin Group, parent company of Virgin Atlantic Airways (VAA), has sold its 10% stake in Malaysia’s AirAsia X (ASX), the long-haul, low-cost carrier (LCC).
The move comes as the Virgin Group realigns its investments to concentrate more closely on its own brand. “We can confirm that Virgin Group has sold its 10% stake in AirAsia X (ASX),” External Relations Director Nick Fox said. “The terms of the deal remain confidential. We sold to existing shareholders.”
The company added: “The Virgin Group has a large number of new and exciting investment opportunities in development. We now prioritize resources where we can have the most impact and also use the Virgin brand.
“While AirAsia X (ASX) has been a very successful investment for us, it does not use the Virgin brand and we feel it is the right time to exit to focus on our branded portfolio. We are proud to have worked with [AirAsia (ASW) (CEO)] Tony [Fernandes] to develop the initial business case for AirAsia X (ASX) and wish them well for the future.”
(ASX) did not immediately comment on (VAA)’s sale of its shareholding. According to Malaysian financial newspaper "The Edge," the shareholding has been sold to AirAsia (ASW) and Malaysian company Aero Ventures for around $21 million. Aero Ventures is a holding company established by Fernandes and others to invest in aviation-related projects.
(ASX) is an associate long-haul carrier of regional (LCC) Air Asia (ASW). (VAA) originally took a 20% stake in the company in 2007.
July 2012: AirAsia (ASW) is buying a major stake in Indonesia’s Batavia Air (BTV), a move that will make the low-cost carrier (LCC) the 3rd-largest airline group in Indonesia and a serious competitor for Garuda Indonesia (GIA) and Lion Air (MLI).
Batavia Air (BTV) will be acquired by AirAsia (ASW) and its local partner Fersindo for approximately $80 million. The 2 parties already jointly own Indonesia AirAsia (ASW) with Fersindo holding a 51% stake and AirAsia (ASW) the remaining 49%. The same ownership split will be applied to (BTV) and it is widely expected that (BTV) will eventually be integrated into Indonesia AirAsia (ASW) operating a fleet of A320-100/-200s like the remainder of the AirAsia Group airlines. Batavia (BTV) currently operates 5 A320-200s, 1 A321-200, 2 A330-200s, 14 737-300s, 9 737-400s and a single 737-500 mainly on domestic routes but also on international services to Dili Presidente Nicolau Lobato International (DIL), Guangzhou Baiyun (CAN), Jeddah King Abdul Aziz (JED), Kuching (KCH) and Singapore Changi International (SIN) airports. Indonesia AirAsia (ASW) has so far not been very strong in the domestic market operating only around one third of its flights on domestic routes.
AirAsia Investment, a division of the Malaysian parent company, said it is buying 49% of Batavia Air (BTV) in a deal that passed the remaining 51% to Indonesian company PT Fersindo Nusaperkasa to meet Indonesia’s foreign ownership laws. Fersindo also owns 51% of Indonesia AirAsia (AWR).
AirAsia Investment said the deal is subject to regulatory approval, but it expected to complete the acquisition in next year’s 2nd quarter. The 2 investors would pay $80 million in cash for Batavia Air (BTV), including $1 million for the airline’s flying school. “The acquisition of 100% interest in Batavia (BTV) will be carried out in 2 stages (through acquisition of a majority 76.95% stake and subsequently followed by the remaining 23.05% held by its existing shareholders),” said AirAsia (ASW).
Indonesia AirAsia (AWR), which serves mostly international routes from Indonesia, says Batavia Air (BTV), the country’s 4th-largest carrier, will give it an extensive domestic network.
“The Batavia Air (BTV) acquisition provides greater domestic connectivity and an extensive feeder network into Indonesia AirAsia’s existing hubs in Jakarta, Bandung, Denpasar, Medan and Surabaya,” says AirAsia (ASW).
“The addition of Batavia Air (BTV) will also provide AirAsia (ASW) immediate access to an enlarged fleet of airplanes, experienced pilots and flight crew (FC) and increasingly competitive slots at major Indonesian airports at a time when Indonesia’s travel sector is experiencing double-digit growth on the back of rapidly growing consumer demand for air travel.”
AirAsia (ASW) has selected (GE) Aviation (GEC) to design and deploy a network of (ICAO) Required Navigation Performance Authorization Required (RNP AR) flight paths.
The program will include (RNP AR) approach paths for 15 Malaysian airports. “The highly precise paths will improve (ASW)’s operating efficiencies by reducing track miles and fuel burn while also providing airplanes with precise lateral and vertical arrival and missed approach guidance.”
Under the agreement, (GEC) will design, deploy, validate and maintain precise (RNP) procedures optimized for (ASW)’s A320 fleet.
Work is underway at the 1st 2 airports, Kuching and Penang.
AirAsia (ASW) boss Tony Fernandes has confirmed that he is in preliminary talks to buy up to 100 Bombardier (BMB) CSeries CS300 jets in a 160-seat configuration.
"We are taking this very seriously. It is an impressive airplane and we have good feeling about it. The flight crew (FC) and engineers (MT) are very happy about it as well," he said after a tour of the CSeries cabin mock-up, on which the Canadian airframer electronically projected the AirAsia (ASW) logo specially for the visit.
"The advantage is that the CSeries can get into a lot of airports to which we currently do not have access. And there is the price, and this looks like it could be a very affordable airplane. We are a very big Airbus (EDS) customer and so this is a very big decision."
He added that these airplanes would supplement the low-cost carrier (LCC) fleet of A320s. The 200 A320neo it has ordered will replace its existing fleet from 2016, but the CSeries could come in from 2016 as well, said Fernandes.
With the CS300 due to be delivered to its first customer in 2014, a year after its smaller variant the CS100, the development of the airplane and the date of its actual entry into service (EIS) will be crucial to AirAsia (ASW)'s decision, he added.
Even more importantly, Bombardier (BMB) have to prove that the operating cost of the airplane will "make sense" for (ASW), said Fernandes.
"We live and die by cost, and that will be crucial, but we also hope that Pratt & Whitney (PRW), who are supplying the engines, will be as enthusiastic as Bombardier (BMB) about this airplane," he said.
It is still not clear if Bombardier (BMB) will be able to squeeze 160 passengers into the CS300, with the company displaying a slim seat with a 28 inch pitch in the cabin mock-up. This could get up to 150 passengers, although that could change.
"This is a clean sheet design, and we will always be willing to go with the suppliers that the customers choose and reconfigure the cabin according to what they want," says Mike Arcamone President of Bombardier Commercial Aircraft (BMB).
(ST) Aerospace has a 10 year, $80 million AirAsia (ASW) contract to provide component repair management support for 75 A320s under a maintenance by the hour (MBH) program. (ST) already supports 100 of (ASW)’s 175 A320s with component repair (MBH).
(ST), which signed $540 million worth of contracts in the 1st quarter of 2012 and $370 million in the 2nd quarter, is in the process of a $26 million expansion of its facilities at Singapore’s Seletar Aerospace Park. Though the expansion was originally slated for completion at the end of the year, it is now expected to be finished in the 2013 1st quarter.
A320-216 (3173, 9M-AFV), seen in special "Queens Park Rangers" (English Premier League soccer team) colors. A320-216 (5200, JA02AJ), ex-(F-WWIX), leased to AirAsia Japan.
August 2012: AirAsia (ASW) will increase daily, Kuala Lumpur - Yangon service to 2x-daily, on October 8.
The AirAsia Group has promoted Logan Velaitham to (CEO) of AirAsia Singapore. He will prepare AirAsia (ASW) for further growth by working closely with the market, regulators and government agencies in Singapore, the company said.
In May, Logan was appointed as country head of the Singapore operations, where he was responsible for expanding AirAsia (ASW)’s presence in the island republic and Johor.
“Our Singapore operations, which service 45 flights per day, has become a very important part of our operations as we continue to grow in Singapore, which is a critical regional and international hub, “AirAsia (ASW) Group (CEO) Tony Fernandes said.
When news broke that AirAsia (ASW) has signed an agreement to acquire Indonesia's Batavia Air (BTV), it took many (including the country's own Transport Ministry), by surprise.
While it is not often that low-cost carriers (LCC) propose a complete buyout of another carrier, AirAsia (ASW) appears to be taking a step in the right direction, analysts said.
For one, the deal, to be done in collaboration with (ASW)'s Indonesian partner, Fersindo Nusaperkasa, will give (ASW) immediate access to a fleet of 33 airplanes, trained pilots (FC) and crew, and more importantly, increasingly coveted slots at major Indonesian airports.
Capacity in Indonesia, as measured by (ASK)s, has doubled over the last 5 years (from 31.6 billion in 2007 to 65.8 billion in 2012, (ICAO) data shows). This means that there are now 489,430 domestic departures in Indonesia annually, up from 286,063 5 years back.
Batavia Air (BTV) now has about an 8.5% market share, trailing behind leaders Lion Air (MLI) and Garuda Indonesia (GIA), while ahead of smaller players such as Merpati Nusantara Airlines (PNM), Mandala Airlines (MND) and Sriwijaya Air (SJA).
Indonesia AirAsia (ASR), rebranded and launched in 2005, has only managed to capture about 3% of the market so far.
"AirAsia (ASW) decided to acquire Batavia (BTV) because it is one of the few leading domestic airlines in Indonesia and has a strong domestic presence. It also has 4,500 ready-made distribution channels that (ASW) could utilize. Hence, we find all that attractive," said an (ASW) spokesman. He added the acquisition of (BTV) will give the carriers a combined 10% market share.
"Having a local partner in Indonesia is not just pragmatic but essential, given the nature of business life here. Investing in (BTV) immediately affords (ASW) entry into the lucrative domestic market where (BTV) flies to >40 destinations," said Standard & Poor's analyst Shukor Yusof.
While Yusof believes that it will still remain "almost impossible" for AirAsia Indonesia (ASR) to break Garuda (GIA) and Lion Air (MLI)'s grip on the market, Ascend's head of consultancy in Asia, Paul Sheridan said that move will at least allow (ASW) to "better compete" against the 2 largest players.
"The acquisition also adds scale and opens up markets to the purchaser while also removing a competitor," he added.
AirAsia (ASW) meanwhile has not revealed details of how the 2 airlines will work together after the buyover concludes in 2013, saying that it is still premature as due diligence on (BTV) is yet to be complete. All that is known is that (ASW) will hold a 49% stake while Fersindo will take the remaining 51%, through an $80 million cash transaction.
"The low-cost carrier (LCC) market in Indonesia is massive and still under-penetrated in terms of passengers over total population. There are ample opportunities for (ASW) to grow in Indonesia."
Singapore's Tiger Airways (TGR), which in January completed the purchase of a 33% stake in Mandala (MND) says it will "watch and see how the combination will actually deliver in marketing presence and capacity into the market", taking into consideration that (BTV) is already in the market today.
The deal however, will almost definitely place AirAsia (ASW) in a stronger position when the Association of Southeast Asian Nations' (ASEAN) "open skies" agreement is implemented in 2015. Competition is expected to intensify further in the already stiff market when the policy kicks in, reducing barriers for airlines in the region to expand their networks.
Indonesia looks to be the most attractive market with its 240 million strong population and 17,000 islands. Passenger traffic in the country grows by at least +5% annually, driven by demand from the 35 million people from the middle class.
"The country's Gross Domestic Product (GDP) growth rate, its geography, the growth of (LCC)s and the improvements in infrastructure, all create a near perfect scenario for growth in aviation," said Sheridan.
Lion Air (MLI)'s President Director Rusdi Kirana in December said that he is targeting growing (MLI)'s domestic market share from 47% to 60% by 2013.
(MLI) now has a firm order for 201 737 MAX, 129 737-900s and 27 ATR 72-600s. The turboprops are for its regional subsidiary Wings Air (WON) to develop new routes departing mainly from Sumatra, Kalimantan, Sulawesi and Papua islands. This will also make Wings Air (WON) the largest ATR operator worldwide.
Lion Air (MLI) is also set to launch a new premium carrier, Batik Air in 2013, further increasing its competitiveness.
Flag carrier, Garuda (GIA) meanwhile plans to grow its fleet to 194 airplanes by 2015. These include 50 A320s for its low-cost arm Citilink, 25 regional jets, 83 narrow bodies and 36 wide bodies.
Its (CEO) Emirsyah Satar has said that the narrow bodies will mainly be deployed for domestic and regional use. (GIA) is also planning to acquire either the ATR 72 or Bombardier Dash 8-Q400 turboprops to serve low density routes in eastern Indonesia (a calculated move to take on Lion Air (MLI)). "The smaller players are running the risk of being swamped by Garuda (GIA) and (MLI) even without (ASW)'s proposed acquisition. It is very difficult to play catch up so the smaller airlines will need to find a niche and differentiate themselves from the main players."
How successful such acquisitions will be, however, remains to be seen. "It's too early to say how AirAsia (ASW) - Batavia (BTV) will pan out as it is with Tiger (TGR) - Mandala (MND). Advantages are lower fares and lower yield management, while disadvantages we'll have to wait and see, perhaps in the areas of punctuality and safety although these aspects have improved considerably in Indonesia," said Yusof.
September 2012: In November, AirAsia (ASW) will start its newest Chinese route: Bangkok - Xian. Together with AirAsia X (ASX), the group will soon serve 9 cities in mainland China: Beijing, Chengdu, Chongqing, Guangzhou, Guilin, Hangzhou, Nanning, Shenzhen, and Wuhan.
AirAsia (ASW) and its Indonesian partner, Fersindo have received Indonesian government approval on August 29 for the proposed acquisition of Batavia Air (BTV). In a likely related move, (ASW) has announced plans to bring forward delivery dates for some of the 74 remaining A320-200s on order with plans to now take delivery of 21 A320-200s in 2013 and 24 A320-200s in 2014.
Serbian officials have held “serious talks” with AirAsia (ASW) regarding the financially troubled state-owned (JAT) Airways, several media outlets reported, quoting Serbian Minister of Transport Milutin Mrkonjic.
However, (ASW), which operates no European flights, denies it is looking to buy any airline and was just exploring market opportunity in Belgrade. (ASW) (CEO) Tony Fernandes had said previously (ASW) will do a come-back to Europe when the A350-1000 arrives in 2015.
Financially troubled (JAT) posted a loss of -$34.1 million in 2011 and every attempt to sell (JAT) since 2008 has collapsed due to lack of interest, even with extended deadlines. In March, (JAT) secured government guarantees of $12.56 million for a loan to cover short-term liabilities.
AirAsia (ASW) is reported to be near to closing a deal for +100 more Airbus (EDS) A320s.
AirAsia Group (CEO) Tony Fernandes told reporters at the Farnborough Airshow in July that he was in talks with Bombardier (BMB) regarding the potential purchase of CSeries airplanes, but he added, “We’re pretty much Airbus (EDS) oriented” and confirmed that final negotiations were taking place with Airbus (EDS) for between 50 and 100 A320s.
"Reuters" reported that (ASW) was close to finalizing the deal. Although neither Airbus (EDS) nor (ASW) would comment, Fernandes has indicated his fleet growth plans in recent tweets: “AirAsia Indonesia (AWR) has record profit month. We are rocking there. Going to double our fleet there.” He also tweeted: “Big big news as well. Airasia Japan makes money in 1st month. I’m so thrilled. Need more planes.”
(ASW) has already ordered 375 A320s, comprising 175ceos and 200neos; it has taken delivery of 103 of those airplanes.
(EDS) announced that (ASW) will become the 1st operator of sharklet-equipped A320s. The 1st A320 with the fuel-saving wingtips will be delivered at the end of this year.
A320-216 (5272, 9M-AQM), ex-(F-WWII), delivery, and A320-216 (5283, HS-ABZ), ex-(F-WWIH), wet-leased to Thai AirAsia (THA).
October 2012: AirAsia (ASW) has dropped plans to acquire Indonesian carrier, Batavia Air (BTV) after they failed to reach an agreement.
“We will continue to seek strategic partners to develop our business,” (BTV) Chief Yudiawan Tansari told "Dow Jones."
(ASW) and its Indonesian deal partner, Fersindo Nusaperkasa agreed to acquire (BTV) in July. Under the contract, (ASW) would have taken a 49% stake in Batavia (BTV) and Fersindo Nusaperkasa would have taken a controlling 51% shareholding.
(BTV) launched operations in 2002 and operates 1 737-500, 15 737-300s, 10 737-400s, 7 A320s and 2 A330s.
AirAsia (ASW) began serving the Indonesian island of Lombok (LOP), near Bali, from its Kuala Lumpur (KUL) base on October 12. This is the 2nd international route at Lombok, which is only also served by SilkAir (SLK) from Singapore. (ASW) now flies the route from the Malaysian capital 3x-weekly (on Wednesdays, Fridays and Sundays) with its 180Y-seat A320s.
AirAsia (ASW) management stated that they were keen to have more presence in India if the aviation environment and tax structure were conducive and friendly for low-cost carrier (LCC) operations. With the Indian government allowing a foreign direct investment of up to 49%, (ASW) (CEO) Tony Fernandez tweeted "Fantastic news that India has opened up investments to foreign airlines." He said that it was now easier for him to set up an airline in India. (ASW) wanted to take up a stake of 49% in the airline, which was the maximum allowed by the Indian government at that time. Tony Fernandes said that he had been closely observing the developments in India over the past few years and felt that it was the perfect time for him to set up an Indian version of his airline. (ASW) said that it was seeking government approval to establish a joint venture (JV) with two Indian companies, namely Tata Sons and and Amit Bhatia (owned by Telstra Tradeplace). Tata Sons would represent the airline with 2 non-Executive Directors in the airline's board. (ASW) planned to begin operations to Tier 2 and Tier 3 cities in India with Chennai International Airport as it's main base.
Soon after, AirAsia (ASW) announced that the shares of SpiceJet (ROJ), an airline that already had a major presence in Chennai, went down by over >-4.5%. Amber Dubey of (KPMG) India said that the introduction of (ASW) would cause another price war, which would ultimately lead to an increase in air traffic and some consolidation in the Indian aviation sector.
AirAsia initially invested an amount of US$ 50 million in the new airline. (ASW) wanted to begin operations from Chennai and expand it's network in S India, to where (ASW) already operated flights from Malaysia. Tony Fernandes called the (JV) a "marriage made in heaven." He said that that the Tatas know India very well and have an excellent reputation. A tie-up with the company would help (ASW) to operate efficiently. Fernandes said that he would concentrate mainly on the one million south Indians who travel by rail.
In preparation for it's operations in India, (ASW) struck deals with online and offline travel agents throughout the country. Previously, limited distribution of sales had affected the airline's performance in India and (ASW) wanted to avoid that with its Indian subsidiary by all means. (ASW) started selling its tickets through MakeMyTrip, Yatra.com and many other Indian travel websites.
SEE AAI - AIRASIA INDIA,
Sepang Aircraft Engineering (SAE) has signed a contract with Airbus (EDS) for its Airbus Managed Inventory (AMI) solution. (SAE) performs all base maintenance activities for Air Asia (ASW)’s fleet.
AirAsia (ASW) is accepting pilot (FC) applications with valid Malaysia (ATPL)s for Captain and First Officer flight crew (FC) positions.
See FAPA.aero: Pilot Career Conferences & Job Fairs
...For Future & Active Pilots (FC).
November 2012: (ASW) Group Chairman Tony Fernandes has ceased evaluating the Bombardier CS300 because its maximum capacity of 160 seats was a key issue, compared to its A320'S 180Y configuration, which it will continue to operate. (ASW) may consider converting some orders to A321-200s or A321neos.
A report in a local newspaper "The Sun Daily" said (ASW)'s air operator certificate (AOC) has only been extended for 6 months instead of the usual 2 years due to recent audit findings by the Malaysian Department of Civil Aviation (DCA) related to operational manual problems that the (DCA) requires (ASW) to address in the meantime.
December 2012: AirAsia (ASW) expanded its offering to China from Kuala Lumpur (KUL) on December 10, as it launched its 1st route to the capital of the Chinese Yunnan province, Kunming (KMG). Flights on the 2,500 km route are operated with 4x-weekly frequencies in competition with Malaysia Airlines (MAS)’s 5x-weekly flights.
On December 11, (ASW) launched 3x-weekly flights between Kuala Lumpur (KUL) and the SW Chinese city Nanning (NNG), which became (ASW)’s 7th route to China (and 5th from the Malaysian capital). (ASW) operates the route with 180Y-seat A320-200 airplanes, and is the 1st airline to offer direct flights between these 2 cities.
(ASW) has placed a $9.4 billion order for 100 A320 family airplanes. The order calls for 64 A320neo and 36 A320ceo planes, as (ASW) looks to expand its network to the Philippines and Japan. “We have 3 gold mines in Malaysia, Thailand and Indonesia. On the other hand, Philippines and Japan have enormous potential growth. With these added airplanes, it goes in-line with our strategy to further build our already extensive network through new routes and added frequencies and allow (ASW) to maintain its market leadership,” said Tony Fernandes Chairman of (ASW).
The new planes will add to (ASW)’s current all-Airbus (EDS) fleet comprised of 100 A320s.
1st A320-216 (5428, 9M-AQQ - - SEE PHOTO - - "ASW-A320-216 (1st with sharklets - 2012-12"), delivered taking (ASW)'s fleet to 118 (including subsidiaries). Another 97 A320s are on order, plus 264 A320neo variants.
January 2013: AirAsia (ASW) continues its expansion in the market to China, as it added China’s 3rd-largest city, Guangzhou (CAN) to its Kota Kinabalu (BKI) network on December 25, making it the 2nd (after Shenzhen) destination from the Malaysian city to mainland China. Daily departures are operated by (ASW) on the 1,900 km route, using A320-200s.
(ASW) will cease daily, Kuala Lumpur - Colombo service on February 26. It said the move forms part of the “commercial realignment” of the airline.
The AirAsia (ASW) group appears set to make acquisitions this year so it can expand its footprint farther across Asia. Possible takeover targets include Zest Air (RIT) in the Philippines, plus T'way (TWY) and Eastar (EJS) in South Korea. The (ASW) group is also believed to be eyeing potential opportunities to launch a carrier in Cambodia. To help fund its expansion and boost its balance sheet, AirAsia (ASW) plans to float some of its businesses. Its Kuala Lumpur-based, medium-haul low-cost carrier (LCC) AirAsia X (ASX) aims to have an initial public offering (IPO) early in 2013 on the Kuala Lumpur stock exchange. AirAsia (ASW) also wants to float its Indonesian affiliate, Indonesia AirAsia (AWR), on the Jakarta stock exchange.
AirAsia ((IATA) Code: AK, based at Kuala Lumpur International (KUL)) has abandoned plans to set-up a new airline at Singapore Changi International (SIN) saying that costs for the operation would have been too high and the market potential too small following an internal study of the project. (ASW) and its subsidiaries AirAsia Philippines ((IATA) Code: PQ, based at Manila Ninoy Aquino International (MNL)) (RIT), Indonesia AirAsia ((IATA) Code: QZ, based at Jakarta Soekarno-Hatta International (CGK)) (AWR), and Thai AirAsia ((IATA) Code: FD, based at Bangkok Don Mueang International (DMK)) (THA) already serve Singapore 42x-daily from 14 airports in Indonesia, Malaysia, the Philippines, and Thailand.
February 2013: AirAsia (ASW) said its new proposed Indian budget carrier (a joint venture (JV) between AirAsia Berhad (ASW) and the Tata Group) will launch by the 4th quarter, pending regulatory clearances.
AirAsia Group (CEO) Tony Fernandes said India will be the last major part of AirAsia Berhad (ASW)’s joint venture (JV) strategy. Once the new Indian budget carrier starts operations, group airlines will offer flights to the entire continent from Japan to the Middle East.
(ASW) plans to invest about $30 million to $60 million in the new (JV). >60% of India’s domestic market is already controlled by low-cost carriers (LCCs), but Fernandes said the market of 1.3 billion people is hugely under served. “Malaysia has more airplanes than all of the Indian carriers together (this is despite the fact that India has +10 times more people)” he said.
(ASW) will provide the technical and strategic support to the airline and will use its own A320 airplanes, if permitted.
The Tata Group, which has 30% in the (JV) and interests ranging from mobile telephony to beverages, help provide an understanding of the consumer, he said. The new Indian carrier will be based at the southern Indian city of Chennai. The airport is operated by the government-owned Airport Authority of India, unlike the others at Mumbai, Delhi and Hyderabad, which have been privatized.
Fernandes plans to work with the Indian government and the airport companies to get more terminals and facilities for (LCC)s. He said he will not operate to the expensive airports and is confident of filling airplanes on the non-metro routes. Airline analysts in Mumbai said operating costs in India are very high compared to Southeast Asia, due to high fuel taxes and high airport charges. The market fundamentals need to change and further consolidation would likely need to occur for (ASW) to be successful.
Indian government rules require airlines to operate for a minimum of five years as domestic carriers, before being granted permission to fly international. Fernandes said the focus will be on attracting new passengers who have not used air transport before.
He said (ASW)’s India plan has been 3 years in the making. The new company has hired a (CEO) and is expected to announce its senior management team in the next few weeks.
March 2013: Later, India’s foreign investment regulator cleared AirAsia (ASW) Berhad’s proposal to set up a new Indian low-cost carrier (LCC) jointly with the Tata Group. The new carrier still needs to receive an air operating certificate (AOC) from the Directorate General of Civil Aviation. When launched, the new (LCC) will be India’s 8th domestic carrier.
There were some doubts about whether the permission for (FDI) in Indian aviation would apply to new airlines. Much of the action after the government permission was focused around investments in cash-starved Indian carriers. Abu Dhabi-based, Etihad Airways (EHD) is close to picking up 24% in Jet Airways (JPL). However, all doubts were cleared when the Foreign Investment Promotion Board cleared the AirAsia (ASW) proposal.
AirAsia (ASW) Group (CEO) Tony Fernandes tweeted, “The good always win. People and companies with good intentions to create jobs and make life of the average man better, will always win.”
(ASW) will have a 49% stake in the new airline, likely to be called AirAsia India (AAI), while Tata Sons Ltd will hold 30% and Telestra Tradeplace will hold the remaining 21%. The plan is to start with an investment of around $14 million.
Addressing a news conference last week, Fernandes said the airline will start with 3 to 4 Airbus A320s based in the S Indian city of Chennai, and would look to scale up rapidly. The idea is to build a new customer base from millions of people who still do not travel by air. Fernandes said that despite being 50 times the size of Malaysia, all Indian carriers put together still have fewer airplanes than those in Malaysia.
* SEE AAI - AIRASIA INDIA.
AirAsia (ASW) is a step closer to launching a domestic airline in India. India’s Foreign Investment Promotion Board said the Malaysian carrier’s request “to set up a joint venture (JV) company to undertake the business of operation of scheduled passenger airlines has been approved.” The clearance is part of the Indian government’s push to liberalize its policies and open up to foreign investment. International agencies such as (IATA) have for long been critical of these policies. However, recent changes led by Finance Minister P Chidambaram have focused on removing bottlenecks for potential investors. (ASW) still must get an operators permit from the Director General of Civil Aviation (DGCA), India’s civil aviation regulator.
(ASW)’s Indian (LCC) (AAI) is planned as a joint venture with Indian investors The Tata Group and Arun Bhatia of Telstra Tradeplace. (ASW) Founder & Group (CEO) Tony Fernandes has said he aimed to start flying by the end of the year. Hiring of personnel for the venture has already begun and Fernandes has tweeted about finding an Indian (CEO). The plan is to start with an investment of about $30 million and a fleet of 3 to 4 A320s and gradually scale up operations. The Indian carrier will be based in Chennai and begin with providing domestic connectivity in the region.
Shares of the 2 listed Indian carriers, Jet Airways (JPL) and SpiceJet (ROJ), fell on the Bombay Stock Exchange, as news of the approval came. India’s domestic traffic has been declining for the past year, after unprecedented growth in the past 7 years. (IATA) data for 2012 shows that Indian domestic travel shrank by -2.1% compared to 2011 levels. (IATA) blamed the fall on weak economic growth and increasing operational costs, insufficient infrastructure, high taxes and onerous regulation. Capacity growth in the Indian domestic sector remained flat at 0.3% from 16.2% in 2011, while average load factor was 72.9% LF, according to (IATA).
If Malaysia's AirAsia (ASW) can operate a joint venture (JV) in Indonesia, then Indonesia's Lion Air (MLI) can operate a joint venture (JV) in Malaysia. Malindo Air (MDO) has announced its 1st 2 routes and will operate at a service level between AirAsia (ASW) and Malaysia Airlines (MAS) with 737-900ERs.
Malindo Air (MDO) received its Air Operating Certificate (AOC) this month.
As AirAsia (ASW) develops ever more joint ventures outside of its original home market of Malaysia, Indonesia’s Lion Air (MLI) is finalizing plans for creating a joint venture (JV) in Malaysia to be known as Malindo Air (MDO), taking its name from the 1st few letters of Malaysia and Indonesia, and not because it’s an anagram of “Mad Lion”. The local (JV) partner is Malaysia’s National Aerospace & Defence Industries (NADI). Latest indications are that the airline will start operating from Kuala Lumpur International Airport’s (KLIA) main terminal building from March 22 with 3x-daily flights to Kota Kinabalu, followed on March 23 by 4x-daily flights to Kuching. Both of these routes are already well served by Malaysia’s 2 biggest airlines:
The following shows these 2 destinations, with sector length and competition (weekly departures):
Kota Kinabalu (BKI): 1,631 km: AirAsia (ASW) (98); Malaysia Airlines (MAS) (68);
Kuching (KCH): 971 km: AirAsia (ASW) (91); Malaysia Airlines (MAS) (49).
Starting with a fleet of 2 airplanes, Malindo Air (MDO) expects to have 12 737-900ERs in operation within a year, with further domestic routes to Bintulu, Miri, Sandakan and Sibu already listed as “Coming soon" on the airline’s website. However, with a fleet of 737-900ERs, international destinations are also envisaged, with China and India high on the airline’s priority list.
Malindo Air (MDO) is being conceived as less a low cost carrier (LCC) and more a "value airline." Operating from (KLIA)’s main terminal and having a business class (C) product on its airplanest suggests that Malindo Air (MDO) is trying to position itself somewhere between AirAsia (ASW) and Malaysia Airlines (MAS).
Economy (Y) class has 32 inch seat pitch, with 15 kg baggage allowance. Business (C) class has 45 inch seat pitch, with 30 kg baggage allowance. Each seat will have the option of individual in-flight entertainment (for a fee) and will be some free meal service. (ASW)’s slogan of “Not Just Low Cost” further highlights (ASW)’s attempt to position itself as a value airline rather than a pure (LCC).
April 2013: SE Asia’s biggest budget airline, AirAsia Berhad (ASW), has formalized a shareholder and brand license agreement with its Indian partners. AirAsia India (AAI) is to launch by September.
May 2013: AirAsia (ASW) reported a 1st-quarter pre-tax profit of +MYR131.8 million/+$43.3 million, down from +MYR212.4 million in the year ago period. Profit after tax was similarly down from +MYR172.4 million in 1st quarter 2012 to MYR104.8 million. However, operating profit was up +6% to +MYR254.93 million from +MYR240.1 million in the year-ago period. Revenue for the period was up +11% to MYR1.30 billion from MYR1.17 billion for the same quarter in 2012.
(ASW) begins daily, Kuala Lumpur - Lombok service from June 11 (from 4x-weekly).
(ASW) may order an additional 50 A320 jets on top of its existing record order for 475, Group Chairman Tony Fernandes said. The additional airplanes would be mainly for the market in India, where it expects its new affiliate, AirAsia India (AAI) to launch in the 4th quarter. "We've bought a lot of planes but we're still short. We're still leasing planes at the moment, so I was right buying these planes, and we may have to put in another order of 50 or something like that," Fernandes told "Reuters." Initial airplanes for AirAsia India (AAI) would come from the airline's existing order.
July 2013: AirAsia (ASW) increases to 3x-daily, Trichy - Kuala Lumpur from August 30.
(ASW) intends to reduce growth at its Malaysia unit this year, taking only 6 new A320s instead of the previous 10 planned, to the benefit of its Indonesian (AWR) and Thai (THA) subsidiaries. The start-up of AirAsia India (AAI), in partnership with Tata Sons (30%) and Arun Bhatia of Telestra Tradeplace (21%), previously anticipated for September, is almost certainly postponed to 2014 because of regulatory hurdles.
Meanwhile, AirAsia X (ASX), previously the long haul and now having become the medium haul affiliate of (ASW), is hoping to raise $300 million with an Initial Public Offering (IPO) of 10.6% this month to retail investors. (ASX) plans to expand service in N Asia and Australia, as well as to establish a Thai hub using 2 A330-300s for flights to Japan and S Korea in partnership with Thai AirAsia (THA).
2 A320-214s (5098, PK-AZE; 5703, HS-BBE), ex-(F-WWBI & F-WWIQ), deliveries and leased to Thai AirAsia (THA) and Indonesia AirAsia (AWR)
August 2013: AirAsia (asw), Asia’s largest low-cost carrier (LCC) by fleet size, said its net profit slumped -62% in the second quarter due to higher operating expenses and foreign-exchange losses on borrowings. Net profit was +58.35 million ringgit/+$17.75 million in the three months ending June 30, falling year-on-year despite a +5.5% rise in revenue, according to a filing with Malaysia’s stock exchange.
It said challenges remained due to high prices for oil and aviation fuel. “However, barring any unforeseen circumstances, the directors remain positive for the prospects of the group for the 3rd quarter and the remainder of 2013,” it said.
(ASW) had reported a -39% year-on-year drop in profit in the 1st quarter. Rapidly growing (ASW) has set up subsidiary budget carriers in Indonesia (AWR), the Philippines (RIT) and Thailand (THA). It said each of the fledgling airlines saw significant revenue increases in the quarter.
(ASW) has grown from 2 airplanes, when flamboyant boss Tony Fernandes bought the then-struggling airline in 2001, to a total fleet of >120 A320s. “Our traffic numbers show that the (ASW) brand is strong and that we are still able to stimulate demand and retain loyalty among our existing passengers through our low fares and extensive network across the region,” Fernandes said.
(ASW) is expecting nearly +360 more airplanes to be delivered up to 2026. AirAsia (ASW) is planning to launch a no-frills joint venture in India later this year. But it was announced in June that it would terminate a joint venture (JV) with Japan’s All Nippon Airways (ANA) to set up a Japanese budget carrier, AirAsia Japan (WAJ) citing management differences. (ANA) is re-branding the carrier to "Vanilla Air" (WAJ).
AirAsia (ASW) commenced flights on the 2,700 km route from Kota Kinabalu (BKI) to Hangzhou (HGH) on August 1st, making it its 3rd Chinese route from the Malaysian Airport and 26th overall. Daily flights are operated using A320s. In addition to AirAsia (ASW)’s existing offering to Guangzhou and Shenzhen in mainland China, (ASW) also serves Hong Kong and Taipei from Kota Kinabalu.
According to FAPA.aero, AirAsia (ASW) is accepting pilot (FC) applications from flight crew (FC) with valid Malaysia (ATPL)s for Captain and First Officer (FC) positions to be based in Malaysia.
September 2013: Singapore - Indonesia has emerged as 1 of the world’s fastest growing markets with capacity up +40% year-over-year. While capacity increases on the 2 largest routes connecting the 2 countries (Singapore to Jakarta and Bali) have captured most of the attention, secondary routes are growing even faster.
The 3rd and 4th largest Indonesian destination from Singapore, Surabaya and Medan, will see capacity nearly double in November 2013 compared to November 2012. To the 10 other smaller Indonesian destinations served from Singapore, capacity is increasing by a collective +78%.
Low Cost Carrier (LCC) group Tigerair (TGR) has quadrupled its Singapore - Indonesia operation over the last year, growing its share of capacity in the process from about +4% to +15%. Tigerair (TGR) now serves 8 Singapore - Indonesia routes, up from only 2 a year ago.
(ASW) has a 17% share and also now serves 8 Singapore - Indonesia routes, up from 4 a year ago although its capacity has increased a more modest +34% from a much higher base. The Singapore Airlines (SIA) Group is the market leader with a 31% share and will soon serve all 14 routes as regional subsidiary SilkAir (SLK) has added 3 Indonesian destinations.
December 2013: The Malaysia Department of Civil Aviation Authority (DCA) has approved AirAsia (ASW) to begin flying required navigation performance (RNP) flight paths in Malaysia.
Approval was granted following a collaborative nationwide flight path program that began in 2012 between AirAsia (ASW), the (DCA) and (GE) Aviation (GEC). The program was designed to improve operational efficiency at 15 airports in Malaysia, and (GEC)'s Flight Efficiency Services has now delivered (RNP) flight procedures for 7 airports: Penang, Kuching, Langkawi, Johor Bahru, Miri, Sibu, and Kota Bharu, with the remaining 8 to follow.
Performance based navigation (PBN) allows pilots (FC) to use on board avionics to follow a precise track independent of ground-based navigational aids that limit where the airplane can go. (RNP) procedures are an advanced form of (PBN) technology, which can shorten the distance an airplane has to fly during the en-route phase of flight leading to fuel and emissions reduction, according to (GE) Aviation (GEC).
When the (RNP) paths are deployed for all 15 airports, AirAsia (ASW) expects to save up >$305,000 per year on reduced fuel costs. "The (RNP) flight paths can save the airline up to -23 NM [nautical miles] at Kuching Airport and -18 NM at Kota Bharu, compared to the standard terminal arrival," said Giovanni Spitale General Manager of (GE) Aviation (GEC)'s Flight Efficiency Services. "Some of the new flight procedures, including Langkawi, provide airplanes with an instrument approach procedure and vertical guidance to runways that previously had none."
AirAsia (ASW) is hoping to establish a S Korean subsidiary, AirAsia Korea (based at Seoul Incheon), with documentation about to be submitted to the Ministry of Land, Infrastructure & Transport (MOLIT). It is uncertain as to whom AirAsia (ASW) intends to partner in S Korea given that the country's legislation caps foreign ownership of local airlines at 49%. "BusinessKorea" says (ASW) attempted to acquire S Korean low cost carrier (LCC), T'way Air ((IATA) Code: TW, based at Cheong Ju) (TWY), last year only to be thwarted by aforementioned legislation and objections from local S Korean airlines.
February 2014: AirAsia (ASW) has already chosen its partners and executives to head up its new Japanese low cost carrier (LCC) venture. This is (ASW)'s 2nd venture into the Japanese market following the collapse of its AirAsia Japan venture (became Vanilla Air (WAJ)) with (ANA) - All Nippon Airways late in 2013. (CEO) Tony Fernandez said Yoshinori Odagiri, the former (CEO) of AirAsia Japan will head the new carrier, with Osamu Hata, previously a Chief Financial Officer (CFO) at Japan’s Dell unit, taking the top finance role. In terms of the structure of the new carrier, Mr Fernandes disclosed that (ASW) would hold 33% of the voting rights, with flights likely to start next year. The start-up is considering bases in Osaka Kansai and Nagoya Chu-bu, though given the lessons learned from its AirAsia Japan experiment, Tokyo Narita will not be used. (ASW) will fly internationally and domestically using A320-200s and will be capitalized with as much as US$70 million. Some Japanese media outlets have pointed to a possible tie-up with Spring Airlines Japan ((ICAO) Code: SJO, based at Tokyo Narita) (CQJ), though this has remained largely speculative.
(ASW) currently operates 71 airplanes and serves 15 countries, 59 destinations, 92 routes and 402 daily flights.
March 2014: AirAsia (ASW) has added 4 new Malaysian domestic routes to its network. None of the 4 routes is currently operated by any other carrier, and (ASW) will serve them all with between 3x- and 4x-weekly using its 180Y-seat A320s. These are the 1st new routes (ASW) has launched from its Kuching base since November 2008, when it introduced daily flights to Singapore, and increases its route network from Kuching to 10 routes. From Miri, (ASW) will now be operating to 7 destinations this summer.
These routes as follows:
Starting March 20, Miri (MYY) to Kuala Terengganu (TGG), 3x-weekly (1,212 km); March 21 (MYY) to Penang (PEN), 4x-weekly (1,526 km).
Starting March 21, Kuching (KCH) to Langkawi (LGK), 4x-weekly (1,286 km); March 22, (KCH) to Kota Bahru (KBR), 3x-weekly (1,033 km).
April 2014: AirAsia (ASW) has enhanced its network of routes in Malaysia by starting 3 new routes, 1 domestic and 2 international. All of the routes will be served 4x-weekly using (ASW)’s 180Y-seat A320s, and none of the airport pairs are operated by any other carrier, as follows:
Johor Bahru (JHB) to Tawau (TWU) 1,606 km; Kuala Lumpur (KUL) to
Kalibo (KLO) 2,485 km; and Kota Bharu (KBR) to Singapore (SIA) 563 km.
The AirAsia (ASW) Berhad group has signed a $33.5 million in-flight entertainment (IFE) contract with new Malaysian company Tune Box Avionics Berhad. The 7-year agreement is for the use of extended connectivity services on (ASW) airplanes. It is the 1st major deal for Tune Box with “a key [airline] partner and launch customer.”
Tune Box, a new player in the (IFE) market, has the indirect backing of (ASW) (CEO) Tony Fernandes and (ASW) shareholder Director, Kamarudin Meranun. The service will tap into an agreement between Tune Box and Inmarsat to provide SwiftBroadband, although no exact speeds have been released so far.
AirAsia X (ASX) (CEO) Azran Osman Rani said: “This is a big opportunity for us. Starting in the 2nd half of this year, we will use the new service to add more applications and retail offerings to our services.” Azran said the AirAsia group is No 3 globally in terms of in-flight income from ancillary revenue streams, which it wants to increase.
The contract will offer “low upfront capital expenditure compared to traditional in-flight entertainment systems,” as well as the lowest possible service pricing. Both these factors should help AirAsia (ASW) with yield on what has traditionally been a very low margin-per-passenger business.
The new system is also aimed at providing unspecified “additional in-flight services,” (ASW) said, in addition to bringing in extra revenue through the sale of in-flight data roaming packages and online credit card purchases.
AirAsia (ASW) signed an agreement to implement the Airbus Managed Inventory (AMI) service for its A320 and A330 fleets at bases in Kuala Lumpur and Bangkok. The (AMI) service, which underlines Airbus (EDS)’ strategy in offering customized services based on latest industry standards, ensures the automatic and continuous replenishment of high-usage and non-repairable parts at the customer’s facilities.
Thai AirAsia X (TAAX) will launch services June 17 from Bangkok’s Don Mueang International Airport to Korea’s Incheon International. The new airline is a joint venture (JV) long-haul startup between low-cost carrier (LCC), long-haul carrier AirAsia X (ASX) and Thai shareholders. The carrier will initially use 2 Airbus A330-300s on the daily route. “We are very confident that there is enormous demand for this route,” Thai AirAsia X (TAAX) (CEO) Nadda Buranasiri said.
The new (LCC) plans to introduce flights to Tokyo and Osaka in Japan later in the year, but no dates have been given. Due to the expansion of SE Asian tourism and business travel, the decision to open business on the Korean route is a logical one, Nadda said. “Due to the visa exemption agreement for Thai passport holders, Seoul is an accessible and affordable destination for many Thai people,” he said. In 2013, some 400,000 Thai travelers flew to Seoul
(TAAX)’s original plans for a New Year launch were pushed back, partly due to political turmoil in Thailand.
Thai AirAsia (THA) said that while its Airbus A320 airplanes offer good connectivity for short-haul and regional destinations, its new A330 wide bodies will better suit long-haul routes. “Our new potential to reach further destinations will strengthen AirAsia (ASW)’s extensive route network and create more affordable long-haul travel opportunities from Bangkok,” Nadda added.
The new (LCC) will be the AirAsia Group’s 7th subsidiary.
May 2014: AirAsia (ASW) has added another route to Singapore (SIN) this time from Kuala Terengganu (TGG). 3x-weekly flights on the 455 km route commenced on April 22nd using (ASW)’s 180Y-seat A320s, and (ASW) will not face any direct competition. This is only (ASW)’s 3rd route from Kuala Terengganu, which is known locally as Sultan Mahmud Airport, and which in recent years has handled around 500,000 passengers annually. (ASW) launched flights to the airport from Kuala Lumpur in November 2002, but the 2nd route to Miri, was launched only last month.
July 2014: AirAsia (ASW) expanded its presence at Johor Bahru (JHB) with the addition of 3 new routes, all of which are operated by its 180Y-seat A320s. On July 11th, (ASW) inaugurated 4X-weekly flights on the 1,067 km sector to Ho Chi Minh City (SGN) in Vietnam, as well as on the 1,284 km route to Yogyakarta (JOG) in Indonesia. 1 day later, on July 12th, AirAsia (ASW) launched 3x-weekly flights to Lombok (LOP) in Indonesia. There is no competition on any of the 3 airport pairs.
(ASW) has started flying between Kuala Lumpur (KUL) and Cebu in the Philippines. The 2,593 km route was operated by Cebu Pacific Air (CEB) until the end of August 2013. Then AirAsia Zest (RIT) served the market from December 1st 2013 until May 18th 2014. On July 24th, (ASW) started 3x-weekly (Tuesdays, Thursday, Saturdays) flights using A320s. No other carrier serves the market at present.
1 A320-216 (6158, PM-AJP), delivery and 2 A320-216s (6170, HS-BBM; 6178, HS-BBN), deliveries leased to Thai AirAsia (THA).
August 2014: 2 A320-216s (6204, 9M-AJQ; 6215, 9M-AJR), deliveries.
September 2014: AirAsia (ASW) has on September 1st resumed operation from its Kuala Lumpur (KUL) base to Da Nang (DAD) in Vietnam. The 1,613 km route was previously served by (ASW) between December 11th 2011 and July 21st 2013. (ASW) already serves Hanoi and Ho Chi Minh City from Kuala Lumpur. No other carrier operates this airport pair.
November 2014: News Item A-1: AirAsia is looking for a joint venture (JV) partner to tap into growth opportunities in China. "It will be great if we can find a suitable joint venture (JV) partner," said Tony Fernandes (CEO) and Founder of AirAsia (ASW), adding that it would be 1 of the 3 priorities for (ASW) in China in the next 3 years.
Fernandes said while the (LCC) is open to joining hands with those who want to work with it, they must also understand its culture.
As the 1st budget carrier in Asia, (ASW) with its 8 subsidiaries is well-known for its low fares, which could be sometimes -80% lower than traditional carriers. (ASW) also has a convenient network that links it to major tourism destinations in SE Asia.
It is also the 1st foreign low-cost carrier (LCC) flying to China and operates about 350x-weekly to 17 Chinese destinations on 35 routes.
Low-cost carriers (LCC)s have become a hot topic in the last 2 years, after Chinese aviation authorities announced policies to support the industry amid promising market prospects.
In the next 10 years, 25 to 30% of the routes in China will be taken by (LCC)s. The (LCC)s account for just 5% of the entire market in China now, said Darren Hulst Marketing Director for NE Asia of Boeing Commercial Airplanes (BCA).
Fernandes is equally optimistic about the China market and said (ASW) would continue to explore market opportunities in the country. "The market in the 2nd- and 3rd-tier cities has the potential to grow, especially in the western part of China," Fernandes said.
AirAsia (ASW) will add direct flights between the small cities in China and its SE Asian destinations, including Kuala Lumpur, Bangkok, and Bali, Indonesia, and some of these will be totally new routes.
Developing new markets is what (ASW) is good at, Fernandes said, as about half of its current routes in China had no service before it started operations.
Nonetheless, AirAsia (ASW) will still work hard in big cities, Fernandes said, and he hopes to find some way to provide more services in markets like Beijing and Shanghai.
The busy airports in big cities are often challenging for (LCC)s, especially to add services. This is why most of the (LCC)s seek low-cost airports to expand, he said.
However, before expansion in China, Fernandes and his company have to resolve some complaints in China, said industry experts. According to the Civil Aviation Administration of China (CAAC), (ASW) was on the top of the authority's complaints list among foreign airlines in August and September.
The (CAAC) received 7 complaints about (ASW)'s services in September and the complaints covered ticket booking, refunds and luggage.
Fernandes said most of the complaints can be attributed to lack of communication and understanding of the (LCC)'s conditions, but admitted that (ASW) has taken several steps to improve customer services in China.
The slow refund process was mainly due to (ASW)'s bank partner, Fernandes said. "I am working with the bank to resolve the refund problem and promise that our consumers will get the refund in 7 days."
The call-center is another gray area for the company that has triggered several complaints. Fernandes said (ASW) will add instant messengers and social media platforms to improve the efficiency of communication with its passengers.
"Low cost does not mean low quality," he said.
News Item A-2: AirAsia (ASW) said it will launch a regional air pass next year to increase revenue and boost tourism in SE Asia, taking competition in low-cost air travel to a more intense level.
(ASW) Group Chairman Tony Fernandes said the AirAsia (ASW) (ASEAN) Pass will allow travelers to fly to 10 different destinations in SE Asia in 1 month for 499 ringgit/US$148, excluding airport taxes.
He said it will be the "catalyst" for increased air travel within SE Asia and also lure foreign tourists. The pass will be sold from January 15 and further details will be announced at the time.
AirAsia (ASW), which has dominated cheap travel in the region for years, faces rising competition from the proliferation of discounts airlines in Asia, the world's biggest and fastest growing air travel market.
Air travel in Asia is expected to grow +6.7% annually in the next 20 years, from 780 million passengers in 2010 to some 2.2 billion by 2030. Budget aviation now has a quarter of the air travel market in Asia, and growing.
More and more airlines are scrambling to get into the low-cost carrier (LCC) market, betting on rising incomes in Asia and more open skies after 2015, when the 10 members of the Association of SE Asian Nations (ASEAN) aim to create a common economic community.
(ASW) this month reported a -85% fall in its net profit to +5.4 million ringgit/+US$1.6 million for the quarter through September, citing higher operating and finance costs.
Its long-haul arm, AirAsia X (ASX), posted a net loss of -210.9 million ringgit/-US$63 million for the same period, its 4th straight quarterly loss. (ASX) has announced it will delay delivery of new airplanes in the next 3 years and cut flights to Australia. Fernandes said (ASX) was hit by slumping demand in China and Australia after 2 major disasters involving Malaysia Airlines (MAS) 777 airplanes. It was also hurt as the national carrier lowered fares to boost sales after the tragedies, he said.
In March, Flight 370 from Kuala Lumpur to Beijing disappeared with 239 people on board. A search is ongoing in the southern Indian Ocean where it is presumed to have crashed, though no trace has been found.
In July, 298 people were killed when (MAS) Flight 17 from Amsterdam to Kuala Lumpur was shot down over Ukraine.
Fernandes voiced confidence that the airline will return to profitability next year. He said lower jet fuel prices, as well as a rebound in demand, will boost revenue.
December 2014: News Item A-1: AirAsia (ASW) returned to Hyderabad (HYD) on December 8th when it resumed daily A320 flights from Kuala Lumpur (KUL) after a 3 year hiatus. (ASW) launched the route initially in July 2010 before suspending service in December 2011. The 3,009 km route is already served by Malaysia Airlines (MAS).
News Item A-2: ACCDT: Air Asia Indonesia (AWR) A320-200 Flight QZ8501 (last contact at 7:24 am, Sunday December 28th) with 162 on board (155 passengers) has gone missing between Surabaya, Indonesia and Singapore. The airplane had requested a course change due to bad weather (powerful storms) in the area.
On December 30th, bodies of passengers and debris have been located in the Java Sea, close to the last reported position of AirAsia Indonesia (AWR) Flight QZ8501 that disappeared Sunday, December 28th SW of Kalimantan, Indonesian Borneo.
Indonesian National Search and Rescue Agency (BaSARNas) teams spent much of Tuesday recovering bodies and various debris from the sea, including airplane parts that helped authorities identify the airplane. Indonesia Director General Civil Aviation Djoko Murjatmodjo said that on the basis of the recovered bodies and other debris, “it can be confirmed that [the wreckage] is from the (AWR) airplane."
The debris of the airplane was found in the Karimata Strait around 110 nautical miles SW from Pangkalan Bun, the airline reported. There were 168 people aboard the Airbus A320-200 airplane. There were 155 passengers on board, including 137 adults, 17 children and 1 infant as well as 2 pilots (FC), 4 cabin crew (CA) and 1 engineer (MT). The debris included a passenger door and cargo door painted in AirAsia Indonesia (AWR)'s red and white colors. The Airbus A320 was en route from Surabaya, Indonesia to Singapore when it lost contact with air traffic control at 7.24 am Sunday. (BaSARNas) Director, SB Supriyadi said the bodies found were not wearing life jackets.
On January 14th, 2015, A Singaporean search and rescue submarine has found the fuselage of the Indonesia AirAsia (AWR) A320-200 that crashed into the Java Sea on December 28 2014.
News Item A-3: Divers have recovered the flight data recorder (FDR) of the Indonesia AirAsia Airbus A320-200 that crashed into the Java Sea two weeks ago.
Several media outlets are reporting divers have also located the cockpit voice recorder (CVR), but have not yet recovered it.
AirAsia flight QZ8501 lost contact with Indonesian (ATC) during a scheduled flight December 28 to Singapore after reporting bad weather and requesting to climb to a higher altitude. The cause of the crash is not known.
Part of the tail section was pulled from the Java Sea on Saturday, which did not contain the (FDR) and (CVR).
To date, 48 bodies have been retrieved from the crash site, but the main section of the fuselage has yet to be located and retrieved.
Local TV reports have shown the recorder being placed in the hands of the Indonesian regulatory authority who were stating they would be responsible for analyzing the results. They also mentioned it was possible that there could be problems with reading the results.
The Australians have the best means of doing this analysis and have strongly offered their services to resolve what actually happened.
This is more than a case of the "Fox Watching the chickens" and if the Indonesians are allowed to have a simple means of continuing a cover up, the so called "mysteries" will have full means to continue unhampered.
This is more than a case of the "Fox Watching the chickens" and if the Indonesians are allowed to have a simple means of continuing a cover up, the so called "mysteries" will have full means to continue unhampered.
News Item A-4: On January 14th, 2015, a Singaporean search and rescue submarine has found the fuselage of the Indonesia AirAsia (AWR) A320-200 that crashed into the Java Sea on December 28 2014.
"MV Swift Rescue," a Singaporean navy vessel, detected the wreckage using sonar and then sent a remotely operated vehicle to take pictures, according to Singapore Defense Minister Ng Eng Hen. “The wreckage with wings was about 26 m long,” Ng said (posted on Facebook). “Images taken by the remotely operated vehicle show part of the wing and words on the fuselage. We have informed (BaSARNas), the Indonesian search authority, who can now begin recovery operations.”
The discovery of the fuselage comes after the tail section was found (about 2 km from where the fuselage is) and retrieved from the sea, and follows the recovery of the flight data recorder (FDR) and cockpit voice recorder (CVR).
(BaSARNas), which has been leading the flight QZ8501 search and recovery operation, confirmed that the images from the Singaporean navy are of the crashed airplane’s fuselage, citing wording from the livery that is visible. (BaSARNas) plans to send divers down to inspect the fuselage Thursday January 15th.
“The pictures are correct,” AirAsia Group (CEO) Tony Fernandes wrote on Twitter. “Fuselage found. It is so, so sad though seeing our airplane. I’m gutted and devastated.”
January 20th news: Analysis of radar data shows that Indonesia AirAsia (AWR) flight QZ8501 climbed at the extraordinarily fast rate of 6,000 feet per minute before crashing into the Java Sea on December 28, Indonesia Transportation Minister, Ignasius Jonan said.
Speaking at a legislative hearing in Jakarta on the QZ8501 crash, Jonan said the Airbus A320-200 “stalled” after climbing at a speed well beyond it was designed to ascend. “I think it is rare even for a fighter jet to be able to climb 6,000 feet per minute,” Jonan said. He noted that commercial airplanes normally climb 1,000 to 2,000 feet per minute. The (AWR) A320’s climb rate was “beyond normal,” Jonan said, adding that it has not been determined why the A320 was climbing so fast.
QZ8501 lost contact with air traffic control over the Java Sea en route to Singapore from Surabaya. The A320’s fuselage has been found, but has not yet been retrieved owing to poor weather.
Unconfirmed reports from officials at the Indonesian National Transportation Safety Committee (NTSC) investigating last year’s Indonesia AirAsia (AWR) QZ8501 fatal crash have suggested the captain (FC) was not in his seat at the time of the incident.
The co-pilot (FC) is believed to have been flying the airplane at the time, when there were also storms in the area.
The Airbus A320 crashed into the Java Sea enroute from Surabaya to Singapore last December killing 162 passengers and crew. Initial data from the flight recorders has been analyzed, and report is due to be released internally in February 2015.
Additionally, reports have surfaced that the airplane’s flight augmentation computer (FAC) had seen recurring faults over the previous few days. This has given rise to concerns that this critical part of the auto-pilot system may have either been reset incorrectly or even disabled immediately prior to the crash, which occurred as the airplane attempted to evade a thunderstorm.
February 2015: News Item A-1: The AirAsia (ASW) affiliate carriers that cut their networks last year to boost financial performance are seeing the strategy pay off with improving operational numbers.
March 2015: News Item A-1: AirAsia (ASW) will set up a new regional hub in Langkawi, a tourist island off Malaysia’s west coast.
(ASW), the low-cost carrier (LCC) said it will initially run services to regional destinations such as Bangkok, Ho Chi Minh, Jakarta, and Singapore but plans to use the new hub to expand to international destinations in India and China.
“With this breakthrough, we can put 5 [airplanes] here and look to have flights to India, China and (ASEAN) capitals. [Langkawi] should be as big as Bali or Phuket,” AirAsia (ASW) Group co-Founder & (CEO) Tony Fernandes said.
(ASW) said it plans to start operations by the end of the year, and could generate up to 1.5 million passengers a year, which Fernandes said is “unheard of in Langkawi.”
The airport, originally championed to international status in 1991 by the then Prime Minister Mahathir Mohamad, has long been seen as something of a white elephant facility, despite its massive long-haul-capable 13,000 ft runway.
Partly due to poor connectivity (Malaysia Airlines (MAS) pulled international services out in 2006, leaving AirAsia (ASW) and Silk Air (SLK) offering international flights) passenger numbers have not increased significantly in the last decade, a stark contrast to nearby Thai island, Phuket. Some 1.1 million passengers visited Langkawi in 2007, but that had only grown to 1.9 million by 2013, compared to some 11 million visitors to Phuket in 2013.
Mahathir recently criticized the airport operators, Malaysia Airports Holdings Bhd (MAHB) for charging high landing fees at Langkawi that worked against airline operators. “They want to charge high fees for airplanes using the airport. But with the high fees, not many flights will come to Langkawi,” he warned. That appears to have changed in this Malaysian election year, and (ASW) is understood to have seen significant government incentives to base the new hub at Langkawi.
(ASW) said the new facility would generate jobs as both pilots (FC) and cabin crew (CA) would be stationed on the island. “We have been campaigning for a while now, and we are pleased to know the government and the airport are beginning to see the benefits of (LCC)s,” AirAsia Berhad (ASW) (CEO) Ms Aireen Omar said.
“Langkawi is a great airport but under-utilized. We believe [it] has a huge potential to grow as an international hub,” she added.
May 2015: News Item A-1: AirAsia (ASW) on May 7th launched flights from Kuala Lumpur (KUL) to "Vizag" (VTZ), its 7th destination in India
See attached "ASW-2015-05 - KUL to Visag.jpg."
The 2,164 km route to Visakhapatnam (VTZ) will be flown 3x-weekly (Tuesdays, Thursdays and Sundays) using (ASW)’s A320s. Competition is provided by Malindo Air (MXD) which also operates the route with 3x-weekly flights. Malindo Air (MXD) has been operating the route since mid-February.
Spencer Lee Head of Commercial for (ASW) said, “Vizag is an up and rising destination for trade and tourism in India, and we are confident that the time is right for us to enter into this market, building the tourism demand further for Vizag.” According to (ASW), Visakhapatnam, better known as Vizag, is also affectionately referred to as ‘The Jewel of the East Coast’ and the ‘City of Destiny’ in India. Aptly named with its unspoilt stretch of sandy beaches and well-maintained parks, it provides scenic experiences for visitors.
(ASW) now offers 66x-weekly flights across 7 destinations in India from Kuala Lumpur; 21x-weekly to Tiruchirappalli, 14x- to Chennai, 10x- to Kochi, 7x- each to Hyderabad and Kolkata, 4x- to Bengaluru, and 3x- to Visakhapatnam (Vizag).
News Item A-2: AirAsia (ASW) is looking to raise $300 million through an Initial Public Offering (IPO) for its Indonesia AirAsia (AWR) subsidiary. The (IPO), slated for (H1) 2016, would sell off 30% of the airline, which is co-owned by AirAsia (ASW) (49%) and Indonesian operation, PT Fersindo Nusaperkasa (51%).
June 2015: News Item A-1: Air Asia (ASW) is to take over existing Kuala Lumpur - Male schedules and extend Kuala Lumpur - Manila services from July. The Male service was previously operated by AirAsia X (ASX), and the Manila services will complement the group’s AirAsia Zest (RIT) service.
News Item A-2: AirAsia (ASW) will launch new schedules to 2 new secondary hubs from mid-July. The 1st is a 4x-weekly service from Kuala Lumpur’s (KLIA2) to U-Tapao Airport on the eastern Bay of Thailand, which serves rapidly expanding holiday destination Pattaya. The 2nd is from Singapore’s neighboring Johor Bahru to Bangkok’s Don Mueang Low Cost Carrier (LCC) hub.
Subsidiary (LCC), Thai AirAsia (THA) has also announced plans to start international flights from U-Tapao by the end of the year, and to potentially make the airport its new connecting hub for flights to North Asia, including China. “We already have a strong base in China and [Chinese tourists] like coming to Pattaya for holidays, so it makes sense for us to set up a [new] air link at U-Tapao,” (THA) Commercial Director, Santisuk Klongchaiya said. (THA) has operated principally out of Bangkok’s Don Mueang (LCC) airport.
The new service from Johor Bahru to Bangkok also fits with AirAsia (ASW)’s regional hub-based expansion pattern, which saw the selection of Langkawi as its most recent new Malaysian route hub for the region.
“Johor Bahru is the third largest city in Malaysia with tremendous traveling demand,” (ASW) Head of Commercial, Spencer Lee said. He added the new schedule would help boost international traffic to Thailand, in addition to making connections to existing domestic routes to secondary Malaysian destinations such as Miri, Medan, Penang, and Kota Kinabalu.
The new service would also offer passengers a direct south Malaysia - Bangkok service without having to transit through Kuala Lumpur or commute to Singapore as before, he said.
News Item A-3: AirAsia (ASW) will add 3x-weekly, Kuala Lumpur - Goa route to its network in late August.
July 2015: News Item A-1: AirAsia (ASW) and its subsidiaries are continuing to reorganize network schedules to make better use of their existing fleets.
Indonesia AirAsia X (IAAX) (AWR), which had previously concentrated on long-haul routes using its 2 Airbus A330-300s, plans to start domestic Indonesian services with a route between Jakarta’s Soekarno-Hatta International and Ngurah Rai International in Bali. The new schedule will replace some of regional subsidiary Indonesia AirAsia (AWR)’s A320 services between the 2 destinations.
The new wide body services will replace two existing AirAsia (ASW) flights, and will add to the (AWR) international network of Melbourne in Australia, Taoyan in Taipei, and Jeddah in Saudi Arabia.
AirAsia (AWR) has also reopened a new schedule to Dhaka in Bangladesh from its base at Kuala Lumpur International Airport 2. Its original service to Dhaka was canceled in July 2011, following reports of low yields from the primarily migrant worker traveler segment.
(ASW) Head of Commercial Spencer Lee said the new Bangladesh schedule will allow new connectivity into SE Asia for Bangladeshi travelers and will reinforce “strong bilateral ties” between the 2 countries.
“Malaysia and Bangladesh have had strong ties, particularly in trade and investment,” he said. (AWR)’s recent announcement of Langkawi as a hub could also help expand its network to other destinations on the Bay of Bengal.
The new Dhaka service will offer daily A320 services between the 2 countries catering for what Lee called an “under-tapped market” for both leisure and business travelers.
News Item A-2: AirAsia (ASW) launched 4 new services over the course of last week between the dates of July 15 and 17. Of the city pairs, only services from Kuala Lumpur (KUL) to Manila (MNL) will face direct competition, an airport pair that already sees AirAsia Zest (RIT), Cebu Pacific Air (CEB), and Malaysia Airlines (MAS) operate a combined total of 62x-weekly flights. The average weekly frequency of the new routes is 4.5.
New routes are as follows:
Kuala Lumpur (KUL) to Utapao (UTP) A320 4x-weekly; to Kaohsiung (KHH) A320 3x-weekly;
Johor Bahru (JHB) to Bangkok Don Mueang (DMK) A320 4x-weekly;
(KUL) to Manila (MNL) A320 7x-weekly, vs Malaysia Airlines (MAS) 35x-, AirAsia Zest (RIT) 14x-, Cebu Pacific Air (CEB) 13x-.
News Item A-3: AirAsia (ASW) plans to reopen services to the tourist destination of the Maldives, in the Indian Ocean. The new 3x-weekly service will use an all economy (Y), 180Y-seat A320 from late October.
(ASW) ceased flying to Ibrahim Nasir International Airport, Male in the Maldives in February last year. (ASW) cited challenging business conditions as the reason for the pull-back in less than a year of operating the route. “The decision to withdraw from Male was made taking into account our business imperative to build sustainable and profitable routes,” former (CEO) of AirAsia X (ASX) Azran Osman-Rani had said at the time.
The (ASW) service will fly from (ASW)’s home hub at Kuala Lumpur International Airport 2 (KLIA2), (ASW) Head of Commercial Spencer Lee said.
“The flight schedule for this Kuala Lumpur - Maldives route allows travelers from regions such as Korea, Japan, China, Hong Kong, Thailand, and Australia to connect easily to the route,” he said.
It is not yet clear if the flights will be stopover schedules on the Colombo, Sri Lanka route or stand alone schedules returning to (KLIA2) from Male.
News Item A-4: "Singapore’s Changi Airport Signs Up 5 New Airlines for T4" by (ATW) Jeremy Torr, July 13, 2015.
Singapore’s Changi Airport will have five new tenants for its new S$1 billion/$750 million Terminal 4, due to open in the 2nd half of 2017.
The new tenants include three AirAsia subsidiaries (AirAsia Berhad (Malaysia) (ASW), Indonesia AirAsia (AWR) and Thai AirAsia (THA)) as well as flag carriers Korean Air (KAL) and Vietnam Airlines (VIE). They will join lead tenant Cathay Pacific Airways (CAT) as Terminal 4 launch airline customers.
The new terminal is billed as a replacement for the airport’s previous Budget Terminal, but also as an extension of the airport’s full-service provision. It will boost Changi’s overall passenger capacity from 66 million passengers a year to around 75 million in its initial phases, and will eventually have a maximum planned capacity of 16 million passengers.
Changi Airport Group (CAG) said a mix of tenants will occupy the new terminal’s 4 wide body and 17 narrow body gates; more announcements are on the way.
The terminal will feature new, high-tech processing technology for travelers. This will include a complete self-service check-in facility including automated registration and bag drop, facial recognition immigration clearance, and scanned-in self-service boarding processes.
(CAG) management says the new technologies will eliminate the need for manual verification and lead to shorter queuing times and increased flexibility through usage of the self-service kiosks.
“Passengers can expect to pass through the various touch points more smoothly and stress-free, giving them more time to enjoy the facilities,” (CAG) Executive VP Air Hub & Development, Yam Kum Weng said.
(CAG) speculates the new technologies will also boost long-term growth, which has slowed at Changi over recent quarters. The new systems are billed to bring both time saving and lower operating costs for tenant airlines, with some -40% less processing costs compared to other terminal operations.
However, the lack of direct SkyTrain access to the other Changi terminals has seen local low-cost carriers Scoot (SCT) and Tigerair (TGR) hold back on support for the new facility. Transit passengers will need to take buses from T4 to other departure points, something Scoot (SCT) (CEO), Campbell Wilson was highly critical of last year.
News Item A-5: AirAsia (ASW) plans to restart services to Japan in 2016 after its revamped low-cost carrier (LCC) subsidiary, AirAsia Japan returns to the market following the 2013 collapse of a joint venture (JV) with All Nippon Airways (ANA).
The low-cost carrier (LCC) will use new Airbus A320-200 aircraft from AirAsia (ASW)’s order book, with deliveries starting in August. The airline will fly out of its home hub at Chubu Centrair Airport, Nagoya, and is targeting a 6-strong A320 fleet by the end of next year, flying first schedules to Fukuoka, Sapporo, and Incheon, Seoul.
It expects to operate a 16-strong fleet of A320s by 2018, with a route network extending to other Japanese destinations and potentially to Taiwan and near-Pacific Islands, such as Guam and Okinawa.
The new (LCC)’s structure will see parent, the AirAsia Group with a 49% holding, with the remaining equity held by local investors Octave Japan Infrastructure Fund (19%), Rakuten (18%), Noevir Holdings (9%), and Alpen (5%).
The new incarnation follows the pullout of AirAsia (ASW) from the Japanese market in 2013.
The group entered the Japanese market in 2012 in a joint venture (JV) with (ANA), but following a falling out with the local partner, the venture stopped operating as an AirAsia (ASW) subsidiary and was rebranded by (ANA) as a locally managed (LCC), Vanilla Air (VNL).
August 2015: News Item A-1: AirAsia (ASW) reported 2nd-quarter net profit of +MYR243 million/+$64.3 million, a -43.7% year-over-year (YOY) drop from the +MYR367.2 million the company posted in the June 2014 quarter. (ASW) said the drop in profit was due to unrealized foreign-exchange losses on borrowings and one-off costs related to the company’s sale and leaseback of aircraft during the quarter.
(ASW)'s 2nd-quarter revenue grew +1.1% (YOY) to MYR1.32 billion, despite "an absence of marketing activities in the first quarter due to the [December 28, 2014] QZ8501 incident, which affected forward sales in (2Q) 2015," the company said.
Operating expenses rose +1.1% (YOY) to MYR1.08 billion; (ASW) posted an operating profit of +MYR243.5 million, up +39.8% (YOY).
(ASW) saw +6.7% (YOY) passenger growth, to 5.95 million passengers, during the quarter. Traffic increased +6.8% (YOY) to 7.26 billion (RPK)s, capacity rose +(6.6)% (YOY) to 9.1 billion (ASK)s, and the passenger load factor for the quarter came to 79.8% LF.
(ASW)'s (RASK) during the second quarter fell -5.3% (YOY) to [USD] 3.96¢, a drop of -0.22¢. (CASK) was down -10.8% (YOY), to 3.24¢ ((CASK) excluding fuel was up +2.3% (YOY), to 1.81¢. (ASW)'s average fuel price per barrel fell -25.4% (YOY) during the quarter, from $114 to $85.
"As seen in (2Q) 2015, we are beneficiary of the low fuel price," (ASW) Group (CEO) Tony Fernandes said. "As of now, the Group has hedged 50% of its fuel requirements for 2015 at an average cost [USD] $88 per barrel on jet kero and remains unhedged for 2016."
Among AirAsia Berhad's associate/affiliate airlines, Thai AirAsia (THA) reported a swing to profitability, with a second-quarter net result of +THB374 million/+$11 million, marking a (YOY) increase of +MYR692 million. Traffic on Thai AirAsia (THA) grew +25.2% (YOY) to 3.57 billion (RPK)s, as capacity increased +20.3% (YOY) to 4.41 billion (ASK)s. (THA)'s resulting passenger load factor for the quarter came in at 81% LF.
Indonesia AirAsia (AWR)'s quarterly net loss deepened to -IDR486.4 billion/-$36.4 million, compared to (AWR)'s -IDR340.3 billion loss in the 2014 June quarter. (AWR) traffic fell -4% (YOY) to 2.2 billion (RPK)s; capacity was up +1.8% (YOY) to 3 billion (ASK)s; passenger load factor for the quarter was 73.4% LF.
AirAsia Philippines (APG)'s net loss lessened (YOY) to -PHP777 million/-$17.2 million, an improvement over (2Q) 2014 by +PHP555 million. Traffic on the airline increased +3.5% (YOY) to 894 million (RPK)s, capacity decreased -8.1% (YOY) to 1.15 billion (ASK)s, and the resulting passenger load factor for the quarter came to 77.6% LF.
Start-up low-cost carrier (LCC) subsidiary, AirAsia India (AAI) saw a net loss of -INR441.5 million/-$6.92 million for the quarter, but posted operating revenue of INR1.15 billion. 2nd-quarter traffic was reportedly 332 million (RPK)s, capacity was 398 million (ASK)s, and (AAI)’s passenger load factor was 83.4% LF.
News Item A-2: AirAsia (ASW) Founder, Tony Fernandes has said he could be looking to retire as (CEO) of the budget carrier group within two years.
News Item A-3: AirAsia (ASW) has expanded its route network from its main base at Kuala Lumpur (KUL) with the addition of a new service to Goa (GOI) in India. The 3x-weekly service (Tuesdays, Thursdays and Saturdays) on the 3,360 km route launched on August 27 and will be flown by (ASW)’s A320s. The route is not served by any other carrier. Goa becomes (ASW)’s eighth route to India, as it already serves Bengaluru, Chennai, Hyderabad, Kochi, Kolkata, Tiruchirappalli, and Visakhapatnam. In total, AirAsia (ASW) now serves 68 destinations non-stop from the Malaysian capital. For Goa Airport, this is the sixth international destination served after Doha (with Qatar Airways (QTA)), Dubai (Air India (AIN)/(IND)), Kuwait City (Air India (AIN)/(IND)), Muscat (Oman Air (OMR)) and Sharjah (Air Arabia (ABZ)).
News Item A-4: AirAsia (ASW) has raised the stakes in its dispute with the operator of Kuala Lumpur International Airport (KLIA), demanding compensation from the airport over the condition of the apron around the terminal used by the carrier.
(ASW) has sent a letter to Malaysia Airports seeking RM409 million/$107.1 million due to loss and damages incurred while operating from the relatively new terminal 2 (KLIA2). Problems with ground stability have caused subsidence and water ponding in some parts of the pavement near the terminal, and ongoing repair work has disrupted operations. AirAsia has also blamed the uneven surface for aircraft damage.
In its letter, (ASW) said Malaysia Airports “has failed and/or breached its contractual duties and duty of care which has caused AirAsia to … suffer losses.” Furthermore, (ASW) said these breaches “have damaged (ASW)’s brand and reputation as the public perception is that the failings of the facilities are within the control of AirAsia,” since it is the largest user of (KLIA2).
The new terminal was opened in May 2014, and (ASW) claims it was forced to move into it from another terminal despite its objections. The airline’s vocal complaints about the condition of the pavement in aircraft parking and movement areas have escalated in recent weeks.
Malaysia Airports admits that the apron and taxiway are being affected by “differential settlement.” However, it said only 2.3% of the (KLIA2) area has this problem. The terminal and its surrounding surface movement areas have been inspected and have received all relevant safety certifications.
The development of (KLIA2) was accelerated partly to cater to (ASW)’s growth needs, says the airport. This approach meant the affected surface areas require ongoing maintenance work including patching and resurfacing. Work has also begun on longer term solutions. These efforts are on schedule and are expected to taper off over the next five years, Malaysia Airports said.
Separately, Malaysia Airports reported an after-tax profit of +RM11.9 million for the first half of 2015, down -78.6% from the previous year. Excluding its Turkish holdings, the company achieved a profit of +RM102.2 million from its Malaysian operations, up +84.1%. Passenger movements at (KLIA) were down -1.6%.
October 2015: News Item A-1: AirAsia (ASW) is taking steps to reduce the debt owed by its Indonesian joint venture (JV) to meet a government ultimatum, as signs are also emerging that Indonesia’s two AirAsia (ASW) franchises may merge. The Malaysia-based AirAsia (ASW) parent said in a stock exchange filing that it has converted about 2 trillion Indonesian rupiahs/$136 million) of the amount it is owed by Indonesia AirAsia (AWR) into perpetual capital securities issued by the Indonesian joint venture (JV).
News Item A-2: AirAsia (ASW) has made Changsha (CSX) its 10th destination in China to be served from Kuala Lumpur (KUL) with the introduction on October 2 of a new 4x-weekly service. The 3,081 km route, which will be flown (ASW)’s A320s, is not served by any other carrier. Flights depart Kuala Lumpur at 18:00 arriving in Changsha at 22:30. Return flights leave Changsha at 23:15, getting back to (KUL) at 03:45 the following day.
See attached "ASW-2015-10 - KUL to Changsha.jpg."
Spencer Lee, AirAsia (ASW)’s Head of Commercial commented, “China is an important market for AirAsia (ASW), and this is a special year as it is the 10th anniversary of (ASW)’s presence in China. We are excited to introduce this destination to our guests, marking our 10th destination into China for (ASW); and our 10th new route of the year. We are committed towards growing our presence there, and to maintain our status quo as the largest international carrier to fly into China by capacity.” Changsha is already served by Thai AirAsia (THA) from Bangkok.
As a group, (ASW) flies to 15 destinations in China with a total of 35 routes.
News Item A-3: AirAsia (ASW) will install 90 Airbus A320s with in-flight aircraft tracking systems.
(ASW) said the satellite-based, FlightLink system, supplied by Panasonic Avionics Corporation, would allow it to “maintain constant contact with our aircraft, everywhere we fly.” The move comes a month after its offshoot, India AirAsia (AAI) also opted to install in-flight tracking on its aircraft (but using a system supplied by competitor (SITA)).
AirAsia India (AAI) will use (SITA) OnAir’s (AIRCOM) services, which enables airlines to track flights in real time throughout their entire route network.
(ASW) will also be fitting its aircraft with atmospheric sensor systems to help pilots (FC) with improved flight planning and situational display of atmospheric conditions, including those that could precipitate during icing and turbulence.
The (SITA)-sourced tracking system offers real-time flight tracking, but also provides automatic alerts if an aircraft goes outside pre-determined parameters.
The upgrades come just eight months since an Indonesia AirAsia (AWR) Airbus A320 went missing over the Java Sea. Flight QZ8501 was lost with 162 passengers and crew on a flight from Surabaya to Singapore December 28, 2014, following indications of a particularly steep climb to avoid thunderstorms and bad weather.
"Ensuring the highest level of safety and operational efficiency is our top priority," said AirAsia's Group Head of Engineering, Anaz Tajuddin, adding that the new system satisfies the carrier's requirement to "maintain constant contact with our aircraft everywhere we fly."
To date, no official report has been made on the causes of the QZ8501 crash despite demands from airline organizations, including the Association of Asia Pacific Airlines (AAPA).
November 2015: "AirAsia (ASW) Sets U-tapao Record" by Boonsong Kositchotethana, the "Bangkok Post" November 28, 2015.
AirAsia on November 27 introduced four new routes out of U-tapao airport, setting a record in the Thai aviation industry for simultaneous launches.
The launch of scheduled flights to Chiang Mai, Udon Thani, Singapore, and Macau demonstrated the low-cost carrier (LCC)'s confidence in new traffic catchments, which the sleepy navy-operated airfield in Rayong could create.
Friday's launches brought the number of routes AirAsia (ASW) operates through U-tapao to eight and it is on course to introduce the ninth route on December 3 with the connection to Hat Yai.
Altogether, (ASW) will offer 46 flights a week through U-tapao, the largest number of connections by a single airline group in the 39-year history of the airport, which served as a major staging and refuelling base during the Vietnam War.
(ASW) is largely enthusiastic about the market response to U-tapao as an air gateway to the Eastern Seaboard, particularly Pattaya.
Tassapon Bijleveld (CEO) of Thai AirAsia (THA), declared the intention to "gradually" introduce more routes through the airport. A few more domestic routes such as Ubon Ratchathani, Khon Kaen, and Chiang Rai are on the radar screen, he said.
Internationally, (THA) will be studying the viability of linking U-tapao with India, since many Indians are flocking to Pattaya for holidays, said Mr Tassapon.
AirAsia (ASW), through Thai AirAsia (THA)'s sister airline, AirAsia Bhd of Malaysia, began to descend to the largely empty U-tapao airport from Kuala Lumpur on July 15, triggering traffic flow unseen at the airfield, since it was handed over by the USA in August 1966.
(THA) has already stationed two A320-200s at U-tapao, which is now (THA)'s 5th base to support its burgeoning flight activities. Mr Tassapon said the load factors for the four routes launched November 27 achieved an average of 80% LF, which is satisfactory.
He credited Pattaya City and the Tourism Authority of Thailand for supporting (ASW)'s bid to make U-tapao a new gateway to the east coast.
December 2015: News Item A-1: Malaysian low-cost carrier (LCC) parent group AirAsia Berhad reported a net profit of +MYR160.4 million/+$35.9 million for the 2015 3rd quarter. The company posted revenues of MYR2.8 billion and an operating profit of +MYR332 million.
AirAsia Berhad’s operating segments include associate/affiliate carriers Malaysia AirAsia (ASW), Thai AirAsia (THA), Indonesia AirAsia (AWR), AirAsia Philippines (APG) and AirAsia India (AAI). In spring 2016, the group’s reconfigured subsidiary AirAsia Japan (WAJ) will launch service from Nagoya’s Chubu Centrair International Airport.
“We are witnessing the positive effect of rational pricing and its impact towards passenger travel patterns,” AirAsia Berhad (CEO) Tony Fernandes said in his quarterly outlook statement. “In Malaysia, all signs report toward rational and sustainable growth in the coming quarters, as other players have significantly reduced capacity and rationalized their routes, while the irrational price war that took place in the past is over.”
Citing increased demand by Chinese travelers since May 2015, a +21% year-over-year (YOY) surge, as well as low fuel prices, “we see a great end to the year and a light at the end of the tunnel for [our] Malaysian operations after a series of headwinds that affected our operations,” Fernandes said.
The consolidated AirAsia Berhad group showed passenger growth of +20% (YOY) to 12.88 million passengers during the quarter. Traffic demand increased +22.4% (YOY) to 15.19 billion (RPK)s, as capacity grew +18.1% (YOY) to 18.86 billion (ASK)s. The group’s load factor for the quarter came to 80.5% LF, up +2.8 points (YOY).
Malaysia AirAsia (ASW) posted a 2015 3rd-quarter net result of +MYR166.1 million/+$37.1 million, up +61.4% (YOY) from +MYR102.9 million in (3Q) 2014. Traffic on (ASW) was up +19% (YOY) to 7.77 billion (RPK)s as capacity increased +12% (YOY) to 9.57 billion (ASK)s. (ASW)’s resulting passenger load factor for the quarter was 81.2% LF.
Thai AirAsia (THA) reported a swing to profitability, with a 2015 third-quarter net result of +THB437.1 million/+$12 million, marking a (YOY) increase of THB882 million. Traffic on (THA) grew +23% (YOY) to 3.65 billion (RPK)s, as capacity increased +25% (YOY) to 4.45 billion (ASK)s. (THA)'s resulting passenger load factor for the quarter came in at 82.1% LF.
Indonesia AirAsia (AWR) had a 2015 3rd-quarter net loss of -IDR88.61 billion/-$6 million, falling from a +IDR26.72 billion net profit in (3Q) 2014. Traffic on (AWR) grew +4.4% (YOY) to 2.3 billion (RPK)s; capacity increased +9.4% (YOY) to 3 billion (ASK)s, resulting in a passenger load factor of 76.2% LF.
AirAsia Philippines (APG) reduced its 3rd-quarter net loss (YOY) to -PHP934.5 million/-$19.9 million, an improvement over (3Q) 2014 by +PHP491.3 million. (APG)’s traffic increased +37.1% (YOY) to 950 million (RPK)s as capacity grew +4.8% (YOY) to 1.2 billion (ASK)s; passenger load factor came to 82.3% LF for the quarter.
AirAsia India (AAI) deepened its 3rd-quarter net losses to -INR652.5 million/-$9.8 million, compared to its (3Q) 2014 loss of -INR 529.7 million. Traffic on the start-up airline was at 502 million (RPK)s for the quarter, capacity was at 663 million (ASK)s and its passenger load factor came in at 75.7% LF.
News Item A-2: AirAsia Berhad (ASW) plans to launch its latest direct flight between tier-2 Chinese city Guangzhou and Langkawi, Malaysia at the end of January 2016.
The choice of tourist destination Langkawi for the group's latest international route underlines the company's strategy to develop services on less heavily serviced routes. The schedule will see 4x-weekly A320 departures.
AirAsia (ASW) (CEO) Aireen Omar said (ASW) is focused on expanding its connectivity into China, especially 2nd-tier cities such as the recently launched Changsha - Kuala Lumpur service.
This secondary city approach is echoed by the AirAsia Group’s introduction of flights from Changsha - Bangkok operated by Thai AirAsia (THA); a Krabi (Malaysia) - Guangzhou (China) service by AirAsia (ASW); and a Wuhan (China) - Kota Kinabalu (Malaysia) service, also by (ASW).
Additionally, the Thai subsidiary (THA) has introduced new international schedules from its newest regional hub at Thailand’s U-Tapao International Airport to Macau, Singapore, and is reportedly looking at new routes to India. “We will continue to add more aircraft orders as we go further because we are not only growing in Malaysia, but also in Thailand, Indonesia, the Philippines, India, and hopefully in Japan,” Omar said.
(ASW) is scheduled to take delivery of its 1st Airbus A320neo aircraft from the 2016 2nd half, which Omar said will be used to expand existing regional business as well as act as fleet replacements.
News Item A-3: The Indonesia Ministry of Transportation has begun inspecting Indonesian-registered Airbus A320 aircraft for potential issues with Rudder Travel Limiter Units (RTLU)s, following the findings on the fatal crash of Indonesia AirAsia (AWR) flight QZ8501 in December 2014.
The A320-200 crashed December 28, 2014 with 162 people on board, while flying through rough weather from Surabaya, Indonesia to Singapore.
Crash investigators attributed a causal factor to a faulty connection in the A320’s (RTLU).
“We will check the technical documents, the operation documents and the aircraft itself,” Ministry spokesperson Muhamad Alwi said.
The Ministry has allocated 18 inspectors for the audit, which will cover at least 75 aircraft registered to local carriers, including AirAsia (ASW), Lion Air (MLI), Garuda (GIA), Citilink (CNK) and Batik Air (BTK).
The Ministry said it aims to complete all inspections by June 2016, but will allow aircraft operators to continue normal operations until then.
However, if any aircraft Maintenance Repair & Overall (MRO) logs indicate “repetitive trouble,” such as the warning error messages experienced by QZ8501 prior to the accident, the aircraft will be grounded, according to the Ministry.
Transport Minister Ignatius Jonan recently described Indonesia’s aviation industry and its official oversight as having “failed to meet the standards of transport safety. A number of aviation accidents occurred in Indonesia during 2015; not a few of those accidents were fatal,” Jonan said at the opening meeting of the Ministry of Communications in Jakarta.
January 2016: News Item A-1: AirAsia (ASW) has added 3 new international routes from 3 different airports in Malaysia. None of the routes face direct competition. Wuhan (WUH) in China is a new destination for (ASW), while Guangzhou (CAN) in China, and Ho Chi Minh City (SGN) in Vietnam are now served from 3 different airports on (ASW)’s network. Wuhan becomes (ASW)’s 75th and newest destination (though it is already served by Thai AirAsia (THA). It is also (ASW)'s 9th destination in China, joining Changsha, Chongqing, Guangzhou, Guilin, Hangzhou, Kunming, Nanning, and Shenzhen. (ASW) now serves 16 destinations from Kota Kinabalu (BKI), 9 from Penang (PEN), and 4 from Langkawi (LGK).
Routes as follows:
Kota Kinabalu (BKI) to Wuhan (WUH) A320 7x-;
Langkawi (LGK) to Guangzhou (CAN) A320 4x-;
Penang (PEN) to Ho Chi Minh City (SGN) A320 4x-.
News Item A-2: Messier-Bugatti-Dowty’s new plant in Sendayan, Malaysia, delivered its 1st carbon-disk brakes to AirAsia (ASW) for an A320. The plant specializes in carbon disks, spans 10,000 sq m and has 80 employees, with plans to expand to 150 by 2018.
February 2016: News Item A-1: "AirAsia Group Carried +11% More Passengers in 2015", by Business News, February 15, 2016.
The AirAsia group carried 50.68 million passengers in the 2015 financial year (FY15), up +11% from 45.58 million passengers in the preceding year.
In its preliminary operating statistics, AirAsia (ASW), the low-cost carrier (LCC) said its capacity rose +9% to 63.34 million versus 58.16 million, previously.
“The load factor rose by +2% points year-on-year (YOY) to 80.5%,” the company said.
It said AirAsia (ASW) posted a +10% increase in the number of passengers carried last year to 24.25 million, gained +7% in capacity to 30.08 million and added +2% points in load factor.
As for its units in other countries, AirAsia India (AAI) saw the number of passengers it carried soared by +324% to 1.46 million in 2015 versus 345,298 in 2014, while capacity increased by +322% to 1.82 million from 430,560 and load factor gained one percentage point (YOY) to 81% LF.
However, Indonesia AirAsia (AWR) recorded a decrease of -17% in the number of passengers carried to 6.52 million last year compared with 7.85 million previously, while capacity was down -13% to 8.76 million from 10.04 million and load factor eased 4% to 74% points (YOY).
For the 4th quarter (Q4) ended December 31, 2015 (4Q) 2015), the AirAsia group’s load factor increased by +5% points to 83% LF compared with the same quarter a year ago.
It said the number of passengers carried in (Q4) rose by +12% (YOY) to 13.5 million, ahead of the +6% increase in capacity.
“At the end of 2015, the group has a fleet size of 170 aircraft (171, including 1 aircraft that was delivered to AirAsia Japan (WAJ) in (4Q) 2015, which has not commenced operation),” it said.
It said (ASW) posted a load factor of 85% LF in (4Q) 2015, up +7% points (YOY).
AirAsia (ASW) said demand exceeded capacity with +10% increase in the number of passengers carried at 6.5 million and +1% (YOY) increase in capacity.
“(ASW) ended the quarter with a total fleet of 80 aircraft. 3 new routes commenced operations during the quarter: Kuala Lumpur - Male, Changsha, and Colombo. Frequencies were added on 3 routes: Kuala Lumpur - Kochi and Jakarta; and Johor Baru - Ho Chi Minh City.”
Meanwhile, Thai AirAsia (THA) recorded a load factor of 82% LF in (4Q) 2015, up +3% points (YOY), while Indonesia AirAsia (AWR) maintained its load factor at 80% LF, it said.
As for the Philippines’ AirAsia (APG), it said, its load factor was up by +9% points to 81% LF and AirAsia India (AAI) recorded a load factor of 84% LF, +1% point better compared with the same period last year.
News Item A-2: AirAsia (ASW) will launch 3x-weekly, Penang - Yangon A320 service on March 22.
March 2016: News Item A-1: Malaysia-based low-cost carrier (LCC) AirAsia (ASW) reported a (4Q) 2015 net profit of +MYR554.2 million/+$131 million, reversed from a net loss of -MYR428.5 million in the year-ago period. (ASW) said the results were due to lower fares that had stimulated the market and led to a boost in overall passenger numbers, as well as a windfall due to the removal of fuel surcharge.”
Revenue rose +47% to MYR2.17 billion compared to (4Q) 2014, although (CASK)s rose +4% to MYR0.14 year-on-year. (ASW) attributed the rise in costs mainly to large increases in aircraft operating lease expenses and a +53% rise in Maintenance Repair & Overhaul (MRO) costs year-over-year.
Nonetheless, (ASW) recorded an operating profit of +MYR800.69 million, up +276% on (4Q) 2014, and a net operating profit of +MYR694.33 million, up significantly year-on-year. This was partly due to a traffic growth with 6.47 million passengers carried, which boosted the airline’s overall (4Q) 2015 load factor to “a record high” of 85% LF, up +7% on the previous year’s figures.
A +40% jump in (RASK)s gave MYR0.22 per seat.
AirAsia (ASW) (CEO) Ms Aireen Omar said the results were “very good indeed for the Malaysian operations,” and cited ancillary revenue as another bright spot for the carrier. Ancillary revenue as a whole increased +14% year-on-year, with baggage fees providing 43% of that. Omar said flight insurance income grew by >40% year-on-year.
News Item A-2: AirAsia Berhad (ASW) has introduced 3x-weekly, Penang, Malaysia - Yangon, Myanmar services.
AirAsia (ASW) (CEO) Ms Aireen Omar said the new service was the latest move by (ASW) to expand operations out of the Penang island facility. She described the new service as “another milestone in our commitment to grow Penang as our northern hub.”
The new service is the only flight connecting the 2 destinations. It will consolidate (ASW)’s latest push to move more of its services to 2nd-tier Malaysian hubs such as Kota Kinabalu, Borneo, and Langkawi (both situated (like Penang) on islands off the coast of Malaysia).
Earlier this year, (ASW) introduced new Kota Kinabalu - Wuhan, China; Langkawi - Guangzhou, China; and Penang - Ho Chi Minh, Vietnam services.
The new Yangon service will add to (ASW)’s existing services to the Myanmar capital, which include 2x-daily flights from Kuala Lumpur, Malaysia and 4x-daily flights from Bangkok, Thailand.
Omar said recently (ASW) would continue to add to its existing regional network, and would use its first Airbus A320neo aircraft (due late 2016) to service its expanding operations.
April 2016: News Item A-1: AirAsia (ASW) has signed a multi-million dollar deal with UK-based Mirus Aircraft Seating to retrofit its entire Airbus A320 fleet with lightweight composite-based seats. The deal, which was signed at the Aircraft Interiors Expo (AIX) in Hamburg, will see Mirus deliver “tens of thousands” of the seats, the company said. Mirus was founded in February 2015.
Mirius said its new Hawk seat uses composite technology to reduce moving parts and complexity, enabling a near -40% weight reduction compared to conventional metal-framed seating. The makers also claim the seat offers space savings due to its slimline design.
(ASW) said the seat will also be fitted to (ASW)’s upcoming 200-strong A320neo deliveries, pending full regulatory approvals.
The composite-manufacturing company is based on the premises previously occupied by Caterham Technology & Innovation, the Formula 1 racing team-related business previously owned by (ASW) (CEO) Tony Fernandes. “Through Tony’s association with Formula One, we have been able to work with Mirus, who [have] developed these innovative seats,” said (ASW) Head of Engineering Anaz Ahmad Tajuddin. “We admire [Mirus’] willingness to think beyond the boundaries of traditional economy seat design.”
Tajuddin said the new design reflected Mirius’s expertise in composite materials, and would help achieve a more ergonomic passenger seat while ensuring AirAsia (ASW)’s aircraft are as economical and fuel efficient as possible.
News Item A-2: The Malaysian Transport Ministry is to upgrade the Miri Airport in Sarawak, Malaysia, to handle the increasing numbers of international passengers. The MYR285 million/$72 million upgrade will see the construction of separate departure and arrival halls, and the provision of further covered walkways and apron extension.
Malaysian Transport Minister, Liow Tiong Lai said the upgrades will enable the airport to handle up to 4 million passengers annually, up from the present 2 million design capacity. “The [upgrade] project is waiting for approval from the Finance Ministry. If it is given a green light, it will be implemented next year,” he said.
The airport sees >60 scheduled flights a day by AirAsia (ASW), Emirates (EAD), and by (MAS)wings.
Liow said the upgrade would be relatively easy, as Miri already had most of the requirements for international passenger handling. “Upgrading Miri Airport to Miri International status is not much of a problem, as it already has immigration counters and flights coming in from overseas,” he added. The upgrade plan follows the recent announcement of a new Sarawak government-backed direct schedule between Hong Kong and Kuching by Hong Kong Airlines (CRY), due to start late April.
A Sarawak government spokesperson said the new services will “help spur movement of tourists and business (C) travelers between Southern China [and] Sarawak, and vice versa.”
News Item A-3: "Stranded Rayani Air passengers get Fare Assistance" by (ATW) Jeremy Torr, April 13, 2016.
Following the grounding of Malaysia-based start-up Rayani Air (RKT) on compliance grounds this past weekend, stranded passengers have been given assistance by other airlines, including Malaysia Airlines (MAS) and AirAsia (ASW).
(RKT), which started operations in December 2015 had been given prior warnings by Malaysia’s Department of Civil Aviation (DCA) and was grounded on the basis of operational noncompliance over the weekend. Prior to the suspension, the (DCA) issued 2 warning letters over general noncompliance and poor service levels.
(RKT) canceled all flights late last week, citing pilot (FC) action. However, the (DCA) issued a statement saying this contravened its air operator’s certificate (AOC), as “an airline [must] provide at least 6 months’ notice to the (DCA), if it intends to cease operations.”
The (DCA) said it would undertake a full administration and safety audit of Rayani Air (RKT)’s state of operations, and will investigate the airline’s record to date, along with the operational record of its 2 737-400s.
Passengers affected by the grounding will be able to apply to Malaysia Airlines (MAS) for discounted fares on the same routes as booked with (RKT), providing they can show proof of booking. “We are offering affected passengers special fares to connect them to their intended destinations,” Malaysia Airlines (MAS) (CCO) Paul Simmons said.
AirAsia (ASW) has made a similar offer, enabling all Rayani Air (RKT) passengers affected by the suspension to take a -50% discount on its fares to Langkawi, Kota Bharu, Kuching, and Kota Kinabalu, through April 27. “We empathize with all the affected (RKT) passengers and we hope that this 50% discount will help ease them in making new travel arrangements,” AirAsia (ASW) Head of Commercial Operations Spencer Lee said.
May 2016: News Item A-1: Malaysian low-cost carrier AirAsia Berhad (AirAsia) posted +MYR877 million/+$222.3 million in (1Q) 2016 net income, a nearly six-fold increase year-over-year.
AirAsia Berhad (CEO) Ms Aireen Omar said the results were due to a positive momentum driven by low fares and a resulting sustained increase in the number of passengers.
Revenue rose +31% year-over-year (YOY) to MYR1.7 billion, producing an operating profit of RM521.14 million, more than doubling (ASW)’s (1Q) 2015 operating income.
Passenger traffic rose +17% (YOY) to 6.48 million passengers in the quarter. (ASW)’s traffic for the quarter was up +26% (YOY) to 8.56 billion (RPK)s; capacity grew +12% (YOY) to 10.07 billion (ASK)s. (ASW)’s 1st-quarter load factor was 85% LF, up +10 points (YOY).
Revenue per available seat-km (RASK) rose +17% compared to the corresponding quarter in 2015, to MYR0.17. Cost per available seat-km (CASK) fell by -1% (YOY) to MYR0.12, partly due to the cut in the fuel costs which fell -23% compared to (1Q) 2015.
(ASW) reported increased ancillary revenue from the (1Q) 2015, with a +22% increase in baggage charges (45% of the total ancillary revenue).
“The positive momentum we have seen for our Malaysian operations has continued well into the current quarter. Our improved (RASK) proved that low fares stimulate the market,” Omar said.
News Item A-2: AirAsia (ASW) said increased airport costs at important Malaysian regional center, Kota Kinabalu have contributed to its decision to suspend one of its flights, underlining (ASW)’s call for a dedicated low cost carrier (LCC) terminal.
The group’s Indonesian affiliate will cut its 3x-weekly service from Kota Kinabalu to Bali, Indonesia from June 23. AirAsia (ASW) (CEO), Aireen Omar said “stagnant market growth” means revenues are not high enough to offset costs, and “operational costs have increased quite substantially” for (ASW)’s services in Kota Kinabalu’s Terminal 1.
(ASW) long resisted the airport’s request that it move from its previous location in Terminal 2 into the main Terminal 1 following renovations. However, in November it finally agreed to the shift.
Omar said the need for a dedicated (LCC) terminal at Kota Kinabalu is “inevitable.” It is AirAsia (ASW)’s intention to build the airport into a regional hub and “further grow our connectivity” there, and a (LCC) facility would ensure it can do so successfully, Omar said.
June 2016: News Item A-1: Malaysian low-cost carrier (LCC) AirAsia (ASW) (CEO) Aireen Omar said growth potential across the Association of Southeast Asian Nations (ASEAN) region is still good, despite some signs of a slowdown.
Speaking to Malaysian national news agency Bernama, Omar said, “There are potentials for more connectivity as well as frequencies” throughout the 10-country regional grouping.
However, she said slow progress on the (ASEAN) "Open Skies" agreement across (ASEAN) members has affected potential expansion rates. “Had Open Skies policy and liberalization of the sector taken place earlier, AirAsia (ASW) would have expanded at a much faster pace,” she said.
Omar cited harmonization of standards, licensing, and safety as key factors needing attention in the region’s aviation sector, but said that even without a fully implemented regional Open Skies policy, (LCC)s like (ASW) had successfully used joint ventures (JV)s to expand regionally.
(ASW) Founder Tony Fernandes cited “age-old regulations [that] cripple expansion of airlines in the region” as a contributory factor to slower-than-potential growth, but noted regional market still has potential for expansion.
On the increasing numbers of (LCC)s operating in the region, Fernandes said there is “no such thing as overcrowding” in the market, and welcomed new (LCC)s. He added, “Market liberalization and openness are all about competition and [that’s] always good.”
He said there are only some 400 local aircraft operational in (ASEAN), “while in Europe there are about 3,000 and we are a much bigger [market].”
Nonetheless, Fernandes said existing localized operational regulations “lead to capital disruption and under-investment in the sector” for regional aviation operators. “In some places we want to put more capital, but [we] are prevented from doing it due to outdated regulations,” he said.
News Item A-2: AirAsia (ASW) is backing a campaign to rename the 2nd terminal at Kuala Lumpur International Airport (KLIA) from (KLIA2) to Low Cost Carrier Terminal 2 (LCCT2 or LCC2), to emphasize its role as (ASW)’s main hub.
(KLIA) operator Malaysia Airports Holdings Berhad (MAHB) opposes the move.
The campaign claims “(KLIA2) doesn't mean anything. (LCCT2), on the other hand, is synonymous with low cost.”
AirAsia (ASW) Founder Tony Fernandes said that as Kuala Lumpur grows toward becoming Southeast Asia’s main connecting hub, “we want the world to know that the best value fares are here in Malaysia. I urge (MAHB) to stop denying the fact that [KLIA2] is a low-cost hub,” Fernandes said. He added that using the (KLIA2) name is allowing the advantages of the facility to “go to waste.”
However, Malaysian Minister of Transport Liow Tiong Lai has said the renaming is “neither necessary nor practical.”
(ASW) (CEO) Ms Aireen Omar noted that AirAsia (ASW) makes up some 95% of the terminal’s operations. She said (ASW) flew >2.3 million guests into the airport in 2015. She said that of those, 1.3 million had taken connecting flights from (KLIA2).
“In view of the high volume of traffic brought into Kuala Lumpur [by] the AirAsia Group, we need (MAHB) to acknowledge the fact that Kuala Lumpur is a true low-cost hub with enormous potential,” she said. “[MAHB] needs to change their mindset to facilitate the need of a low-cost model and its rapid growth.”
Omar cited the example of Bangkok’s Don Mueang International Airport as a facility that had “worked closely with customers to bring in traffic,” adding the Airports of Thailand facility had now overtaken (KLIA2) as the world’s largest (LCC) airport.
“(MAHB) needs to adapt the same approach for [KLIA2] to be relevant and gain back that recognition for Malaysia,” she said.
July 2016: (CFM) unveiled (LEAP-1A) engine orders at the Farnborough Air Show to power 164 A320neo family aircraft: Seoul-based Asiana Airlines (AAR) selected (LEAP-1A)s to power 25 A321neos; (TAP) Portugal ordered 83 (LEAP-1A)s to power 15 A320neos and 24 A321neos; and Malaysia’s AirAsia (ASW) ordered 200 (LEAP-1A)s to power 100 A321neos.
April 2017: Boeing Digital Aviation subsidiary Jeppesen has signed with the AirAsia Group to provide digital charting and electronic flight bag (EFB) services across AirAsia (ASW)’s 6 low-cost carrier (LCC) affiliates.
The multiple-year agreement will cover AirAsia (ASW)’s 6 affiliate (LCC) airlines: AirAsia Berhad (Malaysia) (ASW), Thai AirAsia (THA), AirAsia India (AAI), AirAsia Japan (WAJ), Indonesia AirAsia (AWR) and AirAsia Philippines (APE). The AirAsia Group will integrate Jeppesen FlightDeck Pro (EFB) services on Windows-operating tablets to optimize operations, eliminate paper content and improve fuel consumption, the company said.
The agreement with the AirAsia Group follows on Jeppesen’s existing (EFB) service agreement with another of the group’s affiliates, long-haul (LCC) AirAsia X (ASX).
“We had previous experience with digital Jeppesen services with our AirAsia X (ASX) affiliates and extend[ing] these digital navigation and (EFB) services across the AirAsia Group will allow us to continue our transition to a fully digital operating environment,” AirAsia (ASW) Regional Director Flight Operations Adrian Jenkins said.
May 2017: AirAsia (ASW) has added a new destination from its Kuala Lumpur (KUL) hub with the addition on April 26 of a new 4x-weekly service to Bhubaneswar (BBI) in India. The 2,597 km sector will be flown using the low cost carrier (LCC)’s A320s and faces no competition. This is the Indian airport’s only international scheduled service at present.
Ms Aireen Omar (CEO) of AirAsia Berhad (ASW), said: “We are very excited to be here today in Bhubaneswar to celebrate our inaugural flight to this beautiful city. We are officially the 1st airline to offer an international route to Bhubaneswar and we are humbled with the warm welcome from the government and people of Odisha. India is an important market to us at AirAsia (ASW) and this new unique route is a reflection of our commitment towards enhancing our connectivity in the country. Our plans and commitment to grow in the Indian market is in line with the governments’ recent announcement to expand the number of slots for Malaysians carriers to operate between the 2 countries. Through this, we hope to help boost the tourism and trade in India and Malaysia while continue to provide our guests with better connectivity as well as offering them the best services in and out of India.” (ASW) already offers non-stop service from the Malaysian capital to 7 other airports in India; Bengaluru, Chennai, Hyderabad, Kochi, Kolkata, Tiruchirappalli, and Visakhapatnam. As a result, (ASW) now commands almost 40% of seat capacity between Malaysia and India, ahead of Malindo Air (MXD) (29%), Malaysia Airlines (MAS) (27%) and AirAsia X (ASX (4%).
September 2017: The AirAsia Group firmed up a deal with Inmarsat for satellite Wi-Fi on all of its Airbus A320s and A330s, the connectivity and satellite operator said during the Airline Passenger Experience Association (APEX) Expo in Long Beach, California. Inmarsat said the deal for its (GX) Aviation broadband internet includes >120 aircraft across the AirAsia Group airlines, along with new deliveries.
November 2017: AirAsia (ASW) commenced operations on new links from Johor Bahru (JHB) to Kolkata (CCU) and Macau (MFM) on November 28. The 2,855 km Johor Bahru TO Kolkata service will operate 5x-weekly, while the 2,517 km Macau sector will be a daily operation. Both routes will be served by (ASW)’s A320s and neither faces any direct competition.
These are the 4th and 5th new routes launched by AirAsia from Johor Bahru in 2017, with (ASW) having already added services to Jakarta, and 2 domestic Malaysian links to Kuala Terengganu and Langkawi. “AirAsia (ASW) is pleased to connect more international cities into Johor Bahru and increase the number of existing direct flights to further boost foreign tourist arrivals into the southern state of Malaysia, in line with our long-term plan to grow the hub and the state government’s plan of improving direct connectivity,” explained Spencer Lee, Head of Commercial Operations (ASW).
Derick Basir, (CEO) of Senai Airport Terminal Services said: “We have been working closely with AirAsia (asw) for quite some time to develop these 2 new routes for Senai Airport. We are very pleased and excited that it has finally materialized. The direct connectivity between the 2 cities and Johor Bahru will be good for Johor and Iskandar Malaysia, since it will further spur economic and tourism activities in the state. We are also expecting to capture more travelers from mainland China and Hong Kong through Macau, as well as to tap the travelers from other metropolitan cities in India, Bangladesh and Nepal by linking to Kolkata.”
December 2017: News Item A-1: AirAsia (ASW) launched 3 new routes from Malaysia in late 2017, beginning with services from Kuala Lumpur (KUL) to Davao (DVO) on December 21, followed by the start of flights between Kuching (KCH) and Shenzhen (SZX) on December 26 with a final service from Bintulu (BTU) to Singapore being inaugurated on December 27. The 2,692 km Kuala Lumpur to Davao route and the 1,022 km Bintulu to Singapore sector will both be flown 4x-weekly, while the 2,380 km Kuching – Shenzhen city pair will be operated daily. (ASW) will deploy A320s on all 3 airport pairs and will face no direct competition on any of the new routes.
On December 27, Spencer Lee AirAsia (ASW)’s Head of Commercial Operations marked the arrival of its 2 new international services from Shenzhen and Singapore into the Sarawak state, where Kuching and Bintulu are located. “We are honored and humbled to welcome 2 new international flights into Sarawak today,” said Lee. “(ASW) has always been committed towards expanding the markets in Sarawak and these direct flights reiterate our commitment to grow the connectivity in and out of the state.”
News Item A-2: "AirAsia Group Names New Malaysian (CEO), Reshuffles Execs" by Adrian Schofield (ATW) Plus December 13, 2017.
The AirAsia Group has undergone a major reshuffling of its senior executive ranks, including the appointment of a new leader for its core Malaysian operation. Riad Asmat has been named (CEO) of the group’s Malaysian carrier AirAsia Berhad as of January 10, 2018. He was Director of Corporate Planning, Strategy & Business Development for Naza Corporation Holdings, which is active in the automotive, property, construction, food and telecommunications sectors.
January 2018: AirAsia (ASW) achieved its goal of adding +22 more aircraft to its fleet by December 31, 2017 as the multinational (LCC) group ramps up its growth.
Group (CEO) Tony Fernandes outlined the fleet expansion targets in August and November. An AirAsia (ASW) spokeswoman said the goal of a year-on-year net increase of 22 aircraft for 2017 was met, boosting the group’s fleet of Airbus narrow bodies to 196.
The group includes the core Malaysia operation, as well as joint ventures and affiliates in Thailand, Indonesia, the Philippines, Japan and India.
The 2017 increase was the group’s highest growth rate in the past 4 years, following a period of consolidation. (ASW) is planning to add another 33 Airbus narrow bodies in 2018, with aircraft allocated throughout the group.
(ASW) intends to increase its group fleet size to 500 aircraft by 2027, which will require the net addition of about 30 aircraft per year for the next decade. Fernandes said he is confident this rate can be achieved or exceeded, particularly since the carrier intends to set up new associate airlines in Vietnam and China.
AirAsia (ASW) has 400 Airbus narrow body aircraft on order, according to the Aviation Week Network’s fleet database.
February 2018: AirAsia Group plans to launch its latest franchises in China and Vietnam later this year, as its current overseas affiliates demonstrate stronger financial performance.
AirAsia (ASW) has taken steps to establish joint venture (JV) frameworks in China and Vietnam, and during its latest earnings presentation the group said it wants the new carriers to begin operating in the 2nd half of 2018 “after obtaining the necessary approvals.”
Group (CEO) Tony Fernandes said 1 of (ASW)’s goals is to “continue to grow our presence and market share” in the Association of SE Asian Nations (ASEAN) region. He highlighted the proposed Vietnamese airline as “the final piece of the puzzle to complete our (ASEAN) connectivity.” The group has yet to reveal details about aircraft fleets for the 2 startup carriers.
(ASW) said its 4 (ASEAN) carriers (in Malaysia, Thailand, Indonesia and the Philippines) and its Indian affiliate reported operating profits in the 4th quarter, the 1st time they have all achieved this in the same quarter. The other (JV) in Japan is still in the early stages after beginning operations in October.
Fernandes particularly mentioned the turnaround of AirAsia Philippines, which has “proven that perseverance and our business model truly works,” he said. Philippines AirAsia achieved an operating profit of +665.3 million pesos/+$12.8 million in 2017, despite numerous one-off costs and 37% capacity growth. This unit is targeting an initial public offering (IPO) in the 2nd half of 2018.
AirAsia Berhad (including the core Malaysia operation and the Indonesian and Philippine units) reported a full-year net profit of +RM1.59 billion/+$405.6 million, down slightly from +RM1.62 billion in the previous year. Revenue grew +14% year-over-year (YOY) to RM9.7 billion.
For the 4th quarter, net profit declined slightly to RM434.2 million, versus RM464.7 million a year earlier. Revenue increased +10% (YOY) to RM2.7 billion year-on-year. Unit revenue was down -4% (YOY), although ancillary revenue increased by +19%. Unit costs dropped -1% in the quarter, despite higher fuel costs. Unit costs excluding fuel fell -5%.
AirAsia Bhd’s capacity was up +14% in the 4th quarter and 9% (YOY) for the full year. The group-wide fleet added 30 aircraft, of which 24 were operational by the end of the year. Full-year traffic grew +11% (YOY), resulting in load factor increasing by 1 point to 88% LF. (ASW) has a 55% share of the Malaysian domestic market, up from 47% a year earlier.
March 2018: News Item A-1: AirAsia Berhad (ASW) has announced a deal to sell its Malaysia-based aircraft leasing unit Asia Aviation Capital (AAC) to aircraft investor (BBAM) for $1.18 billion. The (AAC) portfolio of 84 aircraft and 14 engines will be acquired by (BBAM)-managed entities FLY Leasing Ltd, Incline B Aviation Ltd Partnership, and Nomura Babcock & Brown. Of the total, 79 aircraft and 14 engines will be leased back to the AirAsia Group. AirAsia (ASW) established (AAC) in 2014.
News Item A-2: "AirAsia to Sell Portfolio of 182 Airbus Jets in Leasing Business Exit" by Liz Lee, Anshuman Daga, Reuters, March 01, 2018.
AirAsia (ASW) is selling its plane leasing operations to firms managed by (BBAM) Ltd, 1 of the world's largest aircraft portfolio managers, in a staggered deal that will see the budget carrier transfer ownership of up to 182 Airbus (EDS) jets.
The transaction, valued at US$1.2 billion in the 1st phase, will help Asia's biggest budget airline cut debt and return money to shareholders, as well as give it firepower to grow its business. (ASW) shares rose +5% to a record after the deal was announced.
Malaysia-based (ASW) is cashing in on a booming leasing sector after ordering hundreds of Airbus planes at bargain prices in recent years to become one of Airbus' biggest customers.
The sale is part of AirAsia (ASW)'s restructuring efforts that include selling stakes in businesses and revamping associate airlines, since the group's finances came under scrutiny 3 years ago as amounts owed by its associate firms rose.
In the 1st phase of the transaction, (ASW) will sell a portfolio of 84 aircraft and 14 engines to Fly Leasing Ltd, Incline B Aviation Ltd Partnership and Nomura Babcock and Brown for US$1.2 billion.
"Investors have historically been concerned that (ASW)'s revenue relied too heavily on aircraft leasing income. In addition, AirAsia's huge aircraft order book would require significant financing and investors are concerned about the risk of its rising financial leverage," said Corrine Png, (CEO) of transport research firm Crucial Perspective.
"As such, the proposed disposal not only alleviates these concerns but also serves to unlock value for AirAsia's shareholders," she said.
AirAsia (ASW) will lease the planes back from (BBAM)-entities, thus saving on large fixed costs.
Fly Leasing (BBB) and Incline also plan to acquire 48 to-be-delivered planes and have an option to acquire a further 50 aircraft to be delivered. (ASW) said it will agree the sale price with the parties at a later date. "Today's sale is much in line with our stated strategy of disposing non-core assets and businesses, an undertaking which we have successfully executed over the last 6 months (starting with our training center, ground handling unit and now our leasing unit)," AirAsia Group (CEO) Tony Fernandes said.
Fernandes, who built (ASW) up from a 2-plane operation in 2002, had been exploring a sale of the leasing operations for the past 2 years.
(ASW) said the sale will raise about US$902 million in cash proceeds. The deal will also see (ASW) take a 10.2% stake in Fly.
San Francisco-based (BBAM) has >400 aircraft under management. In September, Singapore sovereign wealth fund (GIC) agreed to buy a 30% stake in the company, which counts Canadian private equity company Onex Corporation among its investors.
Including this gain, AirAsia (ASW)'s shares have risen +37% this year, valuing it at nearly US$4.0 billion.
Credit Suisse, (BNP) Paribas and (RHB) acted as joint financial advisers to AirAsia (ASW) on the transaction.
Click below for photos:
ASW-A320 - 2015-07.jpg
ASW-A320 WITH SHARKLETS - 2012-09
ASW-A320-214 9M-AHM INCDT Subang Skid 2017-11.jpg
ASW-A320neo - 2016-02.jpg
ASW-A330-300 - 2016-03.jpg
0 737-248QC (JT8D) (199-20218, /69), EX-(ARL), RETURNED (ECC).
0 737-200 (JT8D), (GEF) LEASED, RETURNED.
2 737-3B7 (CFM56-3B2) (1007-22951, /84 HS-AAV; 1339-23378, /87 HS-AAU), EX-(DAL), (GEF) LEASED. LEASED TO (THA). 148Y.
1 737-3B7 (CFM56-3B2) (1308-23376, /86 PK-AWQ), EX-(DAL), LIFT LEASED 2005-07. LEASED TO (AWR). 148Y.
0 737-3L9 (CFM56-3B2) (1402-23718, /87 9M-AAB), EX-(BUL), (TCI) LEASED 2005-03. RETURNED. 148Y.
0 737-3L9 (CFM56-3B2) (1800-24579, /90 9M-AAE), EX-(CEA), (SIL) LEASED 2002-06. RETURNED. 148Y.
0 737-3L9 (CFM56-3B2) (2277-26442, /92 9M-AED), (DEA) LEASED. RETURNED. 148Y.
0 737-3L9 (CFM56-3B2) (2347-27061, /92 9M-AAG), EX-(CRM), (TOM) LEASED 2003-01. RETURNED. 148Y.
0 737-3M8 (CFM56-3B2) (2039-25071, /91 9M-AAT), AV CAPITAL LEASED 2003-12. RETURNED. 148Y.
0 737-3Q8 (CFM56-3C1) (786-26333, /96 N263LF; 2854-28200, /97 9M-AAC), EX-(AFR), (ILF) 7 YEAR LEASED 2002-01. 26333 RETURNED. 148Y.
1 737-3S1 (CFM56-3B2) (1911-24856, /90 PK-AWS), (AERCO) LEASED 2005-07. WET-LEASED TO (THA) (2005-08). 148Y.
0 737-3TO (CFM56-3B1) (1141-23357, /85 9M-AAS; 1142-23358, /85 9M-AAR; 1159-23365, /85 9M-AAO; 1180-23367, /86 9N-AAP; 1181-23368, /85 9N-AAQ), EX-(CAL), (GEF) LEASED. ALL RETURNED. 148Y.
0 737-3YO (CFM56-3B1) (1755-24465, /89 9M-AEB; 1837-24677, /90 9M-AEC; 2277-26442, 9M-AED), (GEF) LEASED. RETURNED. 24677; & 26442; SOLD TO (VVS) 2010-01. 148Y.
0 737-3Y0 (CFM56-3C1) (2013-24907, /91 9M-AAA), EX-(LAM)/(UKR), RETURNED 2001-10. LEASED TO (ZXD) 2007-01. 148Y.
0 737-3YO (CFM56-3C1) (1813-24547, 9M-AAX, 2004-08; 1853-24678, /90 9M-AAY), EX-(EZY), (OAX) LEASED. RETURNED. 148Y.
0 737-3YO (CFM56-3C1) (2001-24905, /91 9M-AAD), (GEF) LEASED, SPECIAL RED & BLUE TIME COLORS, RETURNED. 148Y.
10 737-301 (CFM56-3B1) (1124-23257, /85 9M-AAU; 1132-23259, /85 HS-AEF, LST (THA); 1200-23233, /86 9M-AAM; 1208-23234, /86 9M-AAN; 1214-23235, /86 9M-AAL; 1219-23236, /86 9M-AAK; 1248-23510, /86 9M-AAI; 1268-23511, /86 9M-AAJ; 1382-23552, /87 9M-AAV; 1408-23554, /87 9M-AAW), 7 (GEF) LEASED. 23234 FOR (THA) OPERATIONS 2004-04. 23233 (THA) OPERATIONS 2004-09. 23236, HS-AAK; & 23235, HS-AAL) LEASED TO (THA) 2004-11. 23357; 23511 LEASED TO (THA) 2004-12. 23257; 23259, 9M-AAE, EX-(DAL); 23552; XFRD TO (AWR) 2005-01. 23257, HS-AAU; TO (THA). 23367; & 23510; XFRD TO (THA). 148Y.
0 737-322 (CFM56-3C1) (1836-24659, /90 9M-AEA), EX-(UAL), GOAL LEASED 2005-02. RETURNED. 148Y.
0 737-33A (CFM56-3B2) (1739-24096, /89 9M-AAF), EX-(KEN), (AWW) LEASED 2003-01. RETURNED. 148Y.
0 737-36N (CFM56-3C1) (2846-28555, /97 9M-AAB), RETURNED (GEF) 2001-10, 148Y.
1 737-347 (CFM56-3B1) (1170-23345, /85 PK-AWT), EX-(DAL) 2005-07. WET-LEASED TO (AWR) 2005-09.
0 737-383 (CFM56-3B) (1517-24059, /88 G-STRA), EX-(KG) LEASING (KGL) LEASED 2004-12. EX-(ZS-SPU), EX-(VLV). RETURNED. 148Y.
0 737-375 (CFM56-3) (1434-23808, /87 9M-AAH), EX-(LIJ), 5 YEAR INTEC LEASED. RETURNED. 148Y.
0 747-200 (JT9D-7J) (21162; 21316), (TOW) WET-LEASED FOR HADJ UNTIL 2000 TO 2004.
0 747-220, 3 WET-LSD FOR HADJ 2003-01 TO 2003-03.
0 747-236B (G-BDXJ), (EUL) WET-LEASED FOR HADJ UNTIL 2003-04.
0 747-267B (466-22149, TF-ATC), (AID) WET-LEASED FOR HADJ 2003-01. PARTED OUT AT KEMBLE 2004-06.
0 747-312 (JT9D-7R4G2) (621-23244, /85), EX-(SIA), (AID) WET-LEASED FOR HADJ UNTIL END OF 2001-04.
200 ORDERS (2015-02) A320NEO (LEAP-1A):
64 ORDERS A320neo (LEAP-1A):
36 ORDERS A320ceo (LEAP-1A):
12/25 ORDERS A320-200:
38 +114/50 ORDERS A320-214 (CFM56-5B4/P) (2612, 9M-AFA, 2005-12; 2620; 2633, 9M-AFB, 2005-12; 2656, 9M-AFC, 2006-01 "MANCHESTER UNITED FC" COLORS; 2658; 2683, 9M-AFD, 2006-02; 2695; 2699, 9M-AFE, 2006-03; 2760, 9M-AFF, 2006-04; 2816, 9M-AFG, 2006-06; 2826, 9M-AFH, 2006-07; 2842, 9M-AFI, 2006-07 (IN SPECIAL "EMANGAT HARIMAU MUDA" COLORS); 2881, 9M-AFJ, 2006-09; 2885, 9M-AFK, 2006-09; 2926, 9M-AFL, 2006-10 (REPAINTED INTO SPECIAL "SKYRIDER CLUB" COLORS); 2944, 9M-AFM, 2006-11; 2956, 9M-AFN, 2006-11; 2989, 9M-AFO, 2006-12; 3000, 9M-AFP, 2007-01 WITH "AMAZING" LIVERY - SEE PHOTO; 3018, 9M-AFQ - "VISIT MALAYSIA 2007" - SEE PHOTO; 3064, 9M-AFR, 2007-03; 3117, 9M-AFS, 2007-04; 3427, 9M-AHH, 2008-03; 3448, 9M-AHI, 2008-03; 3568, 9M-AHO, 2008-08; 3576, HS-ABG, 2008-08; 3582, 9M-AHP, 2008-09; 3610, 9M-AHR; 3628, 9M-AHQ; 2009-08; 5098, PK-AZE, 2013-07; 5703, HS-BBE, 2013-07; 6158, PM-AJP, 2014-07; 6170, HS-BBM, 2014-07; 6178, HS-BBN, 2014-07; 6204, 9M-AJQ, 2014-08; 6215, 9M-AJR, 2014-08), 5098; 6170; & 6178 TO (THA) 2013-07 & 2014-07; & 5703; TO (AWR) 2013-07. 180Y.
39 A320-216 (3140, 9M-AFT, 2007-05; 3154, 9M-AFU, 2007-06; 3173, 9M-AFV, 2007-07; 3182, 9M-AFX, 2007-07; 3194, 9M-AFY, 2007-08; 3201, 9M-AFZ, 2007-08; 3223, 9M-AHA, 2007-09; 3232, 9M-AHB, 2007-09; 3261, 9M-AHC, 2007-10; 3277, 9H-AHD; 3291, 9H-AHE, 2007-11; 3299, 9H-AHF; 3327, 9H-AHG, 2007-11; 3338, HS-ABC, LST (THA) 2007-12; 3353, 9M-AHF, 2008-01; 3370, 9M-AHG, 2008-01; 3404, 9M-AFW, 2008-02; 3477, 9M-AHJ, 2008-05; 3486, 9M-AHK, 2008-05; 3729 HS-ABI, LST (THA) 2009-01; 3765, PK-AXF, 2009-01, FOR (AWR); 3776, 9M-AHS, 2009-01; 3813, PK-AXG; 3875, PK-AXH; 3997, 9M-AHT, 2009-08; 4070, 9M-AHU, 2009-10; 4079, 9M-AHV, 2009-09; 4098, 9M-AHW, 2009-11; 4126, HS-ABL, 2009-12; 4147, 9M-AJV, 2009-12; 4386, HS-ABQ, 2010-08; 4390, HS-ABR, 2010-08; 4404, 9M-AQA, 2010-09; 4426, HS-ABS, 2010-10; 4458, 9M-AQB, 2010-10; 4462, PK-AXM, 2010-10; 4477, PK-AXN, 2010-10; 4486, PK-AXO, 2010-10; 4557, HS-ABT, 2011-01; 4571, PK-AXP, 2011-01; 4582, PK-AXQ, 2011-01; 4882, 9M-AQD, 2011-10; 5272, 9M-AQM, 2012-09), 4571; RF (AWR) 2011-10. 3173; SEEN IN "QUEENS PARK RANGERS" (ENGLISH PREMIER LEAGUE SOCCER TEAM) COLORS 2012-07. 180Y.
1 A320-216 (5200, JAO2AJ), LEASED TO AIRASIA JAPAN 2012-07.
1 A320-216 (5283, HS-ABZ), EX-(F-WWIH), LEASED TO (THA) 2012-09.
1 A320-216 (5428, 9M-AQQ - - SEE PHOTO - - "ASW-A320-216 1ST WITH SHARKLETS - 2012-12"), 2012-12.
1 +2 ORDERS A330-301 (CF6-80E1A2) (054, /94 9M-), EX-(AMD)/(ALG)/(ARL), (EC-JMF), (AWW) LEASED 2007-09, FOR (ASX) OPERATIONS. 36C, 279Y.
15/10 ORDERS A330-300, FOR (ASX) OPERATIONS:
Click below for photos:
ASW-1-Aireen Omar - Ctr - 2017-05.jpg
ASW-TONY FERNANDES CEO - 1
ASW-TONY FERNANDES CEO - 2
ASW-TONY FERNANDES CEO - 3
ASW-TONY FERNANDES CEO - 4
ASW-TONY FERNANDES CEO - 5
ASW-TONY FERNANDES CEO - 6
ASW-TONY FERNANDES CHMN
TONY FERNANDES, AIR ASIA (ASW) FOUNDER, GROUP CHAIRMAN (2001-12) PASSED CHIEF EXECUTIVE OFFICER (CEO) RESPONSIBILITY TO MS AIREEN ROZMAN OMAR (2012-06) (email@example.com).
DATUK KAMARUDIN MERANUN, CHAIRMAN (ASW) (HOLDS A 30% STAKE IN FLYASIAN EXPRESS (FSX).
CONOR MCCARTHY, CO-FOUNDER, EX-(ARL)/(RYR).
RIAD ASMAT, CHIEF EXECUTIVE OFFICER (CEO) AIR ASIA BERHAD (2018-01).
Riad Asmat has been named (CEO) of the group’s Malaysian carrier AirAsia Berhad as of January 10, 2018. Riad was Director of Corporate Planning, Strategy & Business Development for Naza Corporation Holdings, which is active in the automotive, property, construction, food and telecommunications sectors.
MS AIREEN ROZMAN OMAR, CHIEF EXECUTIVE OFFICER (CEO), EX-GROUP CHIEF FINANCIAL OFFICER (CFO), EX-(AWR) (2006-08), (2012-06).
LOGAN VELAITHAM, (CEO) AIRASIA SINGAPORE (2012-08).
MS MARIANNE HONTIVEROS, (CEO) AIRASIA INC (CLARK, PHILIPPINES).
TESSAPON BIJLEVELD, (CEO) THAI AIRASIA
BUDRIZ PUTRA, (CEO) SEPANG AIRCRAFT ENGINEERING (MRO) (2007-05).
JAMES RHEE, (CEO) NORTH ASIA.
ADRIAN JENKINS, REGIONAL DIRECTOR FLIGHT OPERATIONS.
LAU KIN CHOY, CHIEF INFORMATION OFFICER (CIO), HEAD INFORMATION TECHNOLOGY (IT).
CAPTAIN CHIN NYOK SAN, HEAD, FLIGHT OPERATIONS & SAFETY (KULRRAK) (firstname.lastname@example.org).
ANAZ AHMAD TAJUDDIN, GROUP HEAD ENGINEERING, AIRASIA GROUP.
MOHD NAZRI MAHAJAR, GENERAL MANAGER/HADJ OPERATIONS.
TIMOTHY ROSS, EXECUTIVE VP CORPORATE AFFAIRS & STRATEGY.
MS JEAN CHANG, EXECUTIVE VP GREATER CHINA & NORTH ASIA (2005-04).
SPENCER LEE, HEAD COMMERCIAL OPERATIONS.
MS JASMINE LEE, COMMERCIAL DIRECTOR.
SHAMSUDIN HAMID, MANAGER QUALITY ASSURANCE (QA) (1997-11
JOEY KAO, MARKETING MANAGER.
WAN HASMAR AZIM, HEAD ENGINEERING (2001-01),
SHAMSUL SALIM, HEAD HUMAN RESOURCES (HR)/ADMINISTRATION.
BERNARD FRANCIS, HEAD, BUSINESS DEVELOPMENT.
CAPTAIN AHMAD RAZLAH AHMAT, FLEET CAPTAIN.
CAPTAIN OMAR SHUIB, CHIEF PILOT TRAINING & STANDARDS.