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  • AirAsia bags Airline Treasury Team of the Year award

    AirAsia bags Airline Treasury Team of the Year award

    AirAsia has bagged the Airline Treasury Team of the Year at the Asia Pacific Aviation 100 awards.

    In a statement today, the low-cost carrier said the Airline Economics Magazine Aviation 100 awards recognize the air travel industry’s most outstanding performers, as well as the most innovative and successful finance and leasing deals,  closed in the last 12 months.

    AirAsia said it won the Airline Treasury Team of the Year based on the company’s efficient fundraising deals that translated to strong financial performance as well as impressive fleet expansion activities.

    In the 2018-2019 year, AirAsia sealed two major aircraft portfolio deals with BBAM and Castlelake LP for a combined US$3.6 billion.

    The completion of the two transactions involved more than 100 aircraft and proved the team was not only efficient in their fundraising efforts, but also able to design financing structures which were not prevalent in typical aircraft financing transactions.

    This year, AirAsia also made global headlines with two significant commitments for new aircraft.

    At the 2019 Paris International Airshow, the company announced it would upsize its future Airbus single-aisle fleet, by converting orders for 253 Airbus A320neo to the larger Airbus A321neo.

    In August 2019, its long-haul affiliate AirAsia X expanded its order book with Airbus by signing a US$5 billion agreement for 12 Airbus A330-900 and 30 A321XLR aircraft.

    AirAsia Group Bhd chief executive officer Tan Sri Tony Fernandes said the sale of its aircraft leasing operations was the culmination of a long-running strategy to dispose of the group’s physical assets, and by doing so, it was able to monetize the aircraft at high prices and reduce residual risk.

    “This strategy has allowed us to invest that cash into a fleet expansion program and our many digital ventures, while at the same time provide shareholder returns and accelerate our vision to become Asia Pacific’s leading travel and financial platform company.

    “This would not have been possible without my incredible aircraft finance team, and I can’t think of anyone else more deserving to win Airline Treasury Team of the Year,” he said.

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  • AirAsia India plots growth to 100 aircraft by 2025

    AirAsia India plots growth to 100 aircraft by 2025

    AirAsia India is planning to accelerate its growth and hopes to increase its fleet fourfold to 100 aircraft in the next five years, an unnamed company source told industry publication TravelBiz Monitor.

    “We have firmed up plans to add 14-15 planes every year starting next year for the next five years. We have remained a small player in the Indian market till now with just 23 planes, which will increase to 29 planes by the end of December,” the executive said.

    According to the ch-aviation fleets advanced module, the Indian LCC, a 51/49 joint venture between Tata Sons and AirAsia Group, currently operates twenty-three A320-200s and is in the process of adding the twenty-fourth unit.

    The airline will be adding aircraft both transferred from other AirAsia Group units and directly from lessors. Out of its current 23-strong fleet, 11 aircraft were previously operated by AirAsia, while the remaining 12 came from other carriers.

    The carrier said earlier this year that its growth plans for 2020 include the addition of the first A320-200neo.

    AirAsia India will focus its growth on existing routes as it plans to add more frequencies rather than launch new, low-frequency routes.

    “There is no point staying a marginal airline on various routes. The focus will rather be on strengthening our position on routes that we are in,” the executive said.

    According to the ch-aviation capacities module, AirAsia India has a 6.8% market share by capacity on the Indian domestic market, compared to 46.4%, 16.0%, and 10.5% shares of its LCC rivals IndiGo Airlines, SpiceJet, and GoAir.

    Meanwhile, the carrier’s Malaysian parent said it will add capacity on its Kuala Lumpur Int’l-Singapore Changi route, using A330-300s operated by AirAsia X to launch an additional two daily services between the cities. According to the ch-aviation schedules module, AirAsia currently operates 59x weekly between Kuala Lumpur and Singapore with all flights operated by A320-200s.

    The carrier’s A320s seat up to 180 passengers, while AirAsia X’s A330-300s have 365 economy class seats and 12 premium class seats. AirAsia has a 21.6% market share by capacity on the Kuala Lumpur Int’l-Singapore Changi market.

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  • E-sports set to fly high with AirAsia backing

    E-sports set to fly high with AirAsia backing

    E-sports are set to take off in a big way with the two head honchos at AirAsia giving their full-fledged support.

    According to Allan Phang, president of the AirAsia All-Stars E-Sports Club, Tan Sri Dr Tony Fernandes, Group CEO, AirAsia Bhd, and Datuk Kamarudin Meranun, executive chairman, AirAsia Bhd, have been very “visionary and supportive” when it comes to e-sports as the low-cost carrier is among the first airlines to back e-sports on a regional scale.

    AirAsia was the main strategic partner of the World Electronic Sports Games Southeast Asia (WESG SEA) Regional Finals, which concluded at the Quill Convention Centre in Kuala Lumpur last weekend.

    Phang said AirAsia made its first foray into e-sports in 2017 with the setting up of the AirAsia All-Stars E-Sports Club.

    “The club had about 10 members upon its inception, but now there are more than 200 members,” said Phang, underlining the surging popularity of e-sports and its future direction.

    As Agri Mind, the organizers of the WESG SEA Regional Finals, have a long-standing relationship with AirAsia, they were able to push through the initiative for the low-cost carrier to come onboard as a partner.

    “AirAsia provided support in terms of flights (to the gamers), which was in support of the e-sports ecosystem, in line with the government’s initiative,” said Phang.

    He added that there are four key verticals of AirAsia’s role in the burgeoning e-sports arena: employee engagement, employer branding, e-sports tourism and supporting the eco-system by way of sponsorship through teams and events.

    “AirAsia is targeting the next generation of consumers as it realizes that the government wants to connect with the youth e-sports generation,” said Phang.

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  • AirAsia India plans to take fleet size to 100 in five years

    AirAsia India plans to take fleet size to 100 in five years

    New Delhi: After growing at a very slow rate in its first five years of operations, AirAsia India plans to expand its fleet more than fourfold to 100 aircraft in the next five years. “We have firmed up plans to add 14-15 planes every year starting next year for the next five years. We have remained a small player in the Indian market till now with just 23 planes, which will increase to 29 planes by the end of December,” said a senior executive, who did not wish to be identified.

    The executive said the lowcost carrier, a 51:49 joint venture between Tata Sons and Malaysia’s AirAsia Berhard, will become an impactful player in the market once its fleet grows to 50 aircraft. The market is dominated by IndiGo, which operates a fleet of about 250 aircraft. “While we will continue to add aircraft under the current model by getting aircraft from AirAsia Berhad, we will also look at leasing planes directly from lessors,” said the executive.

    The airline’s expansion plans focus on strengthening the network on existing routes rather than adding new routes. “The philosophy is simple: There is no point staying a marginal airline on various routes. The focus will rather be on strengthening our position on routes that we are in,” said the executive, adding that both the promoters would put in funds for expansion. AirAsia India, which started operations in 2014, is the smallest scheduled commercial airline in the country. In the ongoing winter schedule, which began at October-end, the airline has increased its flights by 326 departures to 1,345 departures per week.

    With a reduction of nearly 3,600 weekly departures because of the sudden suspension of operations by cash-strapped Jet Airways on April 17, other airlines are seeking to fill the gap by launching new flights.

  • Cebu Pacific, AirAsia launch new domestic routes

    Cebu Pacific, AirAsia launch new domestic routes

    Low-Cost carriers Cebu Pacific and Philippines AirAsia, Inc. started operating new domestic flights. The Gokongwei-led Cebu Pacific launched a direct flight between Cebu and Busuanga, which is the gateway to Coron, Palawan. The operation of the Cebu-Busuanga flights is being carried out by Cebu Pacific’s wholly owned subsidiary Cebgo.

    “The first flight departs Cebu at 7:25 a.m., and arrives in Francisco B. Reyes Airport at 9:00 a.m.; while its return flight leaves Busuanga at 9:20 a.m. and arrives in Cebu at 11:00 a.m.,” Cebu Pacific said in a statement on Monday.

    “The second flight leaves Cebu at 10:25 a.m., and lands in Busuanga at 12:05 p.m.; while its turnaround flight departs at 12:25 p.m. and arrives at 2:10 p.m.,” it added.

    Apart from the new Cebu-Busuanga route, Cebu Pacific, along with Cebgo, flies to 37 domestic and 27 international destinations

    Meanwhile, Philippines AirAsia started offering its thrice-daily service between Manila and Bacolod on Monday.

    For the Manila-Bacolod route, the first 80-minute flight will depart Ninoy Aquino International Airport at 8:20 a.m., and the last one will depart Bacolod at 9:30 p.m.

    “We are excited to celebrate this milestone and to paint the Negros Island skies red. AirAsia’s presence in the region will make air travel more affordable not just for Negrenses but for everyone who wants to explore this part of the country,” AirAsia Philippines Chief Executive Officer Ricardo P. Isla said during the inaugural ceremony at the Bacolod-Silay International Airport on Monday morning.

    Bacolod is the 11th domestic destination that AirAsia Philippines operates out of Manila. Overall, the carrier has more than 500 domestic and international flights weekly coming from its hubs in Manila, Clark, Cebu and Kalibo.

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  • Air Asia flies to Okinawa

    Air Asia flies to Okinawa

    AirAsia announced, Wednesday, a new route from Kuala Lumpur to Okinawa Naha, strengthening its position as the Malaysian carrier with the most connections and capacity in Japan.

    The four times weekly service via Taipei commences 22 January 2020 (subject to regulatory approvals), and will be AirAsia’s sixth international destination in Japan, after Tokyo (Haneda and Narita), Osaka, Sapporo, Fukuoka and Nagoya (via Bangkok).

    AirAsia X Malaysia CEO Benyamin Ismail said: “Our rapid expansion into Japan continues following the launch of services to Fukuoka and Tokyo Narita earlier this year. Okinawa is an island paradise that offers a different Japanese experience for leisure travellers, including white sandy beaches with clear blue waters, some of the world’s most famous diving spots and unique Ryukyuan cuisine.

    “Like Fukuoka, we are building the foundation for more AirAsia flights to serve Okinawa in the near future, strengthening our regional network and allowing more travellers to discover the unique cultural heritage of this amazing destination.”

    Members-only fares from Kuala Lumpur to Okinawa Naha start from RM239* one-way on standard seats and MYR899* one-way on the award-winning Premium Flatbeds, available on airasia.com from today 31 Octoberat 1200 (GMT+8) until 2 November 2019 for travel between 22 January 2020 and 27 March 2020.

    Guests from Kuala Lumpur to Okinawa Naha are not required to obtain a visa during their one hour fifteen minutes stopover in Taipei and may return to their seats after clearing a quick security check of their carry-on bags and inflight belongings.

    Okinawa is one of Japan’s 47 prefectures comprising 160 islands in the East China Sea. With its unique cultural heritage and local cuisine, Okinawa has long been a holiday destination for the Japanese, while its subtropical climate, coral-fringed waters and relaxed way of life attract throngs of international tourists looking for an alternative to the hustle-bustle of major cities in mainland Japan.

  • Indonesia AirAsia names new chief executive

    Indonesia AirAsia names new chief executive

    Indonesia AirAsia (IAA) has named Veranita Yosephine as its new chief executive.

    IAA parent AirAsia Indonesia states in a stock exchange disclosure that Yosephine succeeds Dendy Kurniawan, who is now the president commissioner on its board of commissioners. The change was made at a shareholder’s meeting on 24 October.

    Yosephine’s LinkedIn profile states that she was the airline’s deputy chief executive since July. Prior to that, she served as sales director at Kraft Heinz between March 2017 and June 2019.

    Kurniawan joined AirAsia in May 2014 as chief financial officer at Indonesia AirAsia X (IAAX), before being promoted to chief executive seven months later. Sometime in September 2016, he was then named the Indonesia group chief executive overseeing both IAA and IAAX.

    Cirium had sought comments from IAA on the change in leadership, but it had not yet responded.

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  • AirAsia starts Bacolod-Manila flight

    AirAsia starts Bacolod-Manila flight

    Recognizing the huge tourism potential of Bacolod, low-cost carrier AirAsia has started flying to the Negros Occidental capital city as its 12th and only domestic destination opened this year.

    AirAsia chief executive officer Ricardo Isla said in a press conference at the Bacolod-Silay Airport that they are honored to be part of the city not only in providing socio-economic programs but also in boosting tourism.

    Isla said the airline knows Bacolod City will be one of its fast-selling destinations. Thus, it will continue to expand and build more programs in the near future.

    “This new route will pave the way for us to connect and promote this wonderful destination for its charming location, and of course its local food delicacies and beautiful smiles,” he said.

    He added that now that AirAsia is in Bacolod, “we are committed to offer our affordable products and services so everyone can fly.”

    Initially, the airline has six flight schedules daily — three each for the Bacolod-Manila route and vice versa.

    Its officials announced that ever since they started accepting bookings weeks ago, there were already around 10,000 booked seats for these flights scheduled from the late part of October to December this year.

    Given the initial bookings, they believe that there is a demand in Bacolod City and Negros Occidental.

    Isla, however, said because of their application that has been approved by the airport’s Terminal 4 in Manila with regards to parking and runway slots, the airline has maximized its resources or opportunities for a total of six flights from Manila-Bacolod and vice versa.

    He pointed out that every November and December, there is an increment of about 20 to 30 percent from the regular months.

    “So we are really expecting huge traffic not only for Manila-Bacolod, but also with our 11 other destinations,” Isla said, adding that given these figures, “if we can fly same with other provinces, it should be eight flights here.”

    The 10,000 booked passengers are only about 15 percent of AirAsia’s overall capacity of 64,000 for two months, particularly for its newest domestic route.

    Thus, it can still cater to over 50,000 more passengers, a figure which the airline company is upbeat to cover. Gilber Simpao, chief commercial officer of AirAsia, said the 10,000 booked seats for the next two months is a good start.

    Simpao said they can compare Bacolod versus other flights and that it is ahead of the curve.

    “We’re confident that it’s going to be a healthy route,” he added.

    For Bacolod City Mayor Evelio Leonardia, who was also at the press conference, having more players will always be healthy for the consumers, which is something they expect to happen.

    Citing the reputation of AirAsia and the impression toward it as less expensive, Leonardia said its presence will somehow equalize the playing field.

    “We are expecting AirAsia to be a game changer in Bacolod,” he stressed, adding that the more convenient for the people and more schedules of flights, the better for the city.

    In his speech during the welcome program, the city official said “this is a very much anticipated landing in Bacolod.”

    Leonardia said the 10,000 already-booked passengers are indications of good things to come.

    As he welcomed the new “member of the family,” Leonardia said AirAsia will change the complexion of things.

    “We would like to thank you for responding at a time when there was an uproar over pricing of airfares,” the mayor said, as he expressed hopes that AirAsia’s presence will somehow affect the so-called law of supply and demand.

    For AsiaAsia, making Bacolod City as its newest destination is both a personal choice and corporate decision.

    Lawyer Joseph Omar Castillo, chairman of the Board, said Deputy Speaker Michael Romero, whose family has the largest share at AirAsia, has close relations with the city officials.

    Castillo said the company also sees Bacolod as one of the key cities in the Visayas.

    “So we really wanted to be here for a long time,” he said, adding they waiting for a slot for a long time. “Good thing that we were given.”

    The airline opened only two new destinations this year. Aside from Bacolod-Manila, it also started flying to Osaka, Japan.

    The local government, it recognizes that tourism is going to be the biggest industry in the world. Thus, its programs and plans are also aligned to that.

    Leonardia said AirAsia’s presence will increase the tourism volume for sure.

    “Bacolod is trying to grow, trying our best to be one of the most progressive cities in the Philippines. Let’s grow together,” he added.

    The airline company takes pride in its purpose as a low-cost carrier.

    Simpao said AirAsia believes that flying is not just for rich people as they want everyone to be able to afford to fly.

    He said that when they looked at the market, Bacolod was one of the biggest unserved markets in their network.

    “People from Bacolod should be able to afford good value travel. So we need to be here,” Simpao added.

    Meanwhile, Isla pointed out that the price range varies depending on the timing. Meaning, if the booking is closer to the scheduled flight and if it is during the high-demand period then the airfare cost goes higher, he said.

    If the cost is lower compared to other airlines, it would be five to 10 percent but it still varies depending on the timing, Isla said.

    In terms of on-time performance, AirAsia has 80 percent rate.

    “Hopefully, we will maintain it considering that there is going to be an expected higher traffic in all our airports which most likely we will not encounter that problem in Bacolod,” he added.

    Potential hub

    The airline revealed that two to three more domestic destinations will be added probably by the first quarter of 2020.

    For other areas connecting to the city, officials said they are studying Cebu-Bacolod and Clark-Bacolod routes.

    AirAsia currently has four hubs in the country, namely Manila, Clark in Pampanga, Kalibo in Aklan, and Cebu.

    When pressed if they are looking at Bacolod as another hub.

    “The advance bookings it has are already indications that the focus right now is travelers going to Bacolod,” Isla said, stressing that “for now, there’s no plan but that is actually an option for the future.”

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  • AirAsia X plans for direct flights into Kazakhstan

    AirAsia X plans for direct flights into Kazakhstan

    AirAsia X , the long-haul arm of AirAsia Group Bhd, has met with the Civil Aviation Committee (CAA) of Kazakhstan to discuss the possibility of the airline introducing a direct flight from Malaysia to the Central Asian country.

    The New Straits Times learnt that the meeting was held between AirAsia Group executive chairman Datuk Kamarudin Meranun, AAX chief executive Benyamin Ismail and Kazakhstan CAA chairman Talgat Lastayev as well as representatives from Almaty, Nur-Sultan and Karaganda airports and Kazakhstan embassy to Malaysia.

    The meeting includes discussions on the potential for AAX to introduce a direct route from Kuala Lumpur to Kazakhstan as well as a presentation on the development of the aviation industry in Kazakhstan and the country’s adoption to the Open Skies policy.

    “The interest is there but we must do further research on how to introduce this plan. They (AAX) have expressed interest to use Kazakhstan as a hub for them to fly to the US and Europe,” a source said.

    The potential US and European cities that AAX might fly into include New York, Rome, Milan and Nice.

    The meeting was held at AirAsia’s RedQ office in Sepang on Tuesday.

    Recently, Kazakhstan President Kassym-Jomart Tokayev asked the country to adopt Open Skies policy and expand its international routes while attracting more foreign airlines.

    The sources said that although the move will pose a big competition to Kazakhstan-based airlines, it was time to open the country to the world with more flight connections.

    The move will also help to develop the Astana International Financial Center as well as the country’s tourism industry.

    “Kazakhstan is very excited to have AAX to introduce a direct flight, but of course this is all preliminary. But on Kazakhstan’s side, the country is ready to fully support them (AAX),” another source said, adding that the discussion also included incentives that would be given to the airline such as airport and tariff fees, and marketing support for flight promotion.

    Currently, the only direct flight available is from Almaty to Kuala Lumpur and vice versa via Kazakhstan’s national carrier, Air Astana.

    AAX would be the first international budget airline to fly into Kazakhstan should the carrier introduces the direct flight.

    Meanwhile, Kamarudin expressed his gratitude to Kazakhstan for showing strong interest and offering attractive airport incentives for the airline to fly to various airports in the country.

    “Having been to Kazakhstan, both Nur-Sultan and Almaty, it definitely suits our expansion plan and we have agreed in forming a working team from both parties to seriously explore this possibility.”

    “I would not be surprised to see the flights into Kazakhstan from any of our various hubs some time next year,” he said yesterday.

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  • AirAsia to link Lombok with Surabaya, Yogyakarta

    AirAsia to link Lombok with Surabaya, Yogyakarta

    Low-cost carrier AirAsia is set to launch new routes to Surabaya in East Java and Yogyakarta from Lombok, West Nusa Tenggara.

    The inaugural flight from Lombok to Surabaya will depart on Nov. 25 and be available four times a week, namely on Mondays, Wednesdays, Fridays and Sundays.

    The flight from Lombok International Airport Praya leaves at 8:35 p.m. local time and arrives at Juanda International Airport at 8.40 p.m. local time. The Surabaya-Lombok route, meanwhile, departs at 9.05 p.m. local time and arrives at 11.20 p.m. local time. Surabaya is one hour ahead of Lombok.

    The Lombok-Yogyakarta route will begin on Nov. 26 with thrice-weekly flights, namely on Tuesdays, Thursdays and Saturdays.

    The flight from Lombok will leave at 8.35 p.m. local time and arrive at Adisucipto International Airport in Yogyakarta at 9.10 p.m. local time. The return flight from Yogyakarta to Lombok will depart at 9.35 p.m. local time and arrive at 12.05 a.m. local time. Yogyakarta is also one hour ahead of Lombok.

    Both routes will use the Airbus A320, which has a capacity of 180 passengers.

    Veranita Yosephine, deputy CEO of AirAsia Indonesia, said the new routes were expected to boost Lombok’s tourism.

    “The routes also provide options for travelers in Lombok who wish to extend their vacation to destinations in East Java and Yogyakarta, and vice versa,” she said in an official statement.

    Tickets are available at the airline’s official website and app, with prices starting from Rp 446,000 (US$33.91). Promotions are available until Nov. 25 for the travel period of Nov. 25 to March 28, 2020, for AirAsia BIG members.

    As with AirAsia domestic routes, passengers are allowed free luggage of up to 15 kilograms on both routes.

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  • AirAsia India to increase fleet size to 29 by year-end

    AirAsia India to increase fleet size to 29 by year-end

    Budget carrier AirAsia India will increase its fleet size to 29 aircraft by December-end, as it aims to increase frequencies to metro cities and prune unprofitable routes in the upcoming winter schedule, said Sanjay Kumar, chief operating officer of the airline.

    AirAsia, a joint venture between Tata Sons Pvt. Ltd and Malaysia-based AirAsia Berhad, has 23 aircraft and will induct two aircraft in the next fortnight, he added.

    Tata Sons holds a 51% stake in the airline, while AirAsia Berhad holds a 49% stake.

    AirAsia India operates 175 daily flights to over 20 destinations across the country, including New Delhi, Mumbai, Bengaluru, Hyderabad, Kolkata and Ahmedabad.

    The airline operates an Airbus A320 fleet that’s powered by CFM engines. CFM International is a joint venture between US-based GE Aviation and French aerospace engine manufacturer Safran Aircraft Engines.

    “We don’t want to spread too thin and operate at stations with only one flight or so. Our aim is to strengthen our network, especially in metros, and have multiple frequencies between two cities,” said Kumar.

    The directorate general of civil aviation (DGCA) has approved the operation of 1,345 departures every week by AirAsia India in the upcoming winter schedule between 27 October 2019 and 28 March 2020. This is an increase of 326 departures every week compared to the corresponding period of the previous year.

    This will lead to the airline increasing the frequencies of flights on busy metro routes, including Mumbai-Pune, New Delhi-Chennai, Delhi-Bengaluru, New Delhi-Hyderabad, Guwahati-New Delhi, Guwahati-Kolkata, Guwahati-Bengaluru, and New Delhi-Srinagar.

    AirAsia India recently started a daily flight on the Delhi-Jaipur route and flights from Agartala to destinations such as Guwahati, Imphal, Kolkata and New Delhi from 20 October.

    “Agartala is now connected to four destinations in the country on the very first day of the operations. This is the kind of philosophy we are going to follow, especially when we open a (new) station and network,” Kumar said.

    All the airline’s upcoming new stations will be connected to other destinations across its network.

    During the winter schedule, Indian airlines are set to operate 23,403 departures per week covering 103 airports, as compared to 23,117 departures a week during the winter schedule of the previous year.

    About 3,600 weekly departures were reduced because of the sudden suspension of operations by Jet Airways (India) Ltd from the scheduled domestic aviation, DGCA had recently said. “Prompt steps by the government has filled the void created by Jet Airways and has helped to achieve growth of 1.2% compared to winter schedule 2018,” it had added.

    Jet Airways had grounded its operations in April 2019 following an acute cash crunch.

    AirAsia India has temporarily been allocated some of the slots at major airports that earlier belonged to Jet Airways, Kumar said. “This has helped us increase frequencies between key metro cities.”

    AirAsia India carried 725,000 domestic passengers during September to register 6.3% market share. The airline had carried 498,000 passengers during September 2018 with a market share of 4.4%.

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  • AirAsia X’s 3Q flight frequencies fail to boost overall capacity

    AirAsia X’s 3Q flight frequencies fail to boost overall capacity

    AIRASIA X Bhd’s additional flight frequencies in the third quarter of the year (3Q19) were insufficient to boost overall capacity, MIDF Amanah Investment Bank Bhd said.

    The long-haul affiliate of low-cost carrier AirAsia Group Bhd increased flight frequencies to Gold Coast, Sydney and Melbourne to cater for increased demand following the school-term holidays in Australia.

    However, this was insufficient to boost overall capacity, causing AirAsia X’s average stage length to remain flat on a yearly basis between July and August this year.

    In 3Q19, AirAsia X’s average seat per kilometer (ASK) declined by 3% year-on-year (YoY), outpacing the 2% YoY dip in revenue per kilometer (RPK).

    “This was due to seasonal capacity management which saw the total capacity (-3% YoY) decline more than the number of passengers carried,” MIDF said in a research note yesterday.

    The destinations involved were Sapporo and Taipei in response to weaker demand during the leanest season of the year for these routes.

    Meanwhile, AirAsia X Thailand recorded a 32% YoY increase in passengers carried in 3Q19, underpinned by additional seat capacity and the inauguration of the fifth Japanese destination, Fukuoka, on July 2019.

    ASK grew at a faster pace of 48% YoY due to high capacity, leading to a decline of 10 points in load factor to reach 77% in 3Q19.

    MIDF forecasts a loss of RM8.1 million for AirAsia X in the financial year ending Dec 31, 2019 (FY19), and lower earnings of RM45.6 million for FY20.

    “We are imputing a lower jet fuel estimate as our Brent crude oil estimate for FY19 has been lowered to US$63 (RM264.60) per barrel (previously US$70 per barrel).

    “Nonetheless, the effect of lower estimated fuel expenses is moderated by a higher US dollar to ringgit rate of 4.15 (previously 4.08). We have also taken into account lower growth in capacity amid the group’s ongoing network rationalization exercises in its key markets,” the research house said.

    Moving forward, lower passenger service charges (PSC) of RM50 for international departures from Asean will deliver an additional boost to the current traveling trend.

    The PSC was revised last month for passengers traveling outside of Asean from RM73 to RM50, effective Oct 1, 2019.

    “Notwithstanding this, we believe the ongoing capacity deployment will remain a headwind for the rest of FY19,” MIDF added.

    The adoption of the Malaysian Financial Reporting Standard 16 will be a hurdle to AirAsia X, since the majority of the group’s fleet are leased, with gains from lower interest to be realized beyond the fifth-year of the leased term.

    MIDF maintained a Neutral call on the low-cost long-haul carrier with a target price of 17 sen per share based on the adjustment in earnings.

    AirAsia X share price closed one sen higher yesterday at 17 sen, valuing the airline at RM705 million.

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  • AirAsia sees in-flight Wi-Fi as next income source

    AirAsia sees in-flight Wi-Fi as next income source

    AirAsia has been exemplary in using digital and disruptive technologies in increasing its ancillary income, including the introduction of in-flight Wi-Fi, which is expected to create a US$130 billion global market by 2035, according to London School of Economics research.

    AirAsia is the pioneer of low-cost airline in-flight Wi-Fi in the region.

    “Currently, we have about slightly over 50% of our aircraft (in Malaysia) Wi-Fi-enabled. We expect AirAsia Wi-Fi to be installed fleetwide in all AirAsia Malaysia in 2020,” chief executive officer Riad Asmat said.

    The other AirAsia companies are expected to follow suit, he said.

    “Wi-Fi these days is like oxygen. The moment you sit in a place the first thing we ask is if it has Wi-Fi and it is slowly gaining traction in the aviation sector,” he told Bernama when asked on the growing sector.

    For the Malaysian operation, the flights are all within the one-to four-hour range.

    “Within the AirAsia Wi-Fi ecosystem, the airline has entertainment, we have our e-shop, digital in-flight magazine and some level of entertainment, especially for kids. Besides enhancing the experience of passengers, the service also enables them to connect with their loved ones on air,” said Riad.

    “Hooking up to the AirAsia” Wi-Fi ecosystem is free (browsing kids entertainment, e-shop and magazine) but if you want to use your social media or do real work, then you’ve got to pay and I believe our rates are competitive as compared with other airlines around the region,” he said.

    A check on the service revealed that the Wi-Fi plans range from RM9 to RM58, with the most basic plan capped at 10MB. There is also a top-of-the-line 200MB plan, which is best for streaming. Riad said more than 30% of its passengers have accessed the AirAsia Wi-Fi services and the figure is expected to hit 50% soon.

    Knowing AirAsia, Riad was also quick to point out that incorporating a lot of its services in the AirAsia Wi-Fi ecosystem would also help them cut costs via fuel-saving.

    “Once the aircraft is Wi-Fi-enabled the in-flight magazine (hardcopy) should not be there. It is fuel-saving,” he said, adding that although the hardcopy uses some of the lightest paper material available, going 100% digital would save kilos for every fleet.

    Hence, Wi-Fi is crucial for AirAsia’s business, he said, noting “it is part and parcel of embracing technology.” Riad, however, said the portion of WiFi contribution now to its overall ancillary income is negligible.

    “But the growth potential is phenomenal because once all the aircraft have the service, people start using dependent on the needs of that day. I am sure you can get business out of it, directly and indirectly, especially when passengers browse and make a purchase via OURSHOP,” he said. OURSHOP is AirAsia’s e-commerce platform.

    However, for the service to have a bigger impact on its ancillary income, Riad said it has to remain attractive, noting the company is constantly on the lookout for more content providers.

    AirAsia currently uses the high-speed Ka-band platform, which claims to provide connectivity beyond basic broadband, supporting real-time video, music streaming and more.

    A recent survey by the International Air Transport Association, which represents some 290 airlines comprising 82 percent of global air traffic, revealed that some 53 percent of surveyed passengers found Wi-Fi important to have.

    The importance is highest in Africa (71 percent), followed by Latin America (68 percent) and the Middle East (67 percent), with the lowest in Europe (44 percent) and North America (49 percent).

    The 2019 Global Passenger Survey was based on 10,877 responses from passengers across 166 countries.

    “With the availability of Wi-Fi connectivity continuing to have a direct impact on the overall travel experience, adopting the latest onboard Wi-Fi technology continues to be an effective way for airlines to distinguish their product offering,” said the association.

    Besides WiFi, Riad said there is also a huge potential to increase ancillary income through its cargo business Teleport, which is the second-largest cargo airline group in Southeast Asia by capacity after Singapore Airlines Cargo as of July 2019, according to the Centre for Aviation.

    “We’re currently utilizing only approximately 15% of the available belly space for cargo, in which approximately 40% of our revenues are generated from connections through our network,” he said.

    It delivered approximately RM206 million in revenue in the financial year 2018 and is on track to deliver approximately RM400 million in financial year 2019.

    “We have invested in technology, with the goal to deliver the same day as standard anywhere within Southeast Asia. Airports are at the heart of this ability to do so,” he noted.

    Riad said AirAsia foresees bigger growth in the small parcel business.

  • AirAsia India flights on new route starts

    AirAsia India flights on new route starts

    AirAsia India will start a daily flight on the Delhi-Jaipur route from October 20. The flight will depart daily from Delhi airport at 10.35 am and arrive at Jaipur airport at 11.45 am. The return flight will depart daily at 12.15 pm from Jaipur and arrive at 1.25 pm at Delhi airport. Tickets are available for as low as ₹1,315 on the route.

    The airline had recently announced flights from Agartala to destinations like Guwahati, Imphal, Kolkata, and New Delhi, starting October 20. The airline is offering tickets starting ₹1,019 on this route. Booking of tickets can be done on airasia.com or the AirAsia mobile app.

    AirAsia India is a joint venture between Tata Sons Limited and AirAsia Investment Limited.

    The airline commenced operations on June 12, 2014, and currently flies to 20 destinations across India with a fleet of 23 A320 aircraft.

    Another budget carrier, GoAir offered tickets for as low as ₹1,296 (inclusive of taxes) for international and domestic routes in its 24-hour pre-Diwali ‘super saver fares’ deal. The ‘super saver fares’ was a boon for passengers who would like to usher in Diwali in style.

    The domestic air passenger traffic fell for the fourth consecutive month during September, the monthly decline worsening to 2.20% as compared to 0.94% during the previous month.

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  • AirAsia’s inflight WiFi is getting faster

    AirAsia’s inflight WiFi is getting faster

    WiFi on planes is the next-gen convenience, or potential annoyance, depending on your attitude to people being ‘connected’ all around you. But for business people, parents with families or bored flyers, it will be a welcome addition to the low-cost flying experience.

    Now, passengers, onboard AirAsia can look forward to an “enhanced inflight entertainment and connectivity experience” with the low-cost airlines’ recently upgraded WiFi services.

    Six AirAsia Malaysia planes and two aircraft operated by Thai AirAsia have now been equipped with Inmarsat’s high-speed Ka-band platform, GX Aviation. AirAsia Group president (RedBeat Ventures) Aireen Omar said this development is the “next logical step” for the airline.

    AirAsia formerly carried a system called ‘Rokki’ but has phased that out in preference to the newer, faster system.

    “As the pioneer of low coast inflight WiFi in the region, we are always looking for ways to redefine the digital inflight experience for our guests.”

    Guests will be able to stay connected throughout their journey and perform data-intensive activities, including live streaming. Ka-band claims to provide connectivity beyond basic broadband, supporting real-time video, music streaming and more.

    The AirAsia WiFi Internet plans range between 9 Ringgit (65 baht) and 58 Ringgit (420 baht) with the most basic plan capped at 10MB speed. There is also the top of the range 200MB plan which is best for streaming.

    The service will be rolled out to the rest of the Air Asia fleet over the next 12 months.

    The Thaiger tried out the new system on a flight from Kuala Lumpur to Phuket on Tuesday. We were only using the 10MB speed internet but was perfectly adequate for our work and saving documents in the ‘cloud’.