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Tag: airline

  • Vietnam Airlines losses soar as Covid-19 grounds flights

    Vietnam Airlines losses soar as Covid-19 grounds flights

    Vietnam Airlines has reported losses of VND10.7 trillion ($464 million) in January-September, hit hard by Covid-19. The national flag carrier recorded revenues of VND23.9 trillion in the first nine months of this year, down 58.3 percent year-on-year, it said in a press release on Tuesday.

    During this period, the carrier transported 10.2 million passengers, down 41.2 percent from a year ago.

    The airline has blamed its loss on the pandemic’s impacts on the aviation industry. It said it has cut sales, financial and management expenses, reduced salaries of pilots and flight attendants as well as increased the operation of repatriation flights as part of efforts to reduce costs and boost incomes.

    The carrier’s third-quarter revenues fell 68 percent year-on-year after the second Covid-19 outbreak hit the country in late July, said Tran Thanh Hien, the airline’s chief accountant. The third quarter was usually the highest revenue earner of the year as summer travel peaked, Hien noted.

    The second outbreak forced Vietnam Airlines to cancel 22 new domestic routes during the peak period. So far, it has resumed 11 of these and is considering the viability of resuming the rest in the fourth quarter, always a low travel period.

    The national carrier currently operates more than 60 domestic routes with an average of 300 flights per day. It has resumed one-way flights to Japan and plans to reopen routes soon to mainland China, Taiwan, Laos, and Cambodia.

    As of last month, the airline said its cash reserves had gone down to just VND1.9 trillion.

    The airline has estimated this year’s total loss at around VND15.2 trillion on revenues of VND55.7 trillion.

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  • US$1bil loan offer for AirAsia data

    US$1bil loan offer for AirAsia data

    An American lender is willing to loan AirAsia US$1bil for the data of its customers it has accumulated from its business over the years. AirAsia Group Bhd CEO Tan Sri Tony Fernandes did not reveal the name of the potential US lender but spoke on how its data-driven new “super app” would become an equal contributor to group profit with its airline business in five years.

    “The airline has created this amazing business, ” he said, adding that post-Covid, the app has seen 50 million unique visitors every month.

    “We didn’t rush into the digital age as we started this journey two years before the Covid-19 outbreak, ” he told the media.

    The contribution forecast is based on AirAsia flying 300 aircraft in five years.

    He said there was a cash-raising potential to be done at the airasia.com and airline levels.

    “The first lot of financing will be announced by the end of this month, ” he said.

    Fernandes said that all pillars of the airasia.com app have already broken even except the fintech segment of the digital business because of the interchange fees it has to pay credit card companies. However, it has secured a money lending license from the Housing and Local Government Ministry to add another element towards the app’s fintech business.

    In a statement yesterday, AirAsia said it’s airasia.com Asean super app provides over 15 types of products and services under three main pillars, which are travel, e-commerce, and fintech.

    Fernandes believes the app can be a competitor to some of the established apps in Asean like Grab and Gojek and will provide competition in a fierce segment like food delivery.

    In the lucrative food delivery business, restaurants would not have to pay a commission to airasia.com like they do for other food delivery apps, but pay instead to the food deliverer, which translates to a commission rate of between 3% and 9% per delivery.

    “Now, everyone can travel, experience, shop, eat, enjoy rewards, and more with the new airasia.com super app. From travel needs to everyday lifestyle essentials, there is something for everyone, ” said airasia.com CEO Karen Chan.

    Fernandes said AirAsia would not be taking delivery of new planes as there is a lot of excess aircraft within the industry.

    “No one is going to fly the same size of fleets they did pre-Covid-19 for a couple of years, I imagine.

    “My guess is that we would be able to fly 180 planes by end-2021 for the entire group.

    “It depends on when the borders re-open for all our markets, ” he said. AirAsia has 245 planes currently.

    In fact, Fernandes said the airline would be returning 22 planes this year to its lessors.

    “I don’t see us getting to a position where we want to buy planes for a number of years.

    “Even when you want to buy planes, there will be cheaper second-hand planes out there, ” he said.

    As for travel, Fernandes said leisure travel would likely bounce back ahead of business travel.

    “Leisure, budget, short-haul business travel will bounce back to pre-Covid-19 level and we are already seeing it.

    “In Thailand, we are 95% of the capacity of pre-Covid-19. In fact, by Q4 we will be 10% ahead of where we were.

    “When the borders re-open, (the business) will bounce back really fast, ” he said.

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  • Cebu Pacific promotes Philippine tourism with ‘Juan Love’ campaign

    Cebu Pacific promotes Philippine tourism with ‘Juan Love’ campaign

    The resilience of the country’s tourism sector was put to the test as local businesses and industries had to deal with the immense challenges brought about by the Covid-19 pandemic. Yet, it also brought out the Filipinos’ spirit of Bayanihan, sparking hope for the nation as everyJuan extended support to one another.

    As an airline that strongly believes #EveryJuanWillFlyAgain, the Philippines’ leading carrier, Cebu Pacific, further encourages everyJuan to come together and support the country as it gradually recovers, through its newest campaign “Juan Love — One love for the Philippines.” At a time when borders are slowly reopening, this online campaign aims to inspire everyJuan to travel again — to see the places they’ve missed, and experience the local culture and cuisine unique to every destination.

    The Juan Love campaign will not only highlight the beauty and wonders of the Philippines’ local destinations but will also show how flying supports the people behind the tourism industry — each flight, each tourist, will help people sustain livelihoods — everyJuan for everyone. As this campaign showcases the scenic spots, thrilling activities, and native delicacies each destination is known for, Juan Love will also shed light on all the local businesses and fellow Filipinos making all these possible.

    “We are delighted that Cebu Pacific came up with this heartfelt initiative. More than rekindling the desire of Filipinos to travel once again, the Juan Love campaign also puts a spotlight on the people whose jobs and livelihoods depend on the inclusive growth brought about by tourism. We are always grateful for the support, and rest assured that we will continuously collaborate with the aviation sector so we may all help our industries, and our economy, recover,” expressed Berna Romulo-Puyat, secretary of Department of Tourism.

    “We have been continuously working hand-in-hand with our partners in the government to help ensure the nation bounces back from this crisis. We believe as more destinations open up for tourist travel, we are able to support the small businesses and communities,” said Candice Iyog, Cebu Pacific vice president for Marketing and Customer Experience. “With the launch of our Juan Love campaign, we hope everyJuan joins us in showing one love for the Philippines.”

    Staying true to its commitment to provide safe, affordable, and fun-filled air travels for everyJuan, Cebu Pacific celebrates local tourism with a series of exciting Juan Love Seat Sales! A total of one million seats to domestic destinations will be up for grabs all throughout the “Ber” months.

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  • AirAsia Said to Stop Funding Indian Venture as Cash Dwindles

    AirAsia Said to Stop Funding Indian Venture as Cash Dwindles

    AirAsia Group Bhd has stopped funding its Indian affiliate as the global travel slump leaves the Malaysian group struggling to support a sprawling empire of no-frills airlines, people familiar with the matter said.

    AirAsia India Ltd’s future may now depend on Indian conglomerate Tata Group, its majority shareholder, which has provided emergency funding but has yet to commit to a full rescue, according to the people, who asked not to be named discussing a confidential matter.

    The airline isn’t at any immediate risk of folding, the people said. India’s aviation minister said over the weekend that AirAsia was shutting up shop in the South Asian nation, though his office later suggested the comment was taken out of context.

    AirAsia India declined to comment, as did a representative for Tata Group. AirAsia Group didn’t respond to requests for comment after usual office hours.

    AirAsia said earlier Monday that its Japanese arm will cease flying immediately as the coronavirus outbreak continues to roil the airline industry. Once the poster child of the region’s revolution in low-cost travel, the group is seeking as much as RM2.5 billion to steer its way through the crisis.

    Long-haul arm AirAsia X Bhd has meanwhile said it needs to reach deals with major creditors to restructure debt amid “severe liquidity constraints” that threaten its ability to resume services and continue as a going concern.

    AirAsia India has survived on 3 billion rupees (US$41 million) in funding from Tata, which owns a 51% stake, with another round of financing expected soon, one of the people said.

    Tata is weighing its options and how much it would cost to buy out AirAsia and save the carrier, another person said. The industrial group also has a 51% holding in the Vistara full-service airline venture with Singapore Airlines Ltd.

    AirAsia India predicted it would break even in four months when it began flying in 2014. In reality, it has yet to make money in a market where high fuel taxes and cut-throat fares can make even dominant players unprofitable. The carrier has a market share of 6.8% and employs more than 3,000 people.

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  • AirAsia Japan may be closed down

    AirAsia Japan may be closed down

    Low-cost airline Air Asia is exploring all options over its dwindling operations in Japan, including closing it down.

    There have been reports that the group is planning to discontinue the operations of its affiliate, AirAsia Japan, due to the weak demand following the Covid-19 pandemic.

    Chief executive officer Tan Sri Tony Fernandes did not deny the reports. “We have to look at every option, including closing down the operation. We haven’t reached a decision yet, ” he said when asked to comment on the recent reports.

    On the termination of AirAsia’s flights from Malaysia to Japan, he said that was merely speculative and the board had not made a decision.

    Currently, he said, the airline is unable to fly to Japan due to the international border shutdown, and since its presence in Japan is relatively small, the board was currently evaluating possibilities, including the cessation of its flights there,

    Fernandes, who was speaking to reporters after the launch of the Redbeard Academy, said the academy was initially established in the belief that the digitalization of its airline operations may lead to many of its staff being left redundant.

    “We have to look at every option, including closing down the operation. We haven’t reached a decision yet, ” Fernandes said.

    “Hence, we have Redbeat Academy. But now, of course, we are in a position where the airline has to make retrenchments, and it’s unavoidable. Many of them, hopefully, will come here (Redbeat) and reskill themselves as well, ” he added.

    AirAsia Group’s digital arm, AirAsia Digital, has partnered with Google to launch Redbeat Academy as part of its continuous digital transformation journey.

    AirAsia Digital president Aireen Omar said admissions to the academy, which was previously open only to AirAsia’s staff, is now available to the public and businesses.

    The academy offers a series of tech workshops in areas such as Artificial Intelligence, Machine Learning, Software Engineering, Cybersecurity, Big Data and Infrastructure. Aireen said the course period ranged from two months to a year.

    “For those who have no technology background, they might have to go for a fundamental course, which takes about a couple of months or so, ” she told reporters at the launch.

    The academy was launched by Science, Technology and Innovation Minister, Khairy Jamaluddin.

    Also present were AirAsia Group executive chairman Datuk Kamarudin Meranun and Google Malaysia country head Marc Woo.

    Aireen said the tuition fee was affordable and the curriculum suited to market needs.

    “This is all based on our own experience on the kind of talent we need. The classes will be both online and physical; some classes need to be instructor-led because it’s too difficult to teach online, ” she said.

    During the event, Redbeat Academy also signed a partnership with Malaysian Industry-Government Group of High Technology to reskill a pool of talents in software engineering and high-tech projects.

    The academy also inked a partnership agreement with Universiti Teknologi Malaysia, Universiti Malaya and Asia School of Business, in collaboration with MIT Sloan Management, in awarding a micro-credential to Redbeat Academy’s courses and acknowledging it as part of the Accreditation of Prior Experiential Learning.

  • 2nd airport proposed for Hanoi as air travel boom looms

    2nd airport proposed for Hanoi as air travel boom looms

    The Hanoi Department of Planning and Architecture has recommended the construction of a second airport in the city to cope with the rising demand for air travel. The new airport should be built in the southern district of Ung Hoa, 40 kilometers from the downtown, while the existing Noi Bai International Airport should be upgraded and have its capacity doubled to 100 million passengers a year, it said.

    Ung Hoa has several advantages such as good transport links with the city center since it is served by roads, rail, and waterway, and a large area of 1,300 hectares available for the airport, it explained.

    It could become a satellite town with an industrial zone and a logistics complex in the future, it said. Consultancy Transport Engineering Design Inc (TEDI) has said the number of air passengers could reach 150 million a year in the future, and a second airport should be built starting in 2035.

    The number of passengers and cargo passing through Noi Bai Airport has been growing by 10 percent a year reaching 29 million in 2019.

    Its designed capacity is for 25 million passengers. Vietnam generally saw demand for air travel rise before the Covid-19 outbreak, with its airports handling 116 million passengers last year, up 12 percent from 2018, according to the Airports Corporation of Vietnam (ACV).

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  • AirAsia adding services in super app

    AirAsia adding services in super app

    AirAsia Group announced on Thursday that it is building a super app off its existing mobile application and website to provide services such as e-commerce, delivery, and payments. The app is to be available next month in Thailand and ASEAN.

    AirAsia chief executive Tony Fernandes said the idea to build a super app came before the pandemic, but new revenue streams are desperately needed after most of AirAsia’s fleet has been grounded for months because of travel restrictions. The company suffered losses of US$238 million in the second quarter of this year.

    “This journey didn’t start during the pandemic but it was accelerated because of the outbreak,” Mr Fernandes said. “This is not a Plan B, this was always our Plan A, but we still think aviation will definitely come back.”

    The new platform will be accessible through AirAsia.com and AirAsia’s mobile app on Oct 8, including digital services under subsidiary AirAsia Digital.

    These services include BigPay, a digital payment app; Teleport, a wholly-owned logistics, e-commerce, and delivery business; and Santan, a food and beverage franchise. Mr Fernandes said these services are already earning revenue for AirAsia except for BigPay, which is in negotiations with regulators to set its rates.

    Teleport came to Thailand in 2019 through a joint venture, while BigPay is available in Thailand and can transfer money to Thai bank accounts. Santan is only available in Malaysia or on AirAsia flights.

    “AirAsia’s roots are from moving people from A to B and moving cargo from A to B, and that is the basis of AirAsia Digital and the basis for our platform AirAsia.com,” Mr Fernandes said.

    The app will also allow users to book hotels and flights (from airlines other than AirAsia) and offers a travel and lifestyle rewards program. The company ended its partnership with Expedia and is offering its own travel booking service.

    AirAsia’s new venture will face stiff competition from existing super apps Grab and Gojek, which are both spending billions in venture capital to expand their presence in Southeast Asia. Grab and Gojek are in talks for a merger, which if completed would create a virtual monopoly for ride-hailing and food delivery in Asean.

    Grab is valued at about $14 billion, while Gojek was valued last year at almost $10 billion. Neither company is publicly traded.

    AirAsia, which is listed on the Malaysian stock exchange, has a market capitalization of $624 million.

    “We are nowhere near the size of Grab or Gojek, but AirAsia’s not about being dominant in one country, but providing an Asean product,” Mr Fernandes said.

    The AirAsia app hopes to differentiate itself by leveraging the data it has collected from millions of passengers, while also stressing its cross-country appeal for cross-border travelers in Asean.

    “I don’t believe we are here to compete, but here to complement,” Mr Fernandes said. “Airlines always see us as competitors, but we complemented the full service and created a new market that was not there — before, only a few people could fly, now everyone can fly, and in the same way we will complement the market.”

    He said the platform will also be open to new partners and services, not just those owned directly by AirAsia Digital.

    Michael Araneta, associate vice-president of IDC Financial Insights, said traditional businesses like AirAsia can find success with a super app by leveraging existing customer bases and technical resources.

    “AirAsia has shifted to being a lifestyle company and already has spent considerably on developing technology,” he said. “The company might not need to invest a substantial additional amount to turn their tech offerings into a super app.”

    Users of AirAsia’s super app will benefit from usage points that convert to discount flights and other related partner services supporting its core business, Mr Araneta said.

    During a pandemic, users cannot take advantage of these flight privileges as much.

    Mr Araneta said a winning super app is one that leverages considerable real-time data and various partners to provide relevant benefits to its customer base.

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  • Domestic aviation on the road to recovery

    Domestic aviation on the road to recovery

    Vietnam’s aviation industry is gradually recovering with passenger numbers heading toward pre-pandemic levels after a months-long slump. Noi Bai International Airport in Hanoi handled 29,000 passengers daily during the weekend, nearly triple the daily average of August when there was a Covid-19 resurgence.

    To Tu Ha, deputy director of the airport, said there has been a weekly increase of 15 percent since the beginning of September. “As Vietnam is doing well in controlling the pandemic, we expect domestic travel growth to be maintained for the rest of the year as traveling abroad is mostly limited.”

    International flights have been halted since March. Vietnam Airlines currently operates 200 flights a day, with the number of passengers rising from 17,500 in August to nearly 40,000 now.

    It resumed services on six domestic routes this month and increased the frequency of eight others. It plans to resume flying on six more routes next month, including popular travel destinations Da Lat in the Central Highlands and Nha Trang and Da Nang in the central region.

    “The growth in a number of passengers will help us pare trillions of dong in losses from our earlier forecast,” a spokesperson said. The airline had forecast a loss of VND13 trillion ($560 million). Bamboo Airways is also recovering with the number of passengers doubling this month to 12,000-15,000.

    “We expect strong growth in the routes between Hanoi and Ho Chi Minh City and Con Dao Island,” a spokesperson said. Budget airline Vietjet said passenger numbers have risen by 30 percent since last month though still less than in September last year.

    A spokesperson for Vietjet said: “As the aviation market recovers, losses are being reduced. But airlines continue to face difficulties and we still need government support with taxes and fees.”

    Vietnamese carriers are also expecting a revenue boost from the resumption of flights to seven destinations including Japan, South Korea, China, and Thailand, a proposal the government has approved.

    But Dinh Viet Thang, head of the Civil Aviation Authority of Vietnam, said Tuesday that flights to these destinations have not resumed due to the need for Vietnam and these countries to first reach agreement over-testing, immigration, and quarantine protocols.

    Another challenge is that both Vietnamese and foreign carriers are having trouble identifying businesspeople and “experts,” the only categories of non-diplomatic passengers allowed to enter Vietnam, he added.

    The CAAV wants the Ministry of Public Security and Ministry of Foreign Affairs to take this into consideration when issuing visas so that airlines could sell tickets to the right passengers.

    Vietnamese airlines carried 24.2 million passengers in the first eight months, down 35.1 percent year-on-year, according to the General Statistics Office.

  • Bamboo Airways poised to expand international services

    Bamboo Airways poised to expand international services

    Bamboo Airways plans to launch more new routes to Asian destinations like Japan, Singapore, and Australia besides resuming services to Taiwan and South Korea.

    It will resume flights from Hanoi to Taipei in Taiwan on September 29 and Seoul in South Korea on October 7. There will be one weekly round trip to begin with.

    The airline will begin to fly on the HCMC-Tokyo sector from November 1 and the Hanoi-Tokyo sector from December.

    It will also begin service between the northern port city of Hai Phong and Singapore besides direct flights from Hanoi and HCMC to Melbourne, Australia, in the fourth quarter.

    A spokesperson for the airline said wide-body Boeing 787-9 Dreamliner aircraft would be used for long-haul flights, adding preparations are underway to fly to Europe once Covid-19 is contained globally.

    It is scheduled to start services from Hanoi and HCMC to London in the U.K. and Munich/Frankfurt in Germany in the first quarter of 2021 and is awaiting approval.

    Nguyen Ngoc Trong, the deputy CEO of Bamboo Airways, said there are long-term plans to fly to 27 European destinations. Vietnam suspended all international flights on March 25.

    Bamboo Airways, launched in January last year, was operating on 40 domestic and international routes before the pandemic struck in January. It reported a pre-tax profit of VND303 billion ($13 million) in 2019.

  • AirAsia Seeks Up to $600 Million Cash Injection to whitstand Crisis

    AirAsia Seeks Up to $600 Million Cash Injection to whitstand Crisis

    AirAsia Group is seeking to raise as much as 2.5 billion ringgit ($600 million) by the end of the year as it tries to survive a business slump exacerbated by the coronavirus pandemic.

    The Subang, Malaysia-based budget carrier may borrow up to 1.5 billion ringgit from banks and another 1 billion ringgit from investors, a spokeswoman said Tuesday. AirAsia is also in talks with local and foreign investors including private equity firms, strategic partners, and conglomerates, she said, confirming an earlier report that cited Group Chief Executive Officer Tony Fernandes.

    Airlines around the world are losing money after grounding thousands of planes as countries shut borders and restrict people’s movements. AirAsia, which last month posted its largest quarterly loss on record, resumed domestic operations in late April but its long-haul unit, AirAsia X Bhd., still isn’t flying. Auditor Ernst & Young said in July their ability to continue as going concerns may be in “significant doubt.”

    South Korea’s SK Group said in June that it was in talks to buy a small stake in AirAsia, without providing further details. AirAsia has also cut the salaries of management, trimmed jobs, and deferred plane deliveries in an attempt to shave costs by 30% this year.

    AirAsia is also evaluating its operations in Japan and will make a decision very soon, the company’s spokeswoman said Tuesday. Its India venture remains as is, she said without elaborating. The airline is looking to consolidate and strengthen its business in Southeast Asia, even if that means exiting Japan and India, Reuters reported earlier.

    AirAsia said last month that it needs to reach agreements with major creditors to restructure outstanding debt because it faces “severe liquidity constraints” that threaten its ability to resume flying and continue as a going concern.

    The long-haul budget unit and its AAX Leasing Two Ltd. have received a claim from BOC Aviation Ltd. regarding $23 million of outstanding amounts due under lease agreements, according to an exchange filing Friday. AirAsia X, which said it is seeking legal advice, leases four aircraft from BOC.

    AirAsia is one of Airbus SE’s major customers for A320s while AirAsia X is the world’s biggest customer of Airbus A330neo planes. AirAsia X has 78 of the aircraft on order, according to Airbus’s website, and has already deferred the delivery of some A330neos.

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  • AirAsia to start charging customers for checking in at airport counters

    AirAsia to start charging customers for checking in at airport counters

    Cash-strapped budget airline AirAsia Group Bhd said on Tuesday it would begin charging customers a fee to check-in at airport counters, in part to encourage them to minimize physical contact with staff during the coronavirus pandemic.

    Travelers who do not check-in via the airline’s website, mobile app, or airport kiosk will be charged 20 Malaysian ringgit ($4.83) for domestic flights and 30 Malaysian ringgit for international flights, though some exceptions will apply.

    AirAsia Group Chief Operations Officer Javed Malik said the fees would help motivate travelers to make use of the airline’s investment in digital technology.

    “In view of the Covid-19 pandemic, these self-check-in facilities have become very crucial in minimizing physical contact between our guests and staff,” he said in a statement.

    AirAsia last month reported the biggest quarterly loss in its history due to the devastating impact the pandemic has had on travel demand, with revenue down 96%.

    The airline said it had applied for bank loans in its operating markets and had been presented with proposals from investment bankers, lenders, and potential investors to raise capital.

    The new AirAsia check-in fees are well below European budget carrier Ryanair Holdings’s PLC 55 euro ($65.95) charge for airport check-in, which was put in place before the pandemic.

    US low-cost carrier Spirit Airlines charges $10 for boarding passes to be printed at the airport, according to its website.

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  • Green light for carrier KiteAir likely delayed until 2022

    Green light for carrier KiteAir likely delayed until 2022

    The Planning and Investment Ministry has suggested that the PM delays his approval to new carrier KiteAir’s investment proposal over Covid-19 impacts. The establishment of the new airline would add to the business woes wreaked on the local aviation industry by the pandemic, the ministry said in a document recently sent to Prime Minister Nguyen Xuan Phuc. “A suitable time for a new carrier would be 2022 when the market has recovered.”

    The ministry added that the current priority and focus should be the restoration of domestic and international aviation markets and support for existing carriers.

    Earlier, in July, the Transport Ministry (MoT) had also proposed that the government not license any new carrier, including KiteAir, till 2022, when the local aviation market is expected to recover.

    Based on the MoT’s proposal, Deputy PM Trinh Dinh Dung in July “agreed in principle” with the temporary suspension as proposed by the MoT. Dung, however, assigned the MPI, as an investment proposal appraisal agency, to report to the PM about the KiteAir investment proposal which was already submitted by hospitality group Thien Minh.

    The MPI had said earlier that KiteAir has a sufficient legal basis to have its investment proposal appraised. The MoT, meanwhile, had said the establishment of the new carrier was in line with the orientation and development plans of the industry.

    But in April, amid the Covid-19 pandemic, the PM requested ministries to review and consider the establishment of any new carrier, including KiteAir, given the new context.

    KiteAir, which planned to take off in the second quarter of 2020, was to be headquartered in the central province of Quang Nam with a charter capital of VND1 trillion ($43 million), invested in by Thien Minh, a leading Vietnamese hospitality group.

    It planned to operate six short-haul ATR-72 aircraft with a capacity of 78 seats in the first year of operation and expand the fleet to 30 jets by the fifth year, including 15 narrow-body Airbus A320/321 aircraft.

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  • AirAsia’s 1Q e-commerce sales leap 118%

    AirAsia’s 1Q e-commerce sales leap 118%

    Budget airline AirAsia Group Bhd saw revenue from its e-commerce platform, AirAsia.com, rose 118% year-on-year in the first quarter of this year as it rolled out new offers, promotions, flights and hotel bundle packages.

    “As travel continues to gradually resume, more activities are authorized… which in turn will support the growth of our non-airline business divisions, particularly in the lifestyle, e-commerce and media verticals,” said AirAsia.com chief executive officer Karen Chan in a statement today.

    AirAsia anticipates that its airline and ancillary revenues will gradually stabilize as non-airline revenues become a key driver of growth and business priority.

    “In the future, we foresee our non-airline revenues will outperform our airline performance which is why our focus is on offering innovative products that encompass travel, lifestyle, e-commerce and media verticals, in both the B2B and B2C segments,” said Chan.

    “While Asean is our home and domestic travel is our short-term focus, we look forward to the reopening of international borders to realize the potential of AirAsia.com,” she added.

    In anticipation of international borders reopening soon, Chan said AirAsia is in final stages of discussions with key international airlines to connect their European and MEA networks directly with AirAsia’s vast Asean network.

    “These strategic partnerships will complement our existing partnership with Kiwi.com, which provides a virtual interlining and connectivity optimization engine to offer a one-stop-shop, best-price-guaranteed service for our customers.”

    The airline wants to position AirAsia.com as a leading one-stop travel and lifestyle e-commerce platform in Asean, offering products from flights, hotels, travel activities, shopping and more.

    Chan said AirAsia has always regarded Asean as its playground, connecting its 640 million people to 160 destinations across Asia and the Pacific. “But with the pandemic still at large and continued restrictions to cross-border travel, we are looking at creative ways to overcome these limitations.”

    For now, the focus for AirAsia.com is to promote domestic travel until international borders reopen and travel restrictions are relaxed.

    “Given AirAsia’s dominant market position (with over 73% market share in capacity in Malaysia), we are using our position of strength to stimulate domestic air travel where there is demand.

    “Going back to our DNA which is all about making travel affordable for everyone, we will continue to innovate with more exciting products, leveraging on our one-stop travel shop ecosystem and focusing on our business divisions which are most relevant given current market conditions,” said Chan.

    “Based on our recent market survey, close to 45% of travelers want to travel immediately post lockdown. Flight searches on our website have increased by more than 150% post-hibernation period and as of June 2020, AirAsia.com receives 1 million daily active users.

    “Our domestic travel promotions have been very well-received. We sold over a million seats group-wide in July and we continue to ramp up capacity. With restrictions on activities being lifted, we hope to achieve a load factor of 70%-80% by the third quarter of 2020,” she said.

    Chan noted that the aviation industry, being one of the heaviest impacted by the Covid-19 pandemic, is undergoing a period of consolidation — fare rationalization will be a natural outcome.

    “We continually review our products and innovate to best meet our customer’s needs, at unbeatable prices. We survived for 18 years in a hyper-competitive industry and became the leader of the low-cost carrier segment by providing the best prices, best Asean connectivity and best customer experience.”

    Under its recently-launched Unlimited Flight Pass in Malaysia and Thailand, AirAsia sold more than 200,000 passes and has received many requests for the product to be introduced in other markets.

    “We are closely monitoring the domestic travel situation in all of our markets (that AirAsia operates) and are looking forward to extending the Unlimited Flight Pass to other markets such as Indonesia and the Philippines when flight restrictions have eased,” said Chan.

    To date, AirAsia.com partners close to 400 hotel chain properties and over 100 independent hotels across Malaysia, Thailand and Indonesia.

    In Malaysia, AirAsia.com is working closely with the Malaysian Association of Hotels to collaborate with more hotels, and hopes to increase its partnerships with independent hotels in Kuala Lumpur, Langkawi, Penang, as well as Sabah and Sarawak.

    AirAsia shares closed up one sen or 1.52% at 67 sen today, bringing a market capitalization of RM2.24 billion. A total of 11.91 million shares were traded.

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  • Pacific Airlines gets new CEO

    Pacific Airlines gets new CEO

    The board of Vietnam Airlines has named a new CEO for subsidiary Pacific Airlines, formerly Jetstar Pacific.

    Dinh Van Tuan, 50, has taken from Nguyen Thuong Hoang Hai, who quit for personal reasons. Tuan was earlier the director of Vietnam Airlines’ operations center, and has served in various capacities at the carrier since 1996.

    Jetstar Pacific became Pacific Airlines on August 1 and got a new logo as Vietnam Airlines, which owns a 68.86 percent stake in it, seeks to buy another 30 percent stake from Australia’s Qantas.

    The first joint-stock airline in Vietnam was set up in 1991. In its 29 years, it has only reported profits for four years. It has major expansion plans, with the current fleet of 18 aircraft set to be increased to 50 by 2025.

  • Cebu Pacific to refund tickets of 1.5M passengers

    Cebu Pacific to refund tickets of 1.5M passengers

    Budget carrier Cebu Pacific will provide refunds to an estimated 1.5 million passengers as 50 percent of its fleet remains grounded due to the coronavirus pandemic.

    Charo Logarta Lagamon, corporate communications director for Cebu Pacific Air, assured that passengers who requested refunds since April or earlier will be refunded by August.

    “All of a sudden, we have a situation where hundreds of thousands of passengers are all clamoring for a refund in a 160-day time frame. It’s not that simple to refund, especially now that there’s no cash flow in the airline. Nothing is going in and everything is going out,” she said in a Zoom meeting Friday, Aug. 7.

    Lagamon said they are doing their best to fast-track the process and that there are reforms underway to help in the refund process.

    She said the airline will reimburse payments made through credit or debit card while for those who paid in cash, the refund will be deposited in the bank account of the customer.

    Moreover, to stay afloat during these challenging times, the airline also implemented cost-cutting measures like the layoffs of 800 employees, which is 20 percent of the airline’s 4,000 employees.

    Company officials also had pay cuts.

    “Our second-quarter performance was very challenged due to the prolonged Covid-19 situation,” she said.

    Meanwhile, Cebu Pacific placed 14 of its 76 aircraft in long-term storage in Alice Springs, Australia to preserve the airline’s condition. Others were parked in the different hubs in the country.