Growth of AirAsia Berhad

Growth of AirAsia Berhad

History of Air Asia AirAsia Berhad, is a Malaysian low-cost airline. It operates scheduled domestic and international flights and is Asia’s largest low fare, no frills airline. AirAsia was a pioneer of low cost flights in Asia. It is also the first airline in the region to implement fully ticketless travel and unassigned seats. However, as of 5 February 2009, AirAsia has implemented allocated seatings across all AirAsia flights, including in their sister airlines, Indonesia AirAsia and Thai AirAsia. Its main base is the Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KLIA).

Its affiliate airlines Thai AirAsia and Indonesia AirAsia have hubs at Suvarnabhumi Airport, Thailand and Soekarno-Hatta International Airport, Indonesia, respectively. AirAsia’s registered office is in Petaling Jaya, Selangor while its head office is on the grounds of Kuala Lumpur International Airport in Sepang, Selangor. In 2010 Air Asia won an award for the world best low cost airline. Establishment The airline was established in 1993 and started operations on 18 November 1996. It was originally founded by a government-owned conglomerate DRB-Hicom.

On 2 December 2001, the heavily-indebted airline was purchased by former Time Warner executive Tony Fernandes’s company Tune Air Sdn Bhd for the token sum of one ringgit. This was after great deliberation as the initial offer was fifty sen. Fernandes proceeded to engineer a remarkable turnaround, turning a profit in 2002 and launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1 Second Hub

In 2003, AirAsia opened a second hub at Senai International Airport in Johor Bahru near Singapore and launched its first international flight to Bangkok. AirAsia has since started a Thai subsidiary, added Singapore itself to the destination list, and commenced flights to Indonesia. Flights to Macau started in June 2004, while flights to Mainland China (Xiamen) and the Philippines (Manila) started in April 2005. Flights to Vietnam and Cambodia followed later in 2005 and to Brunei and Myanmar in 2006, the latter by Thai AirAsia. Budget Terminal

A new budget terminal, the first of its kind in Asia was opened in Kuala Lumpur International Airport on 23 March 2006. Built at a cost of RM108 million mand spanning some 35,000 square metres (116,000 square feet), the Low Cost Carrier Terminal (LCCT) is the new home for Air Asia Bhd. Initially, the LCCT handled 10 million passengers a year. Air Asia Group is expected to carry 18 million passengers in 2007. However, all airport taxes charged and collected by the airline have yet to be paid to the terminal owner, due to unknown reasons.

Low Cost Model Air Asia operates with the world’s lowest unit cost of US$0. 023/ASK and a passenger break-even load factor of 52%. It has hedged 100% of its fuel requirements for the next three years, achieves an aircraft turnaround time of 25 minutes, has a crew productivity level that is triple that of Malaysia Airlines and achieves an average aircraft utilisation rate of 13 hours a day. Airbus 320 Fleet Air Asia is currently the largest single customer of the Airbus A320.

The company has placed an order of 175 units of the same plane to service its routes and at least 50 of these A320 will be operational by 2013. The first unit of the plane arrived on 8 December 2005. On August 2006, Air Asia took over Malaysia Airlines’ Rural Air Service routes in Sabah and Sarawak, operating under the Fly Asian Xpress brand. The routes were transferred back to new Malaysia Airlines subsidiary in East Malaysia, MA Swings from August 2007 since they were pulling down profits.

Asian Expansion On 27 December 2006, Air Asia’s CEO Tony Fernandes unveiled a five-year plan to further enhance its presence in Asia. In the plan, Air Asia will strengthen and enhance its route network by connecting all the existing cities in the region and expanding further into Indochina, Indonesia, Southern China (Kun Ming, Xiamen, Shenzen) and India. The airline will focus on developing its hubs in Bangkok and Jakarta through its sister companies, Thai Air Asia and Indonesia Air Asia.

Hence, with increase frequency and addition of new routes, Air Asia expects passenger volume to hit 18 million by end-2007. From September 2007, Air Asia’s Kuala Lumpur hub is fully operated with A320s while Thai Air Asia received its first Airbus A320 in October 2007. Indonesia Air Asia received its first Airbus by January 2008. Partnership On 5 April 2007, Air Asia announced a three-year partnership with the British Formula One team AT&T Williams. The airline brand is displayed on the helmets of Nico Rosberg and Alexander Wurz, and on the bargeboards and nose of the cars. 8] Route Expansion On 27 September 2008, has on its list 106 new routes to be added to its current list of 60 over the next few years. The number of old routes discontinued has not been publicly disclosed. Fuel Surcharge Discontinued On 12 November 2008, Air Asia abolished fuel surcharges. In doing so, it claimed to be the ‘first airline in the world to abolish fuel surcharges’. By May 2008, the airline had flown 55 million cumulative passengers. In 2010, it has the world’s lowest costs for an Airline, at under 2 cents per seat per kilometer. Obviously, to no one’s surprise.

The Airline and Disabled Passengers [pic] [pic] Air Asia 737 with illustrations by Lat (Mohammad Nor Khalid) Disabled passengers from BEAT ‘The Barrier-Free Environment and Accessible Transport Group’ protested against the airline for its refusal to fly passengers who were completely immobile. The protesters, headed by the group’s co-ordinator Christine Lee, asserted that the disabled were discriminated against when booking Air Asia tickets online, where an icon would appear on the website asking if the ticket purchaser would require “special assistance”.

According to Lee, the passenger clicked ‘yes’, then they would not be able to proceed with the booking. Lee also said that Air Asia charged RM12 for renting out a wheelchair, which a passenger could use to go from the ticketing counter to the departure hall. When interviewed by Malaysia’s Daily Express, Air Asia Chief Executive Officer Datuk Tony Fernandes denied that the low cost airline turned away wheelchair using passengers. Air Asia’s ‘Service Fees’ post a charge of RM12 Malaysian Ringgit for wheelchair service fees.

Several consumerist groups have rallied behind the disabled and wheelchair-using travellers, lobbying to bring about changes in Malaysia’s anti-discrimination legislation; among them the ‘Fly Air Asia? Not Me’ website utilizes viral advertising to pressure legislators. In 2007 the activist group used Air Asia’s sponsorship of the Williams Formula One Team and the fact that team owner Sir Frank Williams uses a wheelchair to garner public attention and apply pressure upon legislators and the carrier.

It is unclear whether such groups have had any measure of success. Air Asia has provided two ambulifts, however, one in its LCC Terminal hub at Kuala Lumpur and another in its Kota Kinabalu hub. A year after the BEAT protest these remain the two hubs that are equipped – while the airline’s December 2007 Annual Report affirms that Air Asia flies over 100 routes across 11 countries in Asia and states, ‘Air Asia has a firm commitment with a purchase order for 225 Airbus A320 aircraft. It does not stipulate whether it has any plans to expand access for disabled passengers beyond the two domestic ambulifts. Rights-based advocate for an inclusive and accessible Malaysia and former assistant coordinator of BEAT, Peter Tan writes from The Digital Awakening, ‘Despite assurances by Air Asia CEO Datuk Tony Fernandes on 20 July and again on 4 August this year [2007] that disabled passengers will be treated with dignity, the airlines is still subjecting disabled passengers to discriminatory policies. after he was required to sign an indemnity releasing Air Asia from all liabilities before being allowed to board the aircraft at Kota Kinabalu International Airport’s Terminal 2, agreeing to surrender rights to hold Air Asia liable for damages, injuries or other claims. Fees The airline claims ‘No Admin Fee’, but has introduced a number of fees for services that are free on many airlines.

Its fees and charges are: seating fee (charged for pre-selecting seats, higher for ‘hot seats’ (near the front or exits, with priority boarding), ‘convenience fee’ (a per passenger, per flight charge imposed for all means of payment other than direct debit (only available for customers of certain Malaysian banks)), marked-up airport tax charges, a charge for in-flight entertainment including use of seat-back video, a checked luggage fee (charged by weight, not by piece, with excess baggage charges payable for carrying baggage exceeding 15 kg, if not pre-booked), charges for food, for use of a wheelchair and for amenity kit (pillow, blanket and eyeshade). Associate companies AirAsia X AirAsia X is a service operated by Air Asia X Sdn. Bhd. (previously known as Fly Asian Xpress Sdn. Bhd. ) as a franchise of AirAsia It offers long-haul services from Kuala Lumpur to Australia and China using an Airbus A330-300. Its inaugural flight was on 2 November 2007 to Gold Coast, Australia. Fly Asian Xpress was an airline subcontracted by AirAsia for the operations of Rural Air Service within Sabah and Sarawak previously operated by Malaysia Airlines to a new airline, FlyAsianXpress (FAX). Established on 1 August 006, the airline is a privately owned by the management team of AirAsia. With the formation of MASwings by Malaysia Airlines, FAX ceased all it’s rural air services on 1 October 2007 and will concentrate on long haul routes by AirAsia X. In August 2007, Sir Richard Branson announced his intention to take a 20 percent stake in AirAsia X. The current CEO of AirAsia X is Azran Osman Rani. After making its mark in Britain with the sponsorship made to the Referees (FA England), Air Asia X concluded a sponsorship deal with Oakland Raiders American Football team on 15 September 2009. Tune Hotels Tune Hotels. com is a limited service hotel chain founded by Air Asia CEO Dato’ Tony Fernandes, Currently Tune Hotels. om has hotels in operation in Kuala Lumpur, Kota Kinabalu, Kuching, Penang, the Low Cost Carrier Terminal in Sepang and Bali. Tune Money Tune Money is Asia’s first “no-frills” online financial services portal. Modelled after Virgin Money, it comprises life, home and motor vehicle insurance as well as prepaid credit cards. Destinations [pic] [pic] 2007 AirAsia domestic route map AirAsia operates over 400 flights a day, with both domestic and international routes covering Indonesia, Malaysia and Thailand and with international routes, primarily from Kuala Lumpur, to Australia, Bangladesh, Brunei, Cambodia, the People’s Republic of China, India, Laos, Myanmar, Philippines, Singapore, Sri Lanka, Taiwan, the United Kingdom and Vietnam. Inflight services

Air Asia offers “Snack Attack,” a buy on board programme offering food and drinks for purchase. Air Asia is accredited by the KL Syariah Index, and as per Shariah law it does not serve alcohol and pork. However, this is only applicable on the regional Air Asia group flights, and not applicable to the Air Asia X flight as it does sell wine and beers on board. Air Asia also offers advance bookings of Skybus tickets, which are for a bus service to Kuala Lumpur from LCCT. All meals purchased, as well as Sky bus tickets, are not refunded if you cancel your flight. Passengers are not notified of this during the purchase of the products. In addition it does not distribute materials that it considers to be pornographic. • .


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