Published on Star Business:
- Thursday March 21, 2013
Asia can absorb more aircraft, says AirAsia chief Tony Fernandes
HONG KONG: Asia will be able to take in more aircraft as economic growth and a population of more than 3 billion people will sustain travel demand, said AirAsia Bhd group chief executive officer of AirAsia Tan Sri Tony Fernandes.
“There are 3 billion people in Asia, there are 300 million people in America. America has about three times more planes right now than Asia,” Fernandes said in a Bloomberg Television interview at the Credit Suisse Asian Investment conference in Hong Kong yesterday. “So it can take a lot of planes.”
The comments come after Indonesian budget carrier PT Lion Mentari Airlines ordered 234 aircraft from Airbus SAS this week its second commitment to purchase more than 200 planes in two years stoking concerns of overcapacity in Asia. More than a dozen budget airlines began operations in Asia-Pacific in the past 15 years as economic growth in China, India and South-East Asia enables more people to fly for the first time.
The growing population in Asia was expected to help fill the planes, said Fernandes, whose AirAsia group expected to carry 43 million passengers this year. Eleven years ago, the airline carried 200,000 passengers, he said.
“I wouldn't say there are too many planes in Asia,” Fernandes said. “We have 500 planes and we fly in six countries. Lion Air is in Indonesia and a hybrid in Malaysia. Asia can take the planes they have and we have.”
Discount carriers have secured about a quarter of the region's air travel market in the past decade. The region will account for 33% of global passengers in 2016, according to the International Air Transport Association, and HSBC Holdings Plc has said four out of five airports in Asia are operating at or above their designated capacity.
AirAsia has grown into Asia's biggest discount airline since its takeover by Tony Fernandes and partners in 2001. The carrier has set up ventures in the Philippines, Japan, Thailand, India and Indonesia.
In 2011, AirAsia ordered 200 Airbus A320neo aircraft valued at US$18bil (RM56.2bil) in the biggest order for the planemaker.
Lion Air, which serves more than 36 destinations, is establishing a low-cost carrier in Malaysia to challenge AirAsia, Airbus's biggest A320 customer. Low-cost carriers are increasing their fleet as air travel is expected to grow more than 6.4% annually through 2031.
Lion Air already has 700 planes on order and expects to have ordered 1,000 planes within “two to three years,” president Rusdi Kirana said on March 18. The Indonesian carrier ordered 230 Boeing Co 737 planes last year.
AirAsia planned to pick an engine for the 100 A320 planes it ordered from Airbus by April 18, Fernandes said. - Bloomberg