Saw the following newsclip.
- KUALA LUMPUR (AFP)--Malaysian budget carrier AirAsia Wednesday scrapped administrative charges to boost passenger numbers but said it hasn't been hurt by the downturn that has affected most airlines worldwide.
Chief executive officer Tony Fernandes said the company would lose MYR400 million ($113 million) a year by getting rid of the charges but said he wanted to keep a promise of providing the lowest fares.
"I continue to remain bullish. Any product that can reduce cost will make more profit," he said.
"I have been in the business for the last seven years. There has been perpetual headwinds such as the outbreak of SARS (Severe Acute Respiratory Syndrome in Asia in 2003) and tsunami. We will continue to grow," he added.
"We are going the extra mile to live-up to our brand promise to have the lowest fares in the market," he said, adding that passengers now need to pay only the fare and airport tax.
"With no admin fee more people will travel with AirAsia, especially in view of the current economic uncertainties," Fernandes added. Administration charges range from MYR22 to MYR43 per person.
The world's airlines are expected to lose $9 billion this year, industry body IATA said early this month in a drastic reassessment of the worst slump the industry has ever faced.
Carriers in all regions are expected to report losses in 2009, with Asia-Pacific airlines - once the brightest spot of the industry - accounting for more than a third of the global losses at $3.3 billion.
Fernandes said AirAsia won't defer arrivals of its Airbus A320 aircraft while its route expansion plans remained on track despite the bleak outlook of the sector.
"We are not affected by the swine flu outbreak. We have not deferred our plane orders. We are doing very well. We are growing our capacity," he said as the carrier planned to add Colombo to its route in August.
Fernandes said its new fleet of A320s were fuel savers, which helped to lower operational cost.
"Next week we will let go all our (16) Boeing 737s. We will then have a brand new A320 fleet," he said. It currently has 62 A320s.
AirAsia became the world's biggest customer for the Airbus A320-200 after placing an order for 175 aircraft in December 2007, with an option for 50 more. Deliveries are expected to run until 2014.
AirAsia last month said its profits rose 26% in the three months to March, as it defied the economic downturn and boosted passenger numbers.
The carrier posted net profits of MY203.2 million for the first quarter, compared with MYR161.3 million a year earlier
LOL! So much big talk.
Hey.. would he mind stating how much of the 203.2 million in profits in the first quarter was boosted by extraordinary gains???
LOL!!!
Talk is too cheap.
PS... if can make so much money, why isn't AirAsia not paying Malaysia Airport for the airport taxes it collected? See AirAsia And The Airport Tax Issue
Like you, somehow, I just don't think Air Asia's business is sustainable in the long run.
ReplyDeleteIf AirAsia is doing really well, tell them to pay Malaysia Airport back the airport taxes!
ReplyDeleteIf AirAsia is doing really well, ask them to pay MALAYSIA back all the tax benefit it got!
Ever wonder why it is scrapping back the rm400 million?
Could it be... business is really slowing????
ps: before last quarter 'big' earnings was announced, AirAsia announced and told the whole world that they are going to make 'big' money.... So far.. all we hear is we doing really well.
Hmmm.... :P
I like what AirAsia is doing and am willing to give them the benefit of doubt. Tony Fernandez and his troops are mavericks and have done much to benefit many ordinary people with cheap airfare. Mavericks are usually treated with suspicion and scorn, but hey, give credit where credit is due. Do not prejudge by the standards you set. On the amount owing to MAHB, let AirAsia come out with its version. Interestingly, why is the PM making comments about this issue.
ReplyDeleteDefinitely not sustainable with the rapid and unnecessary fleet expansion.
ReplyDeleteDon't he know that sometimes we need to step back to move forward?!
Tony,
ReplyDeleteI would give them a benefit of a doubt but would you give me one?
Never mind.. I show you some examples.
Do give the posting a read.
http://whereiszemoola.blogspot.com/2008/06/airasia-lunatics-and-cheap-talks.html
How about the deferred taxes?
http://whereiszemoola.blogspot.com/2006/11/airasias-deferred-taxes-issue.html
Quote: "With capital allowances and investment allowances likely to come to RM18bn in total, the company will not have to pay cash taxes for decades."
If AirAsia pays MALAYSIA these taxes or IF AirAsia does not have deferred taxes, how nice for Malaysia, yes? Yeah, it's only 18 BILLION!
Last month AirAsia record earnings of 203 million. A huge chunk was boosted by 79 million of this deferred taxes. Yeah, one would argue that everyone knows it exist but should AirAsia takes credit for all the 203 millin in profit knowing very well that 79 million of this profit is derived from the deferred tax?
Am I impressed?
So sorry I must be flawed because I am not impressed at all.