Air Asia Berhad

Written by Shafiaina Izhar

Air Asia Berhad was established in 1993 with commenced operations in 1996. In 2001, a Tune Air Sdn Bhd, Tony Fernande’s company had purchased this airline from DRB-Hicom. Air Asia’s main base before was in the Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport, while its secondary hubs are at Kota Kinabalu International Airport, Senai International Airport and Penang International Airport.

This airline is known as the main Malaysian low cost airline instead of other airlines that Malaysia had like Malaysia Airlines Berhad. There is no frills airline even its Asia’s largest low fare. The airlines claims ‘No Admin Fee’, but still has some fees for others like services which are free for other airlines. The slogan of Air Asia is ‘Now Everyone Can Fly’.

As a main base of Air Asia at LCCT, it was opened on March 23, 2006 and is said to be carried about 10 million passengers a year. The Air Asia subsidiaries are the likes of Thai Air Asia, Indonesia Air Asia, Viet Jet Air Asia and Air Asia Red Tix. Meanwhile, Air Asia associate companies are Air Asia X, Tune Hotel and Tune Money.

Under the founder of Tony Fernandes, the airline was flying high in 2002 and had launched its new route on that year. For instance, in 2003, a second hub was opened in Senai International Airport, Johor Bahru, same as the airline’s maiden international flight to Bangkok. Not long after that, the Thai and Indonesian subsidiaries were set up as well as the commencement of flights to Indonesia, Macau, China, Philippines, Vietnam and Cambodia in 2005.

To be added, AirAsia now can flies to all ASEAN countries that including India, Iran, Sri Lanka and Bangladesh as well as to the United Kingdom, France, Japan, Korea and Australia via AirAsiaX. Another hub is on the way in setting up other similar operations in the else region soon after.

The Air Asia Berhad main vision is to be the largest low cost airline in Asia so that the company can provide a low cost service that will allow the three billion people to fly to more destinations across the region. The company also aim to be a truly ASEAN airline corporation as they look out for every country’s best interest. One of the company’s vision is to maintain the highest quality, to embrace technology, cost reduction, eleviate service levels and provide the guests with a “WOW” experience.

For investor interest in Indonesia AirAsia, Air Asia Berhad has been considerable that the airline has fully turned around its finances. The airlines achieve higher average fares in Indonesia during Hari Raya Aidilfitri celebrations by 16% year-on-year. Not only that, the Philippines operations also was ancillary per passenger growing 33% year on year which contributing to the increase in revenue per ASK of 13%. There were several one-off costs (RM31 million) incurred in third quarter for re-delivery of aircraft, maintenance and overhaul as well as relating to peso depreciation.

Aside of new airline partnerships, Air Asia Berhad are forming a ground handling joint venture with SATS Ltd. Both joint venture, named Ground Team Red (GTR) will take over ground handling for all stations in Malaysia and Singapore. To be added, the new operating structure and expertise from SATS is expected to drive down unit aircraft turnaround costs by 16% in the first year of operations. The cash proceeds from the joint venture with SATS of USD89 million are due in December 2017.


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