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AirAsia removes fuel surcharge, offers free seats

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AirAsia removes fuel surcharge, offers free seats

 

The Associated Press

Published: November 11, 2008

 

KUALA LUMPUR, Malaysia: Malaysia's AirAsia on Tuesday abolished fuel surcharges on all its flights and said it will give away half a million free tickets next year in an attempt to lure travelers amid the global slowdown.

 

AirAsia Chief Executive Tony Fernandes said the region's biggest budget carrier will offer 500,000 free seats for travel between June 22 and Oct. 24, 2009, on all its domestic and international destinations.

 

"It will be completely free. Passengers will only have to pay airport tax," Fernandes told a news conference.

 

He said the recent steep drop in fuel prices has allowed AirAsia to adopt the bold strategy, adding that the loss of revenue should be offset by higher ticket sales, which will also be bolstered by new marketing strategies.

 

Fernandes said AirAsia is the first carrier in the world to abolish fuel surcharges, which became a standard industry practice a few years ago as oil prices rose on their way to peaking at nearly $150 a barrel in mid-July. But since then, crude prices have tumbled because expectations that slower global growth will mean less demand.

 

"We want to do is get rid of these surcharges," Fernandes said. "The best way to do it is aggressive marketing and low fares."

 

Eliminating the surcharges is expected to cost AirAsia about 940 million ringgit ($63 million) a year.

 

Fernandes said the move will boost Malaysia's economy as well as domestic and regional tourism by encouraging travel.

 

When AirAsia started in December 2001, it focused on flying within Malaysia. It has since expanded to Southeast Asia and China, and is scheduled to launch flights to India next month.

 

Malaysian Domestic Trade and Consumer Affairs Minister Shahrir Samad praised the decision.

 

"Anything that reduces costs to consumers and keeps money in their pocket gets my support," he told reporters after the announcement. "What we need now is optimism instead of grumbling and quarreling."

 

Fernandes added that he could not guarantee that the removal of fuel surcharges would not hit AirAsia's profits, but said the company does not anticipate that would happen. He refused to say what the possible losses might be.

 

He noted AirAsia does not hedge its fuel purchases like other airlines do. To protect against the possibility of prices going up, some carriers make advance orders at current prices.

 

Fernandes said AirAsia will not implement a corresponding increase in base ticket prices with the removal of fuel surcharges, but said he could not guarantee that the surcharge would not be re-imposed if oil prices surge again.

 

"It would be foolish of me to say that fuel surcharges will not be imposed again but we will resist it for as long as possible," Fernandes said.

 

 

http://www.iht.com/articles/ap/2008/11/11/...sia-AirAsia.php

 

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Naim, fret not, this is again another strategy. Yesterday the base airfare for the AOR-KUL route was RM9... Today the base airfare has magically increased to RM29. So it is only the so call the abolishment of the fuel surcharge because that "surcharge" is now absorbed into the airfare.

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Naim, fret not, this is again another strategy. Yesterday the base airfare for the AOR-KUL route was RM9... Today the base airfare has magically increased to RM29. So it is only the so call the abolishment of the fuel surcharge because that "surcharge" is now absorbed into the airfare.

 

"It will be completely free. Passengers will only have to pay airport tax," Fernandes told a news conference

 

maybe limited seats though

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AirAsia Chief Executive Tony Fernandes said the region's biggest budget carrier will offer 500,000 free seats for travel between June 22 and Oct. 24, 2009, on all its domestic and international destinations

No where to go ..

Don't want to buy without a proper plan ..

Buy ... buy later unable to fly, instead of give money freely to Ak

Edited by Nizam

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What I meant is, do not be a fool on this removal of surcharge, thinking that the airfare now will be cheap ALL the time. During the 0 ringgit sale, it will of course will be super duper cheap (limited). But during normal days, it will be the same as the fuel surcharge has been absorbed into the base airfare realistically. All this is a gimmick so that people will believe it has gone cheaper.

 

So grab your free seats whenever possible!

 

 

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Naim, fret not, this is again another strategy. Yesterday the base airfare for the AOR-KUL route was RM9... Today the base airfare has magically increased to RM29. So it is only the so call the abolishment of the fuel surcharge because that "surcharge" is now absorbed into the airfare.

 

Non-optional items should be included in the ticket price. AK can only play this trick once else the investors should be suspecting their accounting practice.

 

:drinks:

 

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I'm seriously wondering ... how long this company will last. :sorry:

 

:rofl:

Hahahaha, Me too

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Hmm... This will benefit us as consumer or is just a marketing strategy?? :blink:

 

The trick is to get the profit-making seats to pay for the loss-making seats and then some more. Sometimes tricks don't work. :sorry:

 

:rofl:

Hahahaha, Me too

 

Tune Money on the rocks already? - see HERE.

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I think probably they are banging on the unused tickets where we buy but didn't utilize.

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Naim, fret not, this is again another strategy. Yesterday the base airfare for the AOR-KUL route was RM9... Today the base airfare has magically increased to RM29. So it is only the so call the abolishment of the fuel surcharge because that "surcharge" is now absorbed into the airfare.

 

Heheheh, too true, too true. There's a silap mata here. Removed fuel surcharge but they bumped up the basic fare. Yesterday I booked KUL-SIN for 26Nov, and I got RM15/way eco promo fare + fuel --> RM194 return. Now no more RM15 fare, but RM66 eco promo, and with no fuel --> RM252 return. WTF?

 

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I was playing with the booking system... 15RM fares for SIN-KUL still available (at least on those days I tried) plus SGD 21 Airport Tax and 11 for Admin charges. Return is less than 100SGD... seems too good to be true!

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No AirAsiaX Free seats?

EDIT- Perth to KL for only $13!!!. If you are in MEL/ADL, you cant get a connecting Tiger flight for about $100, so a pretty cheap deal..

Edited by Lukas Mahoney

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No AirAsiaX Free seats?

EDIT- Perth to KL for only $13!!!. If you are in MEL/ADL, you cant get a connecting Tiger flight for about $100, so a pretty cheap deal..

I think there is a clerical error. There is no sale for Perth to KL/any AirAsia X destination. This is purely AirAsia sale. Sorry to disappoint you. :p $13 is too good to be true.

 

On the other hand, KL-Hong Kong is RM140 return. Whoa,how better can it ever be? :drinks:

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I'm seriously wondering ... how long this company will last. :sorry:

 

 

The "gomen" wont let it down... After all AirAsia is a National pride too although MH is our national airlines... Just like the Perodua to Proton.

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Fuel surcharge as it appears in the ticket is removed but what is done to recover the shortfall in revenue, increase in base fare and/or less number of seats are available in the lower fares and more are put in the higher fares.

 

Net net, Consumers may end up paying more, AK will not end up less or may even be more. Consumers (incl Domestic Trade & Consumer Affairs Minister) have eggs on their faces thanking TF for such a kind and bold gesture.

 

Consumers get screwed unknowingly and they are smiling.

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I think there is a clerical error. There is no sale for Perth to KL/any AirAsia X destination. This is purely AirAsia sale. Sorry to disappoint you. :p $13 is too good to be true.

 

On the other hand, KL-Hong Kong is RM140 return. Whoa,how better can it ever be? :drinks:

 

 

what date?

 

experimented as well yesterday..not that excited as Kul-Bkk is still RM400plus while MH can even offer return flight for RM300 plus.......

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Fuel surcharge as it appears in the ticket is removed but what is done to recover the shortfall in revenue, increase in base fare and/or less number of seats are available in the lower fares and more are put in the higher fares.

 

Net net, Consumers may end up paying more, AK will not end up less or may even be more. Consumers (incl Domestic Trade & Consumer Affairs Minister) have eggs on their faces thanking TF for such a kind and bold gesture.

 

Consumers get screwed unknowingly and they are smiling.

 

Exactly - I'm surprised it became front page news on The Star. The Minister looks like and10t.

 

It is like your local mamak reducing the price of one roti canai to 50 sens but you end up getting 1/3 the size of the previous roti canai at RM1.00. And the Ministry throws a party to celebrate the consumer-friendly mamak.

 

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what date?

 

experimented as well yesterday..not that excited as Kul-Bkk is still RM400plus while MH can even offer return flight for RM300 plus.......

Are you sure?? A return flight for KUL-BKK-KUL costs RM146.50 inclusive tax. If that's not impressive, I don't know what to say.

 

However, I agree, that the 0 ringgit fare is more limited than normally was.

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Consumers get screwed unknowingly and they are smiling.

 

 

Well that's business. Just like asking " Do you want a fries with that?" at McD. or "Extra cheese?" at burger king. :D

 

 

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