AirAsia CEO says Thai political problems a hiccup

[Pieter C. 5]

AirAsia CEO Says Thai Political Problems A Hiccup

 

December 16, 2008

Malaysian budget carrier AirAsia said on Tuesday it expected passenger growth in 2009 of 4-5 million to add to its 19.5 million travelers this year, despite a global recession and political problems in Thailand.

 

Chief executive Tony Fernandes, whose company suffered a setback when anti-government protesters recently blocked flights for a week at Bangkok's main airports, said Thailand's strife was "just a hiccup" and the fight was now on to win back the confidence of tourists.

 

"I'm confident we are adding new routes and planes, and really, every country has their own political troubles," Fernandes said. "We're actually hoping to add another 4-5 million travelers in 2009 on top of what we have now."

 

The company is offering 100,000 free seats from its hubs in Malaysia, Indonesia and Thailand for passengers traveling to popular Thai destinations Chiang Mai, Krabi and Phuket starting from January 2009, Fernandes said.

 

"Thailand is one charming tourist destination," Fernandes said at a briefing in Bangkok.

 

He declined comment on the company's plans after its major shareholder, Tune Air, failed to proceed with a potential buyout of the airline. Tune Air holds 30.7 percent of the USD$573 million firm.

 

Despite a third-quarter loss at Southeast Asia's largest low-cost airline, passengers continued to prefer budget carriers, Fernandes said.

 

The airline, which operates 378 flights a week, posted a loss of MYR465.5 million ringgit (USD$131 million) after it took a one-off charge for contracts tied to fuel hedging and trades held by the bankrupt Lehman Brothers.

 

It was its first net loss since it went public in 2004.

 

Thai AirAsia, the airline's Thai unit, suffered losses of THB350 million baht (USD$10 million) when travelers shunned the country after anti-government protesters halted flights to and from Bangkok's main airports for more than a week.

 

Thai AirAsia would miss its passenger target of 4.6 million this year and now expected 4.1 million, but the number would climb to 5.2 million in 2009 due to new aircraft and routes opening, Thai unit chief Tassapon Bijleveld said.

 

"What happened was a nightmare," said Tassapon, adding its load factor had dropped to somewhere above 80 percent from 92-93 percent in 2007.

 

"But like we people say, it's 'mai pen rai'. It's no problem. We can start over," he said.

 

Among new international destinations the group expected to fly to in 2009 were Bali, India and Guangzhou, he said.

 

The Thai firm has no plans to sell shares on the Thai bourse in an initial public offering for now, wanting to see market conditions improve.

 

(Reuters)

 

Tassapon Bijleveld: definite a Dutch father (and a Thai mother ?)