Air Asia now says no to ADMIN FEES...

[flee 5]

This is another salvo fired by AirAsia... Not sure what effect it has on bottom line fares - but I guess it really depends on your destination and time of travel too. For low fare routes, the difference can be significant. But for long haul routes, the Admin Fee is only a small portion of the cost.

[flee 5]

AirAsia scraps admin fees to make tickets cheaper

 

KUALA LUMPUR: Malaysian budget airline AirAsia on Wednesday abolished administrative fees on all its flights in a move to reduce fares and bolster sales amid the global slowdown.

 

AirAsia Chief Executive Tony Fernandes said scrapping the fee creates further savings for passengers as they will now pay only the fare and airport tax.

 

AirAsia removed fuel surcharges in November last year.

 

The fee ranged from 22.5 ringgit ($6.40) to a maximum of around 43 ringgit per ticket and removing it will cost the airline 400 million ringgit ($113 million) a year.

 

Fernandes said the region's biggest budget carrier is confident it can increase ticket sales and generate income from other sources to offset the loss of revenue.

 

"It's been a tough six months for the airline industry but AirAsia is getting stronger and stronger. We believe we will increase our load factor and become more competitive," he told a news conference.

 

Airlines worldwide are reeling from the global economic slump that has choked passenger and cargo traffic.

 

Many have cut capacity, grounded planes and shed their work force to cope with the downturn.

 

But AirAsia is expanding and says it is benefiting as travelers cut cost and downgrade to budget carriers.

 

Its net profit in the quarter through March hit a record 203.2 million ringgit ($57 million), up 26 percent from a year earlier. - AP

 

 

Source: http://biz.thestar.com.my/news/story.asp?f...mp;sec=business

[Cheng Long 0]

Read from Bernama that they still owe MAHB quite a bit of airport tax. So the "tax+fare", where does the tax go?

[flee 5]

I think those are the "disputed charges"... i.e. charges that AK thinks MAHB should not have levied. So they paid those that are OK and this is the amount left of disputed charges. I think AK is also using this debt as leverage to get what they want from MAHB.

[flee 5]

Just checked their fares. London STN is stated at RM 1,038 for travel in November. Just look at the taxes we pay at UK Airports....

 

[Edwin P K 0]

Good fare! MAS now offer about 2k return as well. Love these competitions!

[flee 5]

Good fare! MAS now offer about 2k return as well. Love these competitions!

This one is for 2 pax. Single pax only RM 1.038 plus extra for luggage and meals.

 

[Edwin P K 0]

This one is for 2 pax. Single pax only RM 1.038 plus extra for luggage and meals.

 

Yes - I noted this. Because of competition, MAS has to push down their prices to about 2k return, which is extremely good value. For those who can afford some luxury and comfort, it's really a good deal.

 

Emirates promo still offering RM1700 thereabouts, all in, but transit times are crazy...!

[flee 5]

Well competition is good, even for non AirAsia travellers!

 

I can still recall paying over RM 800 for a return flight to BKI in the mid 1980's. Compare that to the fare we pay nowadays...

[Li Ren 2]

Just checked their fares. London STN is stated at RM 1,038 for travel in November. Just look at the taxes we pay at UK Airports....

http://micronet-solutions.com/malaysianwings/STN.jpg

 

Wow,the airport tax & fees is more expensive than the air ticket itself

[BC Tam 2]

I think AK is also using this debt as leverage to get what they want from MAHB.

Aha, proof here that the business world has gone topsy turvy

I can still remember days when one feels indebted to one's creditor(s)

Now debt is leverage

[flee 5]

Well MAHB is like the civil service, they are not very commercially minded. In normal commercial circumstances I don't think AK would be allowed to have a debt like that and can still use the facilities!

 

 

 

AirAsia wants lower airport tax at LCCT

 

LOW cost carrier AirAsia Bhd, wants Malaysia Airports Holdings Bhd (MAHB) to recommend a reduction in airport tax to the government for international passengers, at the Low Cost Carrier Terminal (LCCT).

 

Its group chairman Datuk Aziz Bakar said today that the current rate of RM51 charged for international travellers was unfair, and should be reduced to RM10, as the LCCT did not have advantages such as aerobridges when compared to the Kuala Lumpur International Airport (KLIA).

 

"Malaysia Airports should be recommending to the government to lower the charge as it is the entity operating the airport," he told reporters on the sidelines of AirAsia's Major Tariff Adjustment launch in Kuala Lumpur.

 

"The Minister of Finance, Datuk Seri Najib Tun Razak, will have to consider this. We have invested a lot and are always expanding and lowering cost. We want to make Kuala Lumpur a hub for travellers," he added.

 

Aziz said AirAsia had helped bring about the multiplier effect to the country's economy through its passengers.

 

"If Malaysia Airports look at the bigger picture of the economy, what is a few ringgit in service charges?" he asked.

 

He said this when asked to comment on the issue of the RM65 million in airport tax owed by AirAsia to Malaysia Airports and which was brought up in Parliament yesterday.

 

"We have been paying the charges. But the RM65 million is part of the payment we are holding back, until we resolve this issue," he explained. - Bernama

 

 

 

 

From Business Times: http://www.btimes.com.my/Current_News/BTIM...icle/index_html

 

AirAsia scraps administrative charges

 

MALAYSIAN budget carrier AirAsia today scrapped administrative charges to boost passenger numbers but said it has not been hurt by the downturn that has affected most airlines worldwide.

 

Chief executive officer Tony Fernandes said the company would lose RM400 million (US$114 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 RM22 to RM43 per person.

 

The world’s airlines are expected to lose US$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 RM3.3 billion.

 

Fernandes said AirAsia will not 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 per cent in the three months to March, as it defied the economic downturn and boosted passenger numbers.

 

The carrier posted net profits of RM203.2 million for the first quarter, compared with RM161.3 million a year earlier. -- AFP

Edited June 24, 2009 by flee

[Isaac 0]

Well competition is good, even for non AirAsia travellers!

 

I can still recall paying over RM 800 for a return flight to BKI in the mid 1980's. Compare that to the fare we pay nowadays...

In the late 90s, A return MAS YEE30 ticket between BKI/KUL cost only RM699/pax (tax included). The ticket is fully flexible and you may request to change flight 24 hours before actual departure with no penalty. And this YEE30 is valid only for 1-month and your return journey can only be made after 3-day. This YEE30 ticket is especially good if you need a cheap and flexible ticket. What's good is that this ticket was also available for sale in the very last minute. My dad paid RM1280/pax for 3 return tickets to KUL last year. The booking was done just 1 day before departure. how we wished the YEE30 still exist then

 

Another ticket available was the RM900+ one. Unlike the YEE30 ticket, it had no minimum stay and is valid for 1-year.

 

[Cheng Long 0]

Aha, proof here that the business world has gone topsy turvy

I can still remember days when one feels indebted to one's creditor(s)

Now debt is leverage

 

MAS should also learn the Air Asia way, owe some millions of RM and use it a bargaining tool. Then again, they may not have some powerful political figures behind them.

[Edwin P K 0]

MAS should also learn the Air Asia way, owe some millions of RM and use it a bargaining tool. Then again, they may not have some powerful political figures behind them.

 

Just browsed through your blog, staunch support of MAS?

[flee 5]

MAS should also learn the Air Asia way, owe some millions of RM and use it a bargaining tool. Then again, they may not have some powerful political figures behind them.

AirAsia would beg to differ - they say that it is hard to get MAHB to move quickly. See we are already coming up to July and work has not even started on the permanent LCCT. They would say that they have to kick and shout for everything they got out of the MAHB. They will say that they achieved their success despite the inefficiency and lack of competitive business savviness shown by GLCs like MAHB. They also said that Khazanah, being the owner of MAS and MAHB, are trying to slow down the progress of AirAsia.

 

I think AirAsia was clever to forge partnerships in Thailand and Indonesia. With those sister airlines, they can also make alternative plans should Malaysia proves to be too difficult.

Edited June 25, 2009 by flee

[Cheng Long 0]

Just browsed through your blog, staunch support of MAS?

 

Well, not really, I actually like both airlines, such that I am the unofficial ambassador of both airlines to my colleagues. But I don't like it when Air Asia acts like a crook.. owe people but don't want to pay and use it as a bargaining tool some more. I understand their airport tax is already cheaper but they are not satisfied and don't want to pay. A bit of airport tax is not going to make them lose customers cause all airlines will kena airport tax. Theirs is already lower so they already have the advantage.

 

I read today that the government is getting some consultant to sort out this airport tax mess. No doubt the tax in the LCCT should be lower than the main terminal but it should be fair. If the tax difference is too great, then people will start to shun the main terminal. Good for Air Asia but bad for others. So they need to find the middle ground to benefit both the LCCT and main terminal, not just to please Air Asia. But history tells me that Air Asia will more often than not gets what it wants...we will see this time.

[BC Tam 2]

..... But history tells me that Air Asia will more often than not gets what it wants...we will see this time.

I suspect a little bit more of 'history' is currently being played out in BKI's long protracted refurbishment project

[Waiping 12]

Emirates promo still offering RM1700 thereabouts, all in, but transit times are crazy...!

 

But with Emirates you get to fly the whale TWICE!

[flee 5]

AirAsia paying MAHB monthly

 

AIRASIA said it has been making monthly payments on the money owing to Malaysia Airport Holdings Bhd (MAHB) for using its airport services.

 

However, there is a portion that has remained outstanding, pending decision on AirAsia's request for MAHB to review its charging mechanism, AirAsia chairman Datuk Abdul Aziz Abu Bakar said in a statement today.

 

He said this in response to statements made in the Parliament recently that the company has not paid MAHB since 2002.

 

"These (outstanding sum) include the high airport terminal charges and tariff which are the same as those applied to the KL International Airport (KLIA) Main Terminal Building which we feel is too high considering the very basis for facilities at the Low Cost Carrier Terminal (LLCT)," he said.

 

Transport Minister, Ong Tee Kiat had on May 20 told the Parliament that AirAsia owed about RM110 million to MAHB for its use of aiports in the country from March 2002 to March 31, 2008.

 

"AirAsia is in a strong financial position and able to meet its financial obligations as and when due," the statement said.

 

The company abided by the government's directive to move to the LCCT from the Main Terminal Building on March 23, 2006 in support of the government's effort to boost the LCC industry in Malaysia and to turn Kuala Lumpur into the regional LCC hub.

 

"We received indications that MAHB would review for a contract as well as a service level agreement but three years on after the move, neither a commercial agreement or a service level agreement had been prepared and presented to MAHB," Abdul Aziz said.

 

With the increasing aircraft fleet, increased passenger numbers brought into Malaysia via LCCT and substantial landings due to higher flight frequency and aggressive route expansion, the company has helped MAHB recover its investment in terminal buildings, runway and supporting infrastructure much earlier than expected, he said.

 

This is the company's contribution to improve the efficient and effective utilisation over some of these charges and that dispute needs to be resolved.

 

"Contrary to claims made, the current management of AirAsia has paid MAHB on a monthly basis.

 

"The issue is not one of AirAsia withholding payments to MAHB but the issue is that there is a dispute over some of these charges and that dispute needs to be resolved," Abdul Bakar added.

 

He, however said that the company welcomed the government's move to appoint a consultant to resolve the issues between AirAsia and MAHB.

 

"We hope the government's intervention in this matter will help bring about a swift resolution that will be beneficial to all parties concerned," he said.

 

Since moving to the LCCT in March 2006, AirAsia has been overcharged by no less than RM12 million.

 

There are also growth incentives on the increase in number of passenger throughput and landings worth no less than RM90 million, for which both parties have been in discussion but yet to reach a conclusion.

 

AirAsia has since 2003 paid MAHB a total of RM404 million.

In 2008, it paid RM117 million, while in the first five months of this year, over RM40 million has been paid. -- Bernama

 

Source: http://web6.bernama.com/aviation_news/news...ng=en&cat=b