Announcing AirAsia Singapore!

[Mohd Azizul Ramli 2]

A massive thank you to the spy who let me be one of the first to know about this very interesting news! This is actually a proceed from Uncle Tony's tweet as shared in our CEO Facebook/Tweet thread 3 days ago:

 

Tony Fernandes

I always felt it should have been earlier in singapore. But better later than never. People want choice. An open and transparent societies. Even in the corporate world

about an hour

AirAsia Singapore? Open skies? Or a late comment about the election result in Singapore? I can't figure it out.

Malaysia, Thailand, Indonesia, the Philippines, Vietnam and now Singapore - all embracing AirAsia brand!

 

 

DJ AirAsia CEO ''Keen'' On Operating New AirAsia Singapore Brand (2011/05/18 03:10AM)

 

 

By Maxwell Murphy

Of DOW JONES NEWSWIRES

 

NEW YORK (Dow Jones)--AirAsia''s chief executive is "keen" to operate in Singapore, and the Malaysian airline will soon base some aircraft there in a move that may presage an AirAsia Singapore unit launch.

 

Recent advertisements for cabin crew positions at AirAsia Singapore are hoped to be the first step, Tony Fernandes told Dow Jones Newswires in an interview. AirAsia will be "night-stopping" aircraft there, in order to make morning flights out of the Southeast Asian island nation.

 

There have been rumors that Australia''s Qantas is interested in its low-cost unit, Jetstar, making a similar move into Singapore to save on costs by hiring locally.

 

Fernandes also said that its two, 49% owned units, AirAsia Thailand and AirAsia Indonesia, remain on track for separate initial public offerings later this year. The pair may go public simultaneously, or Thailand may go first and Indonesia second, depending on a number of factors.

 

The IPOs come at a good time for AirAsia, he said, as the moves will free up the balance sheet and allow the low-cost airline to launch new AirAsia units in Vietnam and the Philippines in the near term. The CEO said Vietnam''s new government is "much more receptive" to the company''s ideas on branding and its websites, and Vietnam''s tourism industry is growing quickly, so Fernandes doesn''t anticipate the problems that caused its first foray into that country to fail.

 

Fernandes said he was pleased by remarks made earlier Tuesday by the Malaysian prime minister at the Invest Malaysia conference at the New York Stock Exchange, in which the prime minister expressed a desire to make Malaysia the economic center of Southeast Asia.

 

AirAsia doesn''t believe it can beat the market, so it doesn''t do much hedging against rising oil prices, he said, and it is currently about 10% hedged at a cost of about $120 a barrel. Similarly, it doesn''t hedge much against currencies, and noted that many forecasts call for the Malaysian ringgit, which has risen sharply, to hover in the MYR2.90 to MYR2.95 range to the dollar, near current levels.

 

Its long-haul international unit, AirAsia X, is slated to announce a pact with General Electric Co.''s (GE) aviation unit on Wednesday. Fernandes didn''t want to steal the unit''s thunder, but hinted that the pact could involve aircraft engines, a new type of Airbus aircraft AirAsia X hasn''t purchased before and new routes for AirAsia X to Europe.

 

GE lost out on a previous contract to supply AirAsia X airplane engines, and has been aggressively courting AirAsia for new business, he said. GE CEO Jeff Immelt has been "a fantastic friend" of AirAsia.

 

In U.S. dollars, AirAsia has about $3 billion market capitalization, and posted annual revenue of about $2 billion and earnings of about $400 million, which excludes the contributions of the Thailand and Indonesia units, Fernandes said.

 

"We''ve proven the model," he said of the airline that has grown from 2 two planes to around 100 planes, and there is "great upside" for AirAsia, even after the marked increase in its share price, as it continues to extract even more "ancillary" revenue from passengers for things like food and insurance. AirAsia now extracts $16 of such revenue per passenger, up from $5 in the past.

 

-By Maxwell Murphy, Dow Jones Newswires; 212-416-2171; maxwell.murphy@dowjones.com

 

(END) Dow Jones Newswires

 

May 17, 2011 15:10 ET (19:10 GMT)

 

Copyright © 2011 Dow Jones & Company, Inc.

[JuliusWong 0]

Wow!! AK is relentless in pursuing 'painting' SEA's sky red.....TR, 3K and other LCCs maybe squeezed out due to this, if they don't step up their strategy to counter AirAsia Group.

 

Based on the news article, it can be concluded that:

 

• Vietnam AirAsia plan is still on.
  
• D7's A350 will be GE equipped.
  
• AK banks heavily on ancillary revenue like any LCCs, from $5 to $16 currently.
  

 

AirAsia sure makes Malaysia proud!! Now who said AirAsia will fail in 18 months??

[Peter Smith 1]

Who didn't see this coming? hahaha.

 

A few billboards put around around Perth say it all..."We should change our name to Air Everywhere"

[flee 5]

Those who follow TF's tweets will know that he was in talks with the Sg govt. some months ago. I think that it is inevitable that AirAsia Singapore is set up, in view of the tardy progress that MAHB is making on the KLIA2.

 

AK cannot be forever postponing aircraft deliveries just because there is insufficient parking spaces at KUL. Having a base in Sg will enable them to expand and operate new routes despite being hampered by MAHB. Sg has many open skies agreements with other countries and that will allow AirAsia Singapore to exploit these.

 

D7 and GE - now this is very interesting. Could it be that D7 may be using the CF-6 engines on their A332 order? The A350 does not have GE as an engine option, its sole engine is the RR Trent XWB. D7's 9M-XAA has CF-6 engines - so it may make sense to equip the A332's with CF-6's so that some sort of economies of scale may be had with that type.

 

More interesting is the prospect of D7 ordering the A321 (with sharklets) with CFM-56 engines for their regional routes to India and China? D7 may want to increase frequencies but the A333 is too big for more frequencies. Perhaps the additional frequencies may use smaller aircraft?

[c.lee 0]

Those who follow TF's tweets will know that he was in talks with the Sg govt. some months ago. I think that it is inevitable that AirAsia Singapore is set up, in view of the tardy progress that MAHB is making on the KLIA2.

 

AK cannot be forever postponing aircraft deliveries just because there is insufficient parking spaces at KUL. Having a base in Sg will enable them to expand and operate new routes despite being hampered by MAHB. Sg has many open skies agreements with other countries and that will allow AirAsia Singapore to exploit these.

Exactly. I guess it's easier for them to setup a new airline in SIN than to get new routes approved for D7.

 

I recall there is a massive D7 frequency reshuffling from October 2011. Are they going to base some of their A330s at SIN?

 

Fernandes didn''t want to steal the unit''s thunder, but hinted that the pact could involve aircraft engines, a new type of Airbus aircraft AirAsia X hasn''t purchased before and new routes for AirAsia X to Europe.

So I suppose we can rule out A330 (A332 & A333) and A350? Perhaps A340 too since it's a fuel guzzler. The remaining options would be the A320 family and A380.

 

How about A380 with GP7000 engines? Or A321neo with CFM LEAP-X?

Edited May 18, 2011 by c.lee

[flee 5]

How about A380 with GP7000 engines? Or A321neo with CFM LEAP-X?

John Leahy also did not discount the possibility that AirAsia will buy the A380.

 

I think that for D7 to think of the A380, it has to be a flexible and low risk GECAS lease. And with them in NY making the announcement, they might just introduce their new US routes using the A380?

 

I do think that the A321 (either existing one with sharklets or the NEO) is more likely. It is also less risky.

 

D7 flight rationalisation was said to be in preparation for JED and SYD launches. They are expecting these two long applied for destinations to be approved this year.

[Isaac 0]

That sure is very nice of the Singapore Air Transport Authority. No wonder the tiny island nation can prosper. The market in Singapore is no doubt much bigger and Air Asia Singapore may just be able to command a higher yield too for all its flights to/from Singapore. Congrats to the Air Asia Group. They can definitely go farther from Singapore

[flee 5]

Perhaps it will even be called AirAsia X Singapore? That may explain why GE/A380 may be involved in the announcement!

[Kris Kim 0]

How Exciting! I just love flying AirAsia! I wish There was an AirAsia Australia, but maybe in time there might be.

 

Wasn't the Vietnam Air Asia, VietJet Air Asia having issues in the name and branding? The Vietnamese Government can get very very difficult and is very protective of VN, well VN is also very protective of itself to, look whats happening to BL right now, no international flights until they change their logo and branding! Apparently the Vietnam operations will have their aircrafts painted blue!

[Robert 0]

Perhaps it will even be called AirAsia X Singapore? That may explain why GE/A380 may be involved in the announcement!

 

London-SIN-SYD would be an interesting route and with pelnetly of high yield traffic.....

[Tafe 0]

This step will further compliment SIN as the most important point of entry to SEA. Totally dislike this plan! I prefer AirAsia introduce more 'Fly-Thru' facilities esp from/to SIN to catch the market just like JQ/3K did in KUL. Take the hint from UK-based easyJet, they have many virtual hubs but only one subsidiaries, easyJet Switzerland. They utilize the open skies policy. If AK ideas came after KLIA2 frustration, MAHB should seriously consider to speed up that project. More priority should be given. That AK extremely helps our tourism industry...

[Mike P 0]

Hehe, previously SIN chickened out and denied AK's entry... and now finally... I guess most probably due to open skies policy and foreseeing how much AK can benefit the region's aviation by penetrating in SIN's.

[Daniel Tang 0]

It will be interesting to see some 9V registered AirAsia planes around and hopefully some special liveries related to Singapore, especially since SQ is so averse to any livery other than the standard one. Looks like Changi T1 is going to be even redder than it already is.

[BC Tam 2]

Hehe, previously SIN chickened out and denied AK's entry.....

Now, that is a novel way of looking at history - not entirely true mind you, but certainly revealing

[Mohd Azizul Ramli 2]

My spy at the AK Gossip Division just forwarded me a 29 pages analyst report from Credit Suisse. Here is a quote from the report regarding this development:

 

AirAsia plans to start ‘night-stopping’ aircraft (parking overnight) in Singapore, to allow it to mount lucrative peak-hour morning flights from Changi airport. The company has reportedly also advertised for local cabin crew. We believe that this could potentially be a prelude to AirAsia receiving an AOC license in Singapore. This could be a significant positive development for the company, potentially at the expense of Tiger Airways, which could face increased competition in its home market.

[Waiping 12]

So what happen when you local boy have more potential overseas than waiting here?

[jani 0]

How does this affect KUL as an airport?

[flee 5]

How does this affect KUL as an airport?

The LCCT has already reached its capacity limit. So for 2011 and 2012, AirAsia's growth will be limited at KUL. AirAsia can resume growing at KUL only after KLIA2 is ready. However that will take time since the third runway will take even longer to complete - the latest information on this is that the third runway will only be ready 6 months after the terminal is completed.

[Mike P 0]

The LCCT has already reached its capacity limit. So for 2011 and 2012, AirAsia's growth will be limited at KUL. AirAsia can resume growing at KUL only after KLIA2 is ready. However that will take time since the third runway will take even longer to complete - the latest information on this is that the third runway will only be ready 6 months after the terminal is completed.

 

Does it mean no more new route? I'm so eager for the flight to USA, read in the news. The very first city you got to fly in is New York, as highlighted by Dato' TF. Then only later California like LAX.... Woohoo, can't wait for that... and will definitely grab the first promo flight to New York

[BC Tam 2]

I'm so eager for the flight to USA, read in the news. The very first city you got to fly in is New York, as highlighted by Dato' TF

Be careful what you read into Dato TF's "highlights"

First city he flew his metal into was Oakland International (west coast USA) whilst New York is east coast USA

(sorry, could not resist )

[flee 5]

Does it mean no more new route? I'm so eager for the flight to USA, read in the news. The very first city you got to fly in is New York, as highlighted by Dato' TF. Then only later California like LAX.... Woohoo, can't wait for that... and will definitely grab the first promo flight to New York

I think that for 2011, D7 are only expecting to add SYD and/or JED to the network. D7's problem is even more acute because there are only 3 wide body aircraft parking bays at the LCCT.

 

If you read this report, New York will be serviced by extending the existing European flights. It will not come anytime soon as there is lots of approval still to be sorted out.

 

I think AirAsia Singapore is definitely something that will come on stream sooner than the launch of D7's New York route!

[Ikman Ikreza 0]

Which one will come first? AirAsia Singapore or AirAsia Philippines?

[alberttky 0]

Which one will come first? AirAsia Singapore or AirAsia Philippines?

 

Reports in today's Straits Times indicate that the Singapore base would be set up before September.

[leon t 0]

well ak can set up "base" in sep - but what it really needs is for SIN air traffic rights approvals for its flights out of sin to other countries (other than to malaysia). Dont thinkits a easy n fast track to get these coveted traffic rights and certaintly not by sep. QF too is said to be setting up a base for a "new" QF-owned airline in sin.

[Mike P 0]

Definitely a good approach by AK, well done Dato TF. Take the first step to tap into Singapore market before other competitor does. It's not to compete with KUL's base, but to compete with other airlines.