Jump to content
MalaysianWings - Malaysia's Premier Aviation Portal
alberttky

AirAsia China

Recommended Posts

AirAsia Bhd. (AIRA), the region’s biggest discount carrier, said it may add only one more major hub for expansion as it focuses on boosting profits from Malaysia, Thailand and Indonesia in the next three years.

 

 

AirAsia aims to increase annual profit from its three main markets to one billion ringgit ($327 million) each, Group Chief Executive Officer Tony Fernandes said in an interview in Kuala Lumpur today. Taiwan, South Korea, Vietnam and India are among the potential markets for a new base, he said.

“We have three gold mines in Malaysia, Thailand and Indonesia and I really want to capitalize on those three first,” Fernandes said. “I’m beginning to feel that I’d rather focus on these. On top of that I still have energy for another biggie, and maybe a few small ones in Laos, Cambodia and Myanmar.”

Negotiations with Airbus SAS for ordering 100 more A320s may be completed by the end of next month, Fernandes said, as the carrier expands operations to fend off rising competition. Malindo Airways, a venture backed by Indonesia’s PT Lion Mentari Airlines, is set to start low-cost flights in Malaysia next year as the region’s economic growth spurs travel demand.

 

 

‘Strong Branding’

 

“The accelerated roll out of aircraft in Malaysia to dominate routes ahead of the start up of Malindo Airways in March 2013 is a good defensive measure,” Annuar Aziz, an analyst at Credit Suisse Group AG, wrote in a report yesterday. “Coupled with its strong branding, we expect AirAsia to withstand the challenge.”

AirAsia, which also operates ventures in the Philippines and Japan, rose 1.8 percent to 2.90 ringgit as of 12:30 p.m. in Kuala Lumpur trading, after yesterday posting its third-straight increase in quarterly profit. The stock has fallen 23 percent this year, compared with a 5.5 percent advance in the benchmark FTSE Bursa Malaysia KLCI Index.

Net income increased 3.6 percent to 157.8 million ringgit in the three months ended September from 152.3 million ringgit a year earlier, the Sepang, Malaysia-based carrier said in a statement yesterday after trading hours. Revenue rose 15 percent to 1.24 billion ringgit.

Thai AirAsia posted a profit of 199 million baht ($6.5 million) in the quarter while the Indonesian venture had net income of 74.5 billion rupiah ($7.7 million), the company said in the statement.

AirAsia’s main Malaysian unit carried 9 percent more passengers and expanded capacity 10 percent. The group, which currently has a fleet of 112 A320s, plans to take delivery of 266 more planes by 2026. It will add 11 more A320s this quarter, according to the statement.

http://www.bloomberg.com/news/2012-11-22/airasia-may-add-only-one-more-hub-to-focus-on-3-key-markets.html

Share this post


Link to post
Share on other sites

More like it finally hitting home that all these efforts (and costs) of setting up foreign entities within ASEAN and resulting advantages (real or perceived) of having a 'local' entity will likely largely be negated by the forthcoming free-skies policy

That is on assumption that the policy will be implemented fully in spirit and practice :)

Share this post


Link to post
Share on other sites

Why AirAsia doesn’t need a new affiliate in Singapore, the rest of ASEAN and potentially all of Asia

 

http://centreforaviation.com/analysis/why-airasia-doesnt-need-a-new-affiliate-in-singapore-the-rest-of-asean-and-potentially-all-of-asia-95690

 

 

The AirAsia Group has started focusing on growth at its existing portfolio of carriers after determining there is no need for additional affiliates in ASEAN and potentially in the rest of Asia. After spending the last several years actively searching for new joint venture partners, AirAsia has realised that most Asian markets where it does not yet have a local affiliate can be sufficiently covered by its existing carriers. The only possible short-term exception is India, but AirAsia remains wary of entering the Indian market and India has been the only Asian market where the group has reduced capacity over the last year.

Asia’s leading low-cost carrier group will spend most of 2013 growing domestically in its five home markets and expanding international services to some strategic non-home markets, particularly mainland China. But expansion in AirAsia’s largest non-home market, Singapore, will be slowed significantly. Congestion inSingapore – more so than the saturation of Singapore’s LCC market – is prompting AirAsia to focus more on other non-home markets.

The AirAsia Group currently consists of five short-haul carriers in four ASEAN countries – Malaysia, Indonesia, Thailand and the Philippines – as well as Japan. Malaysia-based long-haul LCC AirAsia X is not technically part of the AirAsia Group but works closely with its short-haul sister carriers.

Share this post


Link to post
Share on other sites

Well well well
I still remember when Tony said he wants to have an AIR ASIA company in every Asian's nation. What happened now? Only 5 I think? and Japan Air Asia is believed to bit the dust soon.......

Share this post


Link to post
Share on other sites

THE Tata name is synonymous with the air sector.

 

Going back in time, it was Ratan Tata's uncle, J.R.D. Tata, who founded Air India. Known as the father of civil aviation, J.R.D. started Tata Airlines carrying letters all over, eventually flying passengers.

 

The Indian government took stakes in 1948 and again in 1953 in the airline, designating it a flag carrier, and later renaming it Air India.

In 1990, Ratan got into a venture with Singapore Airlines but it never got regulatory approvals.

More recently, the Tata Group India's biggest industrial conglomerate entered the air sector again via a 6% stake in SpiceJet Ltd, India's second-largest low-fare carrier.

But this week, the Tata name hogged the headlines in India yet again, this time with its joint venture (JV) with Asia's biggest low-fare airline,AirAsia, whose boss Tan Sri Tony Fernandes described the tie-up as “a marriage made in heaven” to the Indian media.

India has been on AirAsia's radar screens for a long time but it has not been easy until Fernandes met Ratan several months ago. Both began talking and as Fernandes put it, “There was chemistry between us and he was excited about the air sector.''

Five months of intense negotiations and the deal was signed on Tuesday, whereby the Tata Group's holding company, Tata Sons, takes 30% equity in the JV to set up AirAsia India to hub in Chennai.

Arun Bhatia whose son is married to steel magnate Lakshmi Mittal's daughter is taking 21%. Arun, a property tycoon, also co-owns the English Premier League football club Queens Park Rangers with Fernandes.

Fernandes seems pretty excited to have two billionaires on board, saying, “It's been nearly four years since we have been looking, and this is probably the high point in my career to get into India. The next will be China, and with that, it would be our crowing moment.''

It is all a question of timing Fernandes meets Ratan, the Indian government relaxes the rules to allow foreign airlines to hold up to a 49% stake in its local carriers in September and he gets Arun too.

If this deals goes though, then it would mark the first international investment in India's struggling airline industry since September.

Talking about timing, AirAsia pulled out of the Indonesian deal to buy the now defunct-Batavia Air in the nick of time, as had it not, it would have been disastrous.

In India, he will drive the venture, sourcing aircraft from AirAsia. The investment being talked about is between US$30mil (RM93.36mil) and US$50mil (RM155.60mil), with the possibility of Tata's investment being capped at US$9mil (RM28.01mil).

Fernandes, his partner Datuk Kamarudin Meranun, Arun and Tata's representatives S. Venkatraman and Bharat Vasani will be board members. The sixth member will be an Indian national, Ratan perhaps, but that remains to be seen.

But India is no easy market even with two billionaires in tow. It has crippling issues of high costs, outrageous taxes, insufficient infrastructure, high airport charges, rupee depreciation and incumbents struggling to make profits.

Jet Airways, SpiceJet, IndiGo and Air India are all fighting declining passenger traffic, while Kingfisher Airlines has not flown since October.

But the news is creating enough buzz in India for Jet Airways and SpiceJet's share prices to tumble, for now. It is seen as a deal that will be the game-changer for air fares, as AirAsia will fight on prices and they expect it to spice up the already competitive market.

Fernandes says he is going in with “eyes wide open ... and it is tough everywhere in the world. Nothing has been easy for us”.

AirAsia will enhance competition and expand the spread of air connectivity to smaller cities. Fernandes' target is the one million people who travel by train. He wants to woo them with really low fares and claims AirAsia India will be a true low-cost carrier. But can the marriage with Tata really spice up the market that he so hopes for?

http://biz.thestar.com.my/news/story.asp?file=/2013/2/22/business/12745353&sec=business

Share this post


Link to post
Share on other sites

This is not consistent with what has been reported before. Uncle Tony said there will be only 1 more AirAsia franchise, it will be located outside of ASEAN and it has been announced that it is India.

 

http://www.malaysianwings.net/forum/index.php?showtopic=18454

 

Edit: crowing = berkokok as in a rooster. To boast. Ok now it makes sense.

Share this post


Link to post
Share on other sites

I would salute to TF if he could get into China's market, it's really super duper tough! Like how AA and UA used to fight for the PEK route before? and NW or DL used to fight for non stop flight to China's cities rather than stopover in NRT? Those were really tough.

Share this post


Link to post
Share on other sites

I'm still secretly hoping that AirAsia buys back into VietJetAir, and eventually turns it into a AirAsia franchise. I think they are considering it, however are hesitating because the AirAsia branding is not allowed, due to restrictions and that's why Jetstar Pacific is flying naked A320's up and down Vietnam, however we are seeing changes with JQ recently changed BL to an all A320 operator and changing the uniform more inline with it's other affiliates. Hopefully the Vietnamese government will change this rule as it may harm and tarnish the growing aviation market in Vietnam.

Share this post


Link to post
Share on other sites

A surprised news which came out out-of-a-sudden. Info was intercepted by our spy at the AK Gossip Division.

 

Key info:

  • Former Thai AirAsia CEO Tassapon Bijleveld is appointed as the CEO of AirAsia China.
  • The new CEO for Thai AirAsia has yet to be announced.
  • AirAsia China is to model the concept of the now disbanded AirAsia Singapore.

 

 

China, through its sheer size, its proximity to all of our AirAsia countries, and through the years of hard work developing the market, has become our most important overseas market. Chinese citizens are the largest number of guests outside of the citizens of our own AOC countries, and we as a group are one of the largest players on Chinas international routes. We hope to do more in China once the right opportunity surfaces. Its the one country that will truly make us the dominant airline in Asia.

China is complex in terms of operations because we have multiple AOCs flying into and out if it MAA, TAA, AAX and PAA (through Hong Kong). There is plenty more growth in China for all of the current AirAsia airlines, as well as any other new airlines we would like to set up in the North Asian region. There is also a lot of duplication in terms of service, operations and commercial activities. This means additional costs, complexity and internal debates and battles on who does what, who pays for what etc. If this is not sorted out, we are just making it difficult for us to keep up with our own growth there.

Given the need for us to give China the focus and attention it needs, I am happy to announce the appointment of Tassapon Bijleveld, CEO of Thai AirAsia, to take on the additional role of CEO of China. He will be responsible for the overall strategy and implementation on regulatory, commercial, distribution and airport development matters. He will take the lead on the review of the China structure that is currently on-going, and will implement the structure that will allow us to grow quickly and profitably and that is fair to all of the AirAsia AOCs involved.

Tassapon is somebody who is very familiar with China, having led TAAs venture into China and making Chinas its most important overseas market. Tassapon is also much closer to China and will be able to oversee and manage China more effectively. And having been a long-time AirAsia Allstar, hes the right person to grow China to make it into a true AirAsia operations.

Tassapons appointment as Chinas CEO is effective 15 July 2013. Please join me in wishing him and the China team all the best in their new roles.

Share this post


Link to post
Share on other sites

Tassapon is still the CEO of TAA no? It's said he will take on an additional role as CEO of AirAsia China in the article

Share this post


Link to post
Share on other sites

Yes, that is what I understand from the above statement. Its similar to the role he played promoting their aborted JV with VietJet.

Share this post


Link to post
Share on other sites
TIANJIN (China): Budget carrier AirAsia Bhd, which sees the importance of the China market as one of its growth frontiers, wants to double China’s contribution to its revenue to 30% in two to three years from 15% currently.


Chief executive officer Aireen Omar hopes this contribution will more than double in the next five years.


For the nine months ended Sept 30, 2013 (9MFY13), AirAsia recorded RM1.28 billion in revenue, up 3.5% from RM1.24 billion a year earlier.


Aireen said for the most part in China, AirAsia will strengthen the markets it has already entered, and that includes increasing its frequencies to bring in more connectivity from other destinations into China.


“China is a huge country and we have only penetrated a very small percentage. There are some new ideas on new destinations, but they are not as a priority as how we want to build the market that we have there,” she told the Malaysian media, before a visit to the Airbus A320 final assembly line.


AirAsia currently flies to 10 destinations in China from Kuala Lumpur.


Aireen noted that AirAsia is the biggest foreign airline in China by capacity because of its connectivity.


“The beauty about it is that we introduced new destinations without cannibalising any of their legacy carriers,” Aireen said, adding that AirAsia fits into the Chinese network and market quite well as it helps with the huge volume of Chinese travellers, and to the economy as well.


“I wouldn’t be surprised if at one point [China] will be Asia’s largest low-cost carrier hub with the kind of encouragement and support that they give,” she said.


Aireen said AirAsia has not seen price competition in China and does not need intense price competition with others as Chinese carriers have a far bigger market than they have already captured, and they focus more on the premium segment while AirAsia focuses on the mass travel sector.


Aireen added that as the group expands and connects into various parts of China, this benefit will feed into the entire group as well (for example, AirAsia X, Thai AirAsia, and India AirAsia).


This year, AirAsia will primarily focus on introducing new routes, as well as adding more frequencies to some of its current routes.


“I think it’s a combination of both, but I would say more than about 60% of what we’re doing this year will be purely on new routes,” said Aireen, reiterating that AirAsia is in a unique position to be able to connect the dots which no other airlines are able to do and thus it should leverage its network.


On recent reports that AirAsia has been enjoying perks from airport operator Malaysia Airports Holdings Bhd (MAHB), Aireen clarified that there is no such thing as a special treatment, adding that the incentive scheme is offered to all airlines that operate into the airports, and it is up to the airlines how they make the most of it.


“For AirAsia, we work really hard to stimulate travel, we take risks to bring in the volume and we continue to promote and boost tourist arrivals. We only receive the incentives when we meet the target. If you don’t meet the target, you will not be entitled to any incentives,” she said.



It is understood from AirAsia that the incentives are in the form of credit notes used to offset invoices issued by MAHB.


“It is a win-win situation, the airport benefits from the passenger volume we bring. And naturally, the country benefits too,” Aireen said.



This article first appeared in The Edge Financial Daily, on February 24, 2014



Share this post


Link to post
Share on other sites

Our spy at the AK Gossip division intercepted an email from Uncle Tony which contains his anger towards his staff who made remarks about Flight 370 in social media platforms, in light of the suspension of the D7's SFO. I think all Allstars in the forum know which email I am talking about.

 

With news about Malaysian visitors being treated badly (passport, bag being thrown upon by the Immigration/Custom) following the incident and that the AK Group holds a larger shares in the Malaysia-China market, I am a bit worried.

Share this post


Link to post
Share on other sites

 

With news about Malaysian visitors being treated badly (passport, bag being thrown upon by the Immigration/Custom) following the incident and that the AK Group holds a larger shares in the Malaysia-China market, I am a bit worried.

Wow, China's anger right up until immigration clearance? Show some maturity lah.

Share this post


Link to post
Share on other sites

Wow, China's anger right up until immigration clearance? Show some maturity lah.

 

Only if one understand how chinese politic works.

Share this post


Link to post
Share on other sites

Our spy at the AK Gossip division intercepted an email from Uncle Tony which contains his anger towards his staff who made remarks about Flight 370 in social media platforms, in light of the suspension of the D7's SFO. I think all Allstars in the forum know which email I am talking about.

 

With news about Malaysian visitors being treated badly (passport, bag being thrown upon by the Immigration/Custom) following the incident and that the AK Group holds a larger shares in the Malaysia-China market, I am a bit worried.

Well blame it on their history of being ill treated by the invading western powers and Japan in the past. Their national education has included patriotism to a level never seen before in China, in many ways to a dangerous and violent level.

 

We crossed the border to China yesterday and left China today, nothing unpleasant or being ill-treated by immigration. We heard people talking about the incident or some even talked to us about the incident for those who knew that we are Malaysian. We didn't come across anyone who showed or acted in stupidity.

 

My wife was in China for a week last week and again nothing unpleasant.

Edited by S V Choong

Share this post


Link to post
Share on other sites
AirAsia, Everbright JV To Establish LCC In China

From Mokhtar Hussain


BEIJING, May 14 (Bernama) -- AirAsia Bhd has signed a memorandum of understanding (MoU) with China Everbright Group and Henan Government Working Group to establish a low-cost carrier (LCC) in China.


It outlines how the parties will incorporate a joint-venture to be known as AirAsia (China) for the purposes of operating a low-cost aviation business based in Zhengzhou, the capital of Henan province in central China.


In addition, AirAsia (China) will invest in aviation infrastructure, including a dedicated LCC terminal at Zhengzhou airport and an aviation academy to train pilots, crew and engineers, as well as maintenance, repair and overhaul (MRO) facilities to service aircraft.


The MoU was exchanged between AirAsia Group Chief Executive Officer, Tan Sri Tony Fernandes, Everbright Financial Investment Holding Executive Director and President, Wang Weifeng and Henan Airport Group General Manager, Li Weidong at China World Hotel here on Sunday.


The ceremony was witnessed by Prime Minister Datuk Seri Najib Tun Razak who is on a five-day working visit to China.


Also present were AirAsia Executive Chairman Datuk Kamarudin Meranun, AirAsia Senior Independent Non-Executive Director Fam Lee Ee and AirAsia North Asia President Kathleen Tan.


China Everbright Group Vice Chairman and President Gao Yunlong said: We are excited to be part of this joint-venture to bring AirAsia to China. We believe China is ready for a true LCC and we feel that only AirAsia can deliver on that promise by providing real value to Chinese travellers, thanks to its unique combination of low fares and award-winning service."


Henan Provincial People's Government Deputy Governor Shu Qing said, "Henan is very pleased to offer AirAsia a home in China. Zhengzhou was once the capital of ancient China. With AirAsia supporting the city's aeropolis - an industrial, commercial and logistics zone five times the size of Manhattan with the airport at its heart - we have absolute confidence that we will succeed in transforming Zhengzhou into the new capital for regional and global transport and logistics."


Commenting on the agreement, Fernandes said Zhengzhou was chosen as a base due to its strategic location and importance as a logistics hub.


"As China's gateway to Europe, Zhengzhou sits at the centre of a vast rail, highway and air transport network that forms the lynchpin of China's development plans for its central and western regions.


"This Chinese venture represents the final piece of the AirAsia puzzle. In just 16 years, we have successfully built a presence in Malaysia, Thailand, Indonesia, the Philippines, India and Japan, with China closing the loop on all major territories in Asia Pacific," he said.


While Kamarudin regarded today's MoU as the latest in a long line of strategic collaborations with Chinese companies, from Tencent, Alipay and Union Pay for payments to Industrial and Commercial Bank of China for aircraft financing and China Aircraft Leasing Group Holdings Ltd for aircraft leasing.


"In addition, we are working closely with Huawei to create a digital airline and smart airport to transform the way we fly."


AirAsia was the first foreign LCC to enter China and has carried more than 40 million guests since its inaugural route to China in April 2005. AirAsia and AirAsia X currently fly to 15 destinations in China and is the largest foreign LCC operating into the country.

Share this post


Link to post
Share on other sites

if AK jv in China succeeds then it will be the largest within AK group considering the hugumonous China domestic air market.

Share this post


Link to post
Share on other sites

It looks like a full blown aviation JV - from setting up airline, training of crew, MRO, building a new LCCT. This is like setting up AK all over again, except on a bigger scale...

Share this post


Link to post
Share on other sites

One can only wish them best of luck in China, and especially the cabin crew. What I've encountered in Mainland flight previously was.........

Share this post


Link to post
Share on other sites

One can only wish them best of luck in China, and especially the cabin crew. What I've encountered in Mainland flight previously was.........

You don't fly AirAsia to be pampered by the cabin crew anyway...

Share this post


Link to post
Share on other sites

Based out of Zhengzhou right? Zhengzhou is a second tier city, the Hakka people's ancestral hometown, is located at the south bank of the yellow river in Northern China....

 

Not really an important city in today's term, however!

Share this post


Link to post
Share on other sites

AirAsia Fernandes’ China dream come true

 

PETALING JAYA: Tan Sri Tony Fernandes has reasons to smile, as for the past 10 years he has been dreaming of setting up a low-cost airline in China, and now, he seems to have gotten his way.
His enthusiasm, however, was not reflected in the share price of AirAsia Bhd, which saw a marginal rise yesterday.
It closed eight sen higher at RM3.56, a day after AirAsia signed a memorandum of understanding (MoU) with two Chinese parties. Analysts believe the potential is huge.
The deal came six weeks after AirAsia entered into a joint venture (JV) with Vietnam’s Gumin Company Ltd and Hai Au Aviation Joint Stock Co to set up a low-cost airline in Vietnam.
Fernandes has been working on the China deal for the past two years. He was supposed to have signed the deal in November last year, but it was cancelled at the eleventh hour. Two days ago, however, he managed to ink it.
“Now, we have earned the right to be called AirAsia (in China),” the group CEO of AirAsia said in a text message to StarBiz.

Share this post


Link to post
Share on other sites

×
×
  • Create New...