Tuesday, March 1, 2011

Air Asia Flying Into Turbulence

Hantu Laut

"Now Everyone Can Fly" a tag line that has become a reality not only in Malaysia but the whole wide world.

Air Asia, a fledgling airline less than a decade ago has become one of Malaysia's greatest success story.A pioneer in budget airline in Asia and Asia's largest low-fare, no frills airline.

Air Asia was founded by government linked company DRB-HICOM.The highly-indebted company was purchased by one man with one clear vision....... to provide affordable air-fare for the masses.

That one man is Tony Fernandes, who bought the loss-making company for RM1.00 and took over some RM40 million of debt and 2 ageing Boeing 737 .His stint at Virgin as a finance and accounting man may have given him the insight on how to start and run a budget airline.

Many thought him to be out of his mind to buy a debt-ridden airline and prophesied its early demise.The prophets of doom were wrong, the airline has grown from strength to strength and have now eclipsed MAS (Malaysian Airline) in term of fleet size, market capitalisation, profit and popularity.

An epitome of one man's loss is another man's gain. Fernandes has become the envy of the corporate world and his airline a household name in the region.This man had received many outstanding awards including the France government and the Queen of England.Malaysia seemed to have missed his contributions.

Air Asia has flown into turbulence in East Malaysia particularly Sabah where MAB (Malaysian Airports) had given it an ultimatum to move to the KKIA main terminal by 1st June 2011.

Moving to the main terminal would mean increase in its operating cost which would have to be passed on to passengers that would certainly cut its passenger load.Fernandes was against the idea and said he would chain himself to Terminal 2 if he had to, to stay there.

I am a proponent of budget airline which allow one to tailor the fare to suit one's pocket.

I fly with both airlines but more with Air Asia because of its better frequency of flights, newer fleet of air crafts and affordable fare.

Unless, you want to complain it is too cheap or you are just a stupid snob let me assure you there is nothing wrong with the airline, most of its planes are younger than those used by MAS on its domestic flights.

It would be silly of the Malaysian government to ignore Air Asia and give special treatment to MAS which is basically run by people with bureaucratic civil servant mentality and dare not face competitions.MAB excuse of wanting Terminal 2 as cargo terminal is just an excuse.I believe there are plenty of room for expansion where the present cargo terminal is.

Air Asia has become too big to ignore.There were rumours that the Singapore government is trying to court Air Asia to move its hub to Singapore with a promise of competitive costs and a dedicated terminal for the airline.It wouldn't take a lot of effort for Fernandes to accept the offer, if true, and move his main hub to Singapore.

I have flown once with Jetstar from Singapore to Kota Kinabalu and it was no where near as systematic and efficient as Air Asia, the queue at the check-in counter was so long I almost die standing.

The rumours of Singapore wanting another low-cost airline to make Changi its main hub may not be untrue.Air Asia is probably the most successful low-cost airline in the world.Many have tried to copy it but some have fallen by the wayside or are struggling to survive.

Read this on the screwing of Air Asia by Joe Fernandez

2 comments:

Wendy said...

If AirAsia does stay at Terminal 2, the authorities should do something about the appalling traffic congestion caused by double and even triple parking in the no-parking (ha!) area in front of the building. Where are the enforcement officers? It took us 10 minutes to crawl along the approach road off Jalan Mat Salleh to reach the terminal building mid-morning recently, and as long again at 10.30 pm. Mana Ada Sistem, or M(alaysia) A(nyone) B(oleh) park di-mana mana.

Hantu Laut said...

Wendy,
That's not fault of Air Asia, it's MAB and the police.It could also be a ploy to make life difficult for Air Asia.

They can police the place same as Terminal 1, but aren't doing it for a purpose.