Malaysian airline tests Asia's resistance to no-frills flights AP<\/p>\n
Sean Yoong, Associated Press, Kuala Lumpur, Malaysia<\/p>\n
Tony Fernandes, chief executive of Malaysian budget carrier
\nAirAsia, has a theory about flying in this region.<\/p>\n
\"Air travel is made for Asia,\" Fernandes says. \"You can
\ngenerally drive from one end of Europe to another, or take a
\ntrain, but that's not the case here. You want to try driving from
\nKuala Lumpur to Bangkok? Good luck, mate! We don't have the land
\ninfrastructure that Europe has.\"<\/p>\n
After a year of buoyant earnings silenced skeptics who claimed
\na cut-price airline wouldn't cut it in Malaysia, Fernandes plans
\nto turn his theory into what industry analysts say could prove a
\nprofitable practice soon by transforming his airline into Asia's
\nfirst no-frills, cheap fare international carrier.<\/p>\n
Modeling itself on successful budget airlines in Europe and
\nthe United States, AirAsia is getting ready to spread its wings
\nto neighboring countries sometime early next year.<\/p>\n
\"Many people would say Asia isn't ready for the classic, no-
\nfrills airline model,\" Fernandes said in an interview. \"There
\nmust be a founder, an airline to drive the change. We'll start
\ndipping our toes in other countries and see what it's like.\"<\/p>\n
Low-fare carriers have been a distant blip on Asia's radar
\npartly because most countries have their own full-service,
\nflagship airlines - often partly owned or backed by the
\ngovernment - that are entrenched on international and domestic
\nroutes.<\/p>\n
Moreover, Asian business travelers generally don't like to fly
\ncoach or make bookings on the Internet, a competitive platform
\nfor low-cost carriers to draw passengers, analysts say.<\/p>\n
But experts say there are substantial opportunities for a no-
\nfrills, no-meals operation in Asia.<\/p>\n
\"With one or two bits of fine-tuning, there could be a
\ndramatic growth in this sort of model,\" Peter Harbison, managing
\ndirector of the Center for Asia-Pacific Aviation, a Sydney-based
\nconsultancy firm, told The Associated Press.<\/p>\n
According to a September study released by the center, low-
\ncost carriers could thrive in Asia by providing short-haul
\nservices relying on secondary airports - instead of national
\nflight gateways - that serve holiday destinations and high-growth
\ntowns outside of capital cities.<\/p>\n
Noting that incomes are rising rapidly in several Asian
\ncountries, no-frills carriers such as AirAsia would help
\nencourage tourism and stimulate air traffic growth by making
\nflights accessible to more people, without undermining flagship
\ncarriers, the report said.<\/p>\n
Indeed, Fernandes said the airline's biggest triumph has been
\ngetting less affluent Malaysians off the ground.<\/p>\n
\"I get a real kick out of people coming up to me and telling
\nme - hey, we've never flown before, but thanks to you and your
\ncompany, this is our first flight and we're so excited,\"
\nFernandes said.<\/p>\n
Fernandes, 37, who resigned as Warner Music's vice president
\nfor Southeast Asia to help revive AirAsia, an eight-year-old
\ncarrier that had never made a profit. With two other former music
\nexecutives and another partner, Fernandes bought the airline and
\nits two planes for 1 ringgit (26 U.S. cents) and assumed debts of
\n70 million ringgit (US$18.4 million).<\/p>\n
Since relaunching in January, AirAsia has cleared the debts,
\nadded three planes to its stable and currently enjoys a gross
\ncash inflow of about 18 million ringgit ($4.7 million) monthly.<\/p>\n
Fernandes says low ticket prices have enlarged the market,
\nmeaning AirAsia can happily coexist with national carrier
\nMalaysia Airlines.<\/p>\n
Nevertheless, government-controlled Malaysia Airlines recently
\ndiscounted fares on limited seats on domestic routes, where it
\nhas reportedly been losing up to 300 million ringgit ($79
\nmillion) annually.<\/p>\n
\"We are certainly pleased AirAsia has done well,\" Malaysia
\nAirlines' managing director Mohamad Nor Yusof said recently.<\/p>\n
\"It's spurred us into thinking there are opportunities\" in
\noffering low-fare flights.<\/p>\n
AirAsia only serves domestic routes so far. But Fernandes said
\nthe airline would start international flights in early 2003,
\nprobably starting with Indonesia and Thailand.<\/p>\n
The airline hopes to mirror the success of budget carriers
\nsuch as Dallas-based Southwest Airlines and Dublin-based Ryanair,
\nwhich flies across Europe. Fernandes has enlisted Ryanair's
\nformer director of group operations, Conor McCarthy, as his chief
\nadviser.<\/p>\n
\"We have been delighted at the similarities we have found
\nbetween the consumer market in Malaysia compared to Ireland,
\nBritain, Germany or any other country Ryanair entered,\" McCarthy,
\nnow an aviation consultant, told the AP.<\/p>\n
\"People the world over like to travel and want to pay a low
\nfare.\"<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/malaysian-airline-tests-asias-resistance-to-no-frills-flights-ap-1447899208",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}