AirAsia seeks waiver on landing and parking charges

[jetjockey696]

Malaysia Star newspaper reported today:

KUALA LUMPUR: AirAsia Bhd group chief executive officer Datuk Seri Tony Fernandes feels the airline and sister carrier AirAsiaX should not pay for parking and landing charges at the new permanent low cost carrier terminal (LCCT) that will be ready by 2011.

“We should not be charged for the landing and parking of our airplanes as we are bringing in the volume of passengers for the airport operator,’’ he told StarBiz in an interview.

He said airport operator Malaysia Airports Holdings Bhd (MAHB) should be able to earn enough income from letting its shoptlots at the new terminal to cover its costs.

“MAHB can keep the rental income from the shoplots but waive our charges,’’ he said.

He said by 2014, AirAsia would be able to grow its passenger volume to 26 million.


“We need to get the right cost structure to enable us to provide low fares as our business model is about low fares and free seats,’’ Fernandes said.

“Our business has a multiplier effect and in times of an economic crisis, which Malaysian brand has gone so far? MAHB should be fair to enterpreneurs.’’

He also wants the international passenger service charge (PSC) or airport tax at the new LCCT reduced from the current RM25 per passenger to RM10. His rationale for that is not to burden passengers in the current economic downturn.

With planning for the new facility under way, Fernandes was quick to point out that he did not want any aerobridges to keep costs down.

He did not disclose AirAsia and AirAsia X’s landing and parking charges at the existing LCCT.

The Government recently decided that the new permanent LCCT will be built near the KL International Airport (KLIA) main terminal in line with the National Airport Masterplan and to allow optimisation of resources such as runways, control towers and transportation infrastructure. MAHB will operate the new terminal, for which construction is expected to begin this year.

The new permanent LCCT will cater for 30-35 million passengers annually.

Giving incentives in the airline industry is not new. MAHB has been doing that to encourage airlines to fly into KLIA.

When AirAsia moved from Subang to LCCT, it was given a five-year incentive programme to facilitate its move.

During this period, AirAsia enjoyed a waiver on aeronautical charges for all its flights, which included landing, parking, aerobridge and check-in counter charges. It also got special rental rates for office space at all airports. This programme expired in 2007.

MAHB could not accede to AirAsia’s request for an extension as MAHB wanted to be fair to all airlines and not continue to single out one airline for the incentives.

The parking and landing charges have not changed for the past 27 years and MAHB is formulating a new incentive scheme, which will include waivers and discounts as incentives for growth. It is learnt that the new scheme will be very helpful to airlines including AirAsia.

The Government decides on PSC and approves any proposal on landing and parking charges. MAHB declined to comment on AirAsia’s request.

[jetjockey696]

Telegraph:



Air Asia upbeat as first budget flight to London prepares for take-off
Posted By: The Asia File at Mar 4, 2009 at 08:49:00 [General]
Posted in: Foreign Correspondents , Travel
Tags:View More Air Asia, Airlines, financial crisis, kuala lumpur, london, malaysia , recession, travel

A week today, an Air Asia Airbus A340 will take off from Kuala Lumpur airport's ramshackle Low Cost Carrier Terminal bound for London in a bold move that will be watched closely by others in the ailing airline industry.



For Air Asia, the plucky Malaysian budget airline, is attempting to roll out a business model that no other operator - not even mavericks like Ryanair's Michael O'Leary and easyJet's Stelios Haji-Ioannou - believe can succeed: long-haul, low-cost travel.

The last airline to try it, Oasis Hong Kong, lasted just 18 months before collapsing last year as high fuel costs and intense competition on the Hong Kong-London route dragged it down. And you 'd be forgiven for thinking that the current climate, with airlines around the world racking up massive losses as passenger numbers slide, is hardly a better time to launch such a speculative venture.

But Azran Osman-Rani, the cheery chief executive of Air Asia X, the subsidiary that is operating the KL-Stansted flights, is confident that he can succeed where Oasis failed.

"There's a lot of latent demand and we think we've got the right elements to make the economics work," he told me when I flew up to KL to meet him on Monday (see video).

Like other no-frills airlines, Air Asia is used to operating on a very frugal cost structure and, unlike the skeptics, Osman-Rani believes that the low-cost approach can be applied to long-haul.

Air Asia X currently operates just four planes on various long-haul routes to Australia and Osman-Rani says that the cost structure is already 50pc lower than full-service airlines with 100 aircraft.

"The two main advantages that help us keep the costs down come from how many hours a day we fly our planes and how many seats we fill," he explained. "We fly 18 hours a day as opposed to 12/13 hours for legacy airlines, whose aircraft spend a lot of time parked."

He added that, Air Asia will be able to fill most of its seats on the KL-London flights because of through-traffic from its well-developed network around Southeast Asia. Eighty-one percent of the Air Asia passengers flying to KL from Australia are in transit and Osman-Rani believes that many of those using the KL-Stansted route will also be connecting to other destinations in the region.

I'll have more insights from the interview with Osman-Rani in the coming days, including a detailed look at how Air Asia keeps its costs down and why he believes that no-frills airlines are fundamentally changing the way we travel.

[B772]

Jetstar are doing ok with their current International services. When they receive their B787's and commence services to Europe the World will be a different place.