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AirAsia Berhad (MYX: 5099) is a low-cost airline based in Kuala Lumpur, Malaysia. It operates scheduled domestic and international flights and is Asia's largest low fare, no frills airline. AirAsia pioneered low cost travelling in Asia. It is also the first airline in the region to implement fully ticketless travel and unassigned seats. AirAsia has been expanding rapidly and is very popular among the travelling public thanks to its frequent low fare deals. Its main base is the Low Cost Carrier Terminal (LCCT) at Kuala Lumpur International Airport (KUL). Its affliate airlines Thai AirAsia and Indonesia AirAsia fly from Suvarnabhumi Airport, Thailand and Soekarno-Hatta International Airport, Indonesia, respectively.

History

The airline was established in 1993 and started operations on 18 November, 1996. It was originally founded by a government-owned conglomerate DRB-Hicom. On December 2, 2001, the heavily-indebted airline was purchased by former Time Warner executive Tony Fernandes's company Tune Air Sdn Bhd for the token sum of one ringgit. Fernandes proceeded to engineer a remarkable turnaround, turning a profit in 2002 and launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1 (US $0.27).

In 2003, AirAsia opened a second hub at Senai Airport in Johor Bahru near Singapore and launched its first international flight to Bangkok. AirAsia has since started a Thai subsidiary, added Singapore itself to the destination list, and commenced flights to Indonesia. Flights to Macau started in June 2004, while flights to Mainland China (Xiamen) and the Philippines (Manila) started in April 2005. Flights to Vietnam and Cambodia followed later in 2005 and to Brunei and Myanmar in 2006, the latter by Thai AirAsia.

A new budget terminal, the first of its kind in Asia was opened in Kuala Lumpur International Airport on 23 March, 2006. Built at a cost of RM108 million (US $29.2 million) and spanning some 35,000 square metres (116,000 square feet), the Low Cost Carrier Terminal (LCCT) is the new home for AirAsia Bhd. LCCT will initially handle 10 million passengers a year. AirAsia Group is expected to carry 18 million passengers in 2007.

AirAsia operates with the world’s lowest unit cost of US$0.023/ASK and a passenger break-even load factor of 52%. It has hedged 100% of its fuel requirements for the next three years, achieves an aircraft turnaround time of 25 minutes, has a crew productivity level that is triple that of Malaysia Airlines and achieves an average aircraft utilisation rate of 13 hours a day.

AirAsia is currently the main customer of the Airbus A320. The company has placed an order of 175 units of the same plane to service its routes and at least 50 of these A320 will be operational by 2013. The first unit of the plane arrived on 8 December, 2005.

On 27 March, 2006, the Government of Malaysia announced that AirAsia will take over 96 non-trunk routes, in addition to 19 domestic trunk routes. This was part of Malaysia Airlines route rationalization programme which saw a large number of its domestic sectors being transferred to AirAsia from 1 August 2006.

On December 27, 2006, AirAsia's CEO Tony Fernandes unveiled a five-year plan to further enhance its presence in Asia. In the plan, AirAsia will strengthen and enhance its route network by connecting all the existing cities in the region and expanding further into Indochina, Indonesia, Southern China (Kun Ming, Xiamen, Shenzen) and India. The airline will focus on developing its hubs in Bangkok and Jakarta through its sister companies, Thai AirAsia and Indonesia AirAsia. Hence, with increase frequency and addition of new routes, AirAsia expects passenger volume to hit 18 million by end-2007.

On September 2007, AirAsia's Kuala Lumpur hub is fully operated with A320s while Thai AirAsia received its first Airbus A320 in October 2007. Indonesia AirAsia will receive its first Airbus by January 2008.

On April 5, 2007, AirAsia announced a three-year partnership with the British Formula One team AT&T Williams. The airline brand is displayed on the helmets of Nico Rosberg and Alexander Wurz, and on the bargeboards and nose of the cars.

In August 2007, Sir Richard Branson announced to take 20 percent stake in AirAsia X.

Passenger Statistics

In FY 2007, AirAsia Malaysia carried 8,737,939 passengers, up from 5,719,411 in FY 2006. Cumulative passengers of the Group totaled 30 million by the end of calendar year 2006. FY 2008 Guidance expects 11 million passengers for AirAsia Malaysia and 7 million for affiliates.

The airline has to-date carried more than 33 million passengers over an extended network.

Value added services

AirAsia has progressively launched value added services into the flight options. On April 24, 2007, AirAsia introduced the web check-ins. This made AirAsia the first airline in Malaysia to offer the ability to check in online and print out boarding passes. It is now available for Malaysian domestic travel only and for those with no check-in baggage.

On May 15, 2007, a service named "Xpress Boarding" has been launched to enable passengers to get priority boarding with nominal fees. This enables the passengers to cut hassle and choose seats at ease. This product is available in all hubs including Thai AirAsia and Indonesia AirAsia.

On the pipeline, after launching web check ins and kiosk check ins, AirAsia will later introduce PDA check ins.

On AirAsia X flights, passengers are given a choice of purchasing extra baggage spaces, meals, comfort kit, and seat number, all with nominal fees.

Subsidiaries

Thai AirAsia

Thai AirAsia (Thai: ไทยแอร์เอเชีย) was established on 8 December 2003 as joint venture with Shin Corporation. Flight operations commenced on 13 January 2004 from its base in Don Mueang International Airport. Since 25 September 2006, the airline is based at the new Suvarnabhumi Airport.

Indonesia AirAsia

AirAsia acquired the then defunct Awair in 2004 with a 49% stake in the airline. Awair commenced services on behalf of AirAsia in December 2004; full rebranding to Indonesia AirAsia was completed on 1 December 2005. The airline is based in Soekarno-Hatta International Airport.

Vina AirAsia

Vina AirAsia is the product of the joint venture company, in which AirAsia Bhd holds a 30% stake (the maximum holding allowable for a single foreign entity) and remaining 70% to Vietnam Shipbuilding Industry Group (Vinashin). This will see both parties securing a licence to establish a low-cost airline by July 2008 in Hanoi, Vietnam.

Associate companies

AirAsia X

AirAsia X is a service operated by AirAsia X Sdn. Bhd. (previously known as FlyAsianXpress Sdn. Bhd.) as a franchise of AirAsia. It will start offering long-haul services from Kuala Lumpur to Australia and China using Airbus A330 and with fares starting from AU$31 (excluding tax and airport charges). Its inaugural flight is on 2 November, 2007 to Gold Coast, Australia

FlyAsianXpress was an airline subcontracted by AirAsia for the operations of Rural Air Service within Sabah and Sarawak previously operated by Malaysia Airlines to a new airline, FlyAsianXpress (FAX). Established on 1 August 2006, the airline is a privately owned by the management team of AirAsia. With the formation of MASwings by Malaysia Airlines, FAX ceased all it's rural air services on October 1, 2007 and will concentrate on long haul routes by AirAsia X.

Tune Hotels

The first AirAsia "no-frills" hotel, Tune Hotels is ready for occupancy in Kuala Lumpur and Kota Kinabalu, and later in Penang, Johor Bahru, Miri, and Kuching.

Tune Money

Tune Money is Asia's first "no-frills" online financial service owned by Tune Air Sdn. Bhd. Modelled after Virgin Money, it comprises life, home and motor vehicle insurance as well as prepaid cards.

Bangladesh AirAsia
AirAsia has signed a memorandum of understanding with East West Airlines, a sister concern of Bangladesh’s Orion group, to run the first-ever airlines joint venture and budget airlines in Bangladesh.

AirAsia Lanka / Air South Asia
Air South Asia, formerly HolidayAir, is an upcoming LCC based in Sri Lanka. The airline is presently 100% owned by Sri Lankan interests, but it plans to use AirAsia's expertise, booking engine and pilot training facilities, with an option for AirAsia to acquire a stake at a later stage.

Destinations

AirAsia operates over 200 flights a day, to 75 domestic and international routes covering Malaysia, Thailand, Indonesia, Macau, China, Vietnam, Laos, Cambodia, Australia and the Philippines.

In 2007, 19 new routes had been introduced over the AirAsia wide network. The routes includes routes from Kuala Lumpur to Gold Coast (Via AirAsia X), Vientiane, and Banda Aceh; connecting Southern China (Macau and Shenzhen) over different Malaysian hubs and Bangkok.

There will be more new route in 2008, which will include routes to India and China:

• Hangzhou (via AirAsia X, starts from 4 Feb 2008))
• Ho Chi Minh City (Starts in 15 Apr 2008)
• Hong Kong (from Kuala Lumpur, Bangkok and Kota Kinabalu, starting in 15 May 2008)
• Haikou (starts in 22 May 2008)
• Kuantan (starts in June 2008)
• Guilin (starts in July 2008)
• Tiruchirapalli, India (starts in October 2008)

The CEO is also not ruling out Kuching-Perth service in the future following Malaysia Airlines withdrawal from the route

Meanwhile, Thai AirAsia has added Shenzhen and later to Guangzhou, Guilin, Chengdu and Chongqing and Hong Kong in 2008..

For Indonesia AirAsia, Jakarta-Kuching will be introduced and Jakarta-Johor Bharu has commenced.

AirAsia X is planning to fly to Australia from its Kuala Lumpur base covering Avalon, in Victoria, Adelaide, and Newcastle. The airline also has plans to fly to India, China, UK and the Middle East.

Fleet

AirAsia began a gradual conversion of its fleet from the Boeing 737-300 to the Airbus A320-200, with the first order made for 40 Airbus A320 aircraft and 40 more on option in a Memorandum of Understanding made in 17 December 2004. When the contract was signed on 25 March 2005, the order was increased to 60 firm orders with 40 on option. The first six Airbus A320s were delivered on 9 December 2005, with the remaining 54 aircraft from the 2005 order to be delivered by June 2009.

On 19 July 2006, the airline exercised the options of 40 Airbus A320-200s to increase its total firm orders to 100 aircraft, with another 30 on option. It made a third order of 50 film A320-200s and increased the options to 50 on 8 January 2007, with delivery expected to be completed by December 2013. The Airbus A320-200 was expected to completely replaced the Boeing 737-300 fleet at the Kuala Lumpur base by July 2007. The airline made its latest order of 25 film orders on 25 November 2007, bringing its total orders of Airbus aircraft to 175 with 50 on option.

On 6 July 2007, the airline placed another order with Airbus for a further 25 A320-200sm making it the largest customer of the type.

Awards

• 2007 CAPA Airline of the Year
• Commendations of Prestige Award from Macau

See also

• Tune Ventures

External links

• AirAsia
• AirAsia fleet age
• AirAsia fleet detail

References

1. Does Low Cost Mean High Risk?
2. "Passengers' perceptions of low cost airlines and full service carriers" (PDF).
3. Leong Hung Yee (27 December 2006). "AirAsia embarks on 2nd chapter". The Star.
4. AirAsia sponsors the Formula One team Williams
5. AirAsia Completes Record Year: Annual Revenue Increased by 52%, Pretax Profit Soars to RM278 million with EBITDAR Margins of 31%
6. "Milestone year for corporate Malaysia". The Star. December 10, 2007.
7. AirAsia web check in information
8. AirAsia introduces Xpress boarding
9. Laalitha Hunt. "AirAsia confident of Vietnam market". The Star.
10. "X-citing deal for air travellers". The Star. 2007-01-06. {{cite news}}: Check date values in: |date= (help)
11. "AirAsia X London flights from RM9.99". The Star. January 5, 2007.
13. Nazrul Islam. "Air Asia eyes Bangladesh skies". New Age.
14. Munza Mushtaq (2 September 2006). "Sri Lanka's first ever budget airline ties up with Asia's best". Asian Tribune.
15. "SWEET SUCCESS FOR FIGHTER". Singapore TODAYonline. January 14, 2008.
16. Channelnewsasia.com
17. Channelnewsasia.com
18. AirAsia flying to India next year
19. "Kuching-Perth flights in the pipeline". The Star.
20. "Thai AirAsia to fly daily to Guangzhou". Bangkok Post. December 10, 2007.
21. Chan Chin Thut (March 7, 2007). "AirAsia plans more new routes". The Star.
22. Welcome to AirAsia.com...now everyone can fly
23. "AirAsia orders additional 25 Airbus A320s" Flight Global, 06/12/2007
24. "AirAsia increases A320 commitment to 100 aircraft". Airbus.com.
25. "AirAsia initiates total fleet renewal with Airbus A320". Airbus.com.
26. "AirAsia orders 40 more A320 Family aircraft". Airbus.com.
27. "100 more A320s for AirAsia". Airbus.com.
28. Malaysia's AirAsia increases A320 order to 175 planes
29. "AirAsia orders additional 25 Airbus A320s" Flight Global, 06/12/2007
30. AirAsia wins Airline of the Year award
31. AirAsia receives Macau award

v t e Airlines of Malaysia
Mainline	Full service Malaysia Airlines (Flag carrier) Batik Air Malaysia Low-cost AirAsia AirAsia X Firefly
Regional	MASwings SKS Airways
Cargo	MASkargo Raya Airways World Cargo Airlines
Charter	Amal Berjaya Air Hornbill Skyways Layang Layang Aerospace MHS Aviation Sabah Air Weststar Aviation
Defunct	Awan Inspirasi Borneo Airways Eaglexpress Federation Air Service Malaysia–Singapore Airlines MYAirline Pelandok Airways Pelangi Air Rayani Air Sabah Airways Saeaga Airlines Vision Air Malaysia Wearne's Air Service

• AirAsia
• Airlines of Malaysia
• Airlines established in 1993
• Low-cost airlines