Flights to malaysia for bt1,500

[george]

BUDGET TRAVEL: Flights to Malaysia for Bt1,500

Published on Oct 31, 2003

Regional open-sky policy good news for local passengers

One-way airline tickets from Bangkok to Kuala Lumpur will cost passengers as little as Bt1,500 next year, thanks to Malaysia-based low-cost airline Air Asia.

Tony Fernandes, CEO of the budget airline, said Air Asia would start services in December to the Malaysian capital from Bangkok and Phuket.

He said the open-sky policy between Thailand and Malaysia made it possible for such an up-and-coming low-cost airline to exist.

The budget airline can offer lower fares because it will be making use of fewer overheads, he said.

Tickets will be handled through the Internet and food and drinks will not be served on board, unless passengers want to pay extra.

The airline will also use only one type of aircraft in its fleet in order to save maintenance costs.

Fernandes said one-way air fares from Bangkok to Kuala Lumpur would start at Bt1,500, while fares from Phuket would cost Bt1,200, about half the price of existing fares.

"We would like to make flying affordable to everyone," he said.

The airline also plans to open a new service between Kuala Lumpur and Chiang Mai next year.

Fernandes said Air Asia would offer tickets at up to 70 per cent cheaper than existing fares, but the airline was targeting a different market from those of Thai Airways International and Malaysian Airlines.

Air Asia is also interested in offering domestic flights in Thailand.

Air Asia began its low-cost operation early last year, after Fernandes' Tune Air acquired the airline from DRB Hicom.

The airline is currently recruiting Thai staff to work as flight attendants and ground service staff, he said, and it would expand its fleet from nine to 21 aircraft next year.

He said Air Asia had discussed a possible cooperation pact with Thai carrier PB Air.

Air Asia is Malaysia's second national airline and is Asia's first low fare, ticketless airline.

The airline operates point-to-point flights from its Kuala Lumpur International Airport hub to 13 destinations in Malaysia.

Fernandes said the airline was modelled on other low-fare airlines, such as Ireland's Ryanair and US-based Southwest Airlines.

In its first year, the airline made a profit of 29 million ringgit (Bt326 million) from sales of more than 300 million ringgit.

--The Nation 2003-10-31

[tomy]

Well, i'll be dam-nn, that is a bargain, KL here i come, with that price i'll be going there every 90days

[george]

LOW-COST AIRLINE: Air Asia has links to Shin

Key director was exec at AD Venture

A former employee of a subsidiary of Shin Corp has emerged as an official “signatory director” in Air Asia Aviation Co, which will be offering low-cost flights between Thailand and Malaysia beginning next month.

According to a document of Air Asia Aviation registered with the Commerce Ministry, Thipsukhon Suphasin, a former business-development executive of AD Venture – an IT business of Shin Corp – is among the directors who have applied to set up

Air Asia Aviation.

Air Asia Aviation is 30-per-cent owned by Malaysia-based AA International, which is a subsidiary of the well-known low-cost airline operator Air Asia.

As a signatory director, Thipsukhon is fully authorised to have management power in the company, though she does not have share ownership in it.

Other directors of the company are Tassaphol Baleweld, a Thai national, and Anthony Francis Fernandes, both former executives of Warner Music.

Fernandes is also chief executive and one of the three largest shareholders of Malaysia’s Air Asia.

Thipsukhon resigned from AD Venture two months ago, before Air Asia Aviation applied for registration with the Commerce Ministry on September 19.

Together Tassaphol and seven other Thai nationals hold about a 70-per-cent stake in Air Asia Aviation, capitalised at Bt200 million. Air Asia has already applied for a licence from the Thai government to operate the first low-cost airline service in Thailand.

“The Transport Ministry is expected to award the licence to Air Asia Aviation this week,” said a source at the ministry. The ministry will also hold discussions soon with the Air Transport Department to set a range of air-fare rates for low-cost airlines after giving the licence to Air Asia, the source added.

“The minimum fare is expected to be around Bt2 per kilometre, compared to the general carriers’ current Bt3.62 to Bt6.82,” the source said.

The source added that according to the proposed business plan of Air Asia Aviation, the carrier would initially operate domestic routes linking Bangkok and Chiang Mai, Hat Yai, Phuket and Nakhon Ratchasima as well as flying from Bangkok to Singapore and Phnom Penh. It will use three Boeing 737-400 aeroplanes to offer the services on the routes.

Air Asia Aviation will use the model of other low-cost airlines by employing non-union workers, eliminating free in-flight snacks and drinks and selling tickets via the Internet to avoid the commission charged by travel agents.

Fernandes also announced last week that Malaysia-based Air Asia would also offer flights on the Bangkok-Phuket-Kuala Lumpur route from December at only Bt1,500 for a one-way ticket.

The transport ministry’s source added that Air Asia had originally proposed to operate chartered flights between Phuket and Langkawi in September this year but later postponed the launch to next month.

Air Asia is entrenched in Malaysia and fast growing. It comes to Thailand shortly after Prime Minister Thaksin Shinawatra and outgoing Malaysian Prime Minister Mahathir Mohamad announced an “open-skies” agreement for low-cost airline operators during Thaksin’s official visit to Langkawi Island in late July.

At a press conference in Langawi, Thaksin also said that Thailand and Malaysia had agreed to support the growth of low-cost airlines in Asia as part of a plan to boost tourism in the Asean nations.

Several of Asia’s big airlines, including Singapore Airlines and THAI, are also mulling the possibility of launching low-cost airlines.

THAI announced earlier in the year that it planned to hold a 25-per-cent to 49-per-cent share in a new low-cost carrier.

But Thaksin said in July that THAI should not engage in such business.

“The airlines that will be able to succeed in offering such services will be the small ones with flexibility, unlike THAI,” he said, adding that Langkawi to Phuket was a viable route for the low-cost airlines.

In Langawi he added that he had heard that some investors were interested in starting up a low-cost airline in Thailand.

Business Reporters

--The Nation 2003-11-03