Tuesday, August 23, 2011

Fall in fuel prices to reduce operating costs, says Fernandes

Posted by- Neelam Mathews
Aug 23, 2011

Fall  in crude oil prices and strengthening of local currencies have eased the impact of high jet fuel prices on operating costs, says AirAsia Group CEO Tony Fernandes.

On the outlook for the rest of 2011, Fernandes was bullish on the prospects of the remaining two quarters of 2011. “Load factors achieved in July 2011 increased y-o-y for all three carriers. Forward bookings are looking very strong. We shall continue to work our best to deliver high load factors of at least 80% and to maintain the lowest operating costs in the industry.” 

Looking beyond 2011, Fernandes stressed that AirAsia will stay focused on its own strategy – containing or driving down costs, raising yields and further expanding network reach. 

 “The setting up of the AirAsia Asean office in Jakarta will allow us to and promote both the airline and the Company as a regional brand. This will also help to draw the attention of governments and the ASEAN community to AirAsia’s huge economic contributions to the region. Within the Group, the establishment of a regional base will enhance cooperation and coordination within the Group, strengthening coordination and strategic planning and implementation,” he said. 

 AirAsia Philippines will launch its first routes by the fourth quarter subject to regulatory approvals. Meanwhile, AirAsia Japan, a joint venture with All Nippon Airways is also to take off. “Japan is a huge, huge market with a very low LCC penetration rate. It’s our first venture outside of ASEAN, and we’re very excited about the prospects there,” he said.

AirAsia placed 200 firm orders on the A320 NEO with Airbus. “With this historic deal, AirAsia has secured its future with the ability to meet the huge growth potential offered by the market," said Fernandes. "Our decision to be one of the first launch customers for the A320 NEO will ensure that we remain ahead of the pack, with one of the world's youngest and most modern fleets." 

 On the collaboration agreement with MAS, Fernandes said the arrangement clarified the present aviation landscape involving the two LCC and Premium carriers. He also stressed that there is no conflict with this announcement and that his focus will remain as the GCEO, and that he and AirAsia’s Kamarudin Meranun as Group Deputy CEO, is to “steer AirAsia to new heights while independently assisting MAS in ways to seek synergies that could benefit both airlines and Malaysia even more in the future. I believe there is no conflict or loss of focus but simply the opposite for myself and Kamarudin”.

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