Singapore To Serve As Virtual Hub For AirAsia

AirAsia Aircraft in Don Mueang International Airport, Thailand 8 October 2012

28 January 2013, Sepang – AirAsia has grown from a two aircraft fleet in ten years to a low cost carrier with 118 aircraft making it one of the most profitable of its business in Asia.   With Malaysia the home ground for AirAsia, the airline has grown its foothold in Thailand, Indonesia, Philippines and Japan.  Singapore will serve as a virtual hub for the airline as most of the routes served are from established hubs in the AirAsia network and AirAsia believes that there is an excess of capacity already out Singapore.

Focusing on its other core markets in Thailand and Indonesia, Group CEO Tan Sri Dr. Tony Fernandes shared one month ahead of the airline announcing its full year results,  that he expects the two entities to generate similar profits to Malaysia in the future.   AirAsia has delivered its first listing in Thailand last year and expect to list in Indonesia this year.

Another focus for the airline is to develop the new entities in Philippines and Japan from its infancy stage.    Routes less than three hours allow better revenue returns as more sectors are flown. The airline has recently terminated the longer routes such as Kuala Lumpur to Colombo.  With routes out of Singapore to the larger population countries such as China and India taking  five hours or more, AirAsia has decided not to proceed with any venture there.

AirAsia Group’s existing operations offering bigger domestic alternatives with larger populations will be the management’s focus.  The airline will continue to explore opportunities in India and Tony believes this market offers the most growth potential in terms of travel.

Other business numbers

  • 114 deliveries out of the 475 aircraft ordered
  •  87% of aircraft is on balance sheet with the highest owned ratio for any airline in Asia
  • Net Gearing of 1.03 times
  • Cash balance of just over RM2 billion

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