KUALA LUMPUR , Malaysia – AirAsia, the region’s largest low cost carrier, is bullish on the Philippine market, as its Philippine unit prepares to challenge the dominance of local airlines Philippine Airlines and Cebu Pacific.
“There are 92 million in the Philippines. In the Philippines, we see the market as big as PAL and Cebu Pacific right now combined and (we aim to ) double that,” Zaman Ahmad, AirAsia customer experience and technology officer, told Philippine-based journalists at the airline’s office here.
However, AirAsia Philippines is still waiting to secure regulatory approval from Philippine civil aviation authorities before it can start operations.
“Hopefully we can start operations by December, but it would be great if all the relevant authorities can give us approval to operate by November 1. We are looking to push as hard as we can. We are coming with a strong operations and safety record,” Ahmad said.
AirAsia Philippines’ first aircraft, a brand-new Airbus 320, arrived at the Diosdado Macapagal International Airport in Clark, Pampanga last August 15. Another aircraft is expected to be delivered on November 8. Even before commercial operations have begun, there are already plans to expand.
“We have aspirations of bringing 4 new aircrafts (to the Philippines) by 2012… We're targeting to fly about a million passengers out of AirAsia Philippines, the operations would be domestic and international,” Ahmad said.
AirAsia Philippines is 60% owned by Marianne Hontiveros, Antonio Cojuangco Jr. and Michael Romero, while the rest is owned by AirAsia Berhad (formerly AirAsia Malaysia) through its wholly-owned subsidiary AirAsia International Inc.
‘No frills service’
AirAsia's story began in 2001 in Malaysia, when former music industry executive Tony Fernandes and partners Dato Pahamin Rejab, Dato Kamarudin Maranun and Dato Aziz Bakar had a vision of democratizing air travel.
They acquired loss-making AirAsia from its Malaysian owner DRB-Hicom for a token 1 ringgit ($0.25 or roughly P14). The 1 ringgit bill used in the transaction is framed and remains prominently displayed at AirAsia’s headquarters.
“They took over September 8, 2001, and what happened 3 days later was 9-11. At that point in time, people were saying aviation industry is going to fall, no one will fly. But these 4 guys, they saw a great opportunity because planes would be cheaper,” Ahmad said.
Patterned after low cost carriers like Ireland's RyanAir and US' Southwest Airlines, AirAsia began offering “no frills” service at fares significantly lower than traditional full-service airlines. This meant no frequent flyer miles, no complimentary drinks and food and no airport lounges for its passengers. Instead, food, drinks and in-flight entertainment are sold on board.
This bare-bones approach has helped AirAsia grow significantly in its 10 years of operations. AirAsia is now Asia’s fourth-largest airline after Japan Airlines, All Nippon Airways and Cathay Pacific.
“In 10 years, AirAsia has grown from 2 planes to 108 planes. We have grown from flying 250,000 in first year to 32 million this year. From 250 employees, we now have 9,500 as a group,” Ahmad said.
AirAsia still sees room for growth, especially in southeast Asia. “Of the 32 million passengers that fly with us today, 45% of them are first-time passengers, who have never flown before,” he said.
From Malaysian brand to ASEAN’s airline
AirAsia is known primarily as a Malaysian brand, although it has local units in Indonesia, Thailand and the Philippines.
But the airline is now looking to change its image from a “born in Malaysia” brand to “ASEAN’s airline,” as it expands to other Association of Southeast Asian Nations (ASEAN) member-countries.
“We envision by 2020, we should have an AirAsia in every (ASEAN) country. That’s our dream… To drive this ASEAN message, AirAsia is taking the bold step of ridding ourselves of the brand that Air Asia is Malaysian. We want to become an ASEAN entity,” Ahmad said.
To further its plans, the airline this year opened an AirAsia ASEAN office in Jakarta, where the ASEAN Secretariat is based. ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
“We’re pushing for ‘One ASEAN.’ It would be great as a company we have resources in Indonesia, Thailand and Philippines and other ASEAN countries, and we can move resources around, and not be restricted by the different aviation authorities… Today that’s not possible, but in the future that’s what we want,” Ahmad said.
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