Flights to and from West and East Malaysia have long been a matter of contention; during peak periods flights can reach up to thousands of ringgit each way and are also scarce. Amid criticism over expensive fares for Kota Kinabalu-Kuala Lumpur flights during peak periods, Tan Sri Tony Fernandes has asked the public to consider the fact that AirAsia needs to garner profits as well to cover the RM4 billion they lost last year.
As reported by Malay Mail, the CEO of Capital A Bhd (operating as AirAsia) claimed that high fares were to be expected during peak periods, and that AirAsia still offers the most affordable and low prices outside the peak seasons.
“Have a heart for us, we lost RM4 billion last year. We lost RM 400 million in the last quarter. We have to make money too. We will do our best to bring down fares, but we still have low fares throughout the year,” speaking to reporters at Kota Kinabalu to launch a special tribute livery of former Sabah Tourism Board general manager the late Datuk Irene Charuruks on one of AirAsia’s planes.
Fares Unlikely to Go Down
Fernandes also mentioned earlier that the fares between Sabah and KL were unlikely to go down lower due to the soaring fuel costs against the US dollar.
“I can’t control oil prices. Oil prices are soaring and the US dollar is strong. Seventy per cent of our costs are calculated in US dollars. As long as the US dollar is strong, our costs will rise. Our philosophy is to provide fares as low as possible, so if the costs fall, the fares will be reduced... but we are still substantially cheaper than anywhere else,” Fernandes said.
When asked if it was possible to increase flights to achieve a balance between supply and demand, Fernandes said, “Increasing flights will definitely help, but we still have about 40 passenger planes that have not yet taken off, so we hope to get financial support. It is not easy to take 200 aeroplanes out of storage. So it will help but can’t be much lower fares when the US dollar is strong.”
Fernandes further argued that the airline’s load factor was at 92%, which meant that people were still flying, which could be interpreted as the fares were not beyond affordable.
“We have had midnight flights, and the government buying aircraft slots from us...but it is difficult for us to provide different air ticket prices for different groups. Maybe the government can provide more suggestions or opinions. But the bottom line is we can still provide air travel to 98 per cent of people and we are looking to invest in new routes too,” he said.
Things Are Looking Up for AA
Last week, the airline group reported that it slashed its net loss to RM178.82 million for the third quarter of 2023 compared with RM901.31 million in the corresponding quarter a year ago, while revenue jumped to RM4.23 billion from RM1.96 billion in the same period.
Last week, the airline group reported that it had slashed its net loss to RM178.82 million for the third quarter of 2023 compared with RM901.31 million in the corresponding quarter a year ago, while revenue jumped to RM4.23 billion from RM1.96 billion in the same period.
Airline CEO Forced to Fly on Rival Airline
Fernandes also posted on Instagram that he was forced to fly on Singapore Airlines (SIA) because there weren’t seats on AirAsia for three flights, apparently pleased by the fact that his airline was doing well. “No seat on @flyairasia for three flights so had to take @singaporeair. Hehehe,” he wrote.
He shared pictures of him about to board a SIA flight and the view from his seat, which appeared to be in economy class. Comments flooded in from users: “This is why Air Asia is successful. Even (the) CEO has no space. Needs to fly competition at higher fare,” said one.
Another wrote, “It is so refreshing to see the CEO of a private airline respect his customer bookings and not find a "corporate" method to shuffle some passengers around and instead fly a different airline altogether. This is also why I love you.”
One sarcastically remarked, “He prolly felt like it was an upgrade.”
Back in October, Fernandes made headlines when he uploaded a social media post of himself shirtless while getting a massage during a management meeting. We've covered many other AirAsia controversies in the past and from what we've seen, the brand, and Tan Sri Tony Fernandes are bullet proof.
Image credit: @tonyfernandes