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Old June 24th, 2005, 05:04 PM   #181
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Congrats MAS!
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Old June 26th, 2005, 01:59 PM   #182
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Malaysia Airlines route map


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Old June 26th, 2005, 02:35 PM   #183
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What is MAS's tagline? I saw these:

1) Going beyond expectations
2) Fly. Rest. Arrive.
3) An experience redefined
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Old June 26th, 2005, 02:55 PM   #184
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Quote:
Originally Posted by Lastresorter
What is MAS's tagline? I saw these:
1) Going beyond expectations
2) Fly. Rest. Arrive.
3) An experience redefined
the first one.
the second one is used in one of their ads.
the third one is used for the major refurbishment of their 777 and 747, not sure of the airbus that they have though..
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Old June 26th, 2005, 03:06 PM   #185
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the one dot with the missing name is Darwin, code-shared with Garuda.

Aberdeen, Dublin, Belfast, Glasgow, Edinburgh, Teesside, Leeds Bradford : code-share with BMidlands
Oslo, Helsinki, Copenhagen, Gothenburg : code-share with KLM
Doha : Qatar Airways, Tashkent : Uzbekistan Airways
and a few other places within SEA with Thai, Garuda etc..

they signed MOU with Garuda earlier for 'flying' pax from Jakarta to Europe via KUL. Madrid should be one of the destinations if i am not mistaken..

has MAS decided on which type of aircraft to replace her aging 737s? i hope they wud go for 737NG.. looks cool.
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Old June 30th, 2005, 07:17 PM   #186
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Business Times - 30 Jun 2005

Air Asia to hold off on fuel surcharge


KUALA LUMPUR - Malaysian budget carrier AirAsia said on Thursday it will suspend plans to impose fuel surcharges until government moves to rationalise domestic air routes are resolved, a report said.

Despite rising fuel prices, AirAsia chief executive Tony Fernandes said the carrier would wait for the rationalisation exercise to be implemented before imposing a surcharge.

The surcharge, which was approved by the government in May, will be imposed on AirAsia's domestic and regional routes.

'We hope the rationalisation will come soon. Fuel prices have continued to rise,' Mr Fernandes was quoted as saying by the official Bernama news agency.

He added that a reworking of the domestic route system was important given that AirAsia had to bear the cost of spiralling fuel prices, in contrast to flagship carrier Malaysian Airlines whose domestic operations are government-subsidised.

Transport Minister Chan Kong Choy said earlier this month that AirAsia and Malaysia Airlines will cooperate on certain domestic routes as part of an industry rationalisation.

Newspaper reports have said that the proposal involves AirAsia taking on some of Malaysia Airlines' less profitable routes but few details have emerged on the plan so far.

Malaysia Airlines last month said net profit fell 29 per cent to RM326.1 million (US$86 million) in the year to March due to higher fuel costs, which more than offset record international traffic growth.

AirAsia is South-east Asia's biggest low-cost carrier in terms of fleet size and derives much of its business within Malaysia. It also operates in Thailand, Indonesia, the Philippines and China.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.
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Old July 4th, 2005, 12:33 PM   #187
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04 July 2005

Budget carriers heading for consolidation as fuel prices rise: AirAsia

KUALA LUMPUR : Asia's most profitable budget carrier AirAsia is expecting a wave of consolidation in the sector as rising fuel prices and firmer aircraft leasing rates put pressure on new entrants, a report said Monday.

The Malaysia-based carrier's chief executive officer Tony Fernandes told the Financial Times that many no-frills ventures were founded by "people chasing what they thought was easy money" but who now faced much tougher operating conditions.

"I think business plans are looking quite different, and I think there's going to be a rationalisation for sure. I think it's inevitable," he was quoted as saying in an interview from Singapore.

The comments come less than a week after Valuair and Jetstar Asia, two discount airlines based in Singapore, announced they were in talks that could lead to an alliance or merger.

The negotiations are a sign that the industry could be set for a shake-out after a period of rapid growth, with a host of new low-cost carriers having been set up across Southeast Asia and India in the past three years.

"At 25 dollar jet fuel (per barrel), with aircraft leasing where it was and people seeing how well we were doing, there was a herd mentality, with many people chasing what they thought was easy money," Fernandes said.

"I think their business plans have obviously changed dramatically, with jet fuel now at 75 dollars (per barrel) and a hardening in aircraft (leasing) pricing," he added, according to the report.

AirAsia, which launched as a budget operator in December 2001 with just two aircraft, has become a significant player in the industry and been imitated by startled national carriers along with a host of new low-cost entrants.

AirAsia is now Southeast Asia's biggest low-cost carrier in terms of fleet size and derives much of its business within Malaysia. It also operates in Thailand, Indonesia, the Philippines and China.- AFP /ls

Copyright © 2005 Agence France Presse. All rights reserved.
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Old July 5th, 2005, 06:33 PM   #188
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Tuesday July 5, 5:09 PM
AirAsia CEO says cooperation talks with Malaysia Airlines going well

KUALA LUMPUR (AFP) - Budget operator AirAsia said negotations with national carrier Malaysia Airlines on cooperating on certain domestic routes as part of an industry rationalisation are making progress.

AirAsia's chief executive officer Tony Fernandes said that, when put in place, the plan would deliver benefits for both carriers.

"We have got tremendous support from the government," he said. "The talks are moving in the right direction. The domestic rationalisation will be a major boost to AirAsia and Malaysia Airlines."

He declined to say when the talks are expected to conclude or what the rationalisation programme includes.

Transport Minister Chan Kong Choy last month said the government wanted the two carriers to cooperate.

Newspaper reports have said the proposal involves AirAsia taking on some of Malaysia Airlines' less profitable domestic routes, but Chan declined to elaborate, saying the carriers were in talks to thrash out the plan.

Malaysia Airlines last month said net profit fell 29 percent to 326.1 million ringgit (86 million dollars) in the year to March due to higher fuel costs, which more than offset record international traffic growth.

AirAsia, which launched as a budget carrier in December 2001 with just two aircraft, has become a significant player in the industry and been imitated by national carriers along with a host of new low-cost entrants.

AirAsia is now Southeast Asia's biggest low-cost carrier in terms of fleet size and derives much of its business within Malaysia. It also operates in Thailand, Indonesia, the Philippines and China.
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Old July 6th, 2005, 01:22 PM   #189
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Business Times - 06 Jul 2005

Int'l routes lift MAS load factor for May to 67.5%


KL keen on AirAsia taking over less profitable MAS domestic routes


By VEN SREENIVASAN

(SINGAPORE) Expansion of its overseas route network seems to be paying off for Malaysia Airlines.

The Malaysian national carrier, which is facing intense competition on its domestic and regional routes from low-cost upstart AirAsia, filled more seats and cargo space in May, thanks largely to its international routes.

The carrier enjoyed an overall load factor of 65.7 per cent during the month, up from 58.9 per cent during the same month a year ago. Its load factor in April was 66.8 per cent, compared to 61.5 per cent a year earlier.

MAS said it carried 12.3 per cent more passengers compared to a year ago as it increased its seat capacity by 24.1 per cent in May.

Passenger load on its international routes was 69.3 per cent, up 12.6 percentage points from a year earlier.

Meanwhile, the airline continues to bleed on its domestic routes despite relatively higher loads. It filled 71.5 per cent of seats on its domestic routes in May.

MAS faces a squeeze on yield as it is forced to go head-to-head against the region's largest low-cost carrier, AirAsia, on key routes.

And, as the national flag carrier, MAS is obliged to operate many unprofitable routes to obscure rural destinations. Analysts say that this second factor is the airline's biggest problem.

Last year, MAS lost some RM270 million (S$120.4 million) on its domestic operations, up from RM150 million in 2003. And the lion's share of the losses came from rural air services in East Malaysia, and some short-haul routes in West Malaysia. The airline's most lucrative short-haul route is the Kuala Lumpur-Singapore hop, from which it gets about 10 per cent of its profit.

But, relief may finally be on the way as the government reviews the domestic route network.

The government has encouraged the two airlines to talk to each other so that AirAsia, with its lower cost operating structure, might be able to take over some of MAS' less profitable routes.

AirAsia chief executive officer Tony Fernandes told the media yesterday that the plan would benefit both carriers when put in place.

'We have got tremendous support from the government. The talks are moving in the right direction,' he was quoted by AFP. 'The domestic rationalisation will be a major boost to AirAsia and MAS.'

But the government's willingness to relook the route network itself is seen by some industry insiders as acknowledgment that there may be less need for air services now to some rural destinations compared to, say, 10 or 20 years ago when the land transport infrastructure in some of these regions was still found wanting. The fact that costs, particularly fuel, have risen so dramatically may also have helped push the process along.

Fuel accounts for a third of the company's operating costs, and MAS' cargo arm yesterday said it would raise the fuel surcharge on shipments to the US, Europe and parts of Africa for a third time this year to compensate for higher oil prices. MASKargo is upping its fuel levy 13 per cent to RM1.71 a kilogramme starting July 15. Its fuel surcharges for cargo to Australia, New Zealand and other destinations remain unchanged for now.

MAS filled 60.8 per cent of its cargo capacity in May compared with 60.1 per cent a year earlier, it said.

Copyright © 2005 Singapore Press Holdings Ltd. All rights reserved.
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Old July 7th, 2005, 04:55 PM   #190
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Thursday July 7, 8:36 PM
Malaysian Airline to increase fuel surcharge for international flights

AP - Flagship carrier Malaysia Airlines said Thursday it will raise fuel charges for international flights from July 15 because of steep jet fuel prices.

For travel between Malaysia and Europe, Australia and New Zealand, North and South America, the Middle East and Africa, the surcharge will go up from 76 ringgit (US$20; €16.77) to 106 ringgit ($27.89; €23.38), Malaysian Airline System Bhd. said in a statement.

The surcharge between Malaysia and the rest of Asia, including neighboring Singapore and Brunei, will be raised from 38 ringgit (US$10) to 53 ringgit ($13.95).

"In view of the steep escalation of jet fuel prices ... airlines worldwide have taken further measures to mitigate this increase to cope with the escalating cost," the airline said. "Malaysia Airlines is compelled to revise the fuel surcharge rates which are for international travel."
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Old July 11th, 2005, 08:02 AM   #191
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Monday July 11, 8:53 AM
MALAYSIA PRESS: PMB Evaluating Loan Offers For Aircraft

KUALA LUMPUR (Dow Jones)--State-owned Penerbangan Malaysia Bhd., or PMB, is evaluating loan offers from banks for its MYR1.2 billion purchase of two aircraft for Malaysian Airline System Bhd.'s (3786.KU) cargo unit, the daily New Straits Times reports, citing bankers involved in the deal.

PMB, which is the parent of Malaysian Airline, has sent out requests for proposals to mainly foreign banks in the country, the daily said.

Lenders like HSBC, Standard Chartered and Citibank have submitted bids, the daily added.

Malaysia Airlines Cargo Sdn. Bhd., the cargo arm of the national carrier, is due to take delivery of two new B747-400 freighters in February and April 2006.

The loan, which is likely to be guaranteed by the government, will be denominated in US dollars and may carry maturities of up to 12 years, the daily added.

PMB and Malaysian Airline officials weren't immediately available for comment.

Newspaper web site: http://www.nst.com.my
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Old July 11th, 2005, 01:30 PM   #192
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AIRASIA REOPENS TALKS OVER HONG KONG LANDING RIGHTS - CO SPOKESMAN
Updated : 11-07-2005
Media : AFX



HONG KONG (XFN-ASIA) - Malaysian budget airline AirAsia Bhd has restarted stalled talks with Hong Kong's international airport over landing rights, a company spokesman said.

Negotiations last year ended in acrimony with the airport refusing to budge on its high landing charges.

However, the spokesman said the two sides have begun "preliminary exploratory talks."

"Hong Kong is warming up to AirAsia," the spokesman said, without elaborating on what is being discussed or at what level.

The delegation of AirAsia chiefs are back at the negotiation table in Hong Kong over the weekend and the talks follow criticism from the travel industry over a lack of low-cost options at Hong Kong's hub.

"They are talking to us and service providers," an airport source was quoted as saying earlier in the South China Morning Post.

"We are talking to a number of carriers."

Based in Kuala Lumpur, AirAsia cuts costs by landing at secondary airports that charge lower landing fees and cuts out some in-flight services.
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Old July 11th, 2005, 01:33 PM   #193
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HK PRESS: HK Airport, Malaysia's AirAsia Resume Talks
Updated : 11-07-2005
Media : Dow Jones



HONG KONG (Dow Jones)--The Hong Kong Airport Authority, which operates Hong Kong's Chek Lap Kok international airport, has resumed talks with Malaysian budget carrier AirAsia Bhd. (5099.KU) about services to Hong Kong just a year after the last round of negotiations ended abruptly, the South China Morning Post reports.

The paper said that a delegation from AirAsia, the region's most profitable low-cost airline, met with airport officials on Thursday and Friday for talks, which it cited a senior executive as saying "were very good."

Earlier negotiations, held in May last year, ended after AirAsia Chief Executive Tony Fernandes picked a "hungrier" Macau, which has a cheaper airport. Hong Kong's airline user fees are among the highest in the region.

At present, AirAsia offers international flights to Bangkok, Kuala Lumpur, Jakarta, Bali, Senai and Phuket. The talks include the possibility of AirAsia flying to Hong Kong from all its current destinations, the paper said.
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Old July 11th, 2005, 06:30 PM   #194
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AirAsia to implement fuel surcharges to combat spiralling prices

KUALA LUMPUR, July 11 (AFP) - Budget carrier AirAsia said Monday that it will introduce a fuel surcharge on its flights for the first time from July 14 as part of efforts to combat spiralling fuel costs.

"Fuel is the single largest cost component for the company; the fuel surcharge will allow the company to alleviate the escalating fuel costs," the carrier said in an announcement to the stock exchange.

AirAsia said the surcharge would be 5.0 ringgit per sector (1.32 dollars) for flights within peninsular Malaysia, 10.0 ringgit per sector for flights to East Malaysia and 25.0 ringgit per sector to Thailand, Indonesia, Macau and the Philippines.

"The fuel surcharge is expected to contribute positively to AirAsia's consolidated earnings for the financial year 2006 ending 30 June 2006," it said.

The government first approved the fuel surcharge in May, but AirAsia has been holding off on introducing the fee in anticipation of government plans to rationalise domestic air routes.

AirAsia's announcement follows similar moves by Malaysia Airlines which last week said it will raise its fuel surcharge for international travel from July 15.

AirAsia, which launched as a budget carrier in December 2001 with just two aircraft, has become a significant player in the industry and been imitated by national carriers along with a host of new low-cost entrants.

AirAsia is now Southeast Asia's biggest low-cost carrier in terms of fleet size and derives much of its business within Malaysia. It also operates in Thailand, Indonesia, the Philippines and China.
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Old July 12th, 2005, 07:23 AM   #195
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AirAsia confirms talks on HK plans
Updated : 12-07-2005
Media : Business Times



AIRASIA Bhd may still get to realise its plan to operate into Hong Kong if talks on landing rights with the island¡¯s airport authority are successful.

The carrier had to abort its plan to fly into Hong Kong earlier due to several issues, including high airport charges, thus forcing the airline to change its course into Macau instead.

An official familiar with the deal, when contacted by the Business Times, did not deny a report out of Hong Kong on the revival of talks but refused to elaborate on the matter.

The negotiation is still at a preliminary stage. Let¡¯s not speculate about it,he said.

AFP, quoting a South China Morning Post report, said talks were revived following criticism from the travel industry over a lack of low-cost options in Hong Kong.

The Hong Kong¡¯s government-controlled airport authority has been accused of turning its back on cheap airlines in order to boost its earnings ahead of a planned partial privatisation.

An analyst, contacted by the Business Times, believes that the sudden interest in AirAsia is due to the success of its Macau flight service.

I think the airport authority in Hong Kong realised that it has underestimated the budget airline after seeing the overwhelming response for AirAsia¡¯s Macau flights, he said.
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Old July 13th, 2005, 05:40 AM   #196
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AirAsia surcharge to have minimal impact
Updated : 13-07-2005
Media : Business Times
Story By : KANG SIEW LI



AIRASIA Bhd new fuel surcharge will have minimal impact on its earnings in the current year, but analysts remain cautious about whether the budget airline can sustain itself amid soaring oil prices.

They said while it is inevitable for AirAsia to impose a fuel surcharge in view of the escalating jet fuel price, in no way will it be recouping the majority or totality of that fuel increase cost.

AirAsia will impose a fuel surcharge for passenger flights of between RM5 and RM25 each way beginning July 14, joining other major airlines in introducing a fuel surcharge as oil prices continue to spike.

TA Securities Holdings Bhd said the surcharge will have a minimal impact on demand for AirAsia¡¯s services as its surcharge is currently the lowest compared to its peers.

We foresee AirAsia experiencing a strong growth boosted by the rapid expansion of fleet and underpinned by passenger growth of 39 per cent in financial year ending June 30 2006 as it aggressively increases its network to high-demand destinations such as China, it said in its daily brief yesterday.

Based on AirAsia¡¯s potential, we have arrived at a fair value of RM1.90 and are recommending a ¡®buy¡¯ call.

OSK Research Sdn Bhd senior analyst Chris Eng said the fuel surcharge was implemented as part of ongoing efforts to respond to recent rapid rises in fuel costs, which comprise 50.2 per cent of AirAsia¡¯s total costs.

Comparing against a sample of AirAsia¡¯s current fares, we estimate that this surcharge will lift yields by 10 per cent, he said in a research note yesterday.

He said although AirAsia sensitivity to fuel price is comparatively lower than full service carriers, he is maintaining his ¡°neutral¡± rating on the stock, with the 12-month target price set to RM1.77, from RM1.65.

An analyst with Mayban Securities Sdn Bhd told Business Times that AirAsia sensitivity to fuel price is comparatively lower than national carrier Malaysian Airline System Bhd (MAS) because the former carries a much smaller earnings base and lower fuel consumption due to less planes and less routes.

For example, we have calculated that every US$1 increase in fuel price translates to a RM10 million earnings impact on AirAsia. This compares with a RM50 million to RM60 million earnings impact on MAS.
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Old July 13th, 2005, 10:12 AM   #197
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JB-Bangkok service to resume next month
Updated : 13-07-2005
Media : Malay Mail
Story By : Rizalman Hammim



AIRASIA Bhd, which is Southeast Asia¡¦s biggest discount carrier, may only resume its Johor Baru to Bangkok service by next month, said Datuk Mohd Sidik Shaikh Osman, a director of Senai Air Terminal Services Sdn Bhd (SATS).

It was earlier reported that the airline had planned to resume the service by last month.

"They recently told us they had postponed their plans to resume the service to August because they were still waiting for the arrival of their new aircraft," Sidik told Mail Money in a telephone interview.

AirAsia suspended the service in December of last year because of shortage of aircraft. Prior to the suspension, AirAsia had a daily service operating from Senai Airport to Bangkok.

On Feb 21, AirAsia said it may miss its profit forecast for the year ending June 2005 because of delays in plane delivery.

Mohd Sidik said that the local flights being operated by AirAsia from Senai hasn't been disrupted. "They are still on-going, its just the international flights," he said.

The Bangkok to Senai service is the only international flight which AirAsia operates from the Senai Airport.

The Senai Airport, which is controlled by Tan Sri Syed Mokhtar Al Bukhary¡¦s SATS, is the only commercial airport in the country, which is operated and managed by a private entity.

The other airports in the country, including the Kuala Lumpur International Airport, are operated and managed by the Government majority-owned Malaysia Airport Holdings Bhd.
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Old July 19th, 2005, 12:12 AM   #198
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AirAsia likely to form new ventures as low-cost sector faces crunch

KUALA LUMPUR, July 17 (AFP) - Asia's dominant low-cost carrier AirAsia is likely to form new ventures in the region with China and India probable targets as high fuel prices force the industry to consolidate, analysts say.

Industry experts are tipping a shake-out among budget airlines, which after mushrooming in recent years are now struggling to cope with spiralling costs as well as intense competition and firmer aircraft leasing rates.

Malaysia-based AirAsia's chief executive Tony Fernandes denied suggestions the carrier is on the prowl for struggling airlines in the region, but confirmed he is on the lookout for new business opportunities.

"There is nothing on paper ... but many people have approached us," said Fernandes, an ebullient former music industry executive. "If there is a potential, we will consider it," he told AFP.

AirAsia, which launched in 2001 with just two aircraft, has become the most profitable player in the sector, and been imitated by startled national carriers as well as a host of new low-cost entrants in Southeast Asia and India.

It is now Southeast Asia's biggest low-cost carrier in terms of fleet size and derives much of its business within Malaysia. It also operates in Thailand, Indonesia, the Philippines and China.

In a sign of its ambitions, earlier this year it ordered 100 Airbus A320 aircraft which will completely replace its current fleet of 28 single-aisle Boeing 737-300s.

Fernandes said there could be a wave of consolidation in the sector as the younger operators face up to reality.

"Under the new tough environment, the aviation business is a hard business. I think all three budget carriers in Singapore are struggling badly," he said.

"A lot of guys want to become British tycoon Richard Branson," he said, referring to the doyenne of low-cost operators who founded the Virgin brand.

Valuair and Jetstar Asia, two discount airlines based in Singapore, recently announced they were in talks that could lead to an alliance or merger, but abandoned the negotiations after just two weeks.

The contacts between the carriers, who compete with Tiger Airways which is 49-percent owned by Singapore Airlines, were seen as another sign that the industry could be set for a shake-out after three years of rapid growth.

Peter Harbison, head of the Sydney-based Centre for Asia Pacific Aviation, said AirAsia may respond by rolling out franchise operations across the region modelled on its successful Thai offshoot.

Thai AirAsia is a subsidiary of the Malaysia-based parent firm which holds a 49 percent stake while Thailand's Shin Corp. -- the family company of Thai Prime Minister Thaksin Shinawatra -- holds 51 percent.

"I believe AirAsia will consider countries that have a liberal aviation policy and a good outbound market coupled with good short-haul routes," Harbison said, naming China, India and the Philippines as possible homes for AirAsia units.

Harbison said, however, that it was unlikely AirAsia would pick up a stake in any of the Singapore-based budget carriers.

"What additional market will they generate?" he asked, adding that "there are other places that are more attractive to AirAsia and which are less competitive."

Fernandes replied "no comment" when asked if the company was in talks with any of the three Singapore carriers, which have been hamstrung by restrictions on routes as well as intense competition and soaring oil prices.

But an official close to AirAsia said the carrier has always been on the lookout for opportunities for expansion within the region, including for access to lucrative routes to Hong Kong and Singapore.

Currently AirAsia is only permitted to fly to the southern Malaysian city of Johor Bahru where passengers transfer to Singapore by road.

"The carrier may set up new joint ventures or invest in existing operations. In our quest for expansion, we do not discount any possibilities. If it is attractive, why not," he told AFP on condition of anonymity.

Am Securities aviation analyst Nigel Foo said AirAsia was likely receiving overtures from a number of Asian governments keen to see joint ventures established in their countries.

"A lot of governments are surely talking to them. It is one sure way to bring investments and tourists into the country. AirAsia is a budget carrier and it is a sure way to boost tourism," he said.

Foo also said AirAsia would target China and India because of their huge population and emerging economies, as well as their wealth of domestic routes and untapped consumer markets.

"Being the first budget carrier in the region and also a proven money-making airline, it will surely be on the look-out for business expansion into the region," he said.
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Old July 20th, 2005, 01:24 AM   #199
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PM Urges Repair Of Malaysia Air's Image Amid Scandal
17 July 2005

KUALA LUMPUR (AP)--Malaysian Prime Minister Abdullah Ahmad Badawi is urging immediate action to restore the image of Malaysia Airlines (3786.KU) following allegations of illegal practices committed by former senior executives, a news report said Sunday.

Abdullah was responding to a police complaint made in May by a director of Malaysian Airline System Bhd. about suspected irregularities in the awarding of a cargo project.

Abdullah said police informed him that investigations are underway, the Sunday Star newspaper reported.

"There are bound to be various reactions from consumers, passengers and the public," Abdullah was quoted as saying. "What's important is that whenever we know of a problem, we must take immediate action to address the problem."

The image of the carrier must be restored to make it among the best airlines around, Abdullah added.

Malaysia Airlines could not be reached Sunday for comment.

Friday, the airline said the cargo project caused it to suffer heavy losses from December 1999 until it was terminated in December 2000.

The New Straits Times newspaper reported Saturday that former Malaysia Airlines Executive Chairman Tajudin Ramli, former Company Secretary Rizana Daud and former MasKargo Vice President Ralph M. Gotz could face questioning as a result of the complaint. MasKargo is a unit of Malaysia Airlines.

The complaint was linked to another lodged by a Malaysian Airlines director in January 2002 alleging irregularities in the airline's dealings with Germany's Advanced Cargo Logistics Gmbh, the Times report said.

Advanced Cargo and Malaysian Airlines agreed in 1999 to develop a European cargo hub around a former military air base in Hahn, Germany. Last September, Advanced Cargo initiated arbitration proceedings against the national carrier, claiming more than $72 million for breach of contract.
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Old July 24th, 2005, 02:21 AM   #200
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HK keen to land AirAsia, says airline
Toh Han Shih
23 July 2005
South China Morning Post

The Hong Kong Airport Authority met with Malaysian budget airline AirAsia yesterday and was keen to grant the low-cost carrier landing rights, according to chief executive Tony Fernandes.

Airport Authority officials met Mr Fernandes at Hong Kong Airport when he arrived yesterday and were scheduled to hold further talks with him at the Grand Hyatt hotel later in the day, he said.

"Now the talks are getting more exciting. This is the first time I see the Hong Kong Airport Authority beginning to understand the needs of low-cost carriers. [It] is making a big effort to come and get AirAsia," said Mr Fernandes, who warned, however, that a deal would not be concluded overnight.

AirAsia was also in talks to secure landing rights in a few south China cities, he added.

In contrast to Mr Fernandes' enthusiastic account of yesterday's discussions, however, the authority sought to downplay the impact of the meetings between the two.

"We welcome all kinds of carriers, including low-cost carriers. They are all important business partners for us. We are constantly talking to various low-cost carriers," a spokeswoman told the South China Morning Post. She declined to comment specifically on AirAsia.

Previous talks between the two parties have been inconclusive and negotiations ended in acrimony in May last year. Instead, AirAsia obtained landing rights in Macau.

Commenting at the time, Mr Fernandes said the authority "was not willing to adjust. They apparently didn't feel the need to go out and get business."

Although talks are now back on, a key hurdle against AirAsia taking up landing rights in Hong Kong is the high user fees charged, said Mr Fernandes, adding that cost will be a key part of his agenda in talks with the authority.

The Airport Authority spokeswoman declined to state whether the airport would readjust its user fees, but pointed out that the airport maintained "user pay" and "value for money" principles in determining charges.

However, Mr Fernandes said airports generally were now reviewing fees, arguing that if it brought in more passengers "why not have three-star hotels along with five-star hotels"? The Hong Kong airport had to deal with different charges for different customers, he added.

There are now seven budget carriers operating at Hong Kong airport, including Valuair and Jetstar Asia. However, budget carriers such as Valuair pay full charges at Hong Kong airport, Mr Fernandes said. "That's why Valuair is in trouble."

"We're not going to go with Valuair as it doesn't fit with our business model. We think Valuair will go with Jetstar Asia. We never made Valuair a binding offer," he added.

Jetstar Asia, the Qantas-owned, Singapore-based budget carrier, is expected to decide soon whether to buy local rival Valuair, which a source said was "weeks away from running out of cash", reported the Financial Times.

AirAsia, meanwhile, has announced a sponsorship deal with English football club Manchester United, which was much better value than Valuair, Mr Fernandes said.

He said AirAsia would pay the club a fee of no more than £2 million ($27.2 million) for the deal.
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