AirAsia Berhad (MYX: 5099) is a Malaysian low-cost airline headquartered near Kuala Lumpur, Malaysia. It is the largest airline in Malaysia by fleet size and destinations. AirAsia Group operates scheduled domestic and international flights to more than 165 destinations spanning 25 countries. Its main hub is klia2, the low-cost carrier terminal at Kuala Lumpur International Airport (KLIA) in Sepang, Selangor, Malaysia. Its affiliate airlines Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, AirAsia India and AirAsia Japan have hubs in Bangkok-Don Mueang, Jakarta-Soekarno–Hatta, Manila-Ninoy Aquino, Bengaluru (Bangalore)-Kempegowda and Nagoya-Chübu Centair airports respectively, while its sister airline, AirAsia X, focuses on long-haul routes. AirAsia’s registered office is in Petaling Jaya, Selangor while its head office is at Kuala Lumpur International Airport.
AirAsia operates with the world’s lowest unit cost of US$0.023 per available seat kilometre (ASK) and a passenger breakeven load factor of 52%. In 2007, The New York Times described the airline as a “pioneer” of low-cost travel in Asia. AirAsia is the sponsor of Malaysia national football team, Singapore national football team, Jamshedpur FC and Queens Park Rangers. AirAsia is also a former sponsor of Manchester United and Asia Red Tour.
AirAsia was established in 1993 and began operations on 18 November 1996. It was founded by a government-owned conglomerate, DRB-HICOM. On 8 September 2001, the heavily indebted airline was bought by former Time Warner executive Tony Fernandes and Kamarudin Meranun‘s company Tune Air Sdn Bhd for the token sum of one ringgit (about US$0.26 at the time) with US$11 million (MYR 40 million) worth of debts. The partners turned the company around, producing a profit in 2002 and launching new routes from its hub in Kuala Lumpur, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as MYR 1 (US$0.27). In 2003, AirAsia opened a second hub at Senai International Airport in Johor Bahru and launched its first international flight to Bangkok.
AirAsia subsequently started its Thai AirAsia affiliate, and began flights to Singapore and Indonesia. Flights to Macau started in June 2004, and flights to mainland China (Xiamen) and the Philippines (Manila) in April 2005. Flights to Vietnam and Cambodia followed in 2005 and to Brunei and Myanmar in 2006, the latter by Thai AirAsia. In August 2006, AirAsia took over Malaysia Airlines’s Rural Air Service routes in Sabah and Sarawak, operating under the FlyAsianXpress brand. The routes were returned to MASwings a year later, citing commercial reasons.
At the end of 2006, Fernandes unveiled a five-year plan to further enhance AirAsia’s presence in Asia. Under the plan, AirAsia proposed enhancing its route network by connecting all of its existing destinations throughout the region and expanding further into Vietnam, Indonesia, Southern China (Kunming, Xiamen, Shenzhen) and India. Through its sister companies, Thai AirAsia and Indonesia AirAsia, the plan called for a focus on developing its hub in Bangkok and Jakarta. With increased frequency and the addition of new routes, AirAsia increased passenger volume to 13.9 million in its 2007 fiscal year.
During 2007, passengers from “The Barrier-Free Environment and Accessible Transport Group” protested against the airline over its refusal to fly passengers who were completely immobile. They claimed that people with disabilities were discriminated against when booking tickets online; the CEO of the airline said it did not turn away passengers in wheelchairs.
On 27 September 2008, the company announced 106 new routes to be added to its list of 60. The number of old routes discontinued has not been disclosed.
In August 2011, AirAsia agreed to form an alliance with Malaysia Airlines by means of a share swap. The alliance was struck down by the Malaysian government, in effect voiding the agreement of both airlines.
By early 2013, AirAsia’s profits increased by 168% on a year-over-year basis compared to the same period in 2012. For the quarter ending 31 December 2012, the airline’s net profit stood at 350.65 million ringgit (US$114.08 million). Despite a 1% rise in the average fuel price, the airline recorded profits of 1.88 billion ringgit for its full 2012 fiscal year.
In February 2013, AirAsia submitted an application to the Indian Foreign Investment Promotion Board, through its investment arm, AirAsia Investment Limited, to seek approval for commencing its operations in India. AirAsia asked to take a 49% stake in the Indian sister airline, which was the maximum allowed by the Indian government at that time. AirAsia committed to invest up to US$50 million in the new airline. Operations would begin in Chennai, expanding its network throughout South India, where AirAsia already operates flights from Malaysia and Thailand. In 2019, AirAsia opened its first restaurant that serves plane food in Kuala Lumpur.
The airline has moved its head office to a new 613,383 square feet (56,985.1 m2), RM140mil facility constructed at klia2 on 7 November 2016. Until the new head office opened, the airline’s head office has remained at LCCT. The new klia2 head office has been scheduled to open in the end of 2015. It is scheduled to hold about 2,000 AirAsia and AirAsia X employees. Aireen Omar, the AirAsia Country CEO of Malaysia, stated that the headquarters needed to be redesigned because in the klia2 plans the location of the control tower had been changed. Construction on the facility was scheduled to begin in July 2014. Malaysia Airports Holdings is leasing the land that will be occupied by the headquarters. An AirAsia X flight attendant gave the building the name “RedQuarters” or “RedQ”, and its groundbreaking ceremony was held in November 2014.
In May 2017, China Everbright Group, the Henan Working Group and AirAsia Berhad have announced the signing of a Memorandum of Understanding to establish a low-cost carrier in China as a joint venture. AirAsia China will be based in Zhengzhou, the capital of Henan province, where the new low-cost carrier also plans to build a dedicated low-cost carrier terminal, an aviation training academy and a MRO facility.
However, the joint venture had lapsed in 2018 as the non-binding preliminary agreement was valid for 12 months and not renewed by related parties when it’s expired.
On 31 March 2017, AirAsia statement to the Malaysia Stock Exchange that they plan to establish a new budget airline in Vietnam in a joint venture with Vietnamese partners.
On 6 December 2018, AirAsia reaffirmed its intention to set up a joint-venture (JV) low-cost carrier in Vietnam by signing a memorandum of cooperation with Vietnamese partners – Thien Minh Travel Joint Stock Company and Hai Au Aviation Joint Stock Company. The joint venture expects to begin services in August 2019.
In October 2012, Air Asia’s management said that they were keen to have more presence in India if the aviation environment and tax structure were conducive and friendly for low-cost airline operations. With the new Indian Government allowing a foreign direct investment of up to 49% in aviation sector, the airline CEO Tony Fernandes tweeted “Fantastic news that India has opened up investments to foreign airlines.” He said that it was now easier for him to set up an airline in India. Tony Fernandes called the joint venture with Tata Sons. He said that the Tatas know India very well and have a good reputation. A tie-up with the company would help AirAsia operate efficiently. Fernandes said that he would concentrate mainly on the one million south Indians who travel by rail. AirAsia announced its Indian low-cost affiliate airline on 19 February 2013. The airline would be operated as a joint venture, with AirAsia holding 49% of the airline. Arun Bhatia took up 21% and Tata Sons the remaining 30% stake in the airline. The joint venture would also mark Tata Sons’ return to aviation industry after 60 years. AirAsia is the first foreign airline to set up an affiliate airline in India. The airlines is headquartered in Chennai and planned to make Chennai International Airport as its hub. Later, the primary hub of the airlines was shifted to Kempegowda International Airport, Bangalore. The maiden flight of AirAsia’s India venture on Bangalore–Goa route took off on 12 June 2014. The airline announced that Indira Gandhi International Airport, Delhi will be its hub for North Indian operations.
AirAsia and Japanese network airline All Nippon Airways announced their joint venture at a press conference in Tokyo on 21 July 2011. Following its establishment in August 2011, AirAsia Japan flew its first flight in August 2012. AirAsia Japan was the first low-cost airline to be based at Narita International Airport. Its formation was announced only months after ANA had announced the formation of Peach, a low-cost airline based at Kansai International Airport in Osaka, and alongside a concurrent effort by Japan Airlines to set up a low-cost affiliate. ANA elected to partner with an existing low-cost airline for efficiency and strategic advantage. It was the fifth affiliate airline for AirAsia and the ninth for ANA. The airline was headquartered alongside ANA in Tokyo, with its main operating base at Narita, and served domestic destinations, using the brand and service model of AirAsia. Future planned international destinations included the Philippines, South Korea, and Taiwan.
AirAsia Japan terminated its operations on 27 October 2013 after announcing the dissolution of its joint venture in June 2013.
In a press release on 1 July 2014 AirAsia announced a relaunch of the AirAsia Japan brand. The first flight is scheduled to depart in the summer of 2015, but instead it was delayed. AirAsia Japan finally relaunched on 29 October 2017, with its 2 daily flights from Nagoya to Sapporo.
AirAsia X is the long-haul operation of AirAsia. The franchise is able to keep costs down by using a common ticketing system. AirAsia X is also affiliated with Virgin Group and Air Canada. On 17 May 2007, Tony Fernandes announced plans to commence flights from Malaysia to Australia. Fernandes said he would be avoiding Sydney Airport due to its high fees. Instead, the airline would concentrate on cheaper alternatives such as Melbourne’s Avalon Airport, Williamtown Airport in Newcastle, and Adelaide Airport. Sustained fares were predicted to be around MYR 800 (A$285) for a return fare, plus taxes. Interest was also expressed in using Gold Coast Airport as another Australian destination. On 14 May 2007, AirAsia confirmed that it had ordered 15 Airbus A330-300 aircraft, 5 more than originally announced. The aircraft were scheduled for delivery from the fourth quarter of 2008. On 27 March 2008, AirAsia signed a firm contract for another 10 Airbus A330-300s bringing the airline’s total order to 25. AirAsia X received its first A330 on 31 October 2008 in Toulouse, France. As of 14 February 2008, 48% of AirAsia X is owned by Aero Ventures; a venture of Tony Fernandes, other prominent Malaysians, and Air Canada‘s Robert Milton. Virgin Group own 16% and a further 16% is owned by AirAsia. Bahrain-based Manara Consortium, and Japan-based Orix Corp have taken a 20% stake in AirAsia X for RM250 million.
In April 2018, AirAsia X cancelled their 10 A350-900 order that they ordered in 2009 due to higher prices on the aircraft, the airline have expressed interest on ordering the Boeing 787-10 and a decision will be made later in 2018.
Indonesia AirAsia & Indonesia AirAsia X
Indonesia AirAsia operates scheduled domestic, international services and is an Indonesian associate carrier of Malaysian low-fare airline AirAsia. Its main base is Soekarno-Hatta International Airport, Jakarta. Until July 2010, Indonesia Air Asia, along with many Indonesian airlines, was banned from flying to the EU due to safety concerns. However, the ban was lifted in July 2010. The airline was established as Awair in 1999 by Abdurrahman Wahid, former chairman of the Nahdlatul Ulama Muslim organisation. He had a 40% stake in the airline which he relinquished after being elected president of Indonesia in October 1999. On 1 December 2005, Awair changed its name to Indonesia AirAsia in line with the other AirAsia branded airlines in the region. AirAsia Berhad has a 49% share in the airline with Fersindo Nusaperkasa owning 51%. Indonesia’s laws disallow majority foreign ownership on domestic civil aviation operations.
Indonesia AirAsia X is a joint venture of AirAsia X. It serves Indonesia AirAsia’s regularly scheduled long haul international flights from Bali’s Ngurah Rai International Airport. Indonesia AirAsia X launched its first flight to Taipei on 29 January 2015.
Indonesian low-cost carrier Indonesia AirAsia looks set to cease operations as a standalone carrier, and be merged with sister AirAsia subsidiary, Indonesia AirAsia X.
Philippines AirAsia is a joint venture between Filipino investors and AirAsia. The Filipino group include Antonio Cojuangco, Jr., Yancy Mckhel Mejia, former owner of Associated Broadcasting Company with flagship television station TV5, Michael Romero, a real estate developer and port operator, and Marianne Hontiveros. The joint venture was approved on 7 December 2010 by the Board of Investments, an agency in the Philippines in charge of big ticket investments. AirAsia Zest Airways, Inc., operating as AirAsia Zest (formerly Asian Spirit, and Zest Air), is a joint venture between AirAsia & AMY Holdings Inc., the company who owns Zest-O corporation in the Philippines. It operates scheduled domestic and international tourist services, mainly feeder services linking Manila and Cebu with 24 domestic destinations in support of the trunk route operations of other airlines. In 2013, the airline became a sister airline of AirAsia Philippines operating their brand separately. Its main base is in Ninoy Aquino International Airport, Manila, and with a hub at Mactan-Cebu International Airport, Cebu. The airline was founded as Asian Spirit, the first airline in the Philippines to be run as a cooperative. It was rebranded to Zest Air in March 2008. On 16 August 2013, the Civil Aviation Authority of the Philippines (CAAP), the regulating body of the Government of the Republic of the Philippines for civil aviation, suspended Zest Air flights until further notice due to safety issues. Less than a year after AirAsia and Zest Air’s strategic alliance, the two companies rebranded as AirAsia Zest on 18 September 2013.
On 15 August 2011, Philippines AirAsia took delivery of its first brand-new aircraft, an Airbus A320 which arrived at Clark International Airport in Clark, Angeles City, Pampanga. On 8 November 2011, Philippines AirAsia took delivery of its second A320. On 7 February 2012, the airline received its Air Operator Certificate from the Civil Aviation Authority of the Philippines which gives the airline permission to fly in Philippine airspace.
Thai AirAsia & Thai AirAsia X
Thai AirAsia is a joint venture between AirAsia and Thailand’s Asia Aviation. Thai AirAsia launched domestic operations in February 2004. It serves AirAsia’s regularly scheduled domestic and international flights from Bangkok and other cities in Thailand. Thai AirAsia was the only low-cost airline operating both domestic and international flights from Suvarnabhumi Airport. The airline shifted all operations from Suvarnabhumi Airport to Don Mueang International Airport effective 1 October 2012. Thai AirAsia is 55% owned by Asia Aviation, 45% owned by AirAsia International, 39% owned by King Power The airline sponsors the Thai football teams Buriram United, SCG Muangthong United, Chonburi, Osotspa Saraburi, BEC Tero Sasana, Chiangrai UTD, Esan United, Chainat, Samut Prakan CUTD, Bangkok United, FC Phuket, Krabi, Air Force United, Nakhon Phanom, Loei City, Trang and the referee of Football Association of Thailand.
Thai AirAsia X is Thailand’s first long-haul low-cost airline. It was scheduled to begin operations in June 2014. After putting off the launch that had been planned for the first quarter, Thai AirAsia X was to launch its maiden service from Bangkok to Incheon, South Korea on 17 June and then begin regular flights to Japan’s Narita Airport in Tokyo and Osaka around July.
In June 2011 AirAsia ordered 200 Airbus A320neos at the Paris Air Show. The planes were originally due to become available in 2015, and the deal was one of the largest ever for commercial aircraft in a single order. The deal was worth US$18 billion at list prices, although AirAsia will have obtained a substantial discount from those prices. The deal makes AirAsia Airbus’ single biggest customer. On 13 December 2012, AirAsia placed an order for an additional 100 Airbus A320 jets, splitting it between 64 A320neo and 36 A320ceo. At the Farnborough International Air Show in 2016, Air Asia ordered 100 A321neos at an estimated cost of US$12.6 Billion dollars at list prices. Air Asia plans to fly these larger aircraft to airports that have infrastructure constraints. AirAsia received its first A320neo In September 2016.
With this, the total number of orders that AirAsia had placed for the Airbus A320 family had gone up to 575, reaffirming the carrier’s position as the largest airline customer for the Airbus single aisle product line.
AirAsia offers “Santan” menu,” a buy on board programme offering food and drinks for purchase. AirAsia is accredited by the KL Syariah Index of Bursa Malaysia, and in accordance with Shariah principles it does not serve alcohol or pork. However, this applies only to the regional AirAsia group flights, and not to the AirAsia X flights, which do sell wine and beer on board.
AirAsia is taking the first steps towards starting its own frequent-flyer programme. The airline has signed an agreement to start a joint venture with financial services firm Tune Money to launch a programme called “BIG”. Under this programme it will issue loyalty points to AirAsia customers and third-party merchants. Points can then be used to redeem AirAsia flights.
Awards and recognition
AirAsia has been named as the world’s best low-cost carrier for 11 years in a row including the latest award for the year 2019.