AirAsia to go bigger and Fernandes says potential is 500 aircraft

BARCELONA: Being No. 1 in Asia is no longer enough for low-cost airline boss Datuk Seri Tony Fernandes. Now he wants to double the size of AirAsia's fleet to catch up with industry titan Southwest Airlines. Fernandes
signalled ambitious plans for AirAsia as he closed in on a potentially
massive deal to buy Airbus aircraft, which could rival a recent
US$16bil, 180-plane deal as one of the world's largest. The
expansion plan reflects confidence in a fast-growing Asian transport
market which continues at a blistering pace despite concerns over fuel
prices. [You must be registered and logged in to see this image.] Filepic:
Datuk Dr.Tony Fernandes, group CEO of AirAsia making his donation
during the launch of "To Japan with Love" campaign in Kuala Lumpur on
May 10. Looking on are Koichi Ito, minister & deputy chief of
mission, embassy of Japan (left), Kathleen Tan, regional head of
commerial AirAsia (2nd left) and Tassapon Bijleveld, CEO of AirAsia
Thailand (right, partly hidden). - RAJA FAISAL HISHAN/The Star
“We
have done a study (which shows) that AirAsia has a potential to have
about 500 planes ... that we could be the size of Southwest airlines.
That would give you some idea; we already have an order of 175 or so,”
he told Reuters. “The market is big and growing. We are in a fantastic playground, Asia Pacific,” Fernandes said. Such
a deal could make AirAsia to Airbus what Southwest is to Boeing,
dominating the customer list for their respective narrowbody airliners. Texas-based
Southwest Airlines started operations after a legal battle in 1971 and
has grown into the world's top low-cost airline with a fleet of 548
Boeing aircraft. AirAsia already has the largest number of A320 aircraft on order of any airline, second only to a US-based leasing giant. Fernandes is looking at placing a big order for A320neos, a revamped version of Airbus's best-selling, medium-haul plane. Airbus
has been under pressure to deliver on pledges to announce hundreds of
sales of the A320neo at the Paris air show on June 20-26, as rival
Boeing tries to persuade airlines to hold off and wait for an even
bolder potential redesign of its 737. The timing appears to
favour AirAsia. “I am never one who particularly likes air shows, but
aircraft manufacturers like air shows, so let us wait and see,”
Fernandes said. Fernandes was speaking to Reuters in the Team Lotus motorhome on the eve of the Spanish Grand Prix. He
has spent the past few days shuttling between the United States, Spain
and France to negotiate a deal almost certain to be well over US$10bil
for aircraft and engines and to indulge his passion for motor racing as
principal of Team Lotus. Wearing a bright red AirAsia-branded cap, Fernandes said the airline's links to popular Formula One had boosted its growth. “The AirAsia brand is growing rapidly. We are only nine years old and I am talking about 500 planes.” In
a sign of the stakes involved for enginemakers as well as the plane's
designers, Fernandes held talks last week with the chief executive of
General Electric (GE), the co-parent of a French-US joint venture that
competes to supply engines. “I was in GE. We have been in
discussions with Pratt. I flew from there to Barcelona, then Nice, so
although I am running a Formula One team it has been a very productive
last few days for AirAsia,” Fernandes said. In sharp contrast
with the secrecy surrounding most aircraft deals, Fernandes, an avid
user of Twitter, has chatted openly about his whereabouts as he played
off big-time manufacturers. - Reuters

how about this.......

Author: William Huang | Publish date: Tue, 24 May 22:28 |
Back

---

AirAsia Bhd recorded a lower pre-tax profit of RM202.874 million in the first quarter ended March 31, 2011, compared with RM256.182 million in the same period last year.

Its revenue, however, increased to RM1.05 billion from RM870.605 million previously.

'What is particularly significant for us is that our operating profit margins were also significantly higher year-on-year, demonstrating that we are maintaining tight control of costs even as we grow revenues,' said Group Chief Executive Officer, Tony Fernandes in a statement today.

'Yes, fuel prices shot up - but that is something beyond our control. Our response is not to wring our hands and moan, but to use our creativity to address the issue and find ways to overcome this challenge. And our first quarter results indicate that we are on the right path,' he said.

On fuel hedges, he said the low cost airline operator had hedged
approximately 17 per cent of its fuel requirements for the second half so far for this year.

'We are monitoring oil prices very closely and the moment we perceive an opportunity, we will not hesitate to add to our hedges,' he added. -- Bernama