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How Air Asia makes money ! Just my theory

Posted by : Kia on Sep 20, 2010 2 comments
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I would like to share how AAsia was sucking the travellers and it happen to me. We bought the ticket from Senai JB to Kuching under group travel of 6. To my chagrin, my son and my name were missing from the group and seats 2D and 2E had been sold to other passengers. Fortunately my wife had the hard copy in her bag.

The counter staff advised me to buy another ticket for the next day available flight – for the reason given the flight was fully booked. I reminded AAsia's staff that - ‘… you sucker can make profit but not cheating people’. They surrendered and issued us the manually written boarding passes. To my surprise again, when I boarded the plane, the seats were a quarter empty!

Why our ‘first-class’ seats were resold to another passenger far beyond my knowledge but I have this theory. The airline wanted to make triple income from my seat and expected me to buy another ticket despite having one. How? Their first income derived from my first ticket, 2nd income from reselling to another party and the 3rd income derived from my 2nd purchase. All for ONE set I have paid!!!??

The airline wanted to take advantage of the Hari Raya rush and they knew very well people will spent anything to reach their respective destinations. Unfortunately it was me who turned green when angreeeey!! I guess, Fernandes would have done the same if he was in my situation.

Yes, now eveybody can fly but MAS is also offering cheaper and better packages. Free in-flight F&B, Free 25 kgs of luggage and they are responsible for the connecting flight. Free sport equipment but AAsia charged RM100 per golf set per trip.

AAsia stewardess smiles less than their friends in MAS. They are too tired to give you a smile. A day will come you have to pay for their smiles.

Can you imagine if AAsia charged you mandatory RM5 for the seat belt and the toilet? I refuse to think but once their aircraft maintenance cost is getting higher - after 2 years from purchase - they either increase the fare or they compromise the safety. I guess they won’t choose the later.

AAsia is not the only but duplicating the business model of SouthWest Airline (SWA) in US. The later has been 20 years in the market long before AAsia made it first maiden flight to Penang. Whilst the service is almost identical, the charges by AAsia are sky-high. The in-flight price of beer sold by SWA is much cheaper than a bottle of mineral water in AAsia.

However, Bloomberg reported AirAsia, the region’s largest low-cost carrier, is “seeing tremendous growth” as travel demand bounces back from last year’s global recession.
The carrier expects to fly 30 million passengers in 2010 and it will expand its fleet, including affiliates, to 100 planes by the year-end, Fernandes said. The airline is planning to “moderate” growth after an initial spurt gave it a dominant share of the Southeast Asian low-cost travel market, he said.

“We now have a size where no one can really challenge us,” he said. “We can now moderate our growth, still be aggressive, but grow at a pace everyone is comfortable with.”

He reiterated that AirAsia will add between eight and 12 planes a year. The airline group includes affiliates in Thailand and Indonesia, and long-haul carrier AirAsia X.

The carrier gained 0.5 percent to 2.06 ringgit at the 12:30 p.m. trading break in Kuala Lumpur. The stock has jumped 49 percent this year.

The carrier’s board will also discuss whether to pay dividends when they meet at the end of the year, Fernandes said.

BloombergChan Sue Ling | September 20, 2010

2 comments: for How Air Asia makes money ! Just my theory

  1. Interesting observation for having gone through such misery. I would turn green too if i were to be in your shoes.
    I have a couple of times be given seats that were also be given to others, but because i was there earlier, God knows what the other person has to do to get a seat.
    So much for the best low cost carrier of the world!