Airasia History

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  • Topic: AirAsia, Airline, Malaysia Airlines
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  • Published : April 8, 2013
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1. Company history

2.1 The sector that the AirAsia Berhad operates is in airline transportation.

2.2 Brief explanation of AirAsia Berhad history
AirAsia was established in 1993 and began operations on 18 November 1996. It was originally founded by a government-owned conglomerate, DRB-Hicom. The heavily-indebted airline was bought by former Time Warner executive Tony Fernandes's company Tune Air Sdn Bhd for the token sum of one ringgit with 40 million ringgit worth of debts on 2 December 2001. Fernandes 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 1 ringgit. AirAsia's CEO Tony Fernandes subsequently unveiled a five-year plan to further enhance its presence in Asia. Under the plan, AirAsia proposes to strengthen and enhance its route network by connecting all the existing cities in the region and expanding further into Vietnam, Indonesia, Southern China (Kunming, Xiamen, Shenzhen) and India. The airline will focus on developing its hubs in Bangkok and Jakarta through its sister companies, Thai AirAsia and Indonesia AirAsia. With increased frequency and the addition of new routes, AirAsia expects passenger volume to reach 18 million by the end of 2007. AirAsia's CEO Tony Fernandes subsequently unveiled a five-year plan to further enhance its presence in Asia. Under the plan, AirAsia proposes to strengthen and enhance its route network by connecting all the existing cities in the region and expanding further into Vietnam, Indonesia, Southern China (Kunming, Xiamen, Shenzhen) and India. The airline will focus on developing its hubs in Bangkok and Jakarta through its sister companies, Thailand AirAsia and Indonesia AirAsia. With increased frequency and the addition of new routes, AirAsia expects passenger volume to reach 18 million by the end of 2007. The company had on its list 106 new routes to be added to its then-current list of 60 on 27 September 2008. The number of old routes discontinued has not been publicly disclosed. On 2 April 2012 Air Asia had their first flight from Sydney to Kuala Lumpur. 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 had seen a steep increase in its profitability. The year-on-year comparison had shown a 168% increase in profits as compared to 2012. For the quarter ending December 31, 2012, the airline's net profit stood at 350.65 million ringgit. Despite a 1% rise in the average fuel price, the airline had recorded profits of 1.88 billion ringgit for the full financial year 2012.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 wanted to take up a stake of 49% in the airline, which was the maximum allowed by the Indian government at that time. AirAsia initially invested an amount of 50 million United States dollars in the airline. The airline wished to begin operations from Chennai and expand its network in South India, to where AirAsia already operated flights from Malaysia and Thailand.

2.3 Brief explanation of the nature of business, including the product and services descriptions. AirAsia Berhad, together with its subsidiaries, provides air transportation services. It offers charter airline services for business travelers; and airspace advertising services, which include online, on ground, onboard, and in-flight magazine advertising. The company also involves in tour operating business; aircraft leasing facilities; and publishing activities. As of February 27, 2009, it operated a fleet of 74 aircrafts, which served 61 domestic and international...
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