Airline News
AirAsia to raise $600 million
April 27th 2015
AirAsia chief, Tony Fernandes, last week said he saw great potential for the group’s expansion and hoped to raise as much as $600 million from Initial Public Offerings (IPO) for the company’s Indonesian and Philippine franchises. Read More »
Speaking to The Wall Street Journal on the sidelines of The World Economic Forum’s East Asia meeting, Fernandes criticized Indonesia’s “floor price” regulation, enacted after the Indonesia AirAsia crash on December 28 that killed 162 people en route from Surabaya to Singapore. In setting minimum prices, the government sought to ensure price competition wouldn’t erode safety standards as low-cost air travel booms in the archipelago. As a result, Indonesia AirAsia was forced to raise its ticket prices by as much as 100% on domestic routes. The airline said it would reduce overall capacity within Indonesia despite president Joko Widodo’s plan to boost tourism. “It’s crazy,” Fernandes said. “It’s cheaper to fly international than domestic. It’s the only country in the world that has it.” The outspoken AirAsia chief confirmed the airline was recovering financially from the crash of Flight QZ8501 and was looking at a net profit for the first quarter of 2015. As previously reported, Fernandes has proclaimed he wanted AirAsia to “fly to every airport in China in the next ten years”.
Over at AirAsia X, the group’s Malaysia-based long-haul arm, continued pressure from the Australian Competition and Consumer Commission (ACCC) has started to pay off. The regulator had criticized AirAsia X for the way it dealt with passengers after it abruptly cancelled flights from Kuala Lumpur to Adelaide, and Denpasar to Melbourne, earlier this year.
After talks with the government watchdog, AirAsia X said passengers affected by the cancellations could re-lodge claims previously rejected by the airline. It said it would "expeditiously process" them and provide a report to the competition regulator on its handling of passengers' expense claims. ACCC chairman, Rod Sims, said consumers were entitled to compensation for any "reasonably forseeable loss" due to a business failing to deliver a contracted service.
