SINGAPORE - After almost a decade of trying and failing to set up a Singapore-based
budget carrier, AirAsia is planning to give it another go.
Its new Singapore CEO Logan
Velaitham has confirmed that Asia's largest budget airline group is preparing
to apply for a Singapore Air Operator's Certificate (AOC), effectively enabling
it to set up a Singapore-based airline.
He said that as a precursor to
the application, AirAsia has made a preliminary presentation to the Ministry of
Transport to "demonstrate" AirAsia's commitment and contribution to
Singapore.
He would not say when the actual
AOC application would be made.
"Singapore is critical for
us and we have been delivering the numbers," he said. "Even without
an AOC, our arrivals, tourist numbers and contribution to the Singapore economy
have been growing rapidly. Imagine what we could do if we have a
Singapore-based carrier?"
AirAsia is believed to have
applied for a Singapore AOC several times in the past eight years; the last
time was in December 2010. But in a one-sentence response late yesterday
evening, a Civil Aviation Authority of Singapore (CAAS) spokesman said the
regulator "has not received any formal AOC application from AirAsia".
But having a carrier based out of
one of Asia's biggest hub airports would figuratively connect the dots to
complete AirAsia founder Tony Fernandes's ambition to establish a pan-Asean
carrier group. The now Jakarta-based Mr Fernandes already oversees a thriving
airline group headquartered in Malaysia, but with associates in Thailand,
Indonesia, the Philippines and Japan.
"We are blessed to be in
Asean," Mr Fernandes told BT recently. "It's a market that some
people ignore, which plays to our advantage. People are fixated on China and
India. There are 690 million people here. I see the growth market as Asean as a
whole - not an Indonesia, not a Thailand.
"Imagine if all 690 million
were flying within Asean for their holidays. That's what happened in Europe and
that's my goal, and that's why I shifted to Jakarta.
"Fifty per cent of our
routes in Asean have been never done before. Obviously, China and India will
grow but these are markets that we can only scratch. But Asean will be one big
market - that's why I am such a big advocate."
Mr Logan is confident that
AirAsia will finally land its much coveted Singapore AOC.
"Perhaps we did not have the
numbers to back up our previous application," he said. "But things
have changed. Last year alone, we flew 3.52 million passengers into Changi. We
operate 277 flights here, employ over 80 people and enjoy a load factor of
around 80 per cent on our Singapore services. Over the last eight years, we
have brought 10 million travellers to Singapore. "
He revealed that AirAsia's Changi
operation also provides a significant volume of feeds to the networks of
AirAsia and AirAsia X through Kuala Lumpur to destinations like Australia, the
Indian sub- continent and elsewhere.
Mr Logan added that AirAsia had
also "met all the key performance indicators" of Changi Airport Group
to qualify for the airport operator's various growth incentives targeted at
airlines operating here.
"We value Singapore, and I
would like to think Changi values us," added the 41-year-old Malaysian who
has lived here since 1988 and holds Singapore permanent residency.
Under existing rules, a Singapore
AirAsia would need to be 51 per cent held by Singaporean entities, with
Malaysia's AirAsia Bhd controlling the remaining 49 per cent stake. The airline
is evaluating various potential Singapore partners.
"Our brand strategy is to be
an Asean airline, with cross-border inter-operability, just like in Europe -
which is why Mr Fernandes relocated to Indonesia," he said. "This
would enable us to redeploy resources, personnel and assets wherever and
whenever necessary. Our pan- Asean vision will not be complete without this (Singapore)
AOC."
Mr Logan conceded that his recent
promotion to CEO of the Singapore operation was a precursor to the AOC
application.
"My job is to keep pushing
our growth trajectory in Singapore, while also doing the groundwork and
liaising with the decision-makers here."
A Singapore AOC could see many of
the airline's new jets being based here. AirAsia hit the headlines in June last
year when it placed a record order for 200 new A320s at the Paris Air Show. It
currently has 105 planes in its fleet.
A new airline would also boost
budget airline passenger numbers at Changi, where the 13 low-cost carriers
currently already account for almost 30 per cent of total traffic.
Ven Sreenivasan
The Business Times
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