March 14, 2008
Indonesia AirAsia to Spend RM200m on Developing New Routes
By Anna Maria Samsudin
JOGJAKARTA: Indonesia AirAsia, a 49 per cent subsidiary of AirAsia Bhd, will pump in RM200 million to develop more new routes to Malaysia from four of its points in Indonesia this year.
Instead of flying solely to Kuala Lumpur, the airline will be expanding its wings to other new destinations in Malaysia namely Kota Kinabalu, Kuching and Penang from its two hubs, Jakarta and Bali, as well as Medan and Jogjakarta.
To date, it has already obtained approval to fly to some of these destinations and expects to commence some of the flights as early as March 30.
AirAsia group chief executive officer Datuk Tony Fernandes said despite the huge investments and high risk involved, the airline is optimistic of making these new services profitable.
He pointed out that the budget airline has always been adventurous in introducing routes that have not been served by other airlines such as its Kuala Lumpur-Bandar Acheh and Kuala Lumpur- Bandung flights.
"I always believe that with the right marketing strategy as well as hard work and good planning, all routes can be profitable.
"Besides, I think operating routes not provided by others would enable us to widen our network and offer our passengers more destinations to go to," he told reporters after the official launch of the Kuala Lumpur-Jogjakarta flight here on Wednesday.
Indonesia AirAsia president-director Captain Dhamardi said looking at its aggressive international route expansion, the airline is optimistic of making profits by this year.
In line with Visit Indonesia Year, the airline aims to see its international fights account for 50 per cent of the flights operated from 30 per cent last year.
Apart from Malaysia, he said the airline also plans to introduce more international routes such as Jakarta-Bangkok and Bali-Perth.
"Looking at our route expansion plan, we expect to see higher yield from our international flights. We are optimistic of becoming profitable this year," he added.
Meanwhile, in addressing soaring fuel prices, Fernandes said the airline may need to review its fares if the need arises.
However, this would only be as a last resort measure after it has exhausted all of its options.
The four times weekly Kuala Lumpur-Jogjakarta flights, which is AirAsia's 13th entry into Indonesia and started on January 13 2008, has already reached more than 75 per cent average load factor. AirAsia will mount daily flights on the Kuala Lumpur-Jogjakarta route by April 15.
Going forward, under Indonesia AirAsia, more routes will be operated via Jogjakarta namely to Jakarta, Bali and Singapore.
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