AirAsia CEO Appeals to Public to Understand The Need to Make Profits

Tony Fernandes has appealed to the public to understand that AirAsia needs to make profits to recover from the RM4 billion loss incurred last year. This comes after criticisms over high fares for Kota Kinabalu-Kuala Lumpur flights during peak seasons. The CEO of Capital A explained that while AirAsia still offers low prices outside peak seasons, high fares are to be expected during peak seasons. He further stated that they lost RM4 billion last year, including RM 400 million in the last quarter, and they need to make money too. He assured reporters that they would try to bring down fares but still maintain low fares throughout the year.


In a report released last week, the airline group announced that it had reduced its net loss to RM178.82 million for the third quarter of 2023 compared to RM901.31 million in the corresponding quarter of the previous year. The revenue had also increased to RM4.23 billion from RM1.96 billion in the same period. For the nine months until September 30, 2023, it reported a net profit of RM996.55 million compared to a net loss of RM2.74 billion in the previous corresponding period. The revenue had more than doubled to RM9.9 billion from RM4.24 billion previously. Fernandes had earlier stated that fares between Sabah and the country's capitals were unlikely to reduce further, given that airlines also have to deal with soaring fuel costs against the US dollar. He explained that the strong US dollar makes it impossible to offer much lower prices, and inflation is causing the increase in prices of everything. He stated that 70% of their costs are calculated in US dollars, and as long as the US dollar is strong, their costs will continue to rise.


Fernandes reiterated that their philosophy is to offer fares as low as possible, and they would reduce the fares if the costs fall. He stated that they are still considerably cheaper than other airlines. However, he pointed out that they cannot control oil prices, which are soaring, and the US dollar is strong. When asked about increasing flights to help the demand and supply balance, Fernandes said that it would help but would not significantly lower the fares. He pointed out that they have about 40 passenger planes that have not yet taken off, and they hope to get financial support. He explained that taking 200 airplanes out of storage is not easy, and increasing flights can only help to a certain extent.

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Fernandes launched a special tribute livery of former Sabah Tourism Board general manager, the late Irene Charuruks, on one of AirAsia's planes. The high cost of flight tickets between East and West Malaysia has been a long-standing point of contention for Bornean Malaysians, especially during festive seasons. During such times, flights are not only scarce but also reach up to thousands of ringgit per way. Fernandes argued that the airline's load factor was at 92%, which means that people are still flying, and the fares are still affordable. He welcomed suggestions from the government on ideas to deal with festive season fares. He also mentioned that they had implemented midnight flights, and the government has bought aircraft slots from them. However, he acknowledged that it is difficult for them to provide different air ticket prices for different groups. Finally, he said that AirAsia can still provide air travel to 98% of people and is looking to invest in new routes.

(RM 1.00 = USD 0.214)

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