Malaysia AirAsia CEO Update

Transcript

Aireen Omar:Langkawi would be our 6th hub in Malaysia, and this is something that is quite a milestone for us because we feel without the airport support, I mean, there's no way it can become a true hub. It's how it can be in terms of realizing its full potential and everything of that sort, basically. So we're looking at introducing flights, more international flights into Langkawi. We're starting with Langkawi-Guangzhou, and then we will introduce Langkawi-Hong Kong, and then there'll be other destinations in the region which will actually feed into Langkawi quite nicely, like Bangkok or so. So for the first year or so, I mean, eventually we'll put in a couple of aircraft, and eventually in the next 5 years or so, we'll probably be looking at a total of at least 5 aircraft to be based there. So we're starting with the Chinese routes first, and then we'll see how that grows. Before we add in more routes from other destinations in the region into Langkawi, there are many destinations that I want to go, but unfortunately we don't have enough aircraft to facilitate it. Basically because of the number of orders that we have delivered for next year, and we have to redeploy them within the group on which one will make the better returns or so. But we're getting at least three, at least additional three more aircraft into our portfolio where we'll be able to fly. To many more destinations. But at the end of the day, also we're relooking at our schedules and trying to optimize the aircraft utilization and all that to see where else we can introduce more new routes as well, new frequencies. So to say that we don't have anywhere else to go, I think we have a lot more places to go, not just in this region where we are trying to connect secondary cities into capital cities or secondary cities to secondary cities, because we see a great demand there. An example would be Johor-Bangkok. When we opened it, 5,000 seats were taken up almost immediately. So I think there are many places in Malaysia, which is from secondary cities to other regional destinations, which is yet not being introduced, and there's a lot of potential there. What we always look at, on average, about 10% or so. I mean, there's always a conservative way or an average way of us introducing additional capacity between about 7 to 10% on average, really. So we'll start with that and then we'll see how else. I think we have seen some good recovery from the Chinese market. We have introduced the latest route that we introduced was Kuala Lumpur-Changsha, and there will be at least 3 more new routes into China that we'll be introducing this year. So yes, we see good demand there. We work really hard in order to get back the assurance of being able to fly into Malaysia and all that. So So the team has worked really hard and I think it is going to grow from here onwards. India is another untapped potential, to be honest, and that's something that we felt that we could have worked harder, like how we worked as hard in penetrating China. But of course there are always these government-to-government bilateral rights that needs to be improved, but we feel there's so much potential there because there aren't enough connectivity from India into ASEAN countries. Like for instance Goa, Kuala Lumpur to Goa, we are the first international airline that actually connects Goa into ASEAN. So I think we have built such a great base in ASEAN with the whole of AirAsia Group, and now I think it's the best time to connect this network that we have built in ASEAN and the rest of Asia into India. We've seen that there's less Malaysians actually going longer distances. They don't really fly to Europe or US unnecessarily for their holidays or so, and yes, they do tend to travel more regionally. Where things are a little bit more affordable for them. Like even Indonesia is still good value for them to have their holidays, Indonesia or even Thailand or so. And yes, we have seen many are actually flying domestically as well for the school holidays and all that as well. But because of the depreciation of ringgit also, I think where Malaysia is probably offering the cheapest holidays in this region purely because of the depreciation of our currency, and we, we want to take advantage of this. So therefore, we're marketing a lot in all the high-currency markets to come over to Malaysia, and I think it's working. I think there is still room to grow the domestic market. There's still routes where it hasn't been introduced, but we know there are growth and pent-up demand for it. There's still room to grow the east of Malaysia as well, East Malaysia and Borneo as well, and connectivity from East Malaysia into peninsula and intra-East Malaysia too. So it's, I think when, you know, it's both ways. You know, you need to be able to have good international destinations as well as domestic destinations to feed into the international destinations. And when you have more tourists coming into Malaysia and then they go into other parts of Malaysia, it sort of like in a way indirectly creates that travel demand basically. And it kind of like opens up small-medium businesses. So like things, cities where previously we never would want to link it up to other domestic destinations or even to international destinations, we're already considering, okay, we have to try and see whether this works because it seems as though there are pent-up demand from this secondary city to go into other capital cities In the region, so you will see quite a few of those routes that we will introduce by the end of the year. On some routes, we actually adjusted it. We actually added more frequencies like Kochi. On Maldives, I mean, we were always thinking about introducing Maldives even before they cut that route. So now that they have cut their routes, then I think well that that's great for us. But we have always thought of flying there four times a week. So we'll continue to with that first because it is an expensive destination. So until we get it right and and we'll see whether it's worth increasing it daily or so. There are certain routes where we just left it as it is because there were excess capacity to begin with, but then we'll see how the market actually plays up on that particular route. So if the demand actually builds, then maybe we'll introduce more frequencies to it. Thank you.

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