AviationAirlines face increasing capacity pressures

AirAsia’s almost-free seat promotion is back

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AirAsia offering free seats across the route network
AirAsia offering free seats across the route network
AirAsia offering free seats across the route network
AirAsia offering free seats across the route network

With the recent abolishment of the fuel surcharge, AirAsia said travellers would only need to pay for airport taxes and fees when booking. Included in the promotion are domestic and international destinations, such as Langkawi, Penang, Kota Kinabalu, Bangkok, Bali, Hong Kong, Kalibo (gateway to Boracay), Melbourne, Seoul, Sapporo (transit via Bangkok) and Taiwan.

AirAsia has revived its Free Seats promotion with more than three million seats offered to more than 20 countries across AirAsia Group’s route network, including AirAsia X.

With the recent abolishment of the fuel surcharge, AirAsia said travellers would only need to pay for airport taxes and fees when booking. Included in the promotion are domestic and international destinations, such as Langkawi, Penang, Kota Kinabalu, Bangkok, Bali, Hong Kong, Kalibo (gateway to Boracay), Melbourne, Seoul, Sapporo (transit via Bangkok) and Taiwan.

The free seats can be booked online at airasia.com  until March 29, and travel from September 1 until May 31 2016. The free seats can also be booked via AirAsia’s mobile app on iPhone and Android devices, as well as the mobile site mobile.airasia.com.

AirAsia is expected to come under pressure from new Malaysian start-up flymojo, a full service carrier, which will operate out of the Senai Airport in Johor and the Kota Kinabalu Airport in Sabah. It is slated to start operations in October 2015.

CIMB Research analyst Gan Jian Bo forecasts that existing airlines’ yields — already under pressure after consumers were spooked by the spate of aircraft disasters — would be compressed further due to overcapacity when flymojo comes on board.

Gan told The Edge Financial Daily, “This year should have been one of capacity rationalisation for the aviation sector, led by Malaysian Airline System Bhd (MAS), which is undergoing restructuring and cutting unprofitable routes, and AirAsia Bhd’s decision to renegotiate slower delivery of some of its new aircraft while it diverts its extra capacity to associates based overseas.

“So we were hoping that yields for airlines would improve because of that. But with a new player expected to come on-stream this year, it puts that hope for capacity rationalisation at risk,” said Gan.

Gan said no one should dismiss flymojo’s potential impact on the local aviation sector. Furthermore, he expects flymojo’s routes to overlap with AirAsia’s as demand for a premium service on non-trunk routes is limited.

Currently, AirAsia has 15% of its seat capacity allocated to Kota Kinabalu and 7% to Johor Baru.

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