AirAsia: Punishing Malaysian Travelers for Their Support

AirAsia has been in the spotlight for the last couple of months. Some for good reasons and mostly not.

MAS-AirAsia Share Swap
This is probably the biggest news involving AirAsia in the last few months. I've truncated a few points below:

•  Tan Sri Tony Fernandes and Datuk Kamarudin Meranun of AirAsia will sit on the MAS board. Their company, Tune Air Sdn Bhd, via a share swap, will end up with 20.5% equity stake in MAS
• MAS' parent, Khazanah Nasional Bhd, will take up a 10% stake in AirAsia and MAS director Datuk Azman Yahya will join the AirAsia board
• MAS managing director Tengku Datuk Azmil Zahruddin has quit the airline along with seven other directors
• The whole idea of the collaboration is to salvage MAS and realign its business to become a truly premium carrier
• The turboprop operations of Firefly, MAS' low-cost unit, will become a full-service carrier to ply regional flights
• Both AirAsia and sister airline AirAsia X will stick with the low-cost airline model for short, mid and long-haul routes

A lot of has been said of this deal on who will be the bigger beneficiary. A lot of concerns have also been raised such as increase in domestic airfare and lack of competitions. I would not like to comment further on this deal as there might be benefits to both companies moving forward but it certainly looked lopsided.

MAHB Raises International Passenger Service Charge

I've truncated a few points below:

• Malaysia Airports Holdings Bhd (MAHB) will increase the international passenger service charge (PSC) by 27% to 28% effective Sept 15 while aircraft landing and parking charges will be gradually raised up to 30% and 64% respectively
• Meanwhile, international PSC will go up from RM25 to RM32 at the low-cost carrier terminal KLIA and Terminal 2 Kota Kinabalu

I'm not a supporter for any price increase. But let's analyze the expected angry response from AirAsia's Tony Fernandez about the airport tax increase. Here are a few points:

• AirAsia group chief executive officer Tan Sri Tony Fernandes lambasted the Transport Ministry for announcing an increase in airport tax, or passenger service charge, without prior consultation with players in the industry
• He said AirAsia will appeal against the hike in order to lessen the burden on passengers and to encourage more people to fly

AirAsia is trying to project an image of fighting for passengers course. While any price increase is no good, let's not forget that the airport taxes are borne by the passenger and not the airlines. These taxes are a source of income to MAHB for the airport usage. Basically AirAsia is blaming MAHB solely for the price increase without realizing that the airport taxes are only a fraction of their international ticket fares. In other words, AirAsia is basically saying it's OK for AirAsia to make more money but not others.


New LCT Designed to Enable Installation of Aerobridges
Let's not forget that MAHB and AirAsia are two different entities. MAHB manages the airports in the country and AirAsia operates a low cost airline. MAHB builds airports to be used by the airlines including AirAsia. It really puzzles me why MAHB has to bow to AirAsia's demand of not wanting to use the Aerobridges. I've truncated the piece of news:

• Provisions have been made in the design of the terminals at the new low cost carrier terminal, the KLIA2, to accommodate the installation of aerobridges, if required at any time byAirAsia group or other low cost carriers
• However, Malaysia Airports Holdings Bhd (MAHB) said in a statement yesterday that based on AirAsia's decision not to use aerobridges at KLIA2 even during inclement weather or for long haul operations, the terminal is constructed without the installation of aerobridges and ramps will be provided instead
• One of the requirements is the usage of aerobridges in their operations. AirAsia has explained that its business model requires a quick turnaround time in order to increase aircraft utilisation
• To support AirAsia's business model, the exemption was given. Subsequently, it had to be extended to other LCCs. Given the exemption, AirAsia has the option of not using aerobridges
• MAHB noted that airports in other countries in the region had made it mandatory for airlines to use aerobridges where provided as to enhance passenger convenience, safety and security.
• AirAsia has explained that they have to use aerobridges at other countries as they are compelled to adhere to the regulatory requirements at these airports, as no exemptions are given
• The current charge to the airline for the use of the aerobridge is RM85 per usage. Based on a full A320 aircraft carrying 180 passengers for both arriving and departing flights, the cost of using the aerobridge works out to be less than 25 sen per passenger

This is akin to you building a house according to your neighbour's requirements. Since MAHB is the airport operator, just make it mandatory for the airlines to use the aerobridges. It's more convenient and safe. The disabled groups have voiced their opposition on this decision. If laws need to be amended, then do it. Are you listening Transport Minister? At one hand, we are building a world class facility in KLIA2, but on the other, we are letting it to be run like a third class facility. The additional costs are paid by the passengers anyway. This is a good write up by a passenger. Again AirAsia is trying to project that the usage of aerobridge will increase ticket fare. It is again the same thing, only AirAsia can make more money but not others.

AirAsia to Charge RM10 Check-In Fee

This is the most disappointing news of all. I've truncated a few points:

• No frills airline, AirAsia Bhd, will charge a RM10 check-in fee per passenger for all flights whose bookings are made from Sept 21 onwards to check in via conventional check-in counters
  
• The airline said the additional charge was part of its plan to aggressively grow revenue through ancillary income and services, instead of transferring the full cost, amid escalating jet fuel prices to its passengers
  
• This fee applies to all AirAsia domestic and international flights originating from airports in Malaysia
• As for AirAsia X, counter check-in charges will apply for flights departing from the airline’s base in Kuala Lumpur and at all airports the airline operates except in Tokyo (Haneda) and Osaka (Kansai) in Japan, Seoul (Incheon) in South Korea and Tehran (Iran)

I'm against the charges simply because it becomes inconvenient for the passenger. We will need to have internet access, printers, laptops etc just to check in. And bare in mind that maybe most people will have internet access and laptops, but most would not have printers to print the check-in slips. AirAsia is taking advantage of this opportunity and making quick bucks out of it. Read more about Customers aren't always right by Adrew Lo on the "convenience" charges by AirAsia.

While AirAsia is making all the noises when MAHB starts to increase airport taxes, they themselves are charging for something as silly as check-in. This again demonstrates that only AirAsia can make more money but not others. The most disappointing part of this decision is that, the fee applies to ALL AirAsia domestic and international flights originating from airports in Malaysia. Who's the biggest user of AirAsia services from and in Malaysia? The answer is surely MALAYSIANS. Who will AirAsia charge the most for the check-in fee? The answer is still MALAYSIANS. Who has been AirAsia's greatest supporter for their growth story in the past decade? MALAYSIANS. And after a decade of support, AirAsia is slowly punishing their very own biggest supporters. They are now showing their true colours. Let's see how far will they go.

Start boycott AirAsia anyone...?