The Malaysian budget airline AirAsia yesterday scrapped administrative fees on all its flights in a move to reduce fares and bolster sales amid the global slowdown.
AirAsia chief executive Tony Fernandes said scrapping the fees creates further savings for passengers, who will now pay only the fare and airport tax. AirAsia removed fuel surcharges in November last year.
The fees ranged from 22.5 ringgit to around 43 ringgit per ticket and removing them will cost the airline 400 million ringgit (US$113 million) a year.
Fernandes said budget carrier is confident it can increase ticket sales and generate income from other sources to offset the loss of revenue.
“It’s been a tough six months for the airline industry but AirAsia is getting stronger and stronger. We believe we will increase our load factor and become more competitive,” he told a news conference.
Airlines worldwide are reeling from the global economic slump that has choked passenger and cargo traffic. Many have cut capacity, grounded planes and shed their work force to cope.
But AirAsia is expanding and says it is benefiting as travelers cut costs. Its net profit in the quarter through March hit a record 203.2 million ringgit, up 26 percent from a year earlier.
On Tuesday AirAsia announced that it would offer flights between Taipei and Kuala Lumpur from next month.
On July 1, an AirAsia Airbus A330 will make the maiden flight from Kuala Lumpur to Taiwan Taoyuan International Airport and will fly the return route one hour later.