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A look at AirAsia

Gabriel DomínguezDecember 29, 2014

Authorities have resumed the search for Flight QZ8501, which vanished en route from Indonesia to Singapore carrying 162 people. DW takes a look at the airline operating the jetliner and its reaction to the incident.

https://p.dw.com/p/1EB62
AIR ASIA Indonesia flight QZ8501 is missing en route from Surabaya, Indonesia to Singapore at 6.35am Malaysian time (C) H.BERBAR (file photo)
Image: imago/HBLnetwork

Headquartered near Kuala Lumpur, Malaysia, AirAsia Berhad is a low-cost carrier and one of the most successful airlines in Asia. The AirAsia Group, comprised of eight affiliates, including Thai AirAsia, Indonesia AirAsia, Philippines AirAsia, AirAsia Japan, AirAsia Zest and AirAsia X (medium and long-haul), offers domestic and international flights to more than 80 destinations in over a dozen countries across Asia, Australia and the Middle East.

Flight QZ8501 was operated by Indonesia AirAsia, 49 percent owned by the main company.

Should no survivors be found among the 162 people on board the jetliner, this would become the third aviation disaster involving a Malaysian carrier or one of its subsidiaries this year alone.

The image of the flag carrier Malaysia Airlines was tainted by two recent tragedies. The fate of MAS Flight MH370 remains shrouded in mystery ever since the Boeing 777 left Kuala Lumpur for Beijing in the early morning hours of March 8, with 239 people on board.

While satellite data suggest the aircraft crashed in the southern Indian Ocean, international search efforts have so far failed to provide any concrete evidence as to the fate of the plane. Moreover, on July 17, 298 people were killed when MAS Flight MH17 was shot down while flying over rebel-held eastern Ukraine.

The company's start

AirAsia was founded in 1994 by a Malaysian government-owned conglomerate, DRB-Hicom. The heavily-indebted company was then bought by former music executive, Tony Fernandes, in December 2001 for the token sum of one ringgit (about 0.25 USD) with 11 million USD worth of debts. In just over a decade, the Malaysian-British entrepreneur, listed as one of the richest men in Malaysia, turned the company around, building it up from two planes to Southeast Asia's biggest budget airline under the slogan "Now Everyone Can Fly."

People queue at an AirAsia counter at Changi Airport in Singapore December 28, 2014 (Photo: REUTERS/Edgar Su)
AirAsia's business model is not much different from that of other budget airlinesImage: Reuters/E. Su

AirAsia's business model is not much different from that of other budget airlines. According to the company's website, its low-cost philosophy focuses on three key strategies. First: High Aircraft Utilization, referring to the high frequency and high turnaround of flights. Second: Low Fare, No Frills. This means no frequent flyer miles in exchange for lower fares. Guests have the choice of paying for in-flight meals, snacks and drinks. Third: Point to Point Network. All short-haul AirAsia flights (four-hour flight radius or less) and medium to long haul AirAsia X flights are non-stop, doing away with the need for human resources, physical infrastructure and facilities at transit locations.

How profitable is the company?

In the third quarter, which ended on September 30, the AirAsia group, which employs more than 15,000 staff, posted a profit before tax of 26.5 million Malaysian ringgit (7.6 million USD), a slight improvement of five percent compared to the same period a year ago. Revenue was also three percent higher than a year ago. The company also claims to be the lowest-cost airline in the world, with a cost per available seat kilometer of 3.67 USD.

The morning after the disappearance of Flight QZ8501, AirAsia shares lost more than seven percent in morning trading in Kuala Lumpur.

What type of planes does AirAsia fly?

AirAsia X, the long haul affiliate of the company, regularly uses Airbus A330 aircraft for flights more than four hours. But most of the AirAsia fleet is comprised of Airbus A320 jetliners - which can seat up to 180 passengers. There are currently over 150 single-aisle Airbus A320s in service for AirAsia and another 200 orders have been placed for the new A320neo. The fleet is one of the youngest in the region, with an average age of just 3.5 years, according to company data. AirAsia is currently the single biggest airline customer for the A320.

Safety record

Before Flight QZ8501's disappearance on December 28, AirAsia and its regional affiliates had had a good safety record. The group had never lost a plane or had fatal accidents, according to industry experts. In 2013, AirAsia carried almost eight million passengers to their destinations.

For Flight QZ8501, the aircraft in use was a twin-engine, single-aisle Airbus A320-200. According to Airbus, the plane had been delivered to AirAsia in 2008 and had accumulated approximately 23,000 flight hours in some 13,600 flights.

According to AirAsia, the captain in command had a total of 20,537 flying hours of which, 6,100 flying hours were with Indonesia AirAsia on the Airbus A320.

The last fatal crash of an A320 occurred in 2008.

AirAsia's reaction to Flight QZ8501's disappearance

Special emergency briefing rooms have been set up at Singapore's Changi International Airport and the Juanda International Airport in Surabaya, where the company is providing regular updates to the relatives of Flight QZ8501's passengers.

Weeping relatives await news of the Air Asia missing plane at Juanda Airport, Surabaya, Indonesia, 28 December 2014 (Photo: EPA/FULLY HANDOKO)
'This is my worse nightmare. But there is no stopping,' tweets AirAsia's chief executive FernandesImage: picture-alliance/dpa/Handoko

The company also established an Emergency Call Center available for those seeking information about relatives or friends who may have been on board the flight. The number is +622129270811.

Shortly after the incident, AirAsia's chief executive Fernandes flew to Surabaya and told a press briefing: "We are very devastated by what has happened. It is unbelievable. Our concern right now is for the relatives and for the next of kin - there is nothing more important to us, for our crew's family, and for the passengers' families."

Fernandes also tweeted: "I am touched by the massive show of support especially from my fellow airlines. This is my worse nightmare. But there is no stopping."