AirAsia announces deal to fly Malaysia civil servants
KUALA LUMPUR, June 19, 2008 (AFP) - AirAsia said Thursday it had sealed a deal to get some business from the Malaysian government, which currently only flies civil servants on state-owned Malaysia Airlines.
"We hope to secure up to 50 percent of the government expenditure on air tickets," the budget carrier's chairman Aziz Bakar told reporters. "It will contribute 20 to 30 percent to our bottom line."
Tour operators estimate the government spends about 500 million ringgit (153 million dollars) annually on flights for the nation's one million civil servants.
AirAsia, launched in December 2001 with just two aircraft, has become the region's biggest low-cost carrier and is in fierce competition with Malaysia Airlines.
Top officials from the two companies have been engaging in an increasingly bitter war of words and have withdrawn the discount offered to each other's chairmen, one of the genteel traditions in the cut-throat aviation industry.
This is how MAS responded:
MAS: We offer wider choice for civil servants
by Tony C H Goh
KUALA LUMPUR: Malaysia Airlines issued a statement yesterday stating that the national carrier remained the premier air transport group for government officials.
This follows a news report that AirAsia Bhd is targeting one million civil servants to fly the low-cost carrier (LCC) instead.
MAS said the group, including its subsidiaries Firefly and MASwings, offered a wider choice of domestic and international routes to government officials.
The Edge Fnancial Daily reported yesterday that AirAsia planned to announce this week an agreement with the government that would allow the more than one million civil servants to fly with the budget carrier.
Its chief executive officer, Datuk Tony Fernandes, said adding the large pool of potential customers was a “big step” for the company as there had been an “unwritten rule “ that government servants could only fly with MAS for work-related travel.
MAS said it had partnered the government since it took to the skies on Oct 1, 1972 and had transported many civil servants within the country and overseas on Government of Malaysia (GOM) travel, providing them vital connectivity for their official duties.
The national flag-carrier said the government had, in 1998, allowed its officials on GOM travel to use Malaysia-based LCCs — Pelangi Airways, Berjaya Air and Transmile Air — in addition to the airline, for domestic travel. It said the government had also approved international sectors GOM travel on Malaysian LCCs from Feb 1, 2008.
“We welcome the increased travel options for our civil servants. Since our business turnaround plan (BTP1) in 2006, our passenger uplift for this GOM traffic rose from around 450,000 in 2006 to more than 500,000 last year, representing an increase of 11%,” MAS commercial director Datuk Abdul Rashid Khan said.
“Whilst we remain the preferred air carrier for GOM business, we also assist our subsidiaries and code-sharing partners by directing this business to them when we do not operate the specific destination or on days GOM travel is required to provide a wider global reach for our GOM customers,” he said.