AirAsia CEO Omar: ASEAN Market Remains for New Routes

8th Jun 2016

When asked today if the ASEAN market is saturated, AirAsia Chief Executive Officer Aireen Omar said this market actually remains attractive to add some new routes. According to Omar, creating demand is all about having the right platform.

She said:

There are potentials for more connectivity as well as frequencies.

Currently, AirAsia Bhd flies to nearly all big cities in the ASEAN, as well as some second and third tier cities in this region.

Speaking about the potential for expansion, AirAsia CEO said:

There are potentials for expansion in second as well as third tier cities, but it all depends on how the open sky policy will turn out to be and the implementation of ASEAN Economic Community. However, even without this open sky policy, AirAsia went around the rules by having joint ventures and expanded in ASEAN.

She also said that, had open sky policy and liberalization of the airline sector been done earlier, AirAsia would have been able to expand faster and added:

It would have enabled us to mobilize our resources better, which means reduction of cost for the airline.

Old Regulations are Disrupting Capital and Investment in the Region, Says Fernandes

According to AirAsia Group Chief Executive Officer Tony Fernandes, the old regulations are doing nothing but disrupting the capital and investment in the ASEAN region.

He commented:

In some places we want to put more capital but our local shareholders are not ready to do so and it leads to inefficient use of capital as we are prevented from doing it due to outdated regulations.

AirAsia Group CEO also said:

We can’t say we control the airline (in some ASEAN countries), which results in associate kind of accounts that doesn’t give the true picture ala RyanAir and EasyJet.

When asked if the ASEAN is overcrowded, Fernandes said there is no such thing and added:

There are about 400 aircraft in ASEAN, while in Europe there are about 3,000 and we are a much bigger market.

Mr Fernandes also took the time to comment on the Value Alliance, saying:

It’s fantastic that a bunch of low-cost airlines have got together to create Value Alliance. We have to compete, just like we have been doing all these while. So, we will adapt and we will get better.