‘Have heart for us’: Fernandes justifies high KK-KL fares during peak seasons, says AirAsia must make money too

Malay Mail
Malay Mail

KOTA KINABALU, Dec 4 — Tan Sri Tony Fernandes has today asked the public to consider that AirAsia needs to garner profits as well to cover the RM4 billion lost last year, amid criticisms over high fares for Kota Kinabalu-Kuala Lumpur flights during peak seasons.

The Capital A Bhd chief executive claimed that AirAsia still offers the most affordable and low prices outside the peak seasons, and high fares were to be expected during peak seasons.

“Have a heart for us, we lost RM4 billion last year. We lost RM 400 million in the last quarter. We have to make money too.

“We will do our best to bring down fares, but we still have low fares throughout the year,” he told reporters here.

Last week, the airline group reported that it slashed its net loss to RM178.82 million for the third quarter of 2023 compared with RM901.31 million in the corresponding quarter a year ago, while revenue jumped to RM4.23 billion from RM1.96 billion in the same period.

For the nine months until September 30, 2023, it reported a net profit of RM996.55 million compared to a net loss of RM2.74bil in the previous corresponding period, while revenue more-than-doubled to RM9.9 billion from RM4.24 billion previously.

Fernandes had earlier said that the fares between the Sabah and the country’s capitals are unlikely to come down lower as airlines also have to contend with soaring fuel costs against the US dollar.

The AirAsia boss said that while the US dollar is still strong, the airlines could not offer much lower prices and said that inflation was causing the increase in prices of everything.

“I can’t control oil prices. Oil prices are soaring and the US dollar is strong. Seventy per cent of our costs are calculated in US dollars. As long as the US dollar is strong, our costs will rise.

“Our philosophy is to provide fares as low as possible, so if the costs fall, the fares will be reduced... but we are still substantially cheaper than anywhere else,” he said.

Asked whether it was possible to increase flights to help the demand and supply balance, Fernandes said that it would help, but was unlikely to be significantly lower in fares.

“Increasing flights will definitely help, but we still have about 40 passenger planes that have not yet taken off, so we hope to get financial support.

“It is not easy to take 200 aeroplanes out of storage. So it will help but can’t be much lower fares when the US dollar is strong,” he said.

Fernandes was here to launch a special tribute livery of former Sabah Tourism Board general manager the late Datuk Irene Charuruks on one of AirAsia’s planes.

The expensive flight tickets between East and West Malaysia have been a long-standing point of contention for Bornean Malaysians, especially in recent years. During festive seasons, flights were not only scarce, but also reaching up to thousands of ringgit each way.

Fernandes argued that the airline’s load factor was at 92 per cent, which meant that people were still flying, which could be interpreted as the fares were not beyond affordable.

He said that there were many ideas thrown around to deal with festive season fares and that he welcomed suggestions from the government.

“We have had midnight flights, and the government buying aircraft slots from us...but it is difficult for us to provide different air ticket prices for different groups. Maybe the government can provide more suggestions or opinions.

“But the bottom line is we can still provide air travel to 98 per cent of people and we are looking to invest in new routes too,” he said.