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AirAsia Cuts Fees to Boost Travel

June 24, 2009 By: Alexia Dellner


Malaysian budget airline AirAsia has removed administration fees on all of its flights, lowering fares in an attempt to bolster sales amid the global economic crisis.

AirAsia chief executive Tony Fernandes said removing the fee creates further savings for passengers as they will now have to pay only the fare and airport tax. AirAsia removed fuel surcharges in November last year.

Scrapping the fee would see a reduction of up to 43 ringgit ($11.35) per ticket and removing it will cost the airline 400 million ringgit ($113 million) a year.

Airlines worldwide are feeling the burden of the global economic crisis. Many have cut back on services and shed their work force in attempts to deal with the recession. Some airlines, like Germany's Lufthansa, have actually increased fuel surcharges.

But AirAsia is expanding. Its net profit in the quarter through March hit a record 203.2 million ringgit, up 26 percent from a year earlier. Fernandes expressed confidence that AirAsia would be able to continue expanding as passengers cut costs by flying budget airlines, and suggested that airports around the world should also reduce their charges in order to encourage travel.

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