Flying should be free?

I'm sure you all know this guy on Asia Inc cover below...

yes... he's my friend Tony Fernandes, Group CEO of AirAsia. Gary Hamel recently said that AirAsia is now the lowest cost airline in the world. Can you imagine that? After 4 years in operation, the regional brand is now becoming one of the biggest phenomenon in the global airline industry.

One key factor to its success is of course its cost-efficiency culture. Lowest cost is like a religion, as Tony said recently in an interview.

That's why he was not afraid at all confronting competitors with the cheapest possible cost... like what they did againts Tiger last time....

....

And that's why they are not afraid to give 2 million seats away for free during its 4-year anniversary commemoration

Giving away free seats may be the next big thing in the low-cost industry.... In Europe, Ryanair is doing the same thing....offering free seats, while giving passengers another service and that is to play casino..

Crazy huh ?

Flying should be Free!

Comments

[Alvin Huang]

I guess besides pursing Cost-leadership. AirAsia under the leadership of Tony Fernandes embraces and employs innovative marketing campaigns too.

Tie em together and bang you got a success. From the way that he shared his views at Adasia 2005, appears that he has been following and implementing the success strategies of Southwest Airlines too. Amazing person. =)

[J. Mangkey]

Wow... one day I'll try to fly Airasia... great and generous offer...

[Togap Siagian]

Hehe.. I love this.. Flying should be free? Hm.. That's supposed to be a dream, right? But Tony Fernandes has proven that it's doable.

Just wonder. Has AirAsia become the number 1 airline in the region? Or it just becomes the airline of choice for the cost-concious customers? If it has not (and neither do RyanAir in Europe and JetBlue in the US), what's the best business model for airliner then? (from the marketing perspective)

[Wahyu Wijanarko]

Last week I saw Discovery Channel, about accident of MD-80, because lack of maintenance. Airline bussiness have high risk for it's passengers, so when Airline company give low cost they should not cut their maintenance and safety budget.

[M. Arief Budiman]

Nice writing, Mr. Hermawan.. reading what's going on and predict the future is one of your expertise. It opens my perspective, marketing game is a simple game but you have to be different for proposing a benefit to customer. I wait your next big thinks..

[shien]

Pak Hermawan,
i think that's the greatest thing that even our local airlines couldn't make our people's dream come true (to fly, I mean..).
Now everyone can fly. that's good.
cheers,
shien

[Yudh@ccess]

This type of company will grow rapidly in Asia because Asia have big demand for low cost carrier and most of airport in Asia offer cheaper Airport Tax then in Europe.

For Example Ryan Air, You only paid EUR 8,99 (return flight) from Amsterdam to Rome, but you have to pay taxes around EUR 75,00.- plus you have to pay credit card charge EUR 2.50 and extra EUR 11.- for the insurance (not compulsory)

If you choose Regular Airlines, you have to paid EUR 199,-. But many European Residence prefer to flight with their own country regular flight (UK - British Airways, Germany - Lufthansa, Netherlands - KLM, France - Air France) even they have to paid EUR 100,- more.

You'll be wonder with this condition for sure. People in Europe prefer to pay more for their safety and insurance. You'll understand after you learn and expreience they way of life. It's really common way of life for modern countries like Europe.

For students, regular Airlines already prepared special fare. Besides Europe have really tight regulation for Air Carrier, even some countries such as France and Belgium already banned more than 10 airline companies.

That's my overview to compare the condition in Europe and Asia. I think, it'll be interesting to know different reaction between two different market.

[Zilko]

In my opinion, the airline still mustn't cut the maintenance and safety cost. I think people will still prefer a more expensive airline but it's guaranteed to be a safe trip than a low-cost airline but its maintenance is not very good and very risky...

However, the idea of efficiency is still a great idea.

Wow, only 0,49 SGD (around Rp. 3100,-) from Singapore to Bangkok??? I think noone is not interested in that.... .