Flying High with AirAsia
Watch the video with Andrew Stotz or read a summary of the World Class Benchmarking on AirAsia Berhad.
Background
AirAsia Berhad (AIRA) is a Malaysian-based, low-cost airline, providing long and short haul, point-to-point domestic and international routes.
It primarily operates in the Asia Pacific region and currently serves about 200 destinations across Asia, Australia, New Zealand and the Middle East.
Business Description
AIRA earns revenues via seven business segments. Its main contributor is scheduled flights, comprising 55% of total sales. These are forward bookings of clients for future travel. Meanwhile, the charter flight segment, flights that are not part of AIRA’s regular schedule, contributes 14% of total sales.
The ancillary segment offers a 16% contribution to total sales and includes assigned seating, cancellation, documentation and other fees, as well as the on board sale of meals and merchandise.
Other business segments include aircraft operating leasing, freight and cargo, and fuel surcharge and management fees.
The group’s network has about 200 destinations spanning 24 countries. Its affiliate airlines include AirAsia India, AirAsia Japan, AirAsia X, Indonesia AirAsia and Philippines AirAsia
AirAsia is considering the sale of its leasing arm Asia Aviation Capital (AAC) with an equity value of around US$1bn including debt.
Leadership
Abdul Aziz Bin Abu Bakar was appointed chairman on 16 June 2008 until Kamarudin Bin Meranun took over that position in November 2013.
Chairman Kamarudin Bin Meranun’s prudence in setting the business direction of AirAsia has earned him a number of upgrades in his role with the company before taking over as chairman. On 13 January 2012, Datuk Kamarudin was re-designated from Group Deputy CEO (a position he held since December 2005) to Deputy Group CEO. He has served with the company since 2001.
CEO Tony Fernandes has served in his capacity since 2001, when he and several partners bought AirAsia from its former owners. AirAsia’s financial metrics have improved greatly in the last two years.
World Class Benchmarking
Profitable Growth has improved to World Class from #9 in 2014. This ranks them among the best 140 of 1,400 large industrial companies.
Profitability has improved to #3 from #7 and Growth has improved greatly since 2014’s rocky period.
Both Profit Margin and Sales Growth now place it in the top tier among its peers. As recently as 2014, AirAsia was at the back of the pack in these metrics. The last two years have been improved sentiments.
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