AirAsia eyes five-fold increase in profits from regional push
SEPANG, June 18 — AirAsia is aiming for an up to five-fold increase in group profits from its regional expansion plans, said its group CEO Tan Sri Tony Fernandes today.
The group currently derives about 90 per cent of its profits from AirAsia Malaysia despite having subsidiaries in Thailand, Indonesia, Philippines and Japan.
“We want to focus on creating a powerful Asean-Asian airline and make Japan, Indonesia, Thailand and Philippines as profitable as Malaysia,” he said in a speech today. “That's our goal – to realise the potential of what we've built.”
He later said in a press conference that if the AirAsia group gets it regional initiatives right it could be looking at a 400 - 500 per cent increase in profit.
Fernandes' move to base AirAsia's regional operations in Jakarta, where the Asean secretariat is located, caused some to speculate whether the businessman lacked confidence in Malaysia or was unhappy over the way the MAS-AirAsia share swap had turned out. He said today however that the move to Indonesia's capital city would allow his AirAsia Malaysia successor, Aireen Omar room to grow.
“We are not abandoning Malaysia,” he said. “If we are in Malaysia, we will be all over her (Aireen).”
He added that AirAsia needs to shift its focus from domestic to regional.
“The enormous potential in an underserved market of 3 billion spread across Asean, Northeast and South Asia offers huge opportunities – and AirAsia we are convinced is ideally positioned to reap huge dividends by serving this market.”
He said that establishing a regional office in Jakarta would give the regional team the distance it needed from the country operations.
“Ideally AirAsia Asean will provide us an environment free of the pressures of day-to-day operations and the necessary 'firefighting' that accompanies these endevours and allow our senior managers the space, time and the interaction so vital to keep us flying higher in our second decade,” he said.
