Flight QZ8501: What is AirAsia?

  • 28 December 2014
  • From the section Business
Air Asia

Now one of Asia's most successful carriers, AirAsia was once a struggling Malaysian government-owned company.

In 2001, former music executive Tony Fernandes bought the heavily-indebted firm for a token sum of 25 cents.

Keeping the brand name, he created Asia's first low-cost airline, taking on local established rivals such as Malaysia Airlines and Australia's Qantas.

With the slogan "Now Everyone Can Fly", AirAsia now covers approximately 100 destinations across more than 15 countries, although many of these flights are serviced by associates and subsidiaries that use the company's brand name.

It is one of these associates, Indonesia AirAsia, which was operating flight QZ8501 from Surabaya to Singapore when it lost contact with air traffic control on Sunday morning.

It flies Airbus A320 aircraft along more than 30 routes, to destinations in Thailand, Malaysia, Indonesia, Singapore and Australia.

Indonesia AirAsia is 49% owned by the main company, but has a separate chief executive, Sunu Widyatmoko. The rest of the firm is owned by Indonesian shareholders.

Indonesia's government prohibits foreign companies from owning the majority of any civil aviation firms.

Image caption The boss of AirAsia Group, Tony Fernandes, is also chairman of Queens Park Rangers football club in the UK

AirAsia's business model is similar to other so-called budget airlines. It offers no business or first class seats, and the average fare is roughly 170 Malaysian ringgit (£30; $48).

In the three months to the end of September, the AirAsia group made a pre-tax profit of 26.5m Malaysian ringgit (£4.8m; $7.6m), and carried almost 5.3 million passengers.

However, the number of passengers carried by Indonesia AirAsia was down by 10% in the same period, dropping to 1.85 million after the airline cut some of its routes.

In 2013, it carried almost 8 million passengers in total.

Indonesia AirAsia was set to float on the stock market in the last couple of years, but rising costs and the depreciation of the country's rupiah currency against the US dollar have delayed such a move.

Indonesia AirAsia flies just one type of plane - the Airbus single-aisle A320.

The A320 seats between 150 and 180 passengers, and is known for its distinctive wingtips, which were designed to make the aircraft more fuel efficient.

Airbus says the A320 used on flight QZ8501 had accumulated some 23,000 flight hours over 13,600 flights.


Analysis: Sharanjit Leyl, BBC News, Singapore

AirAsia's brand image is closely tied with its chief executive, Malaysian entrepreneur Tony Fernandes, who took over operations in 2001. Almost always in jeans and an AirAsia cap when interviewed, Mr Fernandes was seen as Malaysia's answer to Richard Branson.

In the same way that Mr Branson took on the dominance of British Airways in the 1980s, Mr Fernandes wanted to compete with established long-haul carriers in the region - like Malaysia's own flag carrier, Malaysian Airlines.

He's listed as one of the richest men in Malaysia and has always been adept at spinning his marketing message out to the media. With this plane's disappearance, he's wasted no time in tweeting out messages of support to the family and has already arrived in Surabaya along with members of the Indonesian affiliate of AirAsia.


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