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AirAsia X Berhad • Annual Report 2013
“
World’s LARGEST
LoNG-HAUL LOW-COST Airline
”
- CAPA
CEO’s Report
We burn less fuel per passenger thanks to
multiple contributing factors that include having
higher seat density per aircraft; reduced weight
configuration of our aircraft from not having
built-in inflight entertainment systems and leg-
rests; and maintaining a disciplined approach
to flying and engine maintenance to decrease
our fuel consumption. Irrespective of the price
of fuel, therefore, we will always burn less per
passenger than other airlines, and provide a cost
advantage at any fuel price.
Supporting our fuel initiatives is a comprehensive
fuel management framework encompassing
effective fuel procurement and fuel hedging
practices.
CULTURE OF INNOVATION
AirAsia X has come a long way. We have created
a path where none existed before. We have
achieved what conventional wisdom deemed
impossible. In order to do this, we have had to
wipe clean the standard aviation industry slate,
debunk accepted norms, and come up with new
ways of doing things in order not just to survive
but also to thrive. We’ve been able to do this,
quite simply, by being creative and innovative.
From the very beginning, we made a mark for
being innovative and becoming true pioneers in
terms of service and product offerings. In 2007
when we launched, we were one of the earliest
in the industry to introduce assigned seating for
a LCC. We realised passengers would appreciate
being able to choose where they sit, and being
able to board the plane in comfort – without
having to jostle with others. In 2009, we also
launched another pioneering service for the
LHLCC sector – Premium Flatbed seats which
can be fully reclined, offering comfort especially
on night flights.
We also solved the conundrum of having too
much food onboard leading to wastage, or
too little and having hungry passengers, by
introducing pre-booked meals. Again, this
service is much appreciated and has inspired us
to increase the selection of dishes on our menu,
which today is one of the most extensive and
popular among all airlines.
Other innovations have included a multi-
tiered pricing for baggage; portable inflight
entertainment; and Fly-Thru, which provide
added convenience to passengers who have
connecting flights across the AirAsia Group,
such as free replacement connecting flights if
they miss their original connecting flights and
having their baggage checked-in to the final
destination.
What is especially gratifying about these
innovations is they add to our income, as
passengers pay nominal fees to enjoy the extra
perks. We have grown passenger ancillary spend
per passenger from RM119 in 2009 to RM145 in
2013, which now accounts for 21% of our total
revenue (including travel insurance; excluding
cargo). Our cargo business on its own brings in a
sizeable income, amounting to RM90.0 million in
2013, and additional 4% of 2013 revenue.
During the year, we introduced two new services
that add to our ancillary income: Red Carpet and
the Quiet Zone.
Red Carpet offers our passengers a premium
experience from the time they check-in to the
time they collect their baggage at their final
destination. It includes a dedicated check-in
counter, priority baggage tagging and loading,
access to the Plaza Premium Lounge at LCCT,
fast-track immigration, security clearance and
priority boarding with buggy service to the bay
(subject to aircraft parking bay distance) as well
as priority baggage delivery upon arrival.
The Quiet Zone allows our passengers to choose
seats in an area reserved for those aged 12 and
above, hence can be more peaceful than the
rest of the plane. This dedicated cabin section
with special mood lighting comprises eight rows,
from 7 to 14, directly behind our award-winning
Premium Flatbeds.
Our innovations have allowed us to stay ahead
of the competition, and maintain our position as
the preferred LHLCC with the highest customer
satisfaction ratings, according to Skytrax. We
have been able to create a culture of innovation
at AirAsia X by encouraging the exchange
of ideas in an open and non-hierarchical
environment. We keep challenging ourselves in
order to improve our services and maintain our
high level of customer satisfaction. Even as an
LHLCC, we do not compromise on reliability
and service quality, as these are paramount to
attracting and maintaining customers. Our 2,011
Allstars use their own travel experiences as well
as observations of our passengers to identify
kinks in the system, which we subsequently
try to resolve. We have created a culture in
which we do not shy away from challenges and
complaints, but embrace them. As a result, we
keep innovating and evolving, often with positive
results, sometimes not. But we view mistakes as
part of the entire process of improvement, and
use them as key learnings to enhance the airline
and our growth prospects.