Malaysian budget carrier Air Asia and subsidiary Air Asia X, which last month stunned the aviation market by offering short-haul international flights out of Kuala Lumpur priced from US$0.29 to $3.21 have opened a new battle front on the cargo market.
Traditionally, budget airlines seldom target cargo business as it will lengthen the turnaround time of their aircraft, which will jeopardise their strategy of extracting a maximum utilisation rate of their fleet, the South China Morning Post reported.
Also, since most budget airlines are start-ups, their priority is typically passenger business.
However, Air Asia plans to change this model.
The carrier's target is to double the contribution of cargo revenue to eight percent of the total for the two airlines in two to three years. To reach this target, the absolute increase in cargo revenue would have to be more than double the growth in revenue from passenger tickets, which would also be increasing over the same period.
To achieve its aim, Air Asia had launched a pricing strategy in the cargo market that was even more aggressive than its campaign on rock-bottom passenger fares, so that it could build up its brand name among exporters, he said.
But agents said freight rates to Europe from Kuala Lumpur would be priced at a 30 percent discount to the average market price, which would be aimed at overcoming the disadvantage to shippers of a longer transit time for trucking shipments from London's Stansted Airport, which Air Asia X started serving in March, to Heathrow Airport.
Customers making shipments to and from the mainland would be a major market target of the low freight rates, said Air Asia, and together with Air Asia X, it had increased the group's coverage of the Greater China market to about 10 destinations by flying A320s and A330s to Chengdu, Tianjin and Taipei from Kuala Lumpur this year, in addition to existing destinations, including Hong Kong, Macau, Shenzhen, Guangzhou, Hangzhou, Haikou and Guilin.
Cargonews Asia
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