AirAsia maintains no fuel surcharge policy despite reports

Kolkata : Asia?s largest low-cost airline AirAsia is maintaining its no fuel surcharge policy despite reports that other airlines are increasing previously imposed charges, said a top official on Wednesday.

According to the airline, it is ?committed? to keeping air travel affordable for all and has chosen to tackle fuel price hike with aggressive marketing and the strengthening of its ancillary business instead of relying on fuel surcharge to offset rising fuel cost.

?AirAsia scrapped out fuel surcharge in November 2008, and we have no intention of resurrecting it,? said Kathleen Tan, Regional Head of Commercial, AirAsia.

With low-cost long-haul affiliate AirAsia X, it flies to 62 destinations in Asia, Australia and Europe.

?Our strong seat sales and successful ancillary income are enough to offset the rise in fuel price. Rather than impose a fuel surcharge, we use innovation to drive our costs down and are looking at various other revenue streams. As the people?s airline, our commitment is to give our guests more opportunities to fly with our affordable low fares,? Kathleen said.

?Imposing fuel surcharge may be an easy way out, but it can also be an addiction in driving artificial revenue to a company,? Kathleen added.

The airline has been deriving healthy ancillary income from products such as Baggage Supersize, AirAsia Insure, AirAsiaGo, AirAsia Courier, Pick a Seat and AirAsia Megastore.

Last year, ancillary income for the entire AirAsia Group (AirAsia Berhad, Thai AirAsia and Indonesia AirAsia) was approximately RM 603.5 million, 14.6% of the group?s revenue. As of the first half of 2010, the group?s ancillary income was RM 460.9 million.

To further grow revenue, the airline has been monetizing its website airasia.com, which draws millions of unique visitors from around the world. This year to date alone, www.airasia.com has drawn more than 33 million unique visitors.