AirAsia Growing Cargo Business

AirAsia is utilizing Special Prorate Agreements (SPA) with various airlines to help achieve its revenue target for 2010. The low-cost carrier is tying up with more cargo agents and large export-import firms in the markets that AirAsia flies to. It is also reaching markets beyond its current route network through other airlines with which AirAsia has SPA agreements. These major airlines extend AirAsia’s reach to more cities in South Asia, East Asia, the Middle East, Africa and Europe.

The airline, which considers cargo as a major area of growth for 2010, expects its cargo revenue to grow by more than 40% over last year’s performance.

Sathis Manoharen, AirAsia regional head for cargo, said, “We’ve been signing up more key players in the cargo industry. Demand for our cargo space is picking up, and with AirAsia now up there among the world’s most recognizable brands and with the expanded reach that we have with gour airline partners, more large companies are interested in our cargo services. Our competitive prices have allowed us to also increase business with individual senders.”

“AirAsia is growing in many markets, but South Asia is of particular interest because of our rapid expansion there. In November last year, AirAsia started flying to the three Indian cities of Kolkata, Trivandrum and Kochi. These are in addition to our other destinations in the region – Tiruchirappalli, Dhaka and Colombo. Interest from businesses there is picking up, and this should intensify when we begin flights to even more South Asian cities this year,” Sathis added.

AirAsia has operations based in Malaysia, Thailand and Indonesia. It operates short-haul and long-haul flights on 132 routes to ASEAN (Malaysia, Indonesia, Thailand, Cambodia, Myanmar, Laos, Vietnam, Singapore, Brunei and the Philippines), mainland China, Hong Kong, Macau, Taipei, India, Bangladesh, Sri Lanka, UAE, Australia and the UK.

Domestic cargo operations are also expected to receive a boost from increased demand for cargo services for perishables, including seafood from West Malaysia. Seafood and other perishables are currently among AirAsia’s significant cargo revenue sources, and there is a sizeable demand for cargo services for these between East and Peninsular Malaysia and from East Malaysia to Macau, Hong Kong and China mostly via Kuala Lumpur.

With the airline’s frequent daily flights between East and Peninsular Malaysia, it is able to deliver perishables within time frames required by exporters and importers. Also, as part of an agreement with the Cargo Terminal Operator, the airline utilizes usage of the airport’s cold room facility within a fixed period.

AirAsia’s other popular cargo are machinery and car parts, electronics, food items, shoes and apparels.

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