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AirAsia world's first airline to curb admin fee

By Liang Qiwen (chinadaily.com.cn)
Updated: 2009-06-25 11:51

GUANGZHOU: Asia’s biggest low-fare airline, AirAsia, was the first airline in the world to curb administration fees Wednesday.

The regional commercial director Kathleen Tan said the move will reduce the fare and boost up sales volume for the company, which is still profitable in the first half of this year amid the economic turmoil.

Tan said the H1N1 influenza outbreak has added to the financial struggle the aviation industry has been facing since the second half of last year due to the downturn of economy and tourism.

Currently all airlines in the world – apart from AirAsia - add an administration fee, which varies from airline to airline, to a ticket price.

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Administration fees set by some airlines are as high as 20 percent of a ticket price.

Tan said she believes the company will maintain a stable profit margin even the admin fare has been cancelled.

“We open lots of spaces for advertisements on the homepage of AirAsia, the income from advertisement can make up the loss of admin fee,” she said.

The company abolished the fuel charge fee last year, becoming the world’s first airline to do so.

At present, passengers of AirAsia will only need to pay the original air ticket and tax. But the two prices have been mixed up since yesterday.

“The air ticket price will be all-in-one price,” said Tan. “It increases the transparency of the air fare system of AirAsia and help passengers to know the air ticket fare structure more clearly.”

AirAsia’s net profit in the first quarter of 2009 hit a record $57 million, up 26 percent from a year earlier.

Tan expects a further10 percent increase throughout this year.