Airasia is just killing competitors locally

When I wrote the article on Airasia and MAHB working together, I meant to be for both to do well. You know whenever I read the monthly traffic report by MAHB, there is feeling that MAHB just wanted Airasia not to be doing well. That strategy just failed although Malindo and MAS probably treat the MAHB people better. (I am just speculating but that is a norm - especially when dealing with a Group CEO like Airasia who can be difficult and loud.) Why I say this, just read the report by MAHB - it may sound neutral but it is not.

But just look at these numbers as above for example which came out today (10 July 2017). Airasia is delivering and taking up market share. If you look at the ones on yellow box, one can already see it. Which airline does local flights in KLIA2? Airasia only. Which airlines do local flights in Malaysia through KLIA Main? MAS and Malindo. Airasia's June 2017 against June 2016's number grew 16.6% while those that went through KLIA Main dropped (surprise? - as this is a Raya month for 2017 as against 2016 which was in July 2016)

Note: It is harder to analyse numbers for KLIA Main as all other airlines use that terminal as against only Airasia, Airasia X and perhaps Tiger and Jetstar use KLIA2 (in a small way i.e. flight from Singapore)

Perhaps some of the traffic went to the international flights for MAS and Malindo as they probably have reduced their quantum of local flights in Malaysia. Or it could also be their load factor just dropped.

Just note that one should not look at year to date numbers or LTM numbers for comparison as Malindo moved from KLIA2 to KLIA Main last year 14 March.

Let me tell you - based on my observation (and not just from the above table) - Airasia is just flying in terms of bringing traffic as against its main competitors. For Airasia, it is not just load factor that has gone up but also its margin from higher ticket prices and lower fuel costs (as against several years ago). The main costs for Airasia that has gone up is the higher purchase price (from foreign exchange) for new planes and staffs costs. But yet again that happens to its competitors as well. The new planes that it brought is apparently this time is not to replace the old ones but to increase its total seats - and that is because it cannot meet new demand.

I am not just optimistic on Airasia because of my investment that I made 2 years ago but because they are continuously outperform my expectation. I think the message to MAHB is to just face it - Airasia is to dominate in the future - it will probably do the company well - unless higher traffic and profitability is not the main agenda for MAHB.