Friday, January 7, 2011


In early 2005, Air Asia shook up the travel industry offering dirt cheap fares over the internet. Booking a flight has never been so easy and cheap. Everyone can fly.

As time goes on they began jacking up fees on everything from checked bags to credit card reservations. Consumers squawked, but the charges stuck, and fees have become a crucial revenue source for the red carrier.

Now Air Asia should be trying to rewrite the rules on ticket sales through global distribution systems and the travel agencies they do not support. Air Asia has never paid commissions to the middleman and drive more consumers to its website, it could net hundreds of millions of ringgit up front in new revenue and savings. And you can bet that other airlines would follow.

Because Air Asia is the only carrier that flies non traditional routes they have created a niche for themselves. Those tickets are still being sold only at their own site. And Air Asia officials said that sales are trending ahead of last year since Dec. 31.

The company once made a splash by offering more legroom in certain rows, only to learn that customers would not pay extra for it. So Air Asia reconfigured cabins to squeeze in more seats. With its higher fees, only customers who check bags or change a ticket end up paying more.

Air Asia will not reshape the distribution system, travel agencies and GDS companies will continue to take the hit. This is destructive to the travel industry, but extremely great for the traveller.

No comments:

Post a Comment