Some time ago we had JetBlue had its infamous All-You-Can-Jet promotion, now AirAsia is bringing in the ‘AirAsia ASEAN Pass’ designed for one months travel around SouthEast Asia.
To be introduced early 2015, the ASEAN Pass is designed to increase the Tony Fernandes owned budget airlines revenue whilst also boosting tourism in the region.
Fernandes, AirAsia’s sometime eccentric Chief Executive, friend and one time employee of Virgin’s Richard Branson, stated the AirAsia ASEAN Pass will allow travellers to fly to 10 different destinations for as little as MYR499 (approx US$150). ASEAN pass is also seen strategically as a ‘catalyst’ for an increase in travel generally, with the added bonus of luring in foreign tourists.
According to a recent research, the regions rapid economic growth has seen current international tourists approaching 230 million with an expectation this will continue to grow annually at 6.7% for the next 15-20 years.
Although unrelated, AirAsia felt the impact of the Malaysian Airlines disasters earlier in 2014 with a drop in passenger numbers and a net loss for the airlines long haul arm AirAsia X of US$63 million and AirAsia reporting a net drop in profit of 85%, resulting in an announcement to delay delivery of new aircraft and cutting flights on some routes, particularly to Australia. Fernandes remains confident for a return to overall profitability with improving fuel costs and the new initiatives in hand to take advantage of a rebound in demand.
The AirAsia move with the ASEAN Pass shows that low cost and budget airlines are looking to shake up the industry with unique and novel ways of staying ahead of the competition to gain market share. A market that is enjoying growing income levels in the region with budget airlines in general already claiming around 25% of the air travel market.
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