NEW AIRLINE - Fernandes wants to replicate AirAsia's success at Teleport

The CEO of Capital A, owners of the AirAsia Aviation Group, is using its successful AirAsia low-cost passenger airline model as a template for its nascent freight operation. Tony Fernandes wants to shake up the airline logistics model in the region in the same way that AirAsia shook up the intra-Asian passenger airline model.

"Cargo was one of the pluses, if there were any, during Covid," Fernandes told Channel New Asia at the recent Milken Summit in Singapore. "We saw a huge opportunity in logistics. We've just got one freighter. We're taking two more. We are now the market leader in ASEAN for air cargo. We're developing a first-mile and last-mile e-commerce and courier business.

The single freighter, a 22-year-old A321-200(PCF), arrived at AirAsia in mid-2023. At a hangar event in July marking the aircraft's arrival, Fernandes said he expected another two A321 freighters this year and a further seven within 18 months.

"We're very excited with our subsidiary, Teleport, which we think can replicate what AirAsia did in passengers, we can do it in logistics, and as we go to many secondary and tertiary cities, cut out time and cost for users of logistics services."

While the aircraft will wear Teleport livery, AirAsia crews will fly and maintain them. Fernandes said he intends to base the aircraft across several of Capital A's AirAsia brands, including Philippines AirAsia, Thai AirAsia, and Indonesia AirAsia.

Separately, Fernandes said he has no problems attracting and retaining flight and ground crews to keep his aircraft in the air. "We've always been good at training, recruiting, hiring, and keeping our staff." However, the supply of aircraft from Airbus is a problem, although not one exclusive to Capital A. But Fernandes says the silver lining of the delivery delays was that capacity was maintained "at reasonable levels, and there's not crazy price cutting."

Fernandes added that the other supply chain issue concerns engineering and turning around engines. "These things are taking much longer because many experienced staff have left the industry, but that's improving as well, and I hope to get to a steady state in terms of supply chain by the middle of 2024.”

NEW AIRLINE - Capital A plans to base Teleport A321Fs in the Philippines

The CEO of Capital A, the investment arm of the AirAsia Aviation Group, is eyeing a significant expansion of freight operations in the Philippines. Last week, CEO Tony Fernandes said Capital A intends to assign several A321-200(P2F)s coming to its Teleport logistics arm, to the market.

Speaking at the unveiling of Teleport's first freighter to be operated by AirAsia (AK, Kuala Lumpur International) in Kuala Lumpur on July 12, Fernandes told the media that "(the) Philippines is where we see Teleport to be a very big operation. Obviously, Philippines AirAsia (Z2, Manila Ninoy Aquino International) is doing most of Teleport's work right now through belly space. But in the not-too-distant future, the ten aircraft that we're talking about, some will be destined for the Philippines."

Fernandes said another two A321Fs will deliver to Teleport this year and the other seven within 18 months. The first three aircraft are arriving on seven-year leases, and although they will wear Teleport livery, AirAsia crews will operate them. Highlighting the importance of the Philippines to the AirAsia Group, Capital A officials said in raw volume terms, the Manila - Davao route was the group's best performing route.

In June, Fernandes said he was "excited" to put more investments into the Philippines, where the AirAsia Philippines passenger operation is now recording better passenger numbers and load factors than before the pandemic. Capital A has also stated its interest in expanding its MRO operations in the country. Fernandes says one option is bringing Asia Digital Engineering (ADE) to the Philippines. ADE is Capital A's aircraft engineering business with line maintenance and warehouse facilities in Kuching, Penang, Kota Kinabalu, Langkawi, and Johor Bahru, and a full suite of MRO facilities at its Kuala Lumpur International hub.

"We have a great logistics business coming, Teleport Philippines, which we think will be great for e-commerce providers in the Philippines to sell their goods all over," said Fernandes. "We want to build an engineering company here, on top of Lufthansa Technik's. We would like to bring in ADE, which is really a fantastic engineering company."

CH Aviation