AirAsia to turn Penang into fourth hub in Malaysia

Penang is suitable as a hub because it is a tourist destination and a fast-growing industrial and trading centre, says AirAsia

BUDGET carrier AirAsia plans to turn Penang into its fourth hub in Malaysia as it continues to expand its network and add more destinations from the island.AirAsia Bhd (5099) regional head of commercial Kathleen Tan said AirAsia will start flying from Penang to Hong Kong four times a week starting July 31, with one-way fares as low as RM99.

The airline will also be adding a second daily flight between Penang and Singapore due to popular demand. Its existing load factor for this route is above 90 per cent."Penang is suitable as a hub because it is a tourist destination and a fast-growing industrial and trading centre," Tan told Business Times in a phone interview yesterday.

She said Penang had previously been a virtual hub for AirAsia as it did not park planes at the Penang International Airport.But the airline will start parking one plane at the airport as of July 31, as it starts flying to Hong Kong and adds its second daily frequency to Singapore.

"We are looking at a second plane next year as we continue to build Penang as a hub. There is heavy investment in terms of human capital and equipment in building a hub," said Tan but was unable to provide a quantum.

AirAsia has eight hubs in total now, including Kuala Lumpur, Johor Baru, Kota Kinabalu, Bandung, Bali, Jakarta, Bangkok and a "virtual hub" in Singapore."What we need right now is a good low-cost carrier terminal (LCCT) in Penang, as we can easily have up to 10 planes there.

By comparison, we have six planes in Kota Kinabalu," she said.Tan added that a LCCT in Penang will allow for lower passenger airport taxes, as passengers departing from Penang International Airport currently pay RM51 in airport taxes.

"In comparison, our passengers departing from KL (LCCT) and Kota Kinabalu (LCCT) only pay RM25," she said.AirAsia will also look to add more international destinations from Penang next year, including Chennai and Bali.

International flights from Penang now are to Singapore, Bangkok, Medan, Jakarta and Macau.Tan added that concerns surrounding the influenza A (H1N1) virus was unlikely to dampen travel to Hong Kong, as many passengers wanted to capitalise on cheap fares.

"This seems to be the best time to travel due to good deals, more so for the youth market which is not worried about the recession or the flu," she said.Tickets for the new flights to Hong Kong and Singapore are open for sale until July 12, for the travel period from July 31 to April 30 2010.

The all-in fare of RM99 to Hong Kong and RM51 to Singapore is exclusively made available online at www.airasia.com.