A Skytrax survey conducted among millions of airline passengers has awarded AirAsia the World’s best low cost airline for the eighth consecutive year. Skytrax is one of the most esteemed symbols of the airline industry and the international standard of airline excellence that has conducted millions of customer surveys worldwide to measure the quality of an airline’s front-line products and services.
The award for the world’s best low-cost airline is based on the global ratings achieved by all low-cost airlines, taking into consideration assessment of product, customer satisfaction and standards of staff service provided by the airline in both the airport and cabin environments.
Tony Fernandes, the proud CEO of the AirAsia group commended his team and thanked the passengers who had supported the airline all through its years of service. In addition to this great achievement, AirAsia also won the world’s best low-cost airline premium seat and world’s best low-cost airline premium cabin awards for four consecutive years.
The full list of world’s best low-cost airlines are as follows:
2. Virgin America
5. Jetstar Airways
9. Jetstar Asia
10. Azul Airlines
How Does AirAsia Make Money?
Being a low-cost airline, one question that naturally arises about AirAsia is what strategy it employs to make money. Although AirAsia consistently experiences loss of money on seat sales, it gains it back on ancillary revenues. AirAsia happens to be the single largest airline customer of Airbus Group SE. With a huge order of 575 planes made, AirAsia gets a big bargaining power to negotiate the prices and tailor aircraft to cater to its requirements. With so many planes in hand, AirAsia has the option to sell them to a lessor, rent them back, and use the purchase price’s premium as income. In short, the AirAsia company makes more income from selling and leasing its aircraft than it does from flying them.
The profit made by AirAsia in recent quarters has been mostly from ancillary and baggage revenues. Over the past three quarters the company has made an operating income of 642 million ringgit from non-leasing businesses. This is a huge amount when compared to the 614 million ringgit made during the previous three years. What these numbers indicate is that the airline can run perfectly well without the income obtained from lease. However, this would mean increasing costs to customers, which will take away AirAsia’s reputation of being the best low-cost airlines in the world.