Image credit: AirAsia

AirAsia group chief executive officer ,Tan Sri Tony Fernandes, said that as Malaysia has become a “cash machine” the management was turning its focus to other core markets in Thailand and Indonesia. He expects these entities to generate similar profits to Malaysia in the future.

“We have also kept to our promise by delivering our first listing in Thailand, and soon Indonesia this year as both companies become financially dependent on their own balance sheet,”

The company’s other focus is to develop new entities in Philippines and Japan where LCC penetration is still at its infancy and there is good growth potential.

“We have put in a strong management team who shares our vision and strategy, which will enable them to achieve similar dominance like Malaysia, Thailand and Indonesia,” Fernandes said.

On Singapore, he is of the view that the Lion Ciy “is best served as a virtual hub as most of the routes served are from established hubs in the AirAsia network, and we believe there is an excess of capacity already out of Singapore.”

Routes of less than three hours allow better revenue returns due to more sectors flown, and AirAsia has remained focused on that strategy. This is also the rationale behind the airline’s recent termination of longer routes like Kuala Lumpur to Colombo.

“Routes originating out of Singapore to larger population countries like China and India tend to be more than five hours, hence AirAsia’s decision not to proceed with any venture there in the foreseeable future,” said Fenanded.

This lends credence to recent reports that AirAsia has shelved plans for a Singapore joint venture due to high operating costs and lack of domestic market potential in the island republic. In mid last year news emerged that AirAsia had received Singapore’s approval to start a hub in the island republic, allowing the airline to expand its network in the growing regional low-cost market segment.

Tony Fernandes with Michelle Yeoh / Image credit: AirAsia

Fernandes said while other Asean and Asian countries like Vietnam, Cambodia, Laos, Brunei, Myanmar and South Korea seemed attractive, the management would focus on AirAsia group’s existing operations that offered bigger domestic alternatives and with larger populations.

“In terms of non-Asean countries India is an exciting market, and I have been overwhelmed by the developments of the country recently in terms of promoting air travel. We will continue to explore opportunities there but I believe this market offers the most growth potential in terms of travel.”

Fernandes stressed the airline would remain focused and disciplined in terms of cost and its business model. “We have the lowest cost base compared to other airlines in the world and it would be hard for others to replicate that even new competitors.”

AirAsia reported a strong fourth quarter, and 2013 will be stronger in load factors and yields. The group will announce its full-year results in February.

The company has placed an order of 475 aircraft, and 114 have been delivered.

In a related development Fernandes and Datuk Seri Michelle Yeoh, Malaysian born actress (pictured above), have been named “Malaysia Brand Ambassadors” at the “Malaysian Night “held at the recently concluded World Economic Forum (WEF) in Davos, Switzerland. The function highlighted Malaysia’s best success stories and potential for the international market to see.