AirAsia: Find a balance between making profit, maintaining customers

SHAH ALAM – With the surge of complaints on local budget airline company AirAsia, experts suggest that the company should start finding a balance between making a profit and maintaining customers to ensure the sustainability of the firm.

Of late, many customers had taken their frustration to social media to complain about the constant delays of their flights and the postponement of flight services which had been an unnecessary burden to them.

Moreover, their complaints against the company were getting out of hand as the customer service system was not much help in attending to the issues.

Sinar Daily talked to a pilot who had served the company for more than a decade in a bid to find out about the issue.

The pilot, who declined to be named, claimed that the company’s ticketing and marketing teams had sold tickets way beyond what it could accommodate at the moment, considering that they did not have enough aircraft.

He said that the airline’s pilots had highlighted the issue to the management multiple times but the complaints fell on deaf ears.

“Despite our complaints, they were still selling tickets and did promotions like how they did pre-pandemic.

“The ones that have to face the customers are the pilots and the cabin crews.

“Imagine this, when we arrive at the airport according to our rostered schedule, our plane was not there yet and we had to wait alongside the customers,” he said, adding that they had to face the backlash as they were the frontline of the company.

Commenting on the issue, aviation expert from Universiti Kuala Lumpur Malaysian Institute of Aviation Technology Head Aviation Search and Rescue Prof Major Dr Mohd Harridon Mohamed Suffian said the issue was believed to have sparked as the marketing of seats by airlines was mostly driven by specific algorithm employed by the airlines.

He said the algorithm would maximise profits for the airlines by considering the flight seatings, the intensity demand of the flights and many other factors as well.

“In most cases, this works out well for the passengers and the airlines but if the airlines were to enhance their profits tremendously or if the resources of the company are limited, the passengers would suffer.

“This can be observed by the constant rescheduling or cancellation of flights which created financial havoc to the customers,” he said.

Dr Harridon opined that AirAsia should create a trusted and reliable brand as its competitors had offered these to the customers.

He further advised AirAsia’s management to find a balance between making a profit and maintaining the loyalty of its customers, especially as the company expands its business operation in the long run.

He said at the moment, AirAsia was still striving to move forward with their business and courting investors to invest in their diversification.

However, business diversification had its limitations, and AirAsia was reminded to be cautious in funnelling its finances.

“As in most cases of starting new ventures, there are always gestation periods where during these periods, where it would require initial seed funds with the return of investment is only expected after five or more years or could be less than that.

“Thus, this is the inherent risk of establishing or exploring various ventures and it could have taken a toll on the company,” he said.

Meanwhile, Pangolin Aviation Fund Director Mohshin Aziz echoed Dr Harridon’s view that the rescheduled flights and flight delays derived from overbooking or maximised booking where the airline probably had set an algorithm where they expected that there would only be a small percentage of the bookings in one or two per cent.

He agreed it was a challenging period for AirAsia as the demands for the flights were very strong.

“Hence, in my opinion, AirAsia’s management should take a step-by-step approach and try to deploy capacity in a slower manner. By doing this, your scheduling capability and services ability will be better.

“But of course, it’s not going to be perfect because this also means that you are losing out a potential revenue as you know the demand is much stronger since you are slowing down the deployment of flights and schedule,” he said.

Aside from sustaining its revenue based on its aviation and airline businesses, AirAsia also needs to expand its business lines in providing Air Taxi services and e-commerce.

He said the problem was multifaceted as the airline industry had been dormant for quite some time.

Mohshin said during the pandemic, many aviation crews had a light schedule and when the industry started to open up again at a rapid pace, there was a sudden demand for more employees and aircraft.

“All this eventually takes time as you need to certify the aircraft, make sure their licenses are valid and unfortunately, the putback into service requirement takes a bit of time.

“Same goes to people where they will need retraining, refresher courses.

“Even though some has been doing (the job) for a long time but after the pandemic, they somehow are not as efficient as before,” he said.

Sinar Daily had reached out to AirAsia for comments on the issue but has yet to receive a reply.

The aviation industry in the country was slowly picking up again after the two years of the Covid-10 pandemic, which halted almost the entire world and many industries.

Aside from AirAsia, many other local airlines such as Malaysia Airlines, Firefly and Malindo were also trying to survive amidst the impact of the Russia-Ukraine conflict, which had threatened the world with global inflation as well as rising global oil and gas prices.

This had also led to inflated prices of flight tickets sold by all airline companies.

Sinar Daily had reached out to AirAsia for comments on the issue but has yet to receive a reply.