Air Asia becomes world’s first airline to abolish administration fee

Air Asia, the low-fare carrier based in Kuala Lumpur in Malaysia, has done away with administration fee from its fare.

The move, according to a press release from Air Asia, is aimed at boosting travel and tourism in Malaysia and that AirAsia is the first airline in the world to have abolished administration fee.

Putting an end to the administration fee, the airline said, would mean reducing the cost of travelling on AirAsia by 65 baht for each leg of a domestic flight and by 225 baht-245 baht for each leg on international routes.

Tony Fernandes, Group CEO of Air Asia, explained in the press release that, with the abolition of the administration fee, which came into effect from June 24, 2009, the passengers would have to pay only the seat fare and the airport tax.
He said that the carrier’s website AirAsia.com would display the All-In Fares (fare plus airport tax) throughout the booking process, with a view to ensuring “transparency right from the stage of the advertised price to selecting a flight and paying for it on the website.”

Along with eliminating administration fee from the fares, AirAsia had recently launched a regional fare promotion campaign. According to Tony Fernandes, many promotional fares were, in fact, cheaper than fares charged by airport taxis.
Air Asia, its Group CEO said in the press release, achieved 21% passenger growth in 2009, as compared to 2008.

He added that Air Asia would provide “affordable and transparent fares” for business class and leisure travellers and that Air Asia was the first carrier in the world to have done away with fuel surcharge, in 2008.

Recently, Air Asia won the award for the best low-fare airline from Skytrax, the Britain-based consultancy agency that conducts research for commercial air carriers, for its quality and efficiency.

According to the Air Asia press release, all carriers in the world except AirAsia add an administration fee – which varies from airline to airline – to the price of the ticket. Some airlines add administration fee as high as 20% to the ticket price, Air Asia added.

The net profit of AirAsia in the first quarter of 2009 reached a record $57 million – up by 26% from the same period a year before.

The airline said in the press release that it expected a further increase of 10% in net profit throughout 2009.