How AirAsia Makes Money

     AirAsia is malaysia’s low cost airbus company, providing low cost flight with slogan “now everyone can fly”.

     Now, in malaysia whenever people want to travel overseas, or flying domestically, the first airlines company they would think of is AirAsia. Why, because it is cheap? Is it really cheap, yeah sometimes, though its services are real bad to certain extend like no roofed walkway to the airbus, airbus is small, etc. AirAsia has become Malaysian first choice. When it announces free seat, everybody is crazy about it. Even they don’t have enough money, no time; never thought of travelling will just go and buy the ticket, because it is cheap.

     Since it sells the ticket so cheap, how the heck it is going to make money?

     Firstly, it won’t sell all the seats for free for a flight. It will sell only about 30%; you won’t be able to make any booking on that particular flight. The balance 70% would be sold at normal price or even freaking high price if you buy it at last minute. The closer to your departure date, the more expensive it is.

     Secondly, the flight is on 6 months later so that it can make a full use of the money. The money is fully utilized again and again before you are able to take that flight. Sadly, some people just discard the tickets due to certain circumstances such as improper planning, shifted or get promoted in work. However, we pay it 6 months before we can use the ticket.

     Thirdly, if the flight is not making a profit, or could not meet the breakeven, it will just simply tell you the flight is delayed; then to fly with next flight number.eg: flight A has only 30% occupancy rate (50% to breakeven), delays it and matches with flight B with 45% occupancy rate. Sum up 75%, profit is assured.

     After realizing this, would you still choose AirAsia? Yes I will. It is still the cheapest in Malaysia; with proper planning, everyone does can fly.