Asian Viewpoint

AirAsia Wins on Costs

Analysis from consultant Oliver Wyman suggests that AirAsia has operating costs of less than a quarter of Singapore Airlines – and less than half of Malaysia Airlines. The figures are adjusted for stage-length, so give a good indication of the cost advantage that the low-cost operator has over its legacy peers.

Oliver Wyman estimates that AirAsia has stage-length adjusted costs per available seat kilometre (CASKs) of 4.1c, compared to 17.4c for Singapore Airlines (SIA). AirAsia is also operating with CASKs of less than half of Malaysia Airlines’ CASKs of 10.6c, demonstrating the tough battle that MAS has on its hands given that AirAsia is based in Kuala Lumpur.

AirAsia also beats European peers Ryanair (5.3c) and EasyJet (6.3c), while SIA can take solace in that its CASKs are lower than Lufthansa’s 22c, although British Airways comes in slightly lower at 15.7c.

AirAsia is just pipped to the post by US budget operator AirTran, however, which as costs per available seat mile of 6.5c, which comes in at 4.0 in CASK terms.

The figures are based on the financial year 2008.