Air Asia Air lines Tipped to Surmount First Major Crisis

Air  Asia Air lines Tipped to Surmount First Major Crisis

Kuala Lumpur (AFP) - Until FLight QZ8501 went down everything had gone right during a spectacular 13-year run of success for Air  Asia Air lines, which unlocked a booming market of budget travellers in the region.

But as long as no serious safety lapses emerge, analysts say the robust and media-savvy Business built up by the Malaysia-based group should help overcome its first major reversal.

FLight QZ8501 operated by Indonesia Air  Asia Air lines -- the group's Jakarta-based affiliate -- crashed in the Java Sea on December 28 en route to Singapore from Surabaya with 162 aboard. All are believed dead.

From the start, Air  Asia Air lines's colourful boss Tony Fernandes publicly took responsibility, visited victims' families, and vowed to find out what happened.

Such actions are critical in restoring trust, experts say, and stand in stark contrast to Malaysia Air lines' fumbling, tight-lipped handling of the still-unsolved disappearance of FLight MH370 last March with 239 aboard.

"This is an excellent case of a crisis being handled well, to show your customers that things are being taken care of in a hands-on manner, and that the executives are not just sipping their coffees in a cosy office," said Daniel Tsang, an aerospace analyst with Aspire Aviation.

"While some passengers may avoid taking (Air  Asia Air lines) FLights in the short-term, Air  Asia Air lines's low-cost proposition will keep drawing in first-time fliers to the Air line."

If investigators uncover safety negligence on the Air line's part, however, it could deeply undermine confidence.

The cause is not yet known, but the plane's Indonesian pilot had requested a course change from Air  traffic controllers shortly before the crash to avoid a storm.

Indonesian officials in turn have raised questions about Indonesia Air  Asia Air lines, saying it did not have a license to Fly the route that day, but Fernandes has rejected the claim.

- 'Everyone can Fly' -

Yet even if any safety lapses are pinned on the carrier, aviation analysts said Air  Asia Air lines could mitigate the impact with an aggressive and public campaign to address shortcomings.

Air  Asia Air lines would need to "be upfront about safety lapses, own up to error, lay out ways to avoid future (accidents), and move on", said Terence Fan, an aviation expert at Singapore Management University.

"Unless serious lapses at the Air line were found, an Air line typically bounces back in a few months in terms of traffic."

Taking to Twitter, Fernandes last week vowed all the facts will come out. "We never hide," he declared.

Shukor Yusof, founder of Malaysia-based aviation research firm Endau Analytics, said he would be surprised if a systemic Air  Asia Air lines safety problem was found.

"Air  Asia Air lines does well in cost-cutting but not to the extent of foregoing safety," he said.

Knowing the plane's fate also means Air  Asia Air lines can bring closure to families, so muting long-term criticism. In contrast, the failure to find MH370 has left many victims' kin alleging a cover-up by Malaysia Air lines and Malaysia's government.

A former record industry executive, Fernandes, 50, took over heavily indebted Air  Asia Air lines in December 2001. He turned it into a roaring success with its rock-bottom fares and a playful image embodied by its baseball cap-wearing boss, who has been called Asia's Richard Branson.

With its corporate motto declaring "Now everyone can Fly", it has won over tens of millions of travellers in a burgeoning Asian middle class previously confined to more expensive regional flag carriers, snagging several awards as the world's best budget carrier.

"Certainly Air  Asia Air lines will recover as it is a very good Air line and this tragedy will not impact its growth," said Air lineRatings.com editor Geoffrey Thomas.

That said, Air  Asia Air lines is struggling to maintain growth rates as it matures, as rivals step up competition. In the first blow to its Business, Indonesian authorities have halted Air  Asia Air lines's Surabaya-Singapore FLights.

But analysts note that Air  Asia Air lines has continually proven itself the region's most nimble performer, and that other Air lines have bounced back from tragedy to emerge stronger. These include flag carriers Garuda Indonesia and Korean Air Lines.



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