A

s part of its efforts to strengthen its foothold in Southeast Asian countries, AirAsia Group is planning to build its headquarters in Jakarta, an executive says.

“We have chosen Jakarta to be home to our ASEAN office... We will move our regional office operations to Jakarta,” AirAsia regional commercial head Kathleen Tan told The Jakarta Post in an interview at the AirAsia British MotoGP conducted at the Silverstone circuit, off London, last week.

“The new office is now under construction and it will be up by August or September this year,”
Tan said.

Indonesia is the 2011 ASEAN chair and therefore has a key role in the Southeast Asian country network.

AirAsia said earlier that its subsidiary, PT AirAsia Indonesia, aimed to raise US$200 million via an initial public offering in the fourth quarter of this year. It plans to sell around a 20 percent stake of its enlarged capital in the IPO and has appointed CIMB Securities Indonesia and Credit Suisse Securities Indonesia as joint-lead underwriters for the shares offering.

Tan said choosing Indonesia reflected the company’s confidence on the country’s economy and belief for opportunities in the 240-million population nation.

“Indonesia is a huge market,” she added. “I can say that AirAsia has the biggest connections to cover areas in Indonesia nowadays,” she said.

After opening flights to Padang and Banda Aceh recently, AirAsia opened flights connecting Bandung, a city in West Java, popular for ubiquitous factory outlets, to Kuala Lumpur two times a day and Singapore once a day.

The company tried to fly to Bandung from April, but only on June 2 did it officially launch its commercial flights to the city.

“Bandung is the last piece in our jigsaw puzzle,” Tan said, adding that her company hoped it would enjoy support from the government with the construction of the longer runway at the city’s Husein Sastranegara airport regarding its plan to land bigger Boeing 737 planes to cater to a higher influx of traffic.

Tan remarked that there was not enough investment to promote tourism in Indonesia despite the fact that the country’s 17,000 islands had much to offer.

“With such a huge presence in Indonesia, we are committed to help promoting tourism in Indonesia,” she said. Relating to that cause, Tan added that AirAsia planned to link cities across the region to allow people to travel directly to the designated city without much flight transit hassle.

“For instance, people who come to the resort area of Phuket, [Thailand], can now directly fly to another Asian paradise, Bali, without spending the whole day transiting via Jakarta,” she said, adding that such a paradise-to-paradise bridge would generate the tourism business in both countries.

The traffic of holidaymakers and businesspeople in cities across the region is expected to grow exponentially as the airliner also plans to expand its network to the Philippines and Vietnam.

It was reported to start flying out of the Clarke International Airport in the Philippines, also known as Diosdado Macapagal International Airport, in December this year.

No details were immediately available on when operations in Vietnam may start.

Tan added that the company that had garnered recognition as an Asian brand would take an extra mile to go global, including by becoming the main sponsor to the premier motorcycle racing championship in the UK for three years since 2010.

“The MotoGP event is one of our machines to go global...In the past, we were just a t-shirt sponsor, but now we own the event,” she said.

Targeting first-time and young travelers, for low-cost yet long-haul flights through the event, the company expects to hook new visitors to bring them to Southeast Asian destinations. Referring to the gloomy outlook airliners are now facing amid soaring prices of fuel, Tan said her company was committed to fly people with low fares.

“The fuel price hike is something that affects everyone, not just airline businesses. But, we look at other ways to keep fares low using innovative measures and technology to reduce costs,” she said, admitting that the fuel factor accounted
for between 45 percent and 50 percent of its expenses. AirAsia abolished the fuel surcharge in November 2008 and reintroduced the scheme in May to offset the soaring jet fuel prices.

As an example of the efforts to help ease the cost pressure on flyers, she said her company was now telling its customers to check in online to reduce the check-in fee.

AirAsia reported a net profit of 171.9 million Malaysian Ringgit (US$56.71 million) in the first quarter of this year, lower than 224.2 million ringgit in the previous corresponding quarter.

Chief executive officer Tony Fernandes said earlier that the airline’s operating profit margins were significantly higher year-on-year despite the fall in profits.