Word: airasia
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...write off Aceh yet. Thanks largely to four weekly flights from Kuala Lumpur operated by the budget carrier AirAsia, tourists are trickling into Banda Aceh, the provincial capital, and for good reason. The city itself is leafy and slow-paced, while Acehnese people are proud, hospitable and keen to make up for years of isolation. Drive out along the west coast and you'll find white-sand bays studded with jungle-clad islands, beaches where 900-kg turtles lay their eggs, and forests where tigers prowl and gibbons peer down from the trees...
...from rickety buses, inefficient trains and traffic-choked highways. Laykha Boonlerd, 26, a bank employee in Kuala Lumpur, could never before afford to fly to Bangkok to see her family and instead made an excruciating 24-hour pilgrimage by bus and train. But with a one-way ticket on AirAsia costing only $26, she took wing in July for the first time. "I will travel much more with AirAsia," she says. Indeed, about half the travelers on Asia's budget airlines are first-time flyers like Boonlerd...
...carriers, officials are clued in to the possibility that budget airlines can invigorate underused airports and attract much needed tourist dollars. Singapore is building a new terminal as a hub for budget carriers, and other countries have been wooing no-frills airlines by reducing airport fees. In Kota Kinabalu, AirAsia took over a mothballed terminal, which now buzzes with eight flights a day. Fernandes wants to turn the building into a regional hub. "The loyalty to national carriers is getting more and more compromised," he says. "There's no more cozy cartel where they can do what they want...
What makes the budget carriers such ornery opponents is their relentless cost cutting. Fernandes, who has dreamed up all kinds of ways to save money, claims AirAsia is the world's lowest-cost airline. He pays his flight attendants to clean planes instead of hiring special crews, which not only lowers costs but also chops the time spent boarding at terminals to 25 minutes--about half that of the major airlines. His pilots are trained to land at a farther point on the runway and at a slower speed to conserve fuel and reduce wear and tear on tires. Half...
...rivalry among no-frills flyers is already getting brutal. When Tiger offered a 59¢ one-way ticket to Bangkok from Singapore on September flights, AirAsia countered with a 29¢ fare. Fernandes advertised the promotion with his usual flair. Ads showing two beautiful flight attendants draped over a subdued tiger boasted, "AirAsia tames even the wildest tiger." Udom Tantiprasongchai, chief executive of Orient Thai Airlines, says fierce competition from AirAsia and flag carrier Thai Airways forced him to slash the fare on his One-Two-Go budget service from Bangkok to Chiang Mai to less than $25, about 30% lower than...