Profitable cargo agreement for AirAsia

The cargo division of AirAsia is set to generate over US$3.5 million in revenue per annum following a memorandum of understanding (MoU) with Leisure Cargo.

The MoU was signed last May, with Leisure Cargo currently serving as the airfreight provider for AirAsia's regional routes from its Kuala Lumpur hub, specifically its low cost carrier terminal. Subsequently, it has secured over $290,000 in cargo value for the airline every month.

"As the leading and largest low cost carrier in Asia, cargo plays an integral part of our ancillary income and we foresee cargo to be one of the key drivers with significant contribution towards the company's bottom line," said Abdul Nasser Kassim, regional director of cargo, AirAsia Berhad.

The MoU signals AirAsia's focus on developing its cargo services whilst playing an active role in cargo management. The airline has targeted the logistics sector, believing the continuing liberalisation of air travel will run parallel to further revenue generating opportunities.

Currently, AirAsia serves 18 destinations through allocated cargo space on its Airbus passenger aircrafts, offering a cargo space of 2.5 tonnes on its A320 model and 1.5 tonnes on the B737. However, plans have been initiated to increase cargo capacity through the delivery of 150 A320 aircrafts by 2013.

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