A whole new level for airport lounges

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ta04761You’ve passed by doors along airport hallways marked “Golden Lounges” or “Sky Clubs”. If you didn’t already know, these are special lounges for first and business class travellers.

An oasis of sorts, airport lounges provide comfort for frequent jetsetters killing time before their flights.

It used to be that only first and business class ticket holders were given the special treatment to rest, relax and rejuvenate at these designated spaces.

Some lounges even specifically cater to certain airline carriers.

The average economy class had no choice but to hang around restaurants, eateries or airport couches that – let’s face it – aren’t necessarily available nor comfortable.

But what was the average traveller to do? Not every one can afford exhorbitant ticket prices that grant access to these perks.

An influx of low-budget travellers – largely sparked by the rise of low cost carriers opening frequent routes worldwide – gave way to a new industry: pay-per-use lounges.

These are first class lounges open to all travellers regardless of airline flown, for a relatively small fee.

Most lounges carry the basic necessities: buffet and beverage offerings, comfortable seats, a special WiFi for its customers, and plenty of charging docks.

Certain places carry additional offerings such as hotel rooms, spa services, massages and so on.

Malaysian airports achieve best passenger traffic growth

It comes as no surprise that pay-per-use lounges are of growing interest as a viable business, with latest statistics showing passenger traffic in Malaysian airports reaching its peak.

Malaysia Airports Holdings Bhd’s (MAHB) airports in the country recorded in September its first double-digit growth in monthly passenger traffic for 2016 via a 12.3 per cent growth compared with September 2015.

In a Bursa filing on October 10, MAHB said it registered 7.48 million passengers in September 2016.

“Almost all MAHB’s airports recorded positive growth with 10 airports registering double-digit growth in the range of 11 to 25 per cent.

“All the five international airports (in Malaysia) registered high growth rates ranging from 10 to to 46 per cent,” it said.

Kota Kinabalu International Airport registered the highest growth for international traffic over September 2015 at 46 per cent. In addition, the airport’s domestic traffic grew by 11 per cent.

MAHB noted that all the local airlines experienced double-digit growth for international traffic.

“Malindo Air grew by 50 per cent, while AirAsia and Malaysia Airlines Bhd registered a 10 per cent growth respectively. This is the first positive growth for Malaysia Airlines Bhd for 2016,” it said.

MAHB is likely to achieve its best performance in the fourth quarter, and this is expected to result in “an optimistic growth” for the whole of 2016, it said.

For the January-October period, MAHB said there were 72.53 million passengers passing through Malaysian airports – a growth of 5.4 per cent from 68.8 million a year ago.

International passenger numbers grew 12.9 per cent to 3.57 million in October from 3.16 million a year ago, while domestic passenger movements rose 14.9 per cent to 3.75 million from 3.26 million previously.

In terms of overall aircraft movements at the 39 airports in the country, MAHB recorded a 4.5 per cent increase to 69,324 in October from 66,325 a year ago.

Additionally, the International Air Transport Association predicted travel to and from Asia-Pacific will account for nearly half of all air travel by 2034. This amounts to some 2.9 billion annual trips.

 

 

Tourism spurs travel, lounges stand to gain

Malaysia Airports Holdings Bhd (MAHB) is optimistic of registering a five per cent passenger growth next year, following the more than four per cent growth this year.

“Passenger growth is trending at five per cent and this is expected to continue for next year,” managing director Datuk Badlisham Ghazali told local media after the groundbreaking of Phase 2 of the Mitsui Outlet Park KLIA (Kuala Lumpur International Airport) by Tourism and Culture secretary-general Tan Sri Dr Ong Hong Peng.

Citing strong tourist arrivals from China and encouraging development from the Indian subcontinent, Badlisham said healthy passenger growth was possible with new routes and more flight frequency expected from various airlines, including Malaysia Airlines Bhd, AirAsia Bhd and Malindo Air.

He said numerous efforts by various stakeholders to build a robust ecosystem for the tourism sector had helped, including the expansion of the Mitsui Outlet Park as part of the KLIA Aeropolis project.

A statement from Tourism Malaysia confirmed this trend, citing that the tourism industry is “indicating signs of recovery in the first half of 2016 with latest figures showing more tourists after the slowdown in 2015.”

“Tourist arrivals to Malaysia for January to June 2016 showed improvement, registering a hike of 3.7 per cent compared to the same period in 2015,” it explained in the September 8 statement.

The country received 13 million tourists in the first half of this year compared to 12.5 million tourists in 2015. Correspondingly, tourist receipts rose by 10.7 per cent, contributing RM37.4 billion to the country’s revenue against RM33.8 billion in 2015, which translates to an average per capita expenditure of RM2.869.6.

“Total receipts in shopping also recorded positive growth, with RM11.7 billion in 2016 compared to RM10 billion in 2015, an increase of 17.1 per cent,” it elaborated.

“The average length of stay of a tourist was 5.8 nights.”

The top 10 tourist generating markets to Malaysia in 2016 were Singapore (6,596,452), Indonesia (1,378,699), China (992,463), Thailand (864,453), Brunei (637,369), India (359,853), South Korea (228,023), the Philippines (220,163), the United Kingdom (206,313) and Japan (198,693).

The Asean region continued to be the largest contributor of tourist arrivals with 75.7 per cent share (9.87 million) of the total arrivals.

The medium-haul markets contributed 18.3 per cent or 2.3 million tourists to Malaysia’s total arrivals. Tourist arrivals from long-haul markets meanwhile reached 776,673 in 2016, constituting 6% of the total arrivals to Malaysia.

With all these in mind, BizHive Weekly looks at two of Malaysia’s leading lounges, Plaza Premium Lounge and AirAsia Red Premium Lounge, on their performances today:

 

New business for AirAsia with klia2 lounge

The AirAsia Group is not one to be left out of business trends within and surrounding the aviation industry.

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On September 2, the AirAsia Premium Red Lounge at klia2 opened its doors to all guests, offering an elevated traveling experience with 24 hours services and facilities such as buffet spread, wireless internet, lounge area, workstations, showers facilities and more.

According to AirAsia X chief executive officer Benyamin Ismail, this lounge came to birth with the idea of letting passengers from all walks of life – be it business or economy – to peruse their facilities as they want to.

This benefits both business and customers as AirAsia receives a significant number of at least 5,000 transit guests per day who would find services such as the AirAsia Premium Red Lounge an added convenience to their travelling experience.

“As Asia’s leading and largest low-cost carrier by passenger carried and jet fleet size, AirAsia strive to innovate our products and services to ensure the best flying experience for everyone.

“AirAsia Premium Red Lounge is a great addition to our premium range of products that would address the needs of all discerning guests, especially for those who has Fly-Thru connection via Kuala Lumpur where they can rest and relax before their journey ahead,” explained Benyamin to BizHive Weekly.

“For AirAsia and AirAsia X alone, we see over 5,000 transit (Fly-Thru) guests per day at Kuala Lumpur who would find services such as the Premium Red Lounge a great convenience.

“The opening of the lounge is also timely to facilitate the tremendous growth expected for klia2 as Asia’s LCC Hub.”

Benyamin said access to AirAsia Premium Red Lounge is complimentary for Premium Flatbed and PremiumFlex guests, while it is also available to all other guests at RM79 per person.

The Premium Red Lounge offers an elevated traveling experience with 24-hour services and facilities such as buffet spread, wifi, lounge area, workstations, shower facilities and more. Guests can expect to rest and relax in a contemporary and comfortable setting before they continue with their journey.

The lounge can accommodate up to 110 guests at any one time.

The newly unveiled AirAsia Premium Red Lounge is located at the Mezzanine Level of the International Departure at klia2. Spanning across a floor size of 302 square metres with a mezzanine Sun Room overlooking the Skybridge and taxiway, the lounge will be part of the airline groups’ premium range of products including the Premium Flatbed and Premium Flex, which are designed to cater to guests with discerning needs.

The AirAsia X Premium Flatbeds feature universal power sockets, adjustable headrests and built-in personal utilities such as tray table, drink holder, reading light and privacy screen.

Guests travelling on Premium Flatbeds can also enjoy premium complimentary products and services including priority check-in, priority boarding, priority baggage, 40kg baggage allowance, meals, pillow and duvet, as well as access to the AirAsia Premium Red Lounge

When asked on response so far, Benyamin said, “We have received very encouraging response, the AirAsia Premium Red Lounge receives an average of 500 guests a day since its opening, and close to 15 per cent are walk-in guests who find value in our newly launched facility before continuing their journey.”

On future plans to expand its Red Premium Lounge services, he said there was none just yet “but if we see a strong demand for a similar facility for any of our hubs, be it in Malaysia or other regional hubs within the region, we will definitely consider it.”

 

Plaza Premium Lounge pioneers the industry

Bringing about the rise of commercial airport lounges is perhaps Plaza Premium Lounge who first extended the concept to the average traveller.

Through hard work and determination, the group today has presence in more than 140 locations in 35 airports worldwide.

Founder and group chief executive officer Song Hoi-see has led the company for the past 17 years and now employs more than 3,500 staff across the globe.

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In his previous career in investment banking, Song was used to flying business class and taking full advantage of the airport lounge priviledges on his work trips. However, launching his own business led him to fly economy class and thus deprived of said access.

Identifying a gap in this market, Song then launched the first Plaza Premium Lounge at both Hong Kong International Airport and Kuala Lumpur International Airport in 1998.

Open to all travellers regardless of airline or travel class, the service-oriented Plaza Premium Lounge was driven by a heartfelt desire “to do something for the majority.”

Through his initiative and vision, Song has changed the perception that airport lounges should be reserved for premium travellers only.

With more than 18 years of unrivalled experience offering premium airport services, Song has led Plaza Premium Lounge Management Ltd to be the benchmark for airport value-added services.

The company’s services now range from designing, operating and managing premium airport lounges, both independent and on behalf of airlines, transit hotels, private relaxation suites, meet and greet services, dining concepts, business and conference centres and limousine services.

The success of the business model has prompted airport authorities around the world to open their doors to independent lounge facilities and value-added airport services as part of a bid to enhance the overall traveller experience as well as airport service quality.

 

Rise of LCCs, technology aid lounge traffic

A key factor in all of this is the rise of low-cost carriers (LCCs) which have become increasingly dominant in the regional market.

The LCC boom began about 36 years ago when Southwest Airlines roam the skies of the United States. Since then, the group has grown to become the third largest airline in the world in terms of number of guests carried and also one of the most profitable airlines in the world.

Southwest Airline’s success spruced up interest in the LCC concept to all corners of the world. LCC now commands approximately 30 per cent market share of the domestic USA traffic. In Europe, the LCC phenomenon spread much later with Ryanair in 1991, but the growth has been at a much faster pace.

The LCC concept continued to spread throughout the world with WestJet in Canada in 1996, Virgin Blue in Australia in 2000, GOL in Brazil in 2001, AirAsia in Malaysia in 2002, Kulula in South Africa in 2003 and Air Deccan in India in 2004.

Southeast Asia embraced the LCC concept last, but the growth trajectory is the fastest.

Countries with many islands such as Indonesia and the Philippines stood to gain from LCC’s budget routes, tapping into an exponential demand for travel within the country. Malaysia is not left out of this trend.

The reason for the success of the new low cost carriers is very simple – move the maximum number of guests at the minimum of cost. The concept of LCC is based on the idea that people would fly a lot more often if it were more affordable.

LCC airline’s main mission is to make air travel the most simple, convenient and inexpensive form of transportation in the world. The fare differential between the full service carriers (FSC) and LCC can be as high as 40 to 60 per cent cheaper.

“The growth rates in the Southeast Asia region are above the industry average given the socio-economic situation of the countries concerned,” Song said in an interview with Focus Asean. “With the expansion of LCCs in the region, travellers can fly cheaper, smarter and force traditional airlines to be relatively price-competitive.”

“With the rise of the middle class, more quality airport facilities and services will be in demand, together with a sustainable growth in intra-Asean and cross-continent travel,” Song predicted.

The advent of budget airlines has opened up air travel to people around the world who otherwise would not be able to afford it.

Another key trend in the industry is airlines moving toward cost-cutting models through the application of technology: allowing online and mobile check-in, and providing self-service kiosks at airports.

“Service with a human touch actually plays a fundamental role in the travel hospitality industry,” Song said. In this vein, he would like to see airport authorities evolve in the future by “becoming more customer-centric and exploring innovative ideas in the service industry.”

 

Rapid growth and expansion worldwide

Following the successful opening of Plaza Premium Lounges in Cebu, Phnom Penh and Siam Reap earlier, global expansion over the coming months will cover Taipei, Brisbane, Rio de Janeiro and Riyadh with a grand opening of four new Plaza Premium Lounges at Taiwan Taoyuan International Airport on July 26, 2016.

It comes as no surprise that Plaza Premium Lounge once again won the heart of international travellers amongst 19.2 million eligible customers surveyed by crowning the ‘World’s Best Independent Airport Lounge’ at the Skytrax 2016 World Airline Awards on July 12, 2016 at Farnborough International Airshow.

In recognition of its exceptional lounge facilities and service standards, Plaza Premium Lounge scooped the top award for the Best Independent Airport Lounge worldwide with a special highlight of its London Heathrow and Hong Kong operations.

Coincidentally, Plaza Premium Lounge in Hong Kong International Airport took home the prestigious ‘Corporate Excellence Award’ for ‘Best Customer Service of the Year’ of the airport’s annual Customer Service Excellence Programme from Airport Authority Hong Kong and the Chairman of Hong Kong Tourism Board last month (June 2016).

Speaking about the Skytrax Award, Song was deeply humbled by receiving this important honour and was extremely gratified that all of the group’s hard work to exceed  travellers’ expectation was recognised.

“I would like to thank all my Plaza Premium Lounge colleagues who have worked tirelessly to ensure we offer innovative products and world-class services to our travellers.

“As a global company ‘made in Hong Kong’ since 1998, we take great pride in placing this city on the international aviation stage again by winning this coveted award. The World’s Best Independent Airport Lounge award is particularly important to us because it was decided by the votes of 19.2 million travellers globally.”

In presenting the accolade, Edward Plaisted, CEO of Skytrax said, “It has been a fine year for Plaza Premium at the World Airline Awards. Not only did their lounge in Heathrow Terminal 2 secure the top prize, they also achieved second place for their latest Hong Kong lounge facility.

“This is a fabulous success for Plaza Premium Group, particularly as the independent lounge market is now offering more choice than ever to the customers.”

 

Plaza Premium’s achievements in 2016

Extra Mile Outstanding Staff Award 2016 (Q2) – Extra Mile Programme, Singapore Changi Airport, Singapore

World’s Best Independent Airport Lounge – Skytrax 2016 World Airline Awards, Hampshire, UK

Superstar Commercial Partner of the Year 2016 – 5th Annual GMR-IGI Airport Award, Indira Gandhi International Airport, New Delhi, India

Hospitality Outlet of the Year 2016 (Terminal 1D) – 5th Annual GMR-IGI Airport Award, Indira Gandhi International Airport, New Delhi, India

Best Customer Service of the Year of Corporate Excellence Award – HKIA Customer Service Excellence Programme 2016, Airport Authority Hong Kong, Hong Kong

Outstanding Customer Service of Cross-company Excellence Award – HKIA Customer Service Excellence Programme 2016, Airport Authority Hong Kong, Hong Kong

Certificate of Appreciation of Individual Excellence Award – HKIA Customer Service Excellence Programme 2016, Airport Authority Hong Kong, Hong Kong

Gold Award – Talent from the Airport 2016, Airport Authority Hong Kong, Hong Kong

Outperforming Terminal Services (Plaza Premium Lounge Bangalore) – BIAL Pinnacle Awards 2016, Kempegowda International Airport, Bengaluru, India

Good Safety Suggestion Award – HKIA Airport Safety Recognition Awards, Airport Authority Hong Kong, Hong Kong

Most Improved Customer Service Award – United Airlines, Hong Kong