AIRASIA GROUP BERHAD 8 ANNUAL REPORT 2018 A DECADE OF Annual Report EXCELLENCE 2018 YEARS OF GOLD: A DECADE OF EXCE CELLENCE Gold is the colour of champions. As we celebrate our 10th year in a row as the World’s Best Low-Cost Airline according to Skytrax, we thought it fitting to mark the occasion with this sleek, gold-on-gold cover that incorporates the number 10 and the Skytrax medallion, the symbol of our continued excellence. SOME OF THE ALLSTARS WHO MADE IT ALLSTARS WHO MADE IT SSIBLE Administrative Executive Management Accounting Manager Mak Ying Companies are like families. Lim Wen We build them with all our AirAsia is different from other Ying heart, putting our blood Shiow companies in many ways. and sweat into it with one I love the unique office sole purpose - to make it culture and fun environment, grow and flourish. The road and I get to experience ahead will be challenging as new things and challenge AirAsia continues to evolve myself every day. I’m happy but we remain committed to be part of AirAsia and I to strengthening our appreciate the opportunity capabilities and to better I’ve had to grow with the understand ourselves. company. Culture Manager Cabin Crew Yvonne What keeps me going is the friendship. I have met Kadek Dian After more than 10 years Lady lots of good and amazing flying for the best low-cost friends here who been with Kumalasari airline in the world, I reflect Diana me for 11 years. We’ve on the joy of working for gone through many things an employer that provides together - achieving equal opportunity for all milestones, celebrating employees. A company AirAsia’s success, standing by that provides low-cost each other when things get travel to millions and treats tough, wishing each other its employees with respect, during festivals, attending making it a joy to go to work each other’s weddings and every day. A workplace that baby showers, hugging and prides itself on safety, training comforting each other over and an enviable employee lost loved ones. This is my benefits package. We set the Allstars family, perfect in its standard that others follow. imperfection. Administrator Customer Happiness Head Junaida I started working at the Frank Bateman The happiest day in my work AirAsia call centre in Kelana life was when I joined AirAsia Jamadudin Jaya in 2004, handling flight in 2007. Thank you, Tony! I bookings and customer was tasked with delivering inquiries. Two years later, my team building and other soft previous boss Sri Velayuthan skills training to our Allstars, gave me the opportunity and I will always cherish the to handle staff bookings, excitement and happy faces first duty travel and then of those who attended these for the Group CEO’s programmes. (GCEO’s) office. Working in the GCEO’s office has given me the opportunity to meet VIPs, clients, media and vendors from around the world, and allows me to be an ambassador for ICT Manager the company. Whenever I See Keat AirAsia began with a small meet with our guests, I make ICT team when I joined 10 a point to brag about our Loon years ago. Since then it people, culture and success has grown from around 20 as a brand. Being part of people to more than 100 a company with so many today as the company growth opportunities gives transforms into a tech me confidence. company. It has been a memorable yet crazy past 10 years with many late nights deploying IT systems to improve guest experience. A true blood, sweat and tears accomplishment. Cargo Supervisor Security Executive Razmin Che AirAsia is not the same company Govindran Every single day for the last 11 I joined 10 years ago. We have years, I have enjoyed coming Abu begun our transformation from Karuppiah to work. It feels like a second operating manually towards home, and being part of the a fully digital system, which is Security Department has given now our target. I am proud to me pleasure and honour to be part of this journey and I will serve my fellow Allstars. I take continue to serve AirAsia as one great pride in working with this family. Thank you Airasia for this amazing organisation that has honourable recognition. been named Skytrax World’s Best Low-Cost Airline 10 times in a row. Planning Manager GTR Duty Executive Puchit AirAsia is not like a company Fairul Aswadi Twelve years ago, I started as a but family. To shine, smile ground service agent who did not and cry together is our Tansiri Yaacob have any wish or purpose. Now, style and culture. And we as part of the Allstar family that keep growing, moving and has been named the World’s Best changing as a team. I am Low-Cost Airline for 10 consecutive very proud to be part of this years, I feel a sense of pride and family. achievement that I will never forget. Thank you AirAsia, Tan Sri Tony and Datuk Din for giving me the opportunity to change myself. Captain Ramp Manager Febi I have enjoyed my Mohd Firdaus Lynette Simeone said, “The nearly 12 years of sky is not the limit, your mind Irawan service. As a line pilot, Rosli is.” I started my career in I’m happy because AirAsia from zero and I am almost every day I get still challenging myself to to see my family. Thank reach my fullest potential so you, AirAsia, the winner I can contribute as much as of the “Home Sweet I can to the Allstars family. Home” award 12 years I’m thrilled to share my in a row from my kiddos. passion, values and mission that I have learned over the past 15 years to make AirAsia the greatest low-cost airline in the world. Nothing is impossible. Legal Executive Photographer Taranjit Singh It has been a remarkable Ariff Shah I joined in 2007 as a cashier journey for me since 2002, in the finance department, Sandhu when I joined as a call Sopian managing inflight cash sales. centre agent. Since then, Seven years later, I became I have worked as a guest the official photographer for services assistant and cabin AirAsia. Such an amazing crew, and now I’m with the journey after that. Award- legal team. As an Allstar, I winning annual report covers was given the opportunity and photography! And I am to develop my career thrilled to have been able to within the company as I inspire other Allstars to explore was granted a scholarship their passion for photography to pursue my law degree through our hobby group. in London. Truly an honour If you don’t try it, you won’t and privilege that I cherish. know. 6 ABOUT US A JOURNEY OF EXCELLENCE Loyalty ASEAN Business Awards Awards 2018 2018 • Best Use of • Priority Integration Technology Sector (Aviation) Business Red Coral Traveller Award of Asia Asia Pacific Tourism 2018 Awards • Most Popular Airline 2018 • Best Low-Cost Airline Malaysia Excellence Business World Travel Awards Awards (WTA) 2018 2018 • Excellence • World’s Leading in Logistics CARNOC Low-Cost Airline Transportation Communications • World’s Leading Low-Cost Airline Award 2018 Cabin Crew • Annual Creative Brand Communication Case • Most Communicative Inflight Asia Foreign Airlines Pacific 2018 • Most Communicative WeChat Account of • Airline IFEC Foreign Airline Experience (ROKKI) AIRASIA GROUP BERHAD ANNUAL REPORT 2018 7 MARKies Awards 2018 • 5 Gold, 5 Silver, 1 Bronze IDC Digital Transformation Putra Brand Awards 2018 Awards • Operating Model 2018 Master for Malaysia • Gold for Transport, Travel & Tourism The Edge Billion Ringgit Club 2018 • Highest Growth in Profits Weibo After Tax Over Three Years Aviation for Big Cap Companies 2018 • Highest Growth in Profits After Tax Over Three Years • Weibo 2018 for Consumer Products Most Influential and Services Foreign Airline Global Leadership MIRA Awards Annual 2018 Awards • Lifetime 2018 Achievement • Best IR Website (Mid Cap) Skytrax World Airline Awards 2018 • World’s Best Low- Cost Airline 8 ABOUT US AIRASIA GROUP KEY HIGHLIGHTS OUR ALLSTARS SOCIAL MEDIA REPRESENT 62 TWITTER FACEBOOK 7,907,918 11,829,095 DIFFERENT followers fans NATIONALITIES WEIBO INSTAGRAM 1,374,078 1,617,134 fans followers WECHAT LINE 1,897,671 26,700,000 fans fans YOUTUBE LINKEDIN 109,102 271,359 subscribers followers KAKAOSTORY PINTEREST 7,642 3,502 followers followers TIKTOK KAKAOTALK 17,000 17,379 followers followers AIRASIA GROUP BERHAD ANNUAL REPORT 2018 9 AIRASIA GROUP TOTAL MARKET SHARE AIRASIA.COM 43% Malaysia 21% Thailand 16% Philippines 6% India 6% Indonesia RM1+ 0.1% Japan BILLION REVENUE/MONTH INTERNATIONAL MARKET SHARE 35% Malaysia 21% Indonesia 16% Thailand 11% Philippines 7% India 65 MILLION IMPRESSIONS/MONTH DOMESTIC MARKET SHARE 58% Malaysia 32% Thailand 20% Philippines 5% India 2% Indonesia 30 MILLION % 0.2 Japan UNIQUE VISITORS/MONTH TABLE OF CONTENTS 01 ABOUT US The Founders 18 Vision and Mission 20 Our Network 22 2018 Highlights 24 Notice of Annual General Meeting 32 05 BUSINESS REVIEW Corporate Information 42 AirAsia Malaysia 120 Corporate Structure 44 AirAsia Thailand 124 2018 Financial & Investor Calendar 46 AirAsia Indonesia 128 AirAsia Philippines 132 02 LEADERSHIP AirAsia India 136 Directors’ Profiles 54 AirAsia Japan 140 Senior Management Team 64 AirAsia X 144 AOC CEOs 80 Ancillary 148 Social Media 152 03 PERFORMANCE REVIEW Digital & Data 154 Five-Year Financial Highlights 91 Adjacency Businesses 156 Ten-Year Revenue Highlights 92 Five-Year Financial & Operating Highlights 93 06 SUSTAINABILITY STATEMENT 2018 Share Performance 95 About Our Sustainability Statement 168 Market Capitalisation 95 Our Approach to Sustainability 169 Sustainability Governance at AirAsia Group 169 04 PERSPECTIVE Our Material Matters 170 Management Discussion & Analysis 102 Safety & Health 171 Stakeholder Engagement 175 Talent Attraction & Retention 181 Operational Efficiency 185 Service Efficiency 187 Energy Consumption & Fuel Management 188 Environmental Management 192 Risk & Crisis Management 195 07 FINANCIAL STATEMENTS Accountability 202 Corporate Governance Overview Statement 204 Audit Committee Report 211 CONTENTS Statement on Risk Management & Internal Control 216 Additional Compliance Information 223 Reports and Financial Statements 228 AirAsia Group Berhad Financial Statements 228 Other Information 355 Proxy Form CONSTRUCTION.