Friday, June 4, 2010

AirAsiaX To Serve Delhi From Kuala Lumpur, Targets Other Asian Points

Low-Cost carriers

Aviation Daily Jun 04 , 2010 , p. 13
Neelam Mathews

Malaysia-based AirAsiaX, affiliate of Asia’s largest budget carrier AirAsia, will launch its second Indian destination Aug. 4 with daily flights to Delhi from Kuala Lumpur.

At the same time, AirAsia plans to expand its Indian network by adding frequencies from Delhi and Kolkata to Bangkok.

By the end of the last quarter, AirAsiaX will start flights to Tokyo and Seoul, CEO Azran Osman-Rani tells The DAILY. “At the price of a taxi ride from the airport to town, we will provide an air ticket from Kuala Lumpur to Tokyo,” he adds.

The carrier has been in lengthy talks with the Malaysian government for permission to start flights to Sydney — the turf of national carrier Malaysian Airlines — but has been unsuccessful so far, although it has no plans to give up. “This will be my fighting cause,” says Azran.

AirAsiaX has announced 1,000 free seats booked online June 5 on the Delhi-Kuala Lumpur sector, for travel Aug. 4-31. “This will introduce our product to the market and encourage them to fly again,” says Azran. He is considering double daily flights to Mumbai and Delhi if he gets the approvals. The Mumbai-Kuala Lumpur route AirAsiaX started last month already has a 70% load factor. “India is no different from the other markets,” says Azran. “Our model remains the same. We go directly to the customer.”

The AirAsiaX long-haul model seems to be working, having brought in $200 million in revenues with a small net profit last year. The carrier burns 2.4 liters of fuel per seat for every 100 km, compared with Cathay Pacific’s 5 liters. The cost per seat kilometer is 1.2 cents. “Even if fuel were to double, we have a definite cost differentiator from our competition,” says Azran.

AirAsiaX has no plans to fly to New Zealand this year while the Air New Zealand-Virgin Blue strategic alliance is awaiting approval. “We shall wait and watch. If the alliance pushes up fares, we’ll go in.”

Azran says it is clear that expansion will come in the Asia-Pacific region. “We have no plans to fly to the U.S or Europe. Our focus is Asia-Pacific. Why go to economies that are in trouble? The future is India…Asia.”

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