AirAsia X to focus on growth in Asia Pacific, Australia

AirAsia X Plane

AirAsia X to focus on growth in Asia Pacific, Australia

AirAsia X Bhd, the long-haul arm of AirAsia Bhd, has said it has no plans to resume flights to Europe and India till next year, putting to rest speculations that the low-cost carrier may re-enter these destinations with an increased fleet size. The airline, which stopped flying to London, Paris and some Indian cities, wants to concentrate on its network in the Asia Pacific and Australia currently.

“Europe and India are not going to be the markets that we are going to serve this year or next year. Asia Pacific is the market that we are looking at. There is more growth in these markets and it is the right segment,” AirAsia X CEO Azran Othman Rani told reporters recently after a MIDF Research Sdn Bhd luncheon talk here on the prospects of long-haul budget airlines. The airline has plans to increase its flying destinations in more cities in Australia, China and in other Asia-Pacific countries.

While building on its existing routes, the airline is adding locations that contribute to its feed-in air traffic in the Asia- Pacific region. “We are building this global network piece by piece in all markets and then the long-haul arm will connect it to other hubs,” Azran said. AirAsia X stopped flying to Europe and India last year from its Kuala Lumpur base due to soaring taxes and higher jet fuel prices. In India, it was high airport costs and travel agent charges, while in the European Union it was an emission trading scheme that was implemented which had put carriers from North America and Asia at a disadvantage.

Nevertheless, AirAsia X’s parent company AirAsia is planning to set up a carrier in India through a joint venture with the Tata Group and another investor, which may lead to increased flights from Asia Pacific to India since AirAsia has a good network in the region. Azran said the airline will add seven new aircraft this year and seven next year to its fleet, with the total increasing to 25 by 2014.

AirAsia X is coming out with its RM776 million initial public offering (IPO) this year as Malaysia prepares for the general election (GE). With the Parliament dissolved, the GE may happen at anytime within two months (before May ends). “The IPO will be aimed at having a much bigger investor participation. If you missed out on investing in Air Asia in 2004, this might be a good proxy for you,” Azran said, declining to comment on the date and stake dilution that the company is looking at.

Asked if the GE is going to impact the IPO in any way, he said the election and the formation of new government would have taken place by the time the IPO takes off. He said the airline is not planning for a dual listing as “the brand recognition is strong in this market. We have a large customer base here.”

Source: Free Malaysia Today – http://www.freemalaysiatoday.com/category/business/2013/04/05/airasia-x-to-focus-on-growth-in-asia- pacific-australia/

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