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AirAsia X: Europe expansion despite crisis

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KUALA LUMPUR, Dec 1, 2010 (AFP) – The head of budget long-haul carrier AirAsia X said Wednesday the eurozone debt crisis would not prevent the airline expanding in Europe and that he hoped to open a route to New York next year.

 

Tony Fernandes said he would "absolutely not" rethink plans to begin new flights into Russia, Hungary and the Czech Republic, adding that the company had survived other crises in the past.

 

"No (cut back in expansion)," the airline's founder told AFP. "Absolutely not. We have been through the last nine years -- many financial crises, many oil crises and many political crises -- but people still want to fly.

 

"I think AirAsia actually provides a relief from all these financial troubles. People want to get away and have a break. So not at all."

 

Fernandes was speaking after launching the carrier's inaugural flight to Christchurch, to which it will begin four non-stop weekly flights from Kuala Lumpur from April 1.

 

The route will add to AirAsia X's expanding network, which already includes Australia, India, Taiwan, China, Britain, South Korea, Japan and Iran, and will from February 14 also boast France.

 

AirAsia X, an affiliate of regional low-cost carrier AirAsia and Virgin Group, was launched in January 2007.

 

Fernandes cited strong bookings for the Kuala Lumpur-Paris route, which the airline began taking last month, as evidence of the firm's ability to weather the European financial crisis.

 

"Our strategy has always remained the same despite calamity in the world. I was looking at our load factors to Paris, it is truly unbelievable. We are really full. It is one of our best routes," he said.

 

The airline is aiming to start new routes to Moscow, Budapest and Prague from 2012 after it takes delivery of new aircraft.

 

"To me if we can have an entire fleet of A330's that will be fantastic," said Fernandes.

 

He added that he also hoped to kick of flights to New York next year, describing North America as being "definitely on our plan". He added: "We would like to fly from one of the European points into New York and at some stage into Los Angeles. It may come in 2011."

 

Fernandes said the airline has ordered 25 A330-300 and was "pushing" Airbus to provide more range for the planes.

 

"If we can get the A330 into most of Europe then European expansion will be much larger than it is presently," he said.

 

On the outlook for the company next year, Fernandes said: "We are optimistic. We had a fantastic three quarters. Our fourth quarter is going to be strong. Bookings for the first quarter is looking good."

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I am sceptical about their plans. The D7 fleet is really stretching the LCCT facilities with 11 aircraft. I heard that some of next year's deliveries (6 x A333s are scheduled) will be pushed back until after the KLIA2 is completed. So maybe there will be one or two more new routes will follow ORY and CHC.

 

However, flying to New York from one of their European destinations is definitely going to be very interesting. I am not sure which country will give them the 5th freedom rights, though.

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CHC won't be non-stop. It's via OOL. And there's no way they'll get A330-300s to make it to Western Europe unless they decide to order the A330-200s instead. Sounds like the Paris route is looking like it will be successful. I wonder if MH is getting good load factors on their flights to Paris? As for flights to the US, I don't know how successful they'll be because they will be competing with a lot more carriers between Europe and New York. As for LA, isn't MH kinda struggling a little on that route?

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CHC won't be non-stop. It's via OOL. And there's no way they'll get A330-300s to make it to Western Europe unless they decide to order the A330-200s instead. Sounds like the Paris route is looking like it will be successful. I wonder if MH is getting good load factors on their flights to Paris? As for flights to the US, I don't know how successful they'll be because they will be competing with a lot more carriers between Europe and New York. As for LA, isn't MH kinda struggling a little on that route?

 

I think you will find on pages and pages that the KUL - CHC flight is NON-STOP. They are only doing it 4x weekly and the flight schedules loaded are direct flights. Besides, they would mention if a stopover were happening when people book the flights.

 

Remember that Air Asia X have A350's on order. They should make it easy to Western Europe (thought Budapest, Prague and Moscow was Eastern?). The A330's they are ordering already have IGW (as they are the E range) so they should have the legs to do at least Eastern Europe. In comparison, I think Thomas Cook from Europe did flights from Europe to Phuket non stop during Christmas and peak periods.

 

MH is only struggling on the route to LA because it only flies it like 2 - 3 weekly. That is nothing when you want to make a footprint on a route. The minimum is about 4x week or even daily. It also flies via TPE which isn't a high yield port anyway. Hence a lot of factors are point to the reason why MH isn't doing the best on that route. As for Air Asia X and New York via Europe... If they can pick a port that allows them 5th freedom rights, then done. Low cost to New York and I mean low cost (since Air Asia X's cost base is amazingly low) then you would be able to easily make a profit with say 4x week to New York (feed into EWR and you'd could feed onto UA/CO, into JFK and DL, AA) so there would be good reason that it could work.

 

Alex.

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CHC won't be non-stop. It's via OOL.

...

 

MH131 nonstop KUL-AKL 10h 15min, about 8650km, as the crow flies.

 

compare with:

 

Air-Asia-schedule.JPG

 

Flight time KUL-CHC: 10h 15min, also about 8650km.

 

So how to stop at OOL?

 

===

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^^ A regular config A330-300 with minimal cargo SHOULD be able to do Eastern Europe all year round (A332 definitely can!), but we need to bare in mind that D7 configures their A330s with a lot more seats than traditional carriers.

Since the 350s wont be delivered until 2016 (or later actually, given the expected delays of A350 program), they have a few options here:

1) Lease more A343s!

2) Deploy their A333s but carry no cargo and block off a few rows of seats to operate with less pax.

3) Order/Lease/Convert their A333s into A332HGWs!

 

I'm actually very curious about their flight to CHC, a fake booking for KUL-CHC shows it operating non-stop on the A333 (based on seatmap)... Sure, its not as far as Europe, but 5399mi + headwinds + reserve probably means the flight will have some weight penalties.

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Thanks for clearing up the KUL-CHC confusion for me. I'd read earlier when they first announced flights to CHC that it was going to be via OOL. They've obviously changed their mind. I wasn't sure if the A330-300 could make it that far. MH uses their B777-200ER for the KUL-AKL route.

 

As for Mh flying to LAX, I believe the frequency is 6x weekly. It used to be daily.

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3) Order/Lease/Convert their A333s into A332HGWs!

They might do a similar deal that SQ did with Airbus. The prospect of having A332 HGWs leased from Airbus pending the delivery of A350's is to be seriously considered as Airbus has already indicated that the A350 project is behind schedule.

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I think that if D7 needs to make a stop, it should be more beneficial to stop at HNL. Their TPE flights are very full, despite the 9X weekly frequency.

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