AirAsia X May Add Planes, Open New Hubs

[flee 5]

AirAsia X Sdn., the long-haul affiliate of Asia’s biggest discount carrier, may add at least 60 more aircraft to support possible hubs in Japan and Australia.

 

The carrier, which has a backlog of 30 Airbus SAS planes, “could triple our orders,” Chief Executive Officer Azran Osman Rani said in an interview in Tokyo yesterday. “The existing orders are conservative.” He declined to give specific details on how many planes the carrier may add or when.

 

Kuala Lumpur-based AirAsia X may open a base in Japan to work with affiliate AirAsia Bhd.’s planned venture in the country, Rani said. The long-haul carrier and Qantas Airways Ltd.’s Jetstar have won passengers from full-service carriers in Asia with low fares, prompting Singapore Airlines Ltd. (SIA) to draw up plans for its own budget long-haul unit.

 

AirAsia X may eventually operate flights to Guam and Honolulu from Japan on behalf of AirAsia Bhd.’s venture with All Nippon Airways Co., Rani said. The long-haul carrier, which currently flies to cities including London from Malaysia, may also open a base in Australia.

 

“A unit in Australia is definitely a possibility,” Rani said. Still, it will probably take at least two years before this happens, he said.

 

AirAsia X’s plans to hold an initial public offering have been delayed by talks to sell a 10 percent stake to Khazanah Nasional Bhd., Malaysia’s state-controlled investment company, Rani said. The sale is part of a wider deal that also included the purchase of a stake in Malaysian Airline System Bhd. by Tony Fernandes and other AirAsia Bhd. (AIRA) shareholders.

 

AirAsia X is currently owned by AirAsia Bhd., Richard Branson’s Virgin Group Ltd., Manara Consortium, based in Bahrain, and ORIX Corp. (8591), based in Japan.

 

Source

[Sandeep G 1]

Long haul Aussie base? Hmmmm... Perhaps a prelude to those earlier mentioned A321 chance order. These guys are ambitious bu not dumb. Love how they have built the brand, sold on the concept and spread the financial risk whilst maintaining profits.. Textbooks will be re-written!

[Mike P 0]

That's nice! Imagine AirAsia X offering flight to Honolulu from KUL with stopover and change plane at HND or NRT...

[flee 5]

That's nice! Imagine AirAsia X offering flight to Honolulu from KUL with stopover and change plane at HND or NRT...

I suspect that D7 may open a new hub in NRT to service AirAsia Japan. They do not have enough landing slots in HND. And since airlines are charging a considerable premium on Asian services from Tokyo Haneda compared to the city's former exclusive international gateway, Tokyo Narita, D7 might use their HND slots for higher yielding services.

[alberttky 0]

I actually expected them to set up another hub sooner...

[flee 5]

I actually expected them to set up another hub sooner...

They might have if they could not postpone the deliveries of 6 A330s this year. It is quite obvious that KLIA2 will not be ready in time for their deliveries next year. So these new 2012 planes might now need to be based outside KLIA.

[flee 5]

Long haul Aussie base? Hmmmm... Perhaps a prelude to those earlier mentioned A321 chance order. These guys are ambitious bu not dumb. Love how they have built the brand, sold on the concept and spread the financial risk whilst maintaining profits.. Textbooks will be re-written!

Yes, gives a new meaning to "network carrier" - the airlines are also a network themselves. Definitely lower cost than having alliances.

 

The Aussies seem to prefer AirAsia X to their local LCCs for flights into SE Asia and also the kangaroo route. An Aussie base may also be a good place to mount A350 services to South America in future.

[Naim 6]

More new places for me to explore. Very timely.

[flee 5]

 

SEPANG (Nov 27, 2011): It has been nearly four years since AirAsia X Sdn Bhd launched its first international destination — the Gold Coast, Australia — but CEO Azran Osman-Rani said many remain skeptical about the viability of the long-haul, low-cost business model.

 

"Many people, by this I mean investors who are already investing in other airline stocks, are still skeptical about the long-haul, low-cost model (because) they don't understand it. We probably have to wait until our initial public offering (IPO) (to convince them) as I am sure a lot of people would want to study our financial numbers," he told SunBiz in an interview.

 

"As with all things, people who are skeptical and who wait, ultimately are the followers. If you want to lead and to blaze a new trail and be a pioneer, you don't wait until everybody agrees on something because by then, the leaders and the pioneers have already moved ahead. So, we will not let that stop or slow us down," said Azran.

 

"But our numbers will tell that we can indeed achieve a significantly lower unit cost; we can indeed fill up our planes; our seat load factors are higher than that of full-service airlines and we are still able to deliver a strong on-time performance.

 

"For example, over 90% of our scheduled flights arrived on time between January and June this year compared with Hong Kong's Cathay Pacific Airways' on-time performance of 84%."

 

The airline has also attracted investors in the likes of Virgin's Richard Branson who holds a 10% stake as well as Japanese leasing firm Orix Corp and Bahrain-based Manara Consortium, which have an 11% stake each.

 

Under the recent Malaysia Airlines (MAS)-AirAsia share-swap deal, Khazanah Nasional Bhd is also expected to take up 10% of the shares in AirAsia X before its listing.

 

Additionally, the airline has managed to attract financiers for its aircraft despite not having a track record.

 

"All of our bank financing, not a single one has been on the back of any (parent company) AirAsia guarantee. They have all been standalone financing," said Azran.

 

"We have also not received any subsidy from AirAsia which is a public-listed company, and under Malaysian laws they cannot provide financial assistance to another company, especially a related-party company."

 

Still, news that Singapore Airlines (SIA) will start its new long-haul budget carrier called Scoot next year brings to the fore some of the concerns about the viability of the business model.

 

On the oncoming competition, Azran said: "The dynamics are going to be similar to how Tiger Airways first entered the short-haul low-cost carrier segment. People then were questioning whether AirAsia was going to survive. Fast forward five years, and AirAsia is even bigger and the market has grown.

 

"The main thing for us is to ensure that we keep growing as well, and we obviously have an advantage in terms of size, experience, a much bigger network, brand new planes and our brand is more established."

 

He added that SIA's new subsidiary will not be in direct competition with AirAsia X as the former will be based in Singapore which means they are not going to be flying on the same city pairs.

 

Amidst the roadblocks and brick walls, Azran has no plans of giving up.

 

"Even at the start of AirAsia X, we knew there was so much skepticism. I took this job because I knew the fun was going to be winning people over, sooner rather than later. We never expected to be given a red carpet treatment or to have things given to us," he said.

 

"While we didn't expect that (more obstacles coming from within the local industry rather than international), it has made us stronger. The more difficult people try to make it for us, the more creative we become or more persistent."

 

Source

[Ruiz Razy 1]

At the expense of .....

[flee 5]

... those who are not able to compete.

[leon t 0]

SQ's Scoot will have a hard time to be profitable as its costs will still be quite high as its SIN based.

[alberttky 0]

SQ's Scoot will have a hard time to be profitable as its costs will still be quite high as its SIN based.

 

I won't be surprised to see bulk of the labour (including cabin crew) will be from some cheap-labour sources.

[flee 5]

I think that there are quite a lot of people from SIN who are connecting to D7 flights via AK's many daily services. That number might reduce a bit when Scoot begins to ply the routes that Singaporeans want to travel to. It is always better to have non stop direct flights, especially on LCCs!

[Mike P 0]

I think that there are quite a lot of people from SIN who are connecting to D7 flights via AK's many daily services. That number might reduce a bit when Scoot begins to ply the routes that Singaporeans want to travel to. It is always better to have non stop direct flights, especially on LCCs!

 

JQ is already out of the picture while competing with D7 or AK since I heard enough of complains about JQ. I took JQ once too, very silly indeed. Counters closed at 2 hours before boarding, it has caused many to miss their flights! Perhaps with Scoot coming in, it could give D7 some tension to upgrade and serve better.

[Mohd Azizul Ramli 2]

From the AK Gossip Division:

 

D7 will do a charter to Baghdad, Iraq in Ramadan (July) this year. Cabin and cockpit crews identified and registered (and talk about it in Facebook).