AirAsia keen on the Gulf area

[alberttky 0]

DOHA: AirAsia Group is in discussion with several parties to set up a low-cost carrier (LCC) in the Gulf Cooperation Council (GCC) areas, according to group chief executive officer Tan Sri Dr Tony Fernandes.

 

“We're looking at it quite seriously at the moment,” Fernandes told a press conference yesterday.

 

He, however, declined to reveal the names of the parties with which AirAsia was having discussions for the setting up of the LCC business in the GCC, explaining that it was not permissible for him to do so at this juncture.

 

Fernandes pointed to the ample business opportunities in the GCC and the Middle East, effected by hajj pilgrimage, a huge population and rising economic activities, as the main draw for him to expand AirAsia's business in the region.

 

At present, AirAsia flies only to one destination in the Middle East Tehran in Iran.

 

Meanwhile, in the pipeline is a plan to start to flights from Kuala Lumpur to Doha in Qatar. Fernandes, however, said there was no firm decision as yet as to which of the airlines AirAsia X or Malaysia Airlines System, or both that would be undertaking this route. Details would be announced in due course, he said.

 

(AirAsia holds a 20% stake in MAS via a share swap deal completed last year.)

 

On whether AirAsia could be setting up a base in Doha to start flights into Europe, Fernandes said he would not rule out such a possibility.

 

“The beauty of our relationship (between Tune Group and its Qatari partner Mohammad Al Saad) is anything is possible,” Fernandes explained.

 

Fernandes, who co-founded Tune Group with long-time partner Datuk Kamarudin Meranun, yesterday led the launch of a 50:50 joint venture with Al Saad called Tune Middle East.

 

Al Saad in the vice-chairman and managing director of Barwa Bank Group and vice-chairman of Barwa Real Estate. He is also the chairman of Qatari construction groups Tanween and QCon, and sits on the board of directors of various local companies such as Qatar Fuel Co.

 

Headquartered in Doha, Tune Middle East will be a platform for Tune Group to roll out its brands in the GCC and the Middle East, targeting mainly the under-served mass market.

 

Tune Group is a diversified lifestyle business conglomerate which owns various brands, including AirAsia (via Tune Air Sdn Bhd), Tune Hotels, Tune Money, Tune Talk, Tune Box,Tune Studios, Caterham Group, Asean Basketball League, Kuala Lumpur Education City and English Premier league team Queens Park Rangers Football Club.

 

“Our immediate priorities in the Middle East are hotels and Tune Money,” Fernandes said.

 

According to Tune Hotels Regional Services Sdn Bhd Mark Lankester, the group would see its first hotel in the Middle East up in the next 10 months in Saudi Arabia. The plan was to have a 7,000-room capacity spread across various parts of Saudi Arabia, especially in Mecca, Jeddah and Riyahd, within five years.

 

As for Qatar, Lankaster said the target was to have its first hotel up within the next 18 months. At the moment, though, they were still looking for a suitable site to build its hotel in the country.

 

Other countries in the region that Tune Hotels is already in discussions to expand into include Egypt, Iran, Iraq and the United Arab Emirates. Lankester revealed that there were also plans to expand the group's footprint in the hotel industry of East Africa.

 

Meanwhile, Tune Money CEO Peter Miller said the company was still in discussion, trying to find the right products for the market in the Middle East. There was no specific target as to when the first product for the region would be launched, he said, but it would be within a short period of time.

 

http://biz.thestar.com.my/news/story.asp?file=/2012/2/16/business/10746584&sec=business

[Mike P 0]

Personally won't think this is ideal for D7. Rather set up the LCC in US or Europe. Middle East people are way too rich to travel on low cost.

[alberttky 0]

Personally won't think this is ideal for D7. Rather set up the LCC in US or Europe. Middle East people are way too rich to travel on low cost.

 

Plenty of migrant workers in the Middle East for them to tap on to.

[Mike P 0]

Plenty of migrant workers in the Middle East for them to tap on to.

 

Didn't know Middle East got a lot of migrant workers... and where do they head to? Don't seem them much hanging around in Malaysia... And when you mentioned migrant workers, are they low income one too like Bangladeshi?

[BC Tam 2]

Didn't know Middle East got a lot of migrant workers... and where do they head to? Don't seem them much hanging around in Malaysia... And when you mentioned migrant workers, are they low income one too like Bangladeshi?

Migrant workers from all over the world flock to the middle east like nail filings to a magnet !!

From CEO's (think Emirates) to those who take care of the most menial of tasks

I had a chat with a very pleasant young chap from Shandong, China working at duty free outlet at Abu Dhabi on chinese new year eve

[Mike P 0]

Migrant workers from all over the world flock to the middle east like nail filings to a magnet !!

From CEO's (think Emirates) to those who take care of the most menial of tasks

I had a chat with a very pleasant young chap from Shandong, China working at duty free outlet at Abu Dhabi on chinese new year eve

 

Probably Dubai or Abu Dhabi would be the best option then....

[Ruiz Razy 1]

Personally won't think this is ideal for D7. Rather set up the LCC in US or Europe. Middle East people are way too rich to travel on low cost.

Failure of D7 to sustain AUH was a good reminder that long haul low cost may likely not work from M/East

Didn't know Middle East got a lot of migrant workers... and where do they head to? Don't seem them much hanging around in Malaysia... And when you mentioned migrant workers, are they low income one too like Bangladeshi?

Now that's realistic, but that translates for LCC operating flights to the sub continent only ( Pakistan, Bangladesh and India) . However, the big three gulf carriers ( EK,EY and QR) may still pose a significant challenge as they have the capacity and means to match LCC fares. Afterall, their main income comes from significantly from premium cabins.

[BC Tam 2]

..... but that translates for LCC operating flights to the sub continent only ( Pakistan, Bangladesh and India)

Philippines, Indonesia, Malaysia, Indochina, the east european states, etc ?

From what I've seen at DXB and AUH, it's a very cosmopolitan mix over there

[flee 5]

Failure of D7 to sustain AUH was a good reminder that long haul low cost may likely not work from M/East

That is why he is looking at a partnership to start AirAsia Arabia or something like that. Then D7 can relaunch its Middle East route so that it has a feed. A Middle East hub may also become necessary in future to ameliorate the effects of the EU's ETS.

[Ruiz Razy 1]

Philippines, Indonesia, Malaysia, Indochina, the east european states, etc ?

From what I've seen at DXB and AUH, it's a very cosmopolitan mix over there

That's true, but D7 was not able to sustain @ AUH ! Main reason, EY/EK/QR was able to match up their discounted Y fares for these market segment.

[Kaquah 0]

Air Arabia(LCC) hub at Sharjah is growth fastest in last 2 years compare to Air Asia if not mistaken.

[flee 5]

That's true, but D7 was not able to sustain @ AUH ! Main reason, EY/EK/QR was able to match up their discounted Y fares for these market segment.

D7 also used the wrong equipment - the A343 with the ex-AirCanada configuration. Fuel prices rose like crazy (esp. at AUH airport) and they were not able to compete.