Seth K 3 Report post Posted March 17, 2006 (edited) Malaysia AirAsia Mulls More JVs, China Flights KUALA LUMPUR (Dow Jones)--AirAsia Bhd. (5099.KU) - Southeast Asia's biggest low-cost carrier in fleet size terms - is considering more joint ventures in the region, a senior executive said recently. AirAsia, which manages 49%-owned joint-venture low-cost carriers in Indonesia and Thailand, plans to set up similar arrangements in Indochina, and the Philippines over the next 12 to 18 months, Executive Vice President of corporate affairs and strategy, Timothy Ross, told Dow Jones Newswires. As with its current joint ventures, AirAsia will hold a minority stake in any new deal. By keeping the ultimate ownership of joint ventures native to the country they operate in, AirAsia gets easy access to flight rights within those countries, analysts said. Ross said AirAsia is likely to increase flights to China, including possibly flying from Kuala Lumpur to Southern Chinese cities such as Shenzhen and Guangzhou. "With the Airbus 320s, going to South China from Kuala Lumpur is possible," he said. Previously, AirAsia had said flights to China were only possible from Bangkok with its Boeing 737 fleet. AirAsia currently flies to Xiamen, its only mainland China destination thus far, from the Thai capital. "New services to China are being actively considered right now, including lifting Bangkok-Xiamen from four times a week to daily," Ross said. Since December, AirAsia has received four of the 60 new Airbus 320 planes it bought. With 180 seats each, the Airbuses can carry about 22% more passengers than the Boeing 737 jets, previously AirAsia's only plane type. AirAsia will have seven new Airbuses by the end of the financial year ending June 30, and another four by the end of calendar 2007, Ross said. Ross is also upbeat on the ongoing restructuring of domestic routes by the Malaysian government. Late Thursday , the government said the state-controlled Malaysian Airline System Bhd. (3786.KU) will only operate key domestic routes described as "domestic trunk services", as a full-service carrier. AirAsia will also operate the same routes, but as a low-cost carrier. AirAsia will also operate all other domestic routes, described as "domestic non-trunk services." Malaysian Air and AirAsia have to decide which routes are trunk, and non-trunk, before March 27, the government said. "Any form of (domestic route) rationalization will provide us with more opportunities," Ross said. The government's route split plan will lift AirAsia's share of domestic air traffic to 83% in one to two years' time from 29% currently, Citigroup aviation analyst Corrine Png said in a report. Ross reckons Malaysia has an oversupply in terms of seat capacity of 10% to 15% in domestic flights. The government's move to parcel out domestic routes will result in fewer seats and help alleviate oversupply, Ross said. Under the domestic route rationalization announced late Thursday, AirAsia may have to operate rural air services that serve destinations in rain-forest and mountainous areas that can only be served by small Twin Otter and Fokker planes. "AirAsia would prefer not to operate the rural air services itself but several parties have knocked on our door, offering to run them," Ross said. He didn't elaborate, but analysts expect AirAsia to outsource rural air services to other carriers. AirAsia may also lease eight or nine of Malaysian Air's 39 Boeing 737 planes as the low cost carrier takes on more domestic routes.......... More headache in MAS management Edited March 17, 2006 by Seth K Share this post Link to post Share on other sites
Rozhan 0 Report post Posted March 17, 2006 AK is bulldozing regional routes very agressively. Hope they are not pushing it too far. Share this post Link to post Share on other sites
S V Choong 4 Report post Posted March 18, 2006 Hope they are not pushing it too far. Why not? It is business after all. Share this post Link to post Share on other sites
Seth K 3 Report post Posted March 18, 2006 Sources indicated that the carrier is looking ‘big-time’ at India and may start operations not from Chennai alone, which had previously been on its radar, but Mumbai, Delhi, Bangalore and Kolkata, too. Ho Chi Minh City also been eye by AK. A big impact to Jet Airways, Air India and Indian Airlines, and perhaps MH. Share this post Link to post Share on other sites
Raj 0 Report post Posted March 18, 2006 If Air Asia is smart..They won't be flying to the same destinations that Mas fly's to to China..Go for places in China that are not served by Mas or not been doing well for mas.. Share this post Link to post Share on other sites
Ken K. Kour 0 Report post Posted March 18, 2006 If Air Asia is smart..They won't be flying to the same destinations that Mas fly's to to China..Go for places in China that are not served by Mas or not been doing well for mas.. so all of MAS's china routes la? Share this post Link to post Share on other sites
Raj 0 Report post Posted March 18, 2006 Is MH doing bad on all of their China routes??? Haiyo what happening man..I taught donno how many million people visit malaysia from china..Yet can't do well.. Share this post Link to post Share on other sites
Seth K 3 Report post Posted March 18, 2006 (edited) Is MH doing bad on all of their China routes??? Haiyo what happening man..I taught donno how many million people visit malaysia from china..Yet can't do well.. Ken just joking around A friend if mine told me that some Chinese who fly to KUL mostly will take China-HKG-KUL or China-BKK-KUL instead of direct flight to KUL. No particular reason why they do this. That's why we can see CX and TG flights to KUL is a lot. I also read somewhere in news that Chinese traveller prefer via SIN too After all, MH is doing fine to China because my dad took HKG-KUL and Shanghai-KUL and they all full house flights, especially HKG Edited March 18, 2006 by Seth K Share this post Link to post Share on other sites
Rozhan 0 Report post Posted March 18, 2006 There was about 50% fall in Chinese tourist arrivals into Malaysia in the past one year or so, mainly due to 'activities incompatible with the entry visa' and made worse by the ear-squat incident. Share this post Link to post Share on other sites
Tze Shan 0 Report post Posted March 19, 2006 hopes Mh can do it well/ coorperate with AK to settle down their problems.... hopes AK's routes wont affect MH Share this post Link to post Share on other sites
Seth K 3 Report post Posted March 19, 2006 hopes Mh can do it well/ coorperate with AK to settle down their problems.... hopes AK's routes wont affect MH AK route to China will effect MAS big time. But, MH have chances to steal away passengers from AK with business travellers(business travellers doesn't mean they fly in biz), holiday packages(which extremely cheap+luxury), loyal customers(Malaysian rich and Enrich people), better services and connection flights availability at KUL. Let's pray AK doesn't growth outside Malaysia hopes Mh can do it well/ coorperate with AK to settle down their problems.... AK won't work out with MAS for future growth plan which we can see why AK buy 60+40 bus If Air Asia is smart..They won't be flying to the same destinations that Mas fly's to to China AK will fly to routes that fly by MAS right now, that's the business strategy! There always low cost market in every corner of the world-some people just expect to pay less, it just getting from A to B Share this post Link to post Share on other sites
