Flying cheap from KL to London??

[Seth K 3]

I wonder, why they give contract to FAX instead of AK?

[Pieter C. 5]

Just a wild guess: cheaper and different labour-rules ?

[Naim 6]

January 04, 2007 21:21 PM

Malaysian Aviation Industry Takes A Quantum Leap

 

KUALA LUMPUR, Jan 4 (Bernama) -- The Malaysian aviation industry is taking a quantum leap following the government's vision of making the country a regional hub, when it gave Fly Asian Express (FAX) the nod to divert from its normal domestic routes to offer budget long-haul services to Asia, Australia and Europe.

 

FAX is 50 percent owned by AirAsia Bhd chief executive officer, Datuk Tony Fernandes, while the other two shareholders -- Kamarudin and Raja Mohd Azmi -- owned 30 percent and 20 percent respectively. It operates a rural air services in Sabah and Sarawak since Aug 1, 2006.

 

The move augurs well for Visit Malaysia Year 2007 in attracting more tourists, further boost the tourism industry and will have a spin-off effects on the economy.

 

It would also enable locals to travel abroad at much cheaper rates.

 

"Such efforts would promote travelling both inbound and outbound," said AmResearch Sdn Bhd head of research, Gan Kim Khoon.

 

Being the first business model of a budget long-haul service itself gives a sense of pride to the country as well as for operators, FAX and AirAsia Bhd.

 

However, for some it came as a surprise.

 

"It is a surprise. I feel a bit peculiar that AirAsia or FAX would depart from their original point-to-point destinations and test flights that are more than 3.5 hours," said Standard&Poors Equity Research airline analysts, Shukor Yusof.

 

FAX, together with Richard Branson's Virgin Group and Stelios Haji-Ioannou's easyGroup, the parent company of Britain's easyJet, is expected to announce tomorrow plans to offer long-haul low-cost services to the three continents.

 

Shukor said the market for long-haul flights was different from low-cost models or structures which were currently used by AirAsia and other low-cost carriers (LCCs) in the region.

 

"It really depends on what FAX or AirAsia hopes to achieve in the new venture because they have to price it differently. But then again pricing alone is not the only factor in the business," he said.

 

He said a passenger's decision to fly is not purely based on pricing alone but a combination of factors including connectivity, services and route selection.

 

"Hence, the model would be flawed if the company decides to design the long-haul budget business based on pricing structure alone.

 

"The model will be flawed if it is going to be based on pricing alone as long-haul flights need certain number of business class passengers who are able to pay more compared with casual travellers or backpackers.

 

"You got to fill your flights everyday. If you don't have enough people using your aircraft to go abroad, long distance flying becomes insignificant and your cost will rise and margins eroded," he said.

 

Asked on the impact on the aviation industry in Malaysia given that this would be the longest LCC route, Shukor said there would not be much in the near future.

 

He said this could very well serve the company and country in the long run.

 

Reports, quoting sources, said if the FAX-easyJet-Virgin alliance decides to fly to London as well, they could also use the Luton airport as a hub because Virgin already operates a rail link from there to central London.

 

The alliance would also give Virgin and easyJet an access to Kuala Lumpur's LCC terminal, the gateway to a dream Asian hub for their Europe to Australia routes.

 

Shukor was optimistic this local venture could be successful if there was a bigger market for such services.

 

Asked on Malaysia's aim to become the aviation hub for the region, both Shukor and Gan agreed there was a possibility of it being realised.

 

Both believed it was important to have substantial inter-connectivity and bigger volume of airlines flying in and out of Kuala Lumpur International Airport (KLIA).

 

"Arguably, Malaysia does not really have prominent inter-connectivity, which is a fact," said Gan.

 

"But should FAX pull off this feat, it would entice more airlines to touch base with KLIA," said Shukor.

 

On a more personal note, he said, this was the beginning of an even more adventurous journey for Fernandes and company.

 

"He has proven pundits wrong when he started AirAsia, which is currently the most successful and profitable low-cost airline in the region," he said.

 

-- BERNAMA

[Seth K 3]

Three indivdual shareholders from AirAsia and Fly Asian Xpress (FAX) will form an alliance to start the long-haul service to London and China as early as July using three aircraft -- a combination of Airbus A330s and Boeing 777-300s.

[Seth K 3]

In many cases, what Malaysian newspapers reported is only worth the paper it is printed on e.g. Disneyland in Johor.

And F1 track in Johor too......

 

The alliance would also give Virgin and easyJet an access to Kuala Lumpur's LCC terminal, the gateway to a dream Asian hub for their Europe to Australia routes.

Just great, what an offer, access to LCCT is not that tempting..... easyJet to Malaysia will be out of mind

Edited January 4, 2007 by Seth K

[Sandeep G 1]

ohh ahh a combination of A330s and 773s! That's mighty interesting! So is there some evaluation going on to determine whose quoted figures of performance best match the mission?? And then we'll hear an order for more aircraft at the end of this year?

[Pieter C. 5]

Any news from the 'news conference' yet ?

 

Malaysia Approves FlyAsianXpress Longhaul Flights

 

January 4, 2007

Malaysia has given approval to FlyAsianXpress (FAX), a domestic airline controlled by the major owners of low-cost carrier AirAsia, to run a long-haul budget service, state media said on Thursday.

 

The move allows FAX to operate the service between Asia, Australia and Europe, state news agency Bernama reported, quoting Transport Minister Chan Kong Choy.

 

The report comes a day before a media briefing which AirAsia has scheduled in the Malaysian capital, during which it is expected to announce a new service.

 

A source familiar with the plan said on Wednesday that the major owners of AirAsia, via FAX, might pursue a global no-frills alliance with British airlines easyJet and Virgin Atlantic.

 

But both British airlines denied in London on Wednesday that any such alliance may happen.

 

"We are not joining any alliance," easyJet spokesman Toby Nicol said. "The whole low-cost airline business model is based on simplicity," he said, noting alliances with other airlines involved costs and complications.

 

Virgin Atlantic spokesman Paul Charles said: "It's nothing to do with us. AirAsia clearly have their own plans and it is up to them to announce them."

 

FAX is an unlisted rural air service that flies to the eastern Malaysian states of Sabah and Sarawak.

 

Bernama said FAX is 50 percent owned by AirAsia chief and co-founder Tony Fernandes, while Kamarudin Meranun, another co-founder and AirAsia director, owns 30 percent.

 

Raja Mohd Azmi, a former AirAsia chief financial officer and FAX chief, owns 20 percent, Bernama said.

 

(Reuters)

 

and........................

 

FlyAsianExpress yesterday received approval from the Malaysian government to operate low-cost long-haul service to Asia, Australia and Europe, the national Bernama news agency reported. FAX, which is 50% owned by AirAsia CEO Tony Fernandes, reportedly may partner with the larger LCC to offer the service. Rumors of a tie-up with Virgin Atlantic Airways and/or easyJet have been denied. AirAsia is scheduled to make an announcement today.

 

"In order to turn Malaysia into the most advanced hub for international budget flight services, the government has given traffic rights to FAX to operate long-haul budget flight services," Transport Minister Chan Kong Choy said in a statement cited by the Associated Press. "The destinations allocated do not include international flights currently handled by Malaysia Airlines."

 

FAX operates seven 50-seat F50s and five 19-seat Twin Otters.

 

Would be nice to hear from you guys ASAP

 

[Radzi 2]

Just a wild guess: cheaper and different labour-rules ?

 

To my knowledge Air Asia and FAX do not have any pilot union.