One plane with plans for more is enough for AirAsiaX

[Naim 6]

From The Australian.

 

 

One plane with plans for more is enough for AirAsiaX

 

Steve Creedy | October 05, 2007

 

AIRASIAX has rejected suggestions from rival Jetstar that passengers on its new Australian services will be stranded if its only plane breaks down.

 

The long-haul, low-cost carrier - to start flying to Australia early next month - will begin service with just one leased A330 aircraft flying four times a week to Australia and five times to China, but it's what may come next that has Jetstar paying attention.

 

Additional aircraft will come on stream over the next five years. The airline has committed to 15 A330-300s, with options on 10, and gets its first two planes next year. It is also looking at extra leased A330s and, possibly, bigger A340s to service Europe.

 

Jetstar - which has had its own troubles with aircraft problems that have left passengers stranded - has raised questions about AirAsiaX's ability to repatriate Australian travellers if there are problems while it is operating with a single plane.

 

AirAsiaX chief executive Asran Osman-Rani says the airline has the contingency covered, however, and had an insurance plan to cover costs such as food, accommodation and tickets. "One of the things we will offer is compensation, either in refunds or getting people on board other flights," he said.

 

"If you think about it, even if I had five planes I wouldn't have a spare just sitting on the ground.

 

"They're all going to be flying to different destinations and realistically, in our model, I wouldn't expect these planes to be flying about half-full. They'll probably be flying about three-quarters full, if not more.

 

"So there's a limited ability to really do rescue planes on our own flights." The Malaysian-based carrier last Friday announced one-way introductory fares of $99 on its four weekly return services between Kuala Lumpur and Gold Coast.

 

It has pledged to keep seats available at $199 one-way and to maintain its overall prices at about half those currently offered by full-service airlines.

 

This would mean tickets at about the $500 return mark, according to Mr Osman-Rani, who also raised the possibility of $1200 return fares to Britain using the A340s to fly directly from Kuala Lumpur.

 

The airline is 20 per cent owned by Richard Branson's Virgin Group and 20 per cent by Southeast Asia's biggest budget carrier, AirAsia.

 

AirAsia chief executive Tony Fernandes said recently the airline was also in talks with private equity funds to sell an additional 20 per cent. Mr Fernandes declined to name the bidders, but he told Bloomberg there was more than one and the deal would make AirAsiaX one of "best-capitalised start-ups".

 

Analysts have speculated the airline could have up to $125 million in start-up capital if its investment plans were fulfilled.

 

The carrier's plan is some ways mirrors the Qantas Group's plan with Jetstar: connect a two-class, long-haul international carrier to a pan-Asian network. Mr Osman-Rani said the initial aim was to set an international network connecting Europe, China and Australia through Kuala Lumpur.

 

Avalon, in Victoria, remained at the top of the list as the airline's next destination but no agreement had been signed, Mr Osman-Rani said. But he had also talked with Melbourne Airport, Perth and Newcastle.

 

"We will do a second Australian city and a second Chinese city and then also try to increase the frequencies to, perhaps, a daily flight each," he said.

 

"So that the overall expansion is almost like a Y shape between KL and China, KL and Australia and then KL and Britain. These then feed off each other, not just point-to-point, but also to the different markets.

 

"That's probably going to be a core structure of our routes."

 

AirAsiaX also has its sights set on producing unit costs lower than its sister carrier, AirAsia.

 

It would do this by hiring staff from a pool operated by AirAsia rather than employing them permanently, Mr Osman-Rani said.

 

This and the extra stage length of its flights would help the airline bring its unit costs below AirAsia's once it reached a fleet of about five aircraft, he said.

 

"A lot my costs, which would normally be fixed, are variable," he said. "For example, pilots and crew, which is a big chunk of costs, I'm paying AirAsia for that.

 

"In a standalone airline, you'd typically need more pilots than you'd use because people get sick and they go on holidays, but because we're sharing a pool of pilots with AirAsia, I'm only going to be paying for pilots who fly on my planes."

 

Ground handling in Kuala Lumpur was based on the number of flights, rather than a fixed cost, and IT costs would be incremental through AirAsia.com.

 

"Most people have to spend millions to set up an IT infrastructure, I'm just riding on AirAsia's booking system, AirAsia.com," Mr Osman-Rani said.

 

Also, he did not have to pay to build up brand awareness because AirAsia had already done so.

AirAsia will initially use a leased Airbus A330-300 with 279 economy and 36 premium seats, but plans to boost that to a hefty 392 seats as it acquires its own A330s.

 

The 392-seat planes will have 28 premium seats and 364 economy seats arranged in a nine-abreast configuration, instead of the normal eight across.

 

The seats will have a 31-inch (79cm) pitch-equivalent to Qantas international economy seating - but the width will be reduced by just under an inch and some aisle space will be sacrificed.

 

"If you're really concerned you can also travel on our premium product, which is a full business-class seat but at full-fare economy price," Mr Osman-Rani said.

 

Asked about safety concerns at southeast Asia's rapidly expanding low-cost carriers, the AirAsiaX chief said the key to remaining safe was operating new planes.

 

He said the airline was being tightly monitored by the Malaysian Department of Civil Aviation and had to meet Australian Civil Aviation Safety Authority requirements.

 

http://www.theaustralian.news.com.au/story...3-23349,00.html

[Izanee 0]

what rubbish. they can't even keep good care of F50s and DHTs. i suppose they will be more careful with their own aircraft - they can't send the repair bill to MH.

[S V Choong 4]

9 abreast on the A330.......thats madness.... thanks, but no thanks!

 

With 1 plane.....they will be screwed over completely if the plane brakes down...

 

 

[Wai Hung 0]

they can send some 320s there to ferry the passengers right? if the 330 breaks down.

they have so many of those 320s here.

will the 320 be able to travel KUL - SYD and otherwise without stopping?

[Walter Sim 1]

Don't think so A319 probably..

 

Well EK has 10 abreast in their 777's and i've heard that the narrowness of the seat is not that obvious based on TR i've read over the net.

[Seng Lim 0]

will the 320 be able to travel KUL - SYD and otherwise without stopping?

Definitely need a stop like Darwin before A320 can go down any further. KUL - OOL is 7 hours non-stop while KUL - SYD is 8 hours.

 

[Waiping 12]

Hmm...seems like they do not keep records of flight delay/grounded due to technical problems.