General News Jan 2012


 General News

 AirAsia X drops European, Indian routes

Long-haul low-cost carrier (LCC) AirAsia X will cease operating to Europe, dropping its four-times weekly service to Paris on 30 March, followed by its six-times weekly London flights the following day.

Both flights use four-engine Airbus A340-300 jetliners. The airline’s Delhi flights, which have already been reduced from daily to four-times weekly, will also be scrapped from 1 March. Four weekly services to Mumbai were stopped on 31 January.

The airline has been losing money on all four routes. High jet-fuel prices and the weakening demand for travel from Europe due to the current, unstable economic situation, have put pressure on the airline’s bottom line. AirAsia X is the only LCC operating the four routes and is also said to be reviewing its Kuala Lumpur-Christchurch service.

Industry observers say the carrier’s decision to drop Mumbai and Delhi comes as no surprise, since the fares offered were close to those of full-service Malaysia Airlines (MAS). In 2011, the airline dropped its Kuala Lumpur-Chennai and Penang-Chennai as it struggled to compete with MAS and Indian Airlines, which have a firm foothold on both routes.

AirAsia X Chief Executive Officer Azran Osman-Rani says the changes to the network were necessary to improve operating-cost efficiency and consolidate operations to focus on markets where the carrier can take a strong position.

The cut in long-haul routes is consistent with the airline’s plan to limit its services to routes under ten hours’ flying time from its base in Kuala Lumpur, concentrating on its core markets: Australia, China, Taiwan, Japan and South Korea. According to Azran, AirAsia X plans to introduce new routes in these markets soon, increasing frequencies on existing services.

The carrier is understood to be planning to launch daily services to Sydney from 1 April. AirAsia X officials say the carrier is keen to add Sydney to its network. It has been pushing to obtain rights for the route since 2009.

Malaysian transport minister Kong Cho Ha says only that the MoT has no objections to AirAsia X or any other airline planning to add new destinations.

AirAsia X’s current Australian services operate to Melbourne, Perth and Gold Coast.

In January last year, the carrier deferred all three deliveries of new Airbus A330-300s scheduled for that year, with deliveries set to begin again in 2012. AirAsia X operates 11 A330s, with 17 more to come. It has also ordered ten A350-900s for delivery starting in 2017.

Sabah Air to set up new airline

Kota Kinabalu-based Sabah Air Aviation (SAA) is planning to set up a new airline to operate domestic and regional flights. Network and fleet plans for the new carrier have been submitted to the company’s board for approval.

According to SAA Chairman Yusof Kassim, once the proposal is cleared by the board, the company will seek approvals from the Department of Civil Aviation and Ministry of Transport (MoT) in Putrajaya, near Kuala Lumpur.

Yusof says SAA’s move has become necessary in the wake of Malaysia Airlines (MAS) subsidiary FireFly ceasing its jet operations while its parent suspended flights from Kota Kinabalu to Osaka, Kaohsiung, Seoul, Haneda and Perth.

State-owned SAA is in talks with lessors to acquire aircraft and flight crews, and is looking at hiring maintenance personnel.

The company has not revealed what types of aircraft it is considering leasing. Industry observers suggest that the most likely candidates would Boeing 737 or Airbus A320 single-aisle jetliners.

Initially, SAA plans to operate routes within the states of Sarawak and Sabah, and across the so-called East Asean Growth Area (EAGA) comprising Brunei, the southern Philippines and the Indonesian provinces of Sulawesi, East, West and North Kalimantan. At a later stage, SAA plans to operate to rural areas in Sabah using turboprop aircraft.

SAA, which is based in Kota Kinabalu, currently operates 12 helicopters and a nine-seat Beechcraft KingAir 200 offering charter cargo and passenger services. The company was set up in 1975.

Sabah state Minister for Tourism, Culture and Environment Masidi Manjun says the government has given SAA its full backing to set up a new airline to boost its booming tourism industry.

“The Sabah government has written to MoT for the Perth, Haneda, Seoul and Osaka routes to be forfeited by MAS and given to SAA ,” Masidi told Asian Aviation in Kota Kinabalu. The routes were suspended by MAS as part of a major restructuring exercise triggered by heavy losses.

Masidi says several meetings Sabah government officials had with MAS to draw up alternatives instead of suspending the flights only drew blanks.

SAA officials declined to be drawn on whether the company would take over the international services suspended by MAS.

INDONESIA AIRASIA has taken delivery of its 17th Airbus A320. The airline, which also operates four Boeing 737-300 jetliners, will phase out the older aircraft with the addition of five more A320s in 2012. The low-cost carrier plans to go ahead with an Initial Public Offering later this year, hoping to raise US$150 million-US$200 million to finance fleet expansion. Credit Suisse and CIMB Securities Indonesia have been appointed as joint lead underwriters for the IPO.



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