Wednesday, October 24, 2018

AIRASIA X TO EXPAND LOW FARES FOOTPRINT.

Low fares are headed to new destinations in Australia, Japan and China as long-haul, low-cost carrier AirAsia X looks to use efficient, new planes to ramp up growth.
New Australian destinations, Japan’s Fukuoka or Nagoya as well as second- and third-tier Chinese cities are set to be the first to benefit from the influx of fuel-efficient aircraft.
Longer-term destinations could include San Francisco and Los Angeles as well as possibilities in Europe.
The airline has orders for 100 A330neos and hopes to start taking them in 2019, subject to assurances about pricing and engine reliability.
It has ordered the bigger -900 version of the plane incorporating  Rolls-Royce Trent 7000 engines and aerodynamic improvements such as composite Sharklet wingtip devices to boost fuel efficiency.
It is also evaluating the long-range version of the Airbus A321neo to target more destinations with a range of up to seven hours.
New services to Australia are in the pipeline and AirAsia X chief executive Benyamin Ismail confirmed he is involved in talks with authorities in Adelaide about adding the South Australian capital to the airline’s roster of Australian ports. It already flies to Sydney, Perth, Gold Coast and Melbourne.
“We’re keen on going to Adelaide,’’ he told AirlineRatings at the AirAsia’s RedQ headquarters in Kuala Lumpur this week. “I’m actually flying to Adelaide this Thursday to see the board of directors of Adelaide airport.”
Ismail said the airline could also look at destinations such as Cairns and Darwin if it decides to take on the A321neo LR.
Powered by CFM International’s LEAP-1A engines, the A321neo LR,  is due to enter service in the fourth quarter of 2018 and is designed to carry up to 240 passengers 4000 nautical miles.
AirAsia revealed in August that it was evaluating the aircraft, which would allow it to profitably serve destinations unable to support A330 services.
But for now, the main focus is the airline’s bold gamble to move its flights from Melbourne’s main airport at Tullamarine to the Avalon airport, near Geelong.
“I think that is going really, really well,’’ Ismail said. “The loads are better than I expected and I think the team over there has done quite a good job in educating people that Avalon is not down in the woods.”
Other existing AirAsia X destinations will remain as is for now, although Ismail said he could re-evaluate services to Sydney because of difficulties selling seats in the low season.
“We’ve seen essentially that outbound traffic to Australia has declined a little bit, I’m not sure why, but we’re just going to see what’s there, especially out of Sydney,’’ he said.
“Gold Coast is doing OK.
“Perth is actually our star performer. We’ve actually cut down a lot of capacity from there.
“We went from 14 to seven because that market is very competitive — there’s  Malindo, there’s MH (Malaysia Airlines) — and really we didn’t want to go into that fight.
“So we just focused on yield and moving loads up. Loads have been up and we’re making money on that route, which is great.”
Ismail said that Japan was a market in which AirAsia needed to grow and potential destinations included Fukuoka or Nagoya.
Another was China.
“I think in terms of the first-tier (Chinese) cities, we pretty much have it covered and now we’re trying to go into the second tier cities and the third tier cities,’’ he said.
The AirAsia boss said the plans were still fluid because they were subject to getting “the right incentives, the right deal, the right slots, the right timings”.
While noting flights averaging five to seven hours were a sweet spot for the airline, he did not rule out long-haul routes such as the US and Europe.
He noted aircraft would need to be reconfigured for longer flights with a bigger premium class, as much as doubling the current 12 seats, and more leg room in economy.
He downplayed London as a potential destination because of the highly competitive nature of the route but said the airline could look at potentially serving other cities such as Barcelona or Milan.
In terms of the US, Ismail said the airline’s existing route to Honolulu was “doing pretty well for us”.
“We’ve increased to daily now from four times a week,’’ he said. “I think with the neos coming in, if everything goes well, we can potentially touch San Francisco and LA and we’ll see how we go.
“It’s easier for us now because we’ve already got blanket approvals to go in so it’s great.”

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