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Long-haul budget airline

AirAsia X is planning a new hub in the Middle East

Aug 09, 2009

Long-haul budget airline AirAsia X is to soon reveal its new base in the Middle East.

AirAsia X’s chief executive officer Azran Osman-Rani said a location had already been chosen in a Gulf state.

“This will open up completely new markets, and we won’t always have to have the planes based in Kuala Lumpur, which limits us to an eight-hour radius,” Osman-Rani said.

“There will be many in the aviation industry who think this is crazy because the traditional low-cost model is to do only point-to-point flights... to keep it simple,” he said.

He added, “we’re basically looking at using the Middle East/Gulf airport to launch one-stop services [from Kuala Lumpur] to Europe/North Africa”, adding “obviously, the airport we choose must allow full fifth freedom ‘beyond’ rights to make this work”.

Centre for Asia Pacific Aviation (CAPA) highlighted that high aircraft utilisation rates are crucial to the long-haul LCC’s business model, providing it a significant cost advantage over its rivals. But increasing congestion at the Kuala Lumpur LCCT, which has not expanded as quickly as the AirAsia Group would like, has forced the carrier to consider other options. But there are also powerful strategic reasons for basing there. For example, short-haul low cost operations by the growing number of Gulf LCCs expands opportunities for connections into India and other Middle East destinations.

CAPA added that the Middle East, which continues to exhibit strong rates of traffic growth, represents a key opportunity for AirAsia X, suiting the range of its growing A330-300 fleet for services to destinations in Europe and North Africa.

Initially, the carrier will operate flights from Kuala Lumpur to the Middle East hub, before branching out next year by using it to jump to destinations that could include Morocco, Turkey, Spain or the Czech Republic. Azran said the plan was also triggered by potential problems accommodating new aircraft, amid doubts that Malaysia's airports authority will complete a new low-cost carrier terminal in Kuala Lumpur by 2011 as scheduled.

Osman-Rani reportedly said, “instead of the plane flying back to KL, it may fly off to Europe/North Africa, and then back to Middle East and back to KL. It’s not a ‘real’ hub, in the sense that the aircraft will be based there [in the Middle East]. But it allows us to tap new markets (obviously ones where there are no direct services to Southeast Asia) and to keep the aircraft out of KL, so that we reduce potential parking space congestion at the KL LCCT.”

AirAsia X is planning a new hub in the Middle East
Source: Eyefortravel

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