Low-cost Airfare
AirAsia X: How low can you go?
KUALA LUMPUR, Malaysia (eTN) - AirAsia X CEO Azran Osman Rani has been asked the same question many times: How much longer can his long-haul low-cost carrier AirAsia X continue with its business model?
It is a logical question and one that is evidently a puzzle considering the rising cost in fuel prices and with airlines facing a combined losses of US$5.2 billion this year and a total of 26 carriers shutting operations.
His answer: "As a low-cost carrier, how much lower can our fares go? We are a low-fare carrier. There is a big demand for travel at the prices we offer."
This week, in an unshakable belief his airline can not only weather the "perfect storm," but survive to tell its stories, he added in an interview with AFP: "Our low fares mean we are unscathed by the downturn."
Azran further pointed out that AirAsia X's recipe for survival: New, less fuel-hungry planes. The carrier is waiting for delivery of a total of 25 new more fuel-efficient A330-300 aircraft. "Three will be delivered in 2009, and we are fast-forwarding an aircraft originally scheduled to be handed over in 2011,” he said. "We need the aircraft to cater for strong passenger demand on existing routes, and for our new routes.”
Currently operating with a single A330-300 aircraft, AirAsia X, which launched service in January 2007, flies to Gold Coast in Australia and Hangzhou in China.
This will be followed by six return flights per week on its new Kuala Lumpur - Perth route starting November 2, and the Melbourne route from November 12. "Three months before we fly to Perth, half of the seats were taken. We expect 80 percent of the seats to be taken before we start flights."
The airline is slated to begin its London/Manchester flights sometime in the first quarter of 2009.
AirAsia X, which has metamorphosed from a regional low-cost carrier to an international low-cost carrier, share common shareholders with AirAsia's founder, Tony Fernandes. He has now become the doyen of low-cost carriers in the region should it prove it has the capacity to not only survive the high fuel crisis, but prosper to even greater heights.
Referring to the death of Oasis airline from Hong Kong, and latest closure of Zoom airline, which were forced to shut operations due to the overwhelming fuel costs, Azaran said the carriers used old planes, some as old as 20 years old. "With today's high fuel costs, it does not work anymore."
The Virgin Group from the United Kingdom, helmed by Richard Branson, was quick to smell an opportunity and has committed itself to share in AirAsia X's rosy future by buying a 20 percent stake in the carrier following a lavish ceremony in Kuala Lumpur.
Comments
Our domestic carrier Southwest survives the rising fuel crisis - when all the other carriers are charging a fee ranging from $15 to $25 for checked baggage - Southwest is happy to be telling their clients "Fees don't fly with us !"
For an upstart Low Cost International carrier AirAsia X - their management team spells success all the way. Its a no frill, low cost carrier still providing
safety and comfort on their flights to get you from one point to the other. Even though food and drinks are available for purchase - the price is reasonable. Just
think of the hundred of dollars you save
on fares to fly AirAsia X instead of Malaysia's flag carrier MAS.The only
improvement that AirAsia X needs is their so called Low Cost Carrier Terminals in Kuala Lumpur - which is getting very congested. By the way, can we just call it "AirAsia Terminal" instead
of Low Cost Carrier Terminal ?
I flew AirAsia during my last visit to
Malaysia in January of this year and I strongly recommend anyone who plan to visit Malaysia in the near future to give this carrier a try - remember, " No Frill" does not mean "No Service" - "No Frill" means you just have to pay for your snacks, your drinks and your meals. Always believe in one thing, "What you pay is what you get !" But its definitely good to know that you still get excellent in flight service when you fly AirAsia and AirAsia X.
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