Executive Talk AirAsia X
eTN Executive Talk: AirAsia X CEO details strategy for Europe
What is your target in terms of average revenue per seat and load factor for the new Kuala Lumpur-London Stansted flight?
Azran Osman-Rani: Our fares will start from £99 one-way. However, I expect that our average one-way paid fare would be around £180. It is still 40 to 50 percent cheaper than the fares charged by our competitors. I expect an average occupancy of 83 to 84 percent during the first year. But we will already break-even with a 70 percent load factor.
Is it possible to make a profit on such a long route?
A. Osman-Rani: Absolutely! The aircraft will fly 18.5 hours per day, which is an absolute record for such an aircraft. On average, an Airbus A340 flies up to 12 or 13 hours a day. We will stay on the ground in London only for 90 minutes but it could have been possible to make a turn-around in only 75 minutes.
Will you offer additional service such as a higher baggage allowance or a guaranteed connection for people flying beyond Kuala Lumpur?
A. Osman-Rani: Passengers can already chose on the internet for an option to carry more luggage on board with a possibility to choose 15 kg, 20 kg or 25 kg. Our 15 kg basis allowance seems very low. But studying passengers’ behavior on our Australian routes, we have seen that the average luggage weight stands at only 14.2 kg! We are also thinking of introducing a through-check in for luggage for transfer passengers. We also think of introducing very soon a “better connections” option.
Could you introduce AirAsia X flights from your other gateways in Southeast Asia such as Bangkok or Jakarta?
A. Osman-Rani: Such a possibility could not be achieved in the short term as we should also get a national license to operate long-haul flights and have a fleet of Airbus A330 or 340 based in those countries. We do not think also of introducing any code share flights but we will advertise flights through Kuala Lumpur with our regional partners.
How about the future of AirAsia X in Europe or else where around the world?
A. Osman-Rani: We should get more aircraft from 2010 and are currently studying services to two or three cities in the Middle East. We are looking at Abu Dhabi, Dubai and Sharjah in the UAE, Bahrain but also Jeddah, despite the fact that Saudi Arabia remains very protective of its airline’s industry. In Europe, we would first step up our London frequencies from five weekly flights to a daily one. Then we will look at opening a second route once we will get our second airbus A340. I must say that I am particularly seduced by Germany as I see a good potential for development there.
(£1.00=US$1.50)
Comments
Most recently, my wife and I were stranded in Abu Dhabi when AirAsiaX announced they were canceling service to/from Abu Dhabi in January this year. They didn’t notify us (their stranded passengers) until Feb 10th. Neither did they offer any accommodation nor answer our emails asking for help. We had to get back to Malaysia on our own. They won’t reimburse our additional expenses either.
They said they would refund the Abu Dhabi/Kuala Lumpur portion of our trip, but it will take them 30-50 days to process the refund. Such an attitude!
Watch out for these guys. If you are considering using AirAsiaX, It might be a good idea to develop a plan B... just in case.
We flew Air Asia from Kuching (Capital of the State of Sarawak) to Bali via Kuala Lumpur and found their in flight service
just like any regular carriers with no frills (as in what you pay is what you get) - Hot Meals and soft drinks are available for purchase at a price most of us can afford (not forgetting Air Canada charged me $12 US for a sandwich with a bag of chips between Los Angeles and Calgary) and Priority Boarding comes with a price tag ($15 Malaysian Ringgits equivalent to aprox $4 US) is money worth spending since you can choose any seats you want ahead of everyone. Over the years, Air Asia benefited from its only rival - the dysfunctional national carrier - MAS. The only disadvantage is its so called Low Cost Carrier Terminal - small in its scale for handling so many aircrafts and increasing number of passengers that are choosing Air Asia instead of MAS.
Otherwise, its a good carrier in terms of safety and comfort and best of all, at a price you can afford. Will certainly like to see them in North America in the near future. We need a carrier that really represent the Spirit of Malaysia - the Malaysia Boleh - "Yes We Can" attitude !
18.5 hours per day on a 5 times weekly service seems unsustainable to me. One significant tech problem, and you're asking for negative headlines, which will obviously put people off. A low cost operation made viable by the presence of a business class cabin needs to make sure those business class customers are kept very happy. Any delays, and the faith in your airline from the business passenegers will be eroded quickly and a bad reputation will ensue equally rapidly. I think a second A340 will be needed on the London route alone if it's to go daily, before entertaining the idea of other european desintations. 18.5 hours per day seems naive to me. Technical capability and operational reality don't go hand in hand. It's a big ask, but I wish you the very best of luck Mr Osman-Rani - you're gonna need it.
Tom.
Dear Sirs
I do no think the question on whether there is a profit on such long route was answered correctly by given the 18.5 hrs per day?.
The real question is
What is the projected breakeven cabin factor per flight on a rt basis ?
Thank you
Ton Hens
SR Expert Airline and Tourism Commercila Management
Director Asian Explorers
Airline and Tourism Marketing
Netherlands
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