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)