AirAsia X flying to Sydney, Australia on the 1st April 2012. Apparently it was announced in The Star Biz newspaper on the 12th January and it was confirmed by the officials in AAX on the 17th Jan. Tickets for the Kuala Lumpur-Sydney flight on AirAsia X will also start selling from the 17th January (Tuesday) with airfares from Kuala Lumpur starting at RM199. According to the newspaper, AirAsia X will also be looking at daily flights to Sydney putting an end to a three year wait after a bitter duel with Malaysia Airlines over the route and also an earlier start before Singapore Airlines Scoot makes their inaugural flight to the same city.
AirAsia X plane flying over a city
Aviation news also claims that Singapore Airlines new long haul budget carrier called Scoot have named Sydney as its first route but the flights only take off in mid 2012. They made the official announcement on the 1st of December 2011 about
Scoot Flying to Sydney. With the news coming out, this gives AirAsia X a head start in running massive promotions on this sector which is one of the highly profitable routes in Asia Pacific.
The news of the KL-Sydney flights also came in conjunction with
AirAsia X ending European and Indian flights according to a BBC report
on this. But over here in Malaysia, an official press statement from AirAsia X was issued on the same day which read:
KUALA LUMPUR, 12 January 2012 -
AirAsia X, the long haul, low fare affiliate of AirAsia, today
announced a realignment of its network with a focus on its core
markets.
The
move will see AirAsia X withdrawing services to India (Mumbai and
Delhi) and Europe (Paris, London) from its Kuala Lumpur hub as follows:
· Mumbai- Four weekly services will be suspended with the last flight on 31 January, 2012
· New
Delhi- Daily services will be suspended with the last flight on 22
March, 2012. Flights in March will be reduced to four weekly services.
· London- Six weekly services will be suspended with the last flight on 31 March, 2012
· Paris- Four weekly services will be suspended with the last flight on 30 March, 2012
AirAsia
X will offer guests who hold bookings after these dates an alternative
travel option at no additional cost to mitigate the inconvenience caused
as a result of these route withdrawals.
All
affected guests will receive an e-mail stating options that are
available to them, including a full refund, a reroute to another AirAsia
X destination (e.g, in Australia and North Asia), or a move to an
alternative carrier where available.
These
changes will improve operating cost efficiencies and consolidate its
network to focus on markets where it can build a leadership position in
2012.
Azran Osman-Rani, CEO of AirAsia X
said “AirAsia X remains focused on maintaining its global leadership
position in the low cost, long-haul segment. We intend to
concentrate capacity in our core markets of Australasia, China, Taiwan,
Japan, and Korea where we have built up stable, profitable routes within
an infrastructure that supports low cost services. We intend to open up
new routes within these markets, as well as add frequencies on existing
routes. Announcements of our future expansion plans will be made soon.”
“The
continued high jet fuel prices and the weakening demand for air travel
from Europe, brought about by the current economic situation together
with exorbitant government taxes, have placed cost pressures on
operating long-haul low cost flights between Asia and Europe,
compromising our ability to offer the low fares AirAsia X is known for.”
He
adds, “The implementation of the Emissions Trading Scheme and the
escalating Air Passenger Duty taxes in UK, which will rise yet again in
April 2012 has forced our decision to withdraw our services to Europe.”
“As
for Delhi and Mumbai, the continued visa restrictions for travel
between India and Malaysia, and the increase in airport and handling
charges have resulted in a structure not conducive to the low cost
model.”
Azran concluded that, “The airline is hopeful in reinstating services to India once these structural issues can be resolved.”
Note:
Further details on AirAsia X’s withdrawal of Europe and India destinations:
Europe (London and Paris)
AirAsia
X started flights to London in March 2009. At that time, oil prices
were less than US$40/barrel, and have since tripled. With the Arab
Spring unrest of 2011 spilling over to the unrests in Syria and Iranian
oil embargo this year, oil prices are expected to remain high and
crippling the economics of long-haul flights, where fuel represents over
50% of operating cost.
Moreover,
the European situation is also compounded by a very weak economy and
depressed consumer demand, which has resulted in a reduction in the
number of passengers from Europe on the flights over the past several
months. Flights to Europe have also been burdened by exorbitant
government taxes such as the UK Air Passenger Duty which will be
increased to £92 per departing economy passenger and £184 per departing
Premium passenger from 1 April 2012. From 1 January 2012, the European
Governments have also imposed an additional carbon tax under their
Emissions Trading Scheme, which further adds to an already high cost.
The
confluence of macro-factors, including high fuel prices, depressed
European economy and exorbitant taxes have made it economically
impossible to sustain these flights, despite AirAsia X recording load
factors of over 80% for its London and Paris flights in 2011. Attempts
to increase fares to reflect the higher operating cost recently have
shown the price elasticity of travel, with demand falling down
adversely.
India (Mumbai and New Delhi)
AirAsia
X launched flights to Mumbai and Delhi in 2010. Structural issues in
the Indian aviation market have made it difficult to operate
economically viable flights. The airport and handling costs in New Delhi
and Mumbai are already more expensive than even airports in Australia,
and the authorities have just approved a massive 280% increase in
airport fees effective April 2012.
The
Indian routes have also been under-pressure when the Malaysian
Government removed Visa-on-Arrival facilities in August 2010, soon after
the routes were launched. This places Malaysia at a significant
disadvantage versus Thailand and Singapore who offer Indian tourists
convenient Visa-on-Arrival facilities.
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Passengers onboard an AirAisa X flight
With this, there is going to be an interesting challenge for both airlines (Malaysia Airlines & AAX) as it is supposed to benefit each of the individual airlines for the future. Also with new player - Singapore's Scoot Airline, we can probably expect to see some price wars going on or maybe not. As for now, this is the fourth city that AAX flies to. For those planning a trip to down under, you can now visit one of the largest cities here as the news is official that AirAsia X is flying to Sydney, Australia.
