AirAsia plans strong growth in Southeast Asia with new A320 jets
AirAsia plans strong growth in Southeast Asia with new A320 jets
Carolyn Lim, Associate Press, Kuala Lumpur
Malaysia's AirAsia, the No. 1 budget airline in Southeast Asia by revenue, plans to rapidly expand services in the region next year as it takes delivery of new Airbus A320 jets, chief executive Tony Fernandes says.
The airline has ordered 60 of the 182-seater A320s with the option to buy another 40. It took delivery of its first A320 earlier this month, with the rest to be delivered over five years.
AirAsia has grown rapidly in recent years, tempting many first-time and budget air travelers in the region with cheap seats to popular destinations throughout Asia. The purchase of the new jets would make the upstart airline the region's largest budget carrier by fleet size.
Fernandes, a former record industry executive, said in a recent interview with Dow Jones Newswires that the new A320s will allow the Malaysian airline to overcome capacity constrains and focus on developing a strong regional network to stay above growing competition, including Singapore Airlines spinoff Tiger Air and Thai Airways' Nok Air.
By June 2006, AirAsia's fleet will grow to 41 planes including seven A320s, up from 35 now, allowing it to beef up the operations of its Thai and Indonesian affiliates, he said.
"Thailand's domestic (routes) for example are doing well, so we're pumping that up," Fernandes said. The company's 49 percent- owned Indonesia AirAsia affiliate also seeks to double passenger traffic to 1.3-1.4 million next year, he said.
"The inter-ASEAN market is where our focus is going to be," he added.
In 2006, AirAsia plans to fly from Kuala Lumpur to Ho Chi Minh City, Vietnam and to Myanmar and Laos. Those would be added to new routes to Indonesia's Balikpapan and Solo, and Cambodia's Siem Reap that will be launched late December to early January.
Fernandes said AirAsia will also explore new destinations to China from Thailand and Malaysia's Kota Kinabalu on Borneo island. Its 49 percent-owned Thai AirAsia associate now flies to southern China's Xiamen from Bangkok.
Apart from regional expansion, he said AirAsia is also ready to expand within Malaysia by taking over any domestic routes that will be discarded by loss-making national carrier Malaysian Airline.
The two rivals are in talks, at the government's behest, about the possibility of sharing domestic routes as part of plans to help the flag carrier return to profit.
"I'm optimistic the restructuring of (Malaysian Airline) domestic network is on the cards," Fernandes said. "If we can take one chunk of network off their hands, they can focus (on medium- to long-haul routes)."
Relinquishing part of its loss-making domestic routes to AirAsia will also allow Malaysian Airline to consolidate its fleet and boost its efficiency, he added.