AirAsia Goes Long-Haul from Thailand

Malaysian long-haul budget carrier AirAsia X has revealed it is getting closer to launching its new long-haul division in Thailand after confirming in a filing to the Malaysian stock exchange last week that it had reached agreement with Thai AirAsia chief Tassapon Bijleveld and Julpas Kruesopon, a businessman and advisor to Thai Prime Minister Yingluck Shinawatra, to formally incorporate the business.

The joint venture, called Thai AirAsia X, marks the first overseas foray by AirAsia X, the long-haul arm of Asia's largest low cost airline by passengers.  Although not formally part of the AirAsia Group the business has common shareholding with the other airline interests.  In the statement Thai AirAsia X said it submitted an application for an air operator's license on June 20, 2013 and expects approval to be granted by end of this month when it will then apply for an air operator's certificate.

The new airline will almost certainly be based in the Thai capital Bangkok and will likely replicate the current AirAsia X model that has seen it develop activities at Kuala Lumpur International Airport and like in Malaysia will leverage on AirAsia's already established short-haul feeder network in Thailand.  AirAsia X already generates a strong feed to its Kuala Lumpur long-haul operations from the Thai capital.  This move will allow it to offer this sizeable demand a non-stop rather than one-stop option in the future.

No firm indications have been made on the carrier’s launch date, likely now to be early 2014, or its network but it is pretty certain that it will initially focus on the Australian market, which has proved a successful strategy from Kuala Lumpur, and other existing network points. 

The latest news on the new business comes at a time that AirAsia X is growing its own operations, expanding capacity into Australia and introducing two new markets from September 28, 2013 – Colombo in Sri Lanka and Male in Maldives.  The airline will serve the Indian Ocean destinations on a triangle basis with a four times weekly schedule, two flights routing via Male’s Ibrahim Nasir International Airport first and two via Colombo’s Bandaranaike International Airport first.  

“We are excited to announce our latest route to Colombo as well as to the capital city of Maldives that is Male. Our guests may now fly to Sri Lanka to take in the rich flavours and cultures that Colombo has to offer, and also to Maldives for a quick scenic and relaxing getaway,” said Azran Osman-Rani, chief executive officer, AirAsia X.

“What’s unique about this new route is that, guests may opt to hop on our flights to Sri Lanka, or continue on to Maldives or fly direct to Maldives and vice versa from the Kuala Lumpur hub. We are confident that these two new routes will stimulate new travel demand and boost tourism and business potential for us and the two countries,” he added.

The AirAsia brand will not be new to the Sri Lankan market as AirAsia has previously operated flights between Kuala Lumpur and Colombo.  These were launched in August 2009 and were flown on a daily schedule using single-aisle A320 equipment up until May this year.  The Sri Lankan capital is also currently linked to Kuala Lumpur by SriLankan Airlines and Malaysia Airlines, while the latter also provides direct links between Male and the Malaysian capital. 

In 2012 an estimated 237,800 bi-directional O&D passengers flew between Kuala Lumpur and Colombo and 41,000 between Kuala Lumpur and Male.  Interestingly, our analysis shows that AirAsia was the dominant carrier on the Kuala Lumpur – Colombo city pair in 2012 with a 44 per cent share of the total O&D demand.