AirAsia Happy for Airline Partners to Compete

The current structure of AirAsia Group’s airline activities has not come as a result of choice, but a requirement to enable the low-cost specialist to expand in international markets and overcome rigid local ownership issues. This means that rather than working independently, the carrier must develop joint ventures with local interests in each foreign market.

With eight different air operator’s certificates within its group structure there will always be a little cross-over in the networks of the AirAsia Group of airlines, but the company’s group regional head of route and fleet planning, Senthil Balan told a packed audience at yesterday’s Routes Asia Strategy Summit in Kunming, Yunnan Province, China, that there is no single solution to appease its airline partners wishes.

The current structure of AirAsia Group’s airline activities has not come as a result of choice, but a requirement to enable the low-cost specialist to expand in international markets and overcome rigid local ownership issues. This means that rather than working independently, the carrier must develop joint ventures with local interests in each foreign market.

But, what happens if its interests in Malaysia, Indonesia, Thailand or the Philippines want to operate on the same route as one another? According to Balan, it is not an exact science and one model does not necessarily fit all.

“We have a group strategy to network development and there will always need to be some gives and take between airlines. This is not an exact science and has to take a lot of judgement on which resources is best placed to serve the market. There is no fixed structure. We look at it on a case by case basis,” he said.

AirAsia now has a growing presence in North Asia after more than ten years of operations. It now serves 21 points across the region with around 450 frequencies a week. According to Balan, there is an “immense opportunity” for this market to grow, but he urged its nations to adopt an optimal destination partnership model to overcome the higher costs of serving the region. “They need to look at how Australia and New Zealand have brought stakeholders together and learn from them,” he said.

AirAsia remains on a growth trajectory with an ambition to make travel affordable for the general public by maintaining a tight control over its costs. In terms of its network the continued joining of the existing dots remains an important strategy, although new route pairs are also on the cards.

“We’ve never been afraid of taking risks during our history with new routes. There are lots and lots of markets out there that are currently not being flown. We want to pioneer air services between many of them,” added Balan.


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