AirAsia X gets regulatory green light for USA flights

The approval from the US Department of Transportation (DOT) allows AirAsia X to operate services to any destination within the US market and it will now formalise its development plans to serve the market to coincide with the future delivery of new widebodied equipment. The airline is known to have been considering flights to several US states including Hawaii as part of its route expansion plans.

Long-haul low-cost operator AirAsia X has received clearance from the United States of America air service regulator to begin flights into the country, becoming the latest Asian budget carrier to secure approval to operate scheduled passenger flights to the USA after Hong Kong-based HK Express and Cebu Pacific from the Philippines.

The approval from the US Department of Transportation (DOT) allows AirAsia X to operate services to any destination within the US market and it will now formalise its development plans to serve the market to coincide with the future delivery of new widebodied equipment. The airline is known to have been considering flights to several US states including Hawaii as part of its route expansion plans.

"This is a major milestone for AirAsia X,” said Kamarudin Meranun, chief executive officer, AirAsia X Group. “Our expansion up until now has concentrated on Asia, Australasia and the Middle East, and we are excited about our first foray into an entirely new market as we look beyond Asia Pacific."

AirAsia X hopes to take its first steps into the transpacific market this year, as well as return to the Indian and European markets. Alongside supporting local demand, AirAsia X will link up with sister AirAsia short-haul businesses across Asia to provide feed to its long-haul operations, effectively developing a network airline concept.

The long-haul carrier has already stated its intent to introduce a multiple weekly link between Kuala Lumpur and Honolulu, a market that Malaysia Airlines previously served in the 1990s. Although Malaysia is a way down the list of largest source markets for Asian visitors into Hawaii, the largest current markets such as Japan, South Korea, China and Taiwan are destinations already well established within the AirAsia network to support transfer flows.

The Malaysian budget carrier’s chief executive officer, Benyamin Ismail confirmed to Routesonline during the World Routes air service development forum in Chengdu, China last September that plans were well advanced for the new flight, which simply awaited regulatory rubber-stamping, and suggested that the link could commence in the first half of 2017. The airline plans to offer a four times weekly service, rising to a daily frequency in the summer and will operate the route via Osaka in Japan to tap into the Japanese outbound market into Hawaii.

Data from the AirVision Market Intelligence tool from Sabre Airline Solutions shows bi-directional O&D demand between Asia and Hawaii’s main international gateway, Honolulu, growing at an average annual rate of 5.6 per cent since 2010. In fact in 2016, Honolulu was the fourth largest US market for Asian traffic behind New York, Los Angeles and San Francisco with an estimated 3.75 million two-way passengers and Japan was the source market for more than two thirds of this number.

Although the annual demand from Japan into Honolulu has slipped 1.6 per cent according to preliminary MIDT data for 2016, the market has grown by more than half (52.2 per cent) since the start of the decade. Other large source markets such as South Korea and Hong Kong have grown at a similar rate, but this is in the shadow of China where demand has more than trebled across the first six years of the decade, albeit remaining the third largest source market for O&D travellers.


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