Tuesday, March 13, 2007

Delays in AirAsia X's Take-Off

KUALA LUMPUR - AirAsia X, the new longhaul low-cost airline, has delayed its takeoff, possibly until next year, due to planes shortage.

AirAsia's CEO Datuk Tony Fernandes, who also created AirAsia X, was quoted in reports that operations could now start in August 2008.

However, if there are planes available then AirAsia X could take off earlier.

The original maiden flight was scheduled this July, offering fares to all its destinations from RM9.99 (US$2.80).

AirAsia X's network will cover destinations which are more than four hours in flight duration from Kuala Lumpur, offering daily point-to-point frequencies to China, India and Europe, where Malaysia Airlines is not operating.

Malaysia's long-haul budget carrier says it may delay launch

KUALA LUMPUR: AirAsia X, Malaysia's new long-haul budget airline, may delay its commercial launch by a year to the third quarter of 2008 because it can't lease wide-bodied aircraft at the right price, a top executive said Tuesday.

The carrier was originally scheduled to start flying to destinations in Britain and China from July with a handful of leased aircraft.

But the cost of leasing such aircraft is too high and the airline may wait until it can operate its own planes, said Chief Executive Raja Mohamad Azmi Raja Razali.

AirAsia X is set to buy up to 15 aircraft this month - five fewer than earlier planned - but those aircraft will only be delivered from the third quarter of 2008, he said.

"We are looking at the cost structure ... we want the right aircraft and we won't start until the right mix of aircraft is finalized as this is critical (in offering cheaper fares to passengers),'' he told Dow Jones Newswires.

"We don't want to compromise on cost.''

AirAsia X, launched in January, is owned by Fly Asian Express, or FAX, a small airline serving rural routes in Malaysia.

FAX is 10 percent owned by tycoon Tony Fernandes, who controls the region's biggest low-cost carrier, AirAsia.

AirAsia has an option to buy up to 30 percent of AirAsia X.

Raja Azmi said leasing costs have skyrocketed partly because delays in the delivery of the Airbus A380 super jumbo has forced airlines to seek leased aircraft.

He declined to say if the carrier is considering buying Boeing Co. aircraft instead of Airbus, which is the main supplier to AirAsia.

Based on catalog prices, long-haul aircraft could cost AirAsia X as much as 3 billion ringgit (US$857 million, euro714 million), he said.

"We hope to sign a deal for 15 new aircraft by the end of this month, for delivery, most likely in the third quarter,'' he said.

He reiterated the company will finance the purchase through borrowings and shareholders' funds.

AirAsia X has said it expects to carry half a million passengers in its first year of operation, which will ultimately cover China, India, Europe, Australia, Asia and the Middle East.

Officials said average ticket prices will be about half the price of full service airlines.

Under a 30-year franchise, AirAsia X will use the AirAsia brand, its Web site for bookings and other services. But AirAsia X, which will cover destinations more than four hours flying time from Kuala Lumpur, will maintain its own fleet and staff.

Source : STAR Travel Weekly
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