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AirAsia X drives 43% transit traffic at Kuala Lumpur's KLIA. Can Singapore follow the same recipe?

24-Apr-2014 11:00 AM

The long-haul low cost phenomenon in Asia is quickly translating to a more effective competitor for conventional network operations. At the forefront is AirAsia X and its original base of Kuala Lumpur International Airport (KLIA).

On the eve of opening KLIA's new low cost terminal, AirAsia X is rapidly growing its connecting traffic as the medium/long-haul low-cost carrier thickens its schedule and builds out its network. Transit traffic accounted for 43% of AirAsia X total passenger traffic in 2013, up from only 25% in 2011. AirAsia X expects this figure to approach 50% in 2014.

The growth in transit traffic has huge implications for the AirAsia Group and its main hub, KLIA. There are also implications for other Asian carriers and hubs as AirAsia starts to compete on city pairs that previously did not have any LCC options.

The gains in transit traffic at KLIA, which has recorded the fastest passenger growth over the last 15 months among Asia’s major airports, come at the expense of rival hubs. For example, neighbouring Singapore Changi has seen growth moderate significantly and risks a further slowdown unless it can attract a surge from the emerging LCC transit sector.

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Qantas dominated 1990s/2000s tourism boom from Japan, but is disadvantaged in current Chinese influx

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CAPA’s Hall of Fame - Tim Clark

25-27 November, 2013, Airlines in Transition 2013
CAPA’s Hall of Fame celebrates the greatest of aviation legends – individuals who have made a substantial difference to the industry. Recent inductee Tim Clark, president of Emirates, has built the world’s leading long-haul network and long-haul transit hub, implemented new widebody aircraft programmes and recently  spearheaded a ground-breaking alliance with Qantas. Sir Tim looks back at the growth of Emirates and how the airline has remained true to its original business model from the late 1980s, despite achieving massive growth.

Peter Foster - President, Air Astana

Willie Walsh - CEO, IAG

Alan Joyce - CEO, Qantas

Alex Cruz - CEO, Vueling

Christoph Mueller - CEO, Aer Lingus
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