AirAsia X reportedly suspended plans to launch Kuala Lumpur-Manchester service due to the UK Government’s plans to increase its Air Passenger Duty (APD) (Airwise, 25-Oct-2010). Manchester Airport's Head of Government and Industry Affairs, Brian Conway, stated the carrier had been in talks with the airport for “many months” but chose to launch services to Paris Orly Airport instead due to the government tax being too high. UK Transport Secretary Philip Hammond responded stating the government is aware it is making UK airports and airlines more highly taxed than competitors, but it needs to meet its twin goals of cutting the deficit and meeting aviation growth while also meeting climate change targets. He added the government has started developing a new national aviation policy, to be introduced by the end of 2012. Mr Hammond said the new policy would encourage growth at regional airports.
AirAsia X drops plans for Manchester due to tax
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AirAsia X slows fleet expansion, seeking a 2H2015 turnaround. Could AirAsia buy its half-sister?
AirAsia X is further slowing growth as the long-haul low-cost group battles challenging market conditions. AirAsia X’s fleet is now slated to only grow by three aircraft over the next three years, leading to a much slower than anticipated build up for its new affiliates in Indonesia and Thailand.
AirAsia X has now been in the red for seven consecutive quarters, accumulating net losses of USD270 million including USD36 million in 2Q2015. The group has been in restructuring mode since late 2014, leading to a 20% drop in passenger traffic in 2Q2015.
Unfavourable market conditions and unexpected external factors have delayed a hoped for turnaround. But AirAsia X is confident it will be back in the black in 2H2015, boosted by capacity cuts at Malaysia Airlines; any new unforeseen external factors could however be painful.
Malaysia Airlines restructuring - Part 2: 23% international ASK cut enables AirAsia to overtake MAS
Malaysia Airlines (MAS) is cutting international seat capacity by about 18% in Aug-2015 as the ailing flag carrier restructures its network ahead of the 1-Sep-2015 transition to a new company. International ASKs are being reduced by about 23% as the medium and long haul networks have seen bigger reductions than operations within Asia with the new MAS seeking to leverage its strong regional position.
Australia accounts for about 30% the seats and about 40% of the ASKs being removed from the MAS international network in Aug-2015. Europe accounts for about 10% of the seats and 20% of the ASKs being removed in Aug-2015 but the cuts to Europe are much steeper when also factoring in the May-2015 suspension of services to Frankfurt.
In Sep-2015 MAS will for the first time have a fewer international ASKs than the AirAsia/AirAsia X groups. AirAsia’s short-haul Malaysian subsidiary will also overtake MAS as Malaysia’s largest international carrier on a seat basis. On a group level AirAsia already has more international seats in Malaysia and has been the domestic leader for several years.