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- IATA Code
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- Lot 4, Level 2, Stesen Sentral Kuala Lumpur,
50470 Kuala Lumpur
- Main hub
- Kuala Lumpur International Airport
- Business model
- Low Cost Carrier
- Domestic | International
- Airline Group
- Part of AirAsia Group
- Frequent Flyer Programme
- Association Membership
AirAsia is a low cost carrier based at Kuala Lumpur International Airport, Malaysia. The carrier, which was formed out of Tune Air in 2002, is led by CEO Tony Fernandes and pioneered the cross-border joint venture in Asia, establishing Thai and Indonesian units with bases in Bangkok and Jakarta. The airline has also partnered with other airlines and investors to create ventures in the Philippines, India and Japan. AirAsia's extensive domestic and regional network includes services within Malaysia and to China, Southeast Asia and the Subcontinent.
Location of AirAsia main hub (Kuala Lumpur International Airport)
AirAsia share price
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider AirAsia fits the LCC profile and it is included in our reporting on this basis. Please note: when reporting for an airline is changed from or to LCC the historical data is not affected and it can lead to a distortion in the current reported data. Contact us if you have any queries.
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VietJet Air is entering a new phase as the fast-growing Vietnamese LCC takes on AirAsia on the Ho Chi Minh-Kuala Lumpur route. Kuala Lumpur will become the sixth international destination for VietJet and only the fourth international market where it faces competition from other LCCs.
Since its late 2011 launch VietJet has focused primarily on the domestic market, where it now serves 17 destinations. However Vietnam’s domestic market is starting to become saturated after four years of rapid growth, and VietJet strategically needs to establish a bigger international presence.
VietJet is also expanding in Taiwan, with planned new services to Kaohsiung and Tainan and a second daily flight on the Ho Chi Minh-Taipei route. But VietJet faces challenges in establishing its brand overseas and has already experienced some setbacks in the international market.
Myanmar’s international market will experience another surge of additional capacity in 2H2016 as several new routes are launched. International passenger growth in Myanmar slowed significantly in 2015, following a period of very rapid growth, but could re-accelerate as the market again starts to capture attention.
After Qatar Airways, Emirates will become only the second airline with long haul services from Myanmar as it launches a new daily flight from Dubai to Yangon in Aug-2016. HK Express and Thai Lion Air are also planning to launch services to Myanmar over the next few months.
Myanmar is currently served by 24 foreign airlines, compared with only 13 four years ago. Myanmar’s international market has more than doubled in size since 2011, but overcapacity has been a consistent problem and conditions are likely to remain challenging as more airlines enter.
Japan Airlines is eagerly counting down to 01-Apr-2017, which is expected to be the date when business expansion restrictions on JAL that were put in place after its bankruptcy restructuring will be lifted. The rules are complex and contain exceptions; JAL has been able to open new service to points like Boston and San Diego and invest in Jetstar Japan, but not able to open other routes or to invest in Skymark Airlines. Recent years have been a bonanza for its rival All Nippon Airways, which had been Japan's No. 2 airline but used government support and JAL's restrictions to embark on ambitious expansion, from long haul growth to purchasing Skymark Airlines and A380s.
JAL is unlikely to engage in rapid capacity expansion. JAL is firmly focused on maintaining high airline margins while replicating ANA's group strategy of non-cyclical ground-based businesses (flight training, maintenance, etc.). One exception however is Southeast Asia, where ANA has been growing. Japan has become politically closer to Southeast Asia and commercially too, with tourism influxes.
Yet there is still a hesitation when it comes to organic growth. One solution could be a partnership with AirAsia, which would give JAL access to a wide network and growing business segment. In return, JAL could even invest in AirAsia Japan, which is facing start-up delays and could benefit from parental help. JAL would join ANA in having two LCCs; JAL is an investor in Jetstar Japan, whose owner Jetstar is a partial rival to AirAsia. JAL-AirAsia would combine two of ANA's main foes: AirAsia Japan, which was a JV between ANA and AirAsia, was dissolved in bitter disagreement.
Malaysia’s Malindo Air to pursue faster expansion following rebranding and fully embracing FSC model
Malaysia’s Malindo Air is accelerating expansion as it prepares for a rebranding aimed at firmly positioning the Lion Group affiliate as a full service airline. Malindo now plans to add 10 Boeing 737s in 2016 and end the year with a fleet of 37 aircraft, including 26 737NGs and 11 ATR 72-600s.
Malindo has been rapidly expanding its international network, adding seven destinations over the last four and a half months. It plans further expansion of the network in 2016 including potential new destinations in Australia, South Korea and Japan, which would be served as part of one-stop fifth freedom routes via Indonesia and Taiwan.
However, Malindo will implement a brief hiatus from expanding its international network over the next few months, instead focusing on capacity increases and schedule changes to existing destinations. Malindo is also now focusing on its 15-Mar-2016 move back to Kuala Lumpur International Airport’s original terminal (KLIA1), which will reinforce its full service position and support a new brand being rolled out in mid-2016.
Luang Prabang in Laos is emerging as one of Southeast Asia’s fastest growing tourist destinations, driving rapid passenger growth with services by at least four new airlines in 2016. Thai AirAsia will become the first LCC to serve Luang Prabang Airport in Mar-2016 as it launches flights from Bangkok, ending a long battle to gain access to the previously restricted Luang Prabang market.
Malaysia AirAsia and HK Express are also planning to launch service to Luang Prabang, while Singapore Airlines regional subsidiary SilkAir is planning a new route from Singapore on a circular routing that also includes the capital Vientiane. The new SilkAir route is strategically important for the SIA Group as Laos is the only ASEAN country currently not served by any SIA Group airline.
Vientiane had approximately twice the traffic of Luang Prabang in 2015, but Luang Prabang is the bigger tourist attraction and has tremendous growth potential. Luang Prabang completed an expansion project in 2012 which enabled the airport to accommodate jets, and the Lao government is now planning to expand the tiny international passenger terminal to meet surging demand.
AirAsia 2016 outlook Part 4: Malaysia expansion focuses on international routes from secondary bases
Malaysia AirAsia (MAA) is focusing on expanding secondary bases in 2016 as its fleet grows by three aircraft. The Kuala Lumpur-based short haul LCC is adding four international routes from secondary cities in 1Q2016, giving it a total of 20 international routes from six secondary cities.
MAA is the largest airline in Malaysia and has been able to increase its market share over the last year while traffic in the overall Malaysian market has been flat. Growth should resume in 2016 in both the domestic and international markets, driven partially by MAA expansion, but competition is also intensifying as other Malaysian airlines expand.
China, particularly, is a fast-expanding market from Malaysia. Two of the four routes that MAA is launching are 1Q2016 are to China, while the other two are to Myanmar and Vietnam.