- CAPA Analysis
- Schedule Analysis
- Route Maps
- Annual Reports
- Print Summary
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. 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.
1,771 total articles
206 total articles
Indonesia AirAsia slows expansion. Domestic share to suffer but international position to strengthen
Indonesia AirAsia has decided to significantly slow down expansion in 2014 as market conditions in the Indonesian market, particularly domestically, have become challenging. The carrier, which added eight A320s in 2013, had dropped plans to add two aircraft in 1H2014 and is also considering deferring some or all of the four deliveries initially slated for 2H2014.
Indonesia AirAsia is also planning to adjust its network to focus more on international services. The international market is more profitable as it is less impacted by the devaluation of the Indonesian rupiah. But cutting domestic capacity will result in a reduction in AirAsia’s already small share of Indonesia’s domestic market.
AirAsia still has a strong position and bright outlook in Indonesia’s international market. But 2014 will mark another setback in the group’s long-term strategy of securing a larger presence in Southeast Asia’s largest domestic market.
Malaysia-based long-haul low-cost airline group AirAsia X is moving forward with plans to establish its second affiliate in Indonesia with a base from the resort island of Bali. The group recently signed an agreement with a local partner to establish Indonesia AirAsia X (IAAX) and has already secured an air service licence from Indonesian authorities.
IAAX will likely launch services by the end 2014, sourcing 377-seat A330-300s from the group’s recently expanded order book. The new carrier plans to serve destinations in Australia and North Asia, connecting dots which are already served by AirAsia X from Kuala Lumpur and soon by Thai AirAsia X from Bangkok.
Indonesia’s LCC sector is fiercely competitive, with a fleet of nearly 200 aircraft which is slated to expand by another 20% in 2014. But IAAX will be Indonesia’s first long-haul low-cost carrier, giving it important first mover advantage in several relatively underserved markets.
Tigerair has forged an alliance with Cebu Pacific as part of an agreement to sell the group’s small Philippine affiliate to the country’s largest low-cost carrier. As it essentially only involves interlining and coordination on overlapping routes, the partnership is not that deep – at least not initially. But it has broader potential ramifications for Asia’s dynamic and fast-growing LCC sector.
Cebu Pacific will be Tigerair’s third partner following Indian LCC SpiceJet and Singapore Airlines long-haul low-cost subsidiary Scoot. More partners will follow, including potentially Thai Airways' LCC affiliate Nok, which has a new partnership with Scoot.
Cebu Pacific, Tigerair and SpiceJet are similarly sized. Combined, the three have the scale and network to match their much larger competitors – leading Asia-Pacific LCC groups AirAsia, Lion and Jetstar.
Malindo Air launches India, further shaking up Kuala Lumpur market for Malaysia Airlines and AirAsia
Malaysia’s Malindo Air is moving forward on its delayed expansion plans for India with four new routes which will quickly give the Lion Air Group affiliate a 15% share of the Malaysia-India market. Malindo is seeking to become a major player in the Malaysia-India market as well as offer connections in the fast growing Indonesia-India market.
Malindo is targeting the Kuala Lumpur-Delhi and Kuala Lumpur-Mumbai routes, which currently are only served by Malaysia Airlines (MAS). It will compete against AirAsia to Tiruchirappalli and will become the only carrier linking Kuala Lumpur with Ahmedabad.
The hybrid carrier is also adding a second destination in Bangladesh, Chittagong, as part of its push into South Asia. By its first anniversary in late Mar-2014, Malindo will account for 12% of total capacity between Malaysia and South Asia.
The Korean market has had few major developments since the launch of a number of low-cost carriers mid last decade. That may change in 2014. Asiana Airlines has named Kim Soo Cheon as its new CEO effective 01-Jan-2014. Mr Kim leads the Kumho Group's flagship business, having served as CEO of part-owned subsidiary Air Busan, an LCC that fought to be recognised and at times appeared to be neglected by Asiana. Mr Kim brought Air Busan to profitability, and at Asiana will have a number of tasks, including bringing the carrier to profitability after it outpaced Korean Air in growth in 2013. Mr Kim will also preside over Asiana's introduction of the A380.
Air Busan may now take on a greater role with Mr Kim now at the top of the airline. This is not a moment too late, as the AirAsia group reportedly filied an application to launch a Korean subsidiary, AirAsia Korea. This would consummate AirAsia's long flirtation with the Korean market, and once again give the LCC group a North Asia subsidiary after it pulled out of AirAsia Japan.
Rival Jetstar already has Jetstar Japan while Tigerair plans to launch a subsidiary in Taiwan. Even VietJet is discussing a Korean venture. AirAsia's entry into Korea will give the market a long-needed adrenalin shot to become more competitive. The short-term would see pressure on Korean LCCs but little on Asiana and Korean Air, although the two would benefit from closer integration and expansion of their LCCs.
Low-cost carriers in the Asia-Pacific region enter 2014 operating a combined fleet of nearly 1,000 aircraft. With over 1,500 orders in place, 1,000 aircraft is just the tip of the iceberg for Asia’s booming LCC sector.
2014 will see a record level of start-up activity as about 10 LCCs are launched, bringing the total number of LCCs operating in Asia-Pacific to nearly 60. Most of the region’s 47 existing LCCs are also planning more rapid growth for 2014. Most added capacity at a double-digit clip in 2013 and are not about to slow down as competition intensifies.
There will be no turning back as the momentum that LCCs have steadily built up in Asia over the last decade continues to gain steam. LCCs now account for only 15% of the region’s fleet and slightly over 20% of seat capacity but approximately 50% of orders. Ten years ago LCCs accounted for only about 2% of total capacity in Asia-Pacific.
Great news! CAPA now offers email and phone contact functionality through its partnership with Gooey. Corporate access for this feature is USD1000 per annum.