- CAPA Analysis
- Schedule Analysis
- Route Maps
- Print Summary
Owned initially by a consortium including Tony Fernandes’ Aero Ventures and the Virgin Group, AirAsia X is a low-cost long haul airline based in Kuala Lumpur, Malaysia. 33% of the company's enlarged share capital was listed on 9-Jul-2013 on the Kuala Lumpur stock exchange following a heavily over-subscribed IPO. The carrier operates services to destinations within Asia and Oceania.
Location of AirAsia X main hub (Kuala Lumpur International Airport)
LCCs will continue to evolve into hybrids of the original core model. CAPA and OAG consider AirAsia X 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.
607 total articles
94 total articles
AirAsia X’s new affiliate in Thailand is gearing up to launch services in early 2014 with an initial fleet of two A330-300s and an initial network of three destinations. At least one destination in Australia and North Asia is expected to be served from a base at Bangkok’s Don Muang Airport.
Thai AirAsia X (TAAX) is one of three new low-cost carriers in Thailand but is strategically well positioned as it will be the country’s first medium/long-haul LCC. It will also have the advantage of being on the receiving end of Thailand’s largest short-haul LCC, Thai AirAsia.
TAAX will be the first of potentially several new joint venture carriers from Malaysia-based AirAsia X, which is using proceeds from a Jun-2013 IPO to accelerate expansion in line with a new multi-hub strategy. Indonesia is in line to host the second AirAsia X affiliate, potentially launching by the end of 2014 with a base in Bali. The Philippines for now is not being considered for an AirAsia X affiliate, although it remains a long-term possibility.
As CAPA's LCCs and New Age Airlines Sep-2013 conference in Seoul clearly identified, the wheels are starting to turn in Korea, the home of the first LCCs in North Asia. But more recently it has suffered from stagnation as carriers do not offer a cost base that is competitive with other LCC developments in the region. Jin Air is the country's second largest LCC and wholly-owned by Korean Air. This brings advantages but also disadvantages, as CEO Won Ma said at the CAPA conference. Mr Ma sees that Jin Air needs to improve its cost base and has started to charge for small ancillaries, but not luggage. Jin Air also incurs higher costs from using some Korean Air services.
2012 was Jin Air's third year of profits, which were very respectable given the industry but lagging considering Jin Air's modest network, with limited competition. But the Jin Air-Korean Air relationship is far ahead of Asiana and its partially-owned LCC unit Air Busan, struggling to remain relevant up against Jin Air and the the even larger Jeju Air, Korea's largest independent LCC. If Jin Air, like other LCCs, can make very necessary cost structure reforms, there are increasing opportunities as the Korean outbound market grows, thanks to the strengthening of the won. It is time now more than ever to apply more pressure on the accelerator.
AirAsia’s remarkable track record of success over its first 12 years has come at a price – more competition as others look to duplicate the group’s formula. While AirAsia still reaps the benefits of first mover advantage in several of its markets and continues to outperform nearly all of its peers, competition is intensifying.
The Malaysian market, the group’s original and by far its most profitable market, has been shaken up this year as rival low-cost carrier group Lion has launched Malindo Air and as rival Malaysia Airlines (MAS) has exited a restructuring phase by pursuing aggressive expansion aimed primarily at fighting off Malindo. While AirAsia’s Malaysian short-haul operation continues to report industry-leading operating profit margins of about 20%, its yields have dropped in recent months and the carrier’s profitability could eventually be impacted.
AirAsia’s short-haul operation in Thailand also reported a drop in yields for 2Q2013. Like its Malaysian sister carrier, Thai AirAsia was still able to improve operating profits. But with new competition around the corner as two new LCCs plan to launch in Thailand, market conditions will only become tougher.
Australia’s outbound market has continued to strengthen while its inbound market has been relatively stable in recent years.
Australian residents took a record 8.4 million short-term trips overseas in the financial year ended 30-Jun-2013, according to the Australian Bureau of Statistics (ABS), up from 8 million trips in 2012 and nearly three times the number from 10 years ago when 3.3 million short-term departures were recorded.
This growth has been largely driven by Australia's strong resources fuelled economy, with a high AUD making international travel more appealing for Australians compared to a domestic holiday. The recent substantial fall in the AUD has not yet had time to make its effects felt at the consumer end, but the approximately 15% fall against the USD since Apr-2013 (and against those currencies linked to the USD) will be causing pain to airlines whose reliance on Australian outbound traffic is high.
Despite the AUD losing ground however, there appears to be little lessening of appetite for Australians to travel – at least in the short term.
AirAsia has reported increases in operating profits for its three main short-haul subsidiaries in Malaysia, Thailand and Indonesia. But the Malaysian and Thai carriers saw yields decline while Indonesia AirAsia saw its operating margin drop.
The group continues to find the going tough in the Philippines, where its affiliate incurred another large loss in 2Q2013, and sister long-haul carrier AirAsia X was also in the red. Following the setback in Japan, where AirAsia has dissolved its affiliate, and with the challenges confronting the group in India, where it plans to launch its newest affiliate in 4Q2013, the group needs the older carriers in its portfolio to perform well.
But while AirAsia, AirAsia X, Indonesia AirAsia and Thai AirAsia continue to outperform most of its rivals, competition is intensifying across all of its markets. Malindo has launched in Malaysia, Indonesia AirAsia is battling three other LCCs and Thailand could see two new low-cost competitors emerge in 2014.
This first part of a two-part series of reports looks at AirAsia’s position in the Malaysian market. The second part will look at its other home markets.
Bilateral agreement differences are providing a check on the launch of services to Australia by Philippine low-cost carrier Cebu Pacific, which is interested in serving Melbourne and Sydney using its new fleet of A330-300s. The differences between Australian and Philippine authorities on an extension to their air services agreement is frustrating Australian airports, which have seen medium/long-haul low-cost carriers drive international traffic growth in recent years.
Cebu Pacific would be the fourth medium/long-haul LCC to operate international services to/from Australia, joining AirAsia X, Scoot and Jetstar. The rapid expansion of AirAsia X in Australia, where the Malaysian carrier will become by the end of 2013 the fourth largest foreign carrier, was analysed in the first part in this series of reports on the Asia-Australia market.
The Philippines is a much smaller market for Australia than Singapore or Malaysia. But there is potential for significant growth, particularly if a new LCC can enter, stimulating demand in a market which is highly price sensitive.
Great news! CAPA now offers email and phone contact functionality through its partnership with Gooey. Corporate access for this feature is USD1000 per annum.