AirAsia X Drops Auckland But Will Relook At Resuming Expansion To Australia/New Zealand

Transcript

Benyamin Ismail:Well, I think the first thing is really what we are realigning our whole network. We want to sort of focus on key markets where we think that we can grow much bigger, one being Japan, one being North Asia, one being Australia, one being India. So these are the key markets we're going to focus with. With New Zealand, I think it's a market that we developed I think, into Auckland. It's a one-stop via Gold Coast, but I guess we felt that, you know, with the competition there with Virgin and with Air New Zealand there, you know, with very low fares, especially with this current fuel environment, I felt that it's not the best to just keep sustaining that. So, but I think this market's a huge market. You know as I do that the fact that a lot of the carriers do go into New Zealand, Auckland, so it will be a market that I will revisit again in due time, so let's wait Wait for the fuel to come down first. Well, Christchurch was something that was, I think, was a success. Unfortunately, when we started, you know, a month after that, the earthquake happened. And really, I think Christchurch has never since recovered since the earthquake. If you read up, you know, the population base has decreased, people have moved out. So really, I think Auckland is the right market for us, but it's just, I think, something that we'll revisit again in the next few months or a year or so. It's very small, you're probably looking at about 20 to 30%. A lot of people generally go, we have a portion that goes to Auckland, portion that goes to Gold Coast. So whatever leftovers, we try to fill that void through that trans-Tasman route, which is Gold Coast, New Zealand. But we fill it up. Loads are great. But I think the yields are fairly low, especially when we have a 777 aircraft versus a 180 aircraft, you know, and potentially with more frequencies, they can have that flexibility to lower the yields and maybe take a hit on that route at that time. Gold Coast is doing well for us, so we will maintain that daily. So Gold Coast has been very good to us for 11 years, so we will continue to do that. We're going to explore other markets in Australia. I still haven't got my 5th port, which is Adelaide. Unfortunately, we've tried really hard to encourage to go to Adelaide in terms of flying there. Airports are very receptive, very full-service minded. They are focusing just Singapore Airlines, Asia Airlines. And, you know, I think for us, we keep telling that we will not be diluting the market or impacting this full service. We'll be stimulating the market, adding more capacity, especially new segments of the market in terms of travellers. It's tough. We've been trying, but we'll see. By the moment, I'll just focus on the other 4 markets. You've got to realise that 98 or 95 fuel, you know, you've got to be more accurate in how you make decision-making because I think in Australia, the market swings effectively quite heavily on the lean season, so potentially doing double dailies on some routes will be a bit tough. So really what we try to do is basically just find the optimal level first, and during peak we increase. And doing peak in first quarter and fourth quarter is always fairly strong for us, so we'll keep doing that. Sydney as well, it's a very high-cost port. We've got to be tactful in how we do it, so I'm happy at 11 times as we do it. Melbourne? It's a very mature market, you know, we've seen a very strong demand all year round, and I think with having Avalon there, it's a new proposition in effect of the fare and all that. And I think the message out to the passengers is it's a seamless airport, you know, you'll be out in 10 minutes, 15 minutes, compared to Tullamarine where I could be stuck there for 2, 3 hours, so it depends. And it's great, we are the first carrier coming in and we'll be the mover for it. The yields have been great? And the loads for December is ahead of last year, so I'm very proud of where we have. So, and that is also a testament to the team that I told them, you know, it's even before we move that you have to educate people about Avalon. And the good thing about Avalon Airport team as well, they've been educating people, making deals with Skybus to make sure that it connects to that airport. So it's been great. So I'm very happy the way it's panned out so far. It is always on the radar, but of course we've got to assess it, you know, of course the 777 A330 will be a bit heavy on those markets, so we'll really look at that and we'll see where the demand is. But we're happy if the deal is right, if they are— usually it relies on the airports as well— if they are receptive for us to come in and they're happy for us to come in, it'll be great for us to develop that. Yeah, that would be the great market, into your Townsville and to all the smaller markets. So that's something that I'm focused on. We are still assessing the viability of the 321s. I need to know whether is there enough scale to acquire those aircraft, whether it's 20 or 30 or 40 aircraft that is needed within the system, and scale down on the widebodies. So that's something that we're exploring. We're still far from anything else. So that's something. And again, it helps me on my developing routes, routes that I just started off, and it can be upgauged to a widebody. That's something that I could potentially look at. What are the benefits of suspending services to Auckland?

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