AirAsia: “You never know where fuel prices are going to head in the next few months. So it does give us a bit of a cushion. Yes, we do hedge, but probably not as substantially as other airlines. For us, the biggest strategy is being very distinctive in being the world’s most efficient fuel-volume consumer rather than hedging, because no airline in the world has achieved any sustainable competitive advantage from a fuel hedge policy. We are in the midst of going through very thick proposal documents from advisers and underwriters. We are expecting to probably look at first half of next year in terms of a listing timeframe. Realistically the primary listing base will probably still be in Kuala Lumpur. We are evaluating an option to have a dual listing in another exchange. Whether that is Hong Kong, New York or London, those are all being evaluated. It all depends whether there really is an investor pool that we won’t be able to tap if we were only listed in Kuala Lumpur.” CEO Azran Osman-Rani. Source: Bloomberg TV, 04-May-2011.
AirAsia X CEO comments on fuel surcharge and IPO
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AirAsia X to become the ninth Asia Pacific low cost airline serving the US, and the third in Hawaii
Malaysia’s AirAsia X is launching services from Osaka to Honolulu in Jun-2017, making it the second LCC to operate from North Asia to Hawaii and the third LCC from Asia-Pacific. The route is made possible by a combination of liberal air service agreements, providing fifth freedom rights to the Malaysian airline. The Korean Air LCC subsidiary Jin Air and Qantas subsidiary Jetstar Airways are currently the only LCCs from Asia Pacific with service to Hawaii – or any of the 50 US states.
AirAsia X secured US FAA approval in Feb-2017, ending a tedious two year process. AirAsia X ibecomes the ninth Asia Pacific LCC to secure US FAA approval and the second from Southeast Asia, after Cebu Pacific. Six Asian LCCs currently serve Guam and five serve Saipan.
Asian LCCs will inevitably also serve the mainland US. Both AirAsia X and Cebu Pacific, along with new Chinese LCCs, have the US west coast in their business plans. Cebu Pacific is the only likely low cost operator of nonstop flights from Southeast Asia to the continental US.
Malaysia’s AirAsia: resuming domestic expansion and eyeing MASwings routes
AirAsia is resuming domestic expansion in the Malaysian market with a focus on connecting more dots within its network of 15 domestic destinations. The LCC is launching or resuming three domestic routes from Johor Bahru in late Apr-2017 and has lodged applications for four more new domestic point-to-point routes.
By the end of 2017 AirAsia is also aiming to take over a few domestic routes within east Malaysia that are now exclusively operated by the Malaysia Airlines Group turboprop subsidiary MASwings. The routes are part of the Malaysian government’s subsidised rural air services (RAS) programme, but are potentially big enough to support larger aircraft on a commercial basis. The Malaysia Airlines Group is preparing to reduce its ATR 72 turboprop fleet further following anticipated changes to the RAS programme, which is coming up for renewal this year.
AirAsia is the leading domestic airline in Malaysia and has 50% of its total seat capacity allocated to the domestic market. However, AirAsia’s domestic capacity has been flat the last three years as it has focused entirely on international expansion.