- CAPA Analysis
- Schedule Analysis
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- Fast Fact Report
- Airline Status
- IATA Code
- ICAO Code
- Corporate Address
- 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.
327 total articles
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.
The AirAsia Group has forged a new joint venture in Vietnam, marking its third attempt to establish a Vietnamese affiliate. AirAsia was initially partnered with VietJet Air but the partnership was dissolved prior to VietJet commencing operations in late 2011.
The market has since more than doubled in size, and Vietnam has emerged as Southeast Asia’s fastest growing market. While there is further growth potential, the LCC incumbents VietJet and Jetstar Pacific have first mover advantage, and infrastructure constraints could make it difficult for any new entrant to establish a significant presence. AirAsia will also need to overcome regulatory hurdles.
Vietnam is the second largest market in Southeast Asia without an AirAsia affiliate - after Singapore, where the group has been able to develop a sizeable presence with a virtual hub. Vietnam is a market AirAsia strategically cannot avoid, but the group is late to the party and faces some of the same obstacles that have impacted its performance in the Philippines.
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.
Growth in Malaysia’s dynamic aviation market is set to accelerate in 2017 owing to aggressive expansion by all four of the main Malaysian carriers – AirAsia, AirAsia X, Malaysia Airlines and Malindo Air. The total passenger fleet in Malaysia is projected to grow 11% in 2017, and passenger growth could reach 15% as average aircraft utilisation rates at most of the airlines also increase.
The Malaysian market grew by 7% in 2016, to approximately 68 million passengers. Malindo Air captured the most growth, accounting for nearly half of the additional passengers. The Lion Group affiliate is again poised to account for nearly half of the total passenger growth in 2017, with more than four million additional passengers, although Malaysia Airlines, AirAsia and AirAsia X are also likely to carry at least one million additional passengers each.
Heavy discounting will be required in order to fill the additional seats and meet load factor and traffic targets. Fares in Malaysia are already very low and yields could decline further, particularly in 2H2017 when most of the additional aircraft are slated to be delivered.
Malaysian long haul low cost airline AirAsia X is planning to dry lease two 777-300ERs from 2Q2017 to support the resumption of services to London Gatwick in Jun-2017. Its joint venture airline in Thailand is also aiming to launch long haul services to Europe in summer 2017 with a new route to Frankfurt, using the group’s existing A330-300ceo fleet.
The lease of second hand 777-300ERs enables AirAsia X to accelerate the relaunch of flights between its main home market of Malaysia and Europe. Previously AirAsia X was intending to wait for the delivery of the A330-900neo to resume long haul flights, which it last operated in 2012 with inefficient A340-300s.
The group was initially aiming to start operating A330-900neos from 2018, but first delivery has been delayed to early 2019. Short term leases on two 777-300ERs therefore give AirAsia X at least an 18 month jump on resuming London – a strategically important market.
However, the 777-300ERs come with high risks and costs, particularly given the current market conditions and the relatively low density full service airline configuration that AirAsia X inherits with the aircraft.
Southeast Asia’s low cost airline fleet grew by only 7% in 2016, representing the slowest growth in several years. The region’s two main groups, AirAsia and Lion, both slowed their growth significantly, with AirAsia slightly reducing its Southeast Asian fleet in 2016.
Southeast Asian LCCs ended 2016 with a fleet of 623 aircraft – up a modest 41 aircraft compared to the beginning of the year. The same group of 21 airlines added 67 aircraft in 2015 and 61 aircraft in 2014.
Several airlines responded to overcapacity, which peaked in 2014 following a period of overzealous capacity expansion, by deferring aircraft deliveries. Overcapacity continues to persist in several Southeast Asian markets, but some LCCs are reaccelerating expansion in 2017. Given the sector’s huge order book it is likely 2016 will represent the low point in Southeast Asian LCC fleet growth.