MALAYSIA’S AirAsia PLANNING ROUTES IN RP, INDONESIA
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KUALA LUMPUR, March 18, 2006***
(STAR) Malaysian budget carrier AirAsia is thinking of setting up joint ventures in Indochina and the Philippines over the next 18 months, and will likely increase flights to China, a senior executive said.
AirAsia Bhd. already manages 49 percent-owned joint venture low-cost carriers in Indonesia and Thailand. It plans similar arrangements in Indochina and the Philippines over the next 12 to 18 months, Executive Vice President of Strategy Timothy Ross told Dow Jones Newswires in an interview Thursday.
He would not say which of the Indochina countries _ Vietnam, Cambodia and Laos _ the new ventures will likely be in.
The airline, the region’s biggest low-cost carrier in terms of fleet size, also is likely to increase its routes and services to China, including possibly flying from Kuala Lumpur to southern Chinese cities such as Shenzhen and Guangzhou, he said.
“With the Airbus 320s, going to South China from Kuala Lumpur is possible,” Ross said. Previously, AirAsia had said flights to China were only possible from Bangkok because all its fleet were Boeing 737s. AirAsia currently flies to Xiamen, its only mainland China destination thus far, from the Thai capital.
Since December, AirAsia has taken delivery of four of the 60 new Airbus 320 planes it ordered. With 180 seats each, the Airbus can carry about 22 percent more passengers than Boeing 737 jets.
AirAsia will have seven new Airbus jetliners by June 30, the end of the financial year, Ross said.
“New services to China are being actively considered right now, including lifting Bangkok-Xiamen from four times a week to daily,” he said.
Ross was also upbeat about the ongoing restructuring of domestic routes.
On Thursday , the government said Malaysian Airline System Bhd., which operates flag carrier Malaysia Airlines, will only fly key domestic routes and give all the others to AirAsia.
The move was aimed at reducing losses at MAS, which announced recently that only four of its 118 domestic routes are profitable. MAS has also announced a sweeping business turnaround plan after a series of losses in the financial year that ended Dec. 31.
Ross said AirAsia may lease eight or nine of Malaysia Airlines’ 39 Boeing 737 planes to operate the additional domestic routes it will inherit.
“Any form of (domestic route) rationalization will provide us with more opportunities,” Ross said.
The government’s route split plan will lift AirAsia’s share of domestic air traffic to 83 percent in one to two years’ time from 29 percent currently, Citigroup aviation analyst Corrine Png said in a report.