AirAsia X takes off for the US
Clive Doorman - Consumer Editor
15 Feb 2017
Asia's low fare giant bullish on the US coy on Europe
The first low-cost airline connection from Asia to the US will take off in June, with the promise of ultra-cheap tickets between the two regions eventually being available to and from some of America’s biggest cities.
But AirAsia X, the long-haul arm of South-East Asia’s biggest budget carrier is being ultra-cautious about expansion to Europe and America.
The carrier’s four weekly 377-seat A330-300 flights linking Kuala Lumpur and Honolulu, Hawaii, via Osaka, Japan, take to the air on June 28, 2017, with the prospect that they will quickly be ramped up to daily because of strong interest from Japanese travel agents.
“We think about 80 per cent of the traffic will be Japanese,” AirAsia X chief executive Ben Ismail told AirlineRatings.com. “Hawaii is the No.1 destination for Japan.
“Talking to (Japanese) agents, there is far more demand than supply at the moment. For Asians in ASEAN (the South-East Asian group of nations), it’s something that we’ll continue to push because it’s good for the brand. We can increase that (four weekly flights) anytime we want to.”
AirAsia X normally concentrates on non-stop point-to-point services of seven to nine hours flight duration, which fits the profile of the new Honolulu service, except that, from Kuala Lumpur, it’s two sectors instead of one.
It’s the airline’s second one-stop destination after it inaugurated one-stop A330 flights from Kuala Lumpur to Auckland, New Zealand, via Australia’s Gold Coast, last year.
According to Ismail, that has been an outstanding success with passenger loads between Auckland and the Gold Coast averaging 85 per cent, opening up a new daily market for New Zealanders in search of cheap beach holidays in Queensland.
Now that the airline has secured approvals to operate to the US via Japan from both safety and international government air-rights regulators, Ismail says it will be simply a matter of announcing new services as soon as the necessary aircraft become available.
However, Ismail says operating to the US east coast – to New York, for example – would be “too much of a stretch” for the airline’s A330s.
“I think the nearest for us would Los Angeles or San Francisco,” he says. “They’re very Asian-dominated markets. “Maybe Las Vegas is something we will also explore. But it will not be in the next two years or so.”
Alas, with the current generation of airliners – even the long-range A350, which AirAsia X has ordered – the prospect of operating non-stop to the US from Kuala Lumpur is unlikely because the economics of ultra-long-range flight don’t stack up for a low-cost carrier. “Long-haul non-stop to the US would be a stretch for us,” Ismail says, “but we’ll never rule anything out.”
Ismail has also put a dampener on plans – touted enthusiastically by AirAsia founder Tony Fernandes in the past two years – to return to London. The last time AirAsia X operated services to London and Paris, before they were axed in 2012, the airline lost money and the airline is being careful not to repeat that experience.
“We’re still running the numbers,” he says. “We’re looking at the right aircraft to do this.” That refers to the fact that the airline has ordered both the longer-range A330-300neo (“new engine option”) and the new-generation fuel-efficient A350.
“We’re doing some analysis on the yields going into London, but we haven’t concluded yet whether we’re doing it or not,” Ismail says. “We will know in the next few months. If the numbers make sense, we will announce it very quickly (this year), but if they don’t, we put it on the backburner for a while.”
The first low-cost long-haul service linking South-east Asia and southern Europe starts in June 2017 when Singapore Airlines subsidiary, Scoot, begins flying from Singapore to Athens four times a week using Boeing Dreamliner 787-8s.