Air Asia X says it firmly believes the low-cost model will translate to medium and long-haul services that the carrier intends to launch next month
The airline ” in which the Virgin Group holds a 20% stake ” will fly sectors of between four and eight hours from Kuala Lumpur to the UK, China and Australia among others, and believes its new customers have the requisite industry knowledge to make informed choices about how they fly and what they will pay for on board.
Addressing today”s (24 September) Routes Leaders Forum in Stockholm, Air Asia X CEO Azran Osman-Rani, said: ”We think that today”s travellers are very sophisticated ” they are comfortable with using two point to point destinations ” it”s not an issue at all for us.”
”We (will) have connecting passengers and they (will) have no difficulties at all; when there are routes to the European Union, that is very powerful.”
AirAsia X will operate using Airbus A330-300 aircraft, with a fleet of 15 machines due for delivery from September, 2008. The first aircraft this year, will fly on the basis of a long-term operating lease.
Osman-Rani also said that Air Asia X would introduce a premium seat for passengers who valued comfort more than traditional legacy carrier business benefits.
The discretionary element lies at the heart of any long-haul, low-cost according to Air Asia X. While some believe that any departure from a single-class model will add complexity, the Kuala Lumpur airline maintains that the ability to pick and choose variables, such as seat pitch and comfort, is more important than the provision of frequent flyer programmes or airline lounges.
But will the airline appeal to business travellers? ”Small and medium enterprises that are cost-conscious will be talking to us,” Osman-Rani told ABTN. ”When you pay 4,000 USD (” 1,978) for a flight and you have an opportunity to have a comfortable seat for a third of that price, then that is a real proposition.”
A note of caution was sounded however, by the European Low Fares Airline Association, that insisted only a genuine low-cost model would work long-haul. ”Anybody can offer a low fare but only those with low cost can really sustain them.” said secretary general, John Hanlon.
”I think legacy carriers have a dilemma here ” they have had the ability to cross-subsidise economy fares from the very high prices across the Atlantic.
If there is a real, true low-cost competitor snapping at their heels, it could be difficult.”
Hanlon disputed however, that the development of long-haul low-cost with a curtain was the way to compete. Privileged seats, such as those near emergency exits already exist, but any provision of a special cabin or dedicated staff, ran counter to the low-cost model,” he noted.
The secretary general also said that market access was ”a problem we have to address with restrictive air service agreements limiting growth to the benefit of national carriers.
”They have an awakening ahead of them when they have to start competing on EU-US (routes).”