December 30, 2013
The low-cost, long-haul airline business model has been slow to gather momentum in other parts of the world, but it appears set to boom in Asia. Latest developments see AirAsia X placing a major widebody order that would extend its reach to Europe, and two other low-cost carriers (LCC) revealing plans to launch a long-haul joint venture in Thailand.
The largest Asian LCCs have several hundred narrowbody aircraft on order, which will intensify competition in the short-haul market in coming years. So looking for new markets further afield is a logical next step. Most of the region's leading LCCs are thinking this way, and are either operating long-range widebodies or have them on order.
Malaysia-based AirAsia has gone further down this path than its rivals, however. It established AirAsia X in 2007 specifically to pursue long-haul opportunities, and it already operates a fleet of 16 A330-300s. On Dec. 18 it announced an order for 25 A330-300s for delivery from 2015, to be supplemented by another six A330s it will lease from the International Lease Finance Corporation. The latest Airbus deal will boost the airline's outstanding A330 orders to 40, and it is also scheduled to receive 10 A350-900s.
AirAsia X says the new order includes the extended-range version of the A330-300, which provides it with “the ability to offer non-stop service to destinations in Europe or one-stop service to the U.S.” AirAsia X previously operated flights to London and Paris using A340-300s, but cut those routes in March 2012 because it could not make them viable with that aircraft type and Europe's high taxes and fees.
Airbus first unveiled extended-range options for its A330 family in November 2012; they will be available to operators in 2015. The upgrade certainly caught the eye of AirAsia X, as its latest order is Airbus's largest ever for the A330.
The order signals a new wave of growth for AirAsia X. Group CEO Tony Fernandes says the additional aircraft “further cater to our expansion plans in Malaysia,” as well as “other long-haul ventures planned across Asia.”
AirAsia X CEO Azran Osman-Rani has previously stated that the carrier's goal is to launch overseas joint ventures in countries where AirAsia already has established short-haul affiliates, starting with Thailand and Indonesia. The Thailand AirAsia X joint venture is furthest advanced, and is expected to be operational in the first quarter of 2014.