AirAsia X considers Adelaide, Canberra and Cairns

AirAsia X is looking at Adelaide, Canberra and Cairns as potential new destinations in Australia. However, the Malaysian long haul low cost carrier in the short term is focused at improving its performance on its existing Australia routes.

AirAsia X has been serving Australia since the airline’s launch in Nov-2007, when Kuala Lumpur-Gold Coast became its very first route. AirAsia X currently operates 43 weekly flights from its Kuala Lumpur hub to Australia using 377-seat two-class A330-300s, including 14 flights to Melbourne, 11 to Sydney, 11 to the Gold Coast and seven to Perth. Seven of the 11 Gold Coast frequencies continue to Auckland.

For most of the year AirAsia X has 53 weekly flights to Australia as Perth and Sydney is increased to double daily. During the peak summer period in December and January the operation increases to 56 weekly flights as Melbourne is upgraded to 17 weekly frequencies.

Short haul sister airline Indonesia AirAsia also serves Australia from Bali. It currently operates 21 weekly flights from Bali to Perth and four weekly flights from Bali to Darwin using 180-seat single-class A320s.

There has been talk in recent months about AirAsia X resuming Kuala Lumpur-Adelaide, which it served from late 2014 to early 2016. AirAsia X CEO Benyamin Ismail told CAPA on the sidelines of the 7-Nov-2017 CAPA Asia Aviation Summit that resuming Adelaide is a possibility along with launching Canberra or Cairns, which the AirAsia Group has never served.

“The main focus right now is that the key routes are making money, which is Perth, Melbourne and Sydney,” AirAsia X CEO Benyamin Ismail.

However, for the time being AirAsia X is focusing on improving its performance on its existing Australia routes. Competition in the Australia-Southeast Asia market has been intense, pressuring yields. In the most recent month of available BITRE data, Aug-2017, AirAsia X’s Australia traffic increased by 6% year over year to 122,000 passengers, driven partially by a 3pts improvement in load factor from 69% to 72%.

“It has to make sense in terms of P&L and the numbers,” Mr Ismail told CAPA TV when asked about the possibility of Australia expansion. “Adelaide was something we were struggling with in the past. The main focus right now is that the key routes are making money, which is Perth, Melbourne and Sydney. Once we see maturity on those routes if there’s excess capacity I don’t mind exploring Adelaide, Canberra, even Cairns. We will see how it goes.”

Adelaide is already served from Kuala Lumpur by Malaysia Airlines, while Canberra and Cairns do not have any links to Malaysia. Canberra has service from just one foreign airline, Singapore Airlines, and will gain a second when Qatar Airways launches Canberra in Feb-2018. With the upcoming withdrawal of Philippine Airlines (PAL), Cairns will have year-round services from only four foreign airlines including Air Niugini, Cathay Pacific, Hong Kong Airlines and SilkAir.

Cairns Airport and North Queensland tourism authorities has been working on trying to attract AirAsia X for some time. The loss of PAL will likely lead to a stronger push. Adelaide and South Australia tourism authorities also have been trying to encourage AirAsia X to return since it withdrew almost two years ago, while Canberra is eager to continue growing its international portfolio.