AirAsia X gives up on resuming service to Adelaide

AirAsia X has dropped consideration of resuming services to Adelaide and is now focusing on a newly revised Australia schedule that features additional capacity to Gold Coast, Perth and Sydney during peak summer months and a year-round double daily service to Melbourne Avalon.


Summary:

  • AirAsia X has given up on plans to resume services to South Australia due to what it claims is an unreceptive Adelaide Airport;
  • The airline will operate 50 weekly flights to four Australia destinations during peak periods this summer but maintain only 39 weekly flights the rest of the year;
  • AirAsia X previously had year-round double daily service to Melbourne, Perth and Sydney but now only has a double daily service to Melbourne, soon to be moved to Avalon.

The low cost carrier has talked over the last couple of years about relaunching service from Kuala Lumpur to Adelaide, which it dropped in Mar-2015 after less than 18 months of operating the route. AirAsia Group CEO Tony Fernandes has used social media multiple times to state his aspirations for returning to Adelaide and how the group was working towards relaunching the service.

However, AirAsia X has had to shelve plans for Adelaide claiming the airport is not receptive. and the airline’s CEO Benyamin Ismail told CAPA TV on the sidelines of the recent CAPA – Centre for Aviation Asia Aviation Summit that “we’ve tried really hard to go to Adelaide” but the airport is “very full service minded, focusing on Singapore Airlines and Malaysia Airlines”.

Singapore Airlines operates a daily year-round service to Adelaide and is up-gauging the route on 15-Dec-2018 from 285-seat A330-300s to 303-seat A350-900s. Malaysia Airlines increased Kuala Lumpur- Adelaide services in early Jul-2018 from four to five weekly A330-300 flights, partially restoring capacity that was cut as part of its 2015 restructuring.

See related report: Singapore Airlines aircraft changes in the Adelaide and Brisbane markets: the good and the bad

Adelaide Airport is apparently concerned that new competition from AirAsia X could make it difficult for Malaysia Airlines to sustain the route. “We keep on telling them we would not by diluting the market or impacting the full service,” Mr Ismail said. “We would be stimulating the market, adding more capacity especially new segments of the market.”

Indeed, when both AirAsia X and Malaysia Airlines served the Kuala Lumpur-Adelaide route in 2014, passenger traffic between the two cities reached a high of 245,000. In 2017, only 98,000 passengers travelled nonstop between the cities.

TABLE – Annual Adelaide-Kuala Lumpur nonstop passenger traffic shows clear stimulation when both Malaysia Airlines and AirAsia X together served the city pairSource: The Blue Swan Daily and BITRE

Mr Ismail said that AirAsia X hopes Adelaide changes its mindset, but in the meantime “I will be focusing on the other four markets”. In Australia, AirAsia X currently serves Gold Coast, Melbourne, Perth and Sydney.

The Melbourne service, which is operated with two daily flights year-round, is being transferred to Avalon Airport on 5-Dec-2018. As The Blue Swan Daily previously highlighted, AirAsia X began selling Avalon in Jul-2018 with one-way base fares starting at only AUD12 and return fares including taxes starting at AUD150.

See related report: AirAsia X lowers fares as it moves from Melbourne Tullamarine to Avalon

However, Mr Ismail said “the yields have been great and the loads for December are ahead of last year”. He added that AirAsia X has done a good job educating passengers about Avalon, including the recently enhanced SkyBus service to Melbourne CBD and a seamless experience on arrival which will Mr Ismail expects will enable passengers to get out the door in less than 15 mins compared to up to two or three hours at Melbourne Tullamarine.

AirAsia X cut capacity to Gold Coast, Perth and Sydney early this year but is adding frequencies for the upcoming southern summer peak season. Sydney will be back up to 14 weekly flights for most of December and January compared to 11 currently while Perth will be increased to 11 frequencies compared to seven currently.

Meanwhile, AirAsia X is adding four weekly Kuala Lumpur-Gold Coast flights from mid-December to mid-January for a total of 11. Its local Kuala Lumpur-Gold Coast capacity will also increase in Feb-2019 as it drops the Gold Coast-Auckland tag.

AirAsia X will have a total of 50 weekly flights to Australia during peak periods this summer and 39 weekly frequencies the rest of the year. AirAsia X is still well below its previous high of 56 weekly flights to Australia, which was achieved in both summer 2014/2015 and summer 2016/2017.

Mr Ismail believes AirAsia X’s current Australia schedule is optimal although it generates significantly less year-round capacity than previously. “In Australia the market swings quite heavily in the lean season,” he explained. “Double daily on some routes are quite tough.”

He added that maintaining double daily year-round to Sydney, which AirAsia X tried to do in 2014 and again in 2017, is particularly difficult. “Sydney is a very high cost airport. We got to be tactical how we do it. I’m happy with 11 times.”