AirAsia X keen to resume Australia and New Zealand expansion – but not quite yet

AirAsia X continues to be on the hunt for new destinations in the Southwest Pacific despite shrinking its network in the region with the upcoming suspension of Auckland and shelving plans for resuming Adelaide. However, expansion beyond its four longstanding destinations of Gold Coast, Melbourne, Perth and Sydney is not likely in the near-term.


Summary:

  • AirAsia X is suspending services to New Zealand in Feb-2019 for the second time, but it is keen to relaunch flights to Auckland in the future;
  • The Low Cost Long Haul carrier continues to evaluate new potential secondary destinations in Australia including Canberra, Newcastle and Townsville;
  • AirAsia X is considering acquiring A321neos or A321neoLRs, which would be the ideal platform for developing new secondary markets in Australia.

In a report last month, The Blue Swan Daily examined why AirAsia X is no longer considering the relaunch of the Kuala Lumpur-Adelaide route, which it suspended in 2015. The report also analysed AirAsia X’s newly revised schedule for Australia, which includes less year-round capacity to Gold Coast, Perth and Sydney but extra flights during peak summer weeks while maintaining a year-round double daily service to Melbourne. (The Melbourne service was moved earlier this month from Tullamarine to Avalon).

While Adelaide is no longer under consideration, AirAsia X continues to look at other potential new secondary markets in Australia. It is also keen to resume flights to Auckland at some point, potentially as a nonstop link from Kuala Lumpur.

AirAsia X has served Auckland from Kuala Lumpur with a one-stop daily service via the Gold Coast, where it has fifth freedom pickup rights, since Mar-2016. This service, which represents AirAsia X’s second attempt to serve New Zealand, is being dropped from 10-Feb-2019. AirAsia X’s first attempt at serving New Zealand, a four times weekly nonstop service from Kuala Lumpur to Christchurch, ended in 2012 after slightly more than a year.

AirAsia X CEO Benyamin Ismail told CAPA TV last month that AirAsia X would like to make a third stab at serving New Zealand. “I will revisit it again in due time. Let’s wait for the fuel to come down first,” he said.

Resuming Christchurch is not likely as AirAsia X does not believe the Christchurch market has fully recovered from the 2011 earthquake. “Auckland I think is the right market for us,” Mr Ismail said. “It’s something we will revisit again in the next few months or a year or so.”

Meanwhile AirAsia X continues to study secondary cities in Australia that it has never served. When asked about the potential of Canberra, Newcastle and Townsville, Mr Ismail said: “It’s always on the radar [and] of course we do assess it. A 377-seat A330 would be a bit heavy in those markets so we will relook at that and see where demand is. If the deal is right – usually it relies on the airports as well, if they are receptive for us to come and happy for us to come in – it will be great for us to develop that.”

The Blue Swan Daily highlighted in Sep-2018 the possibility of secondary Australia markets being launched with A321neoLR narrowbody aircraft, which AirAsia X has been evaluating. At the time it stated that “while larger A330s will remain the most suitable aircraft for the Kuala Lumpur-Melbourne and Kuala Lumpur-Sydney routes, the A321neo could enable AirAsia X to restore frequencies in its two smaller Australia markets (Perth and Gold Coast) and launch new Australia routes that are too thin for A330s”.

Mr Ismail confirmed in the CAPA TV interview that AirAsia X is looking at converting some of its A330-900neo orders to A321neos or A321neoLRs. He said new generation long range narrowbody aircraft would be ideal for developing and experimenting with new markets in Australia and India which could be later up-gauged to A330s if demand grows.

AirAsia X has not yet made a decision to add A321neos as it first needs to make sure it needs a sufficient number (at least 20 and potentially 30 or 40) to make adding a second aircraft type worthwhile. “We are still assessing the viability of the A321s. I need to know if there’s enough scale to acquire those aircraft,” Mr Ismail said.

HEAR MORE from AirAsia X’s CEO, Benyamin Ismail, in this in exclusive CAPA TV interview filmed on the sidelines of the CAPA Asia Aviation Summit in Singapore in early Nov-2018.