Malaysia’s AirAsia plans more rapid expansion in 2019 despite airport constraints and pilot shortage

AirAsia is planning further rapid expansion in its original home market of Malaysia despite airport infrastructure constraints and a shortage of pilots.


Summary:

  • Malaysia AirAsia has expanded its in-service fleet by 10 aircraft in 2018 and reported a 17% increase in available seat capacity for the first three quarters of the year;
  • The airline plans to add another five to six aircraft in 2019, including its first A321neo, driving another year of double-digit capacity growth;
  • A pilot shortage and a lack of overnight parking spots at its secondary bases have emerged as challenges as the airline expands rapidly.

The CEO of AirAsia’s Malaysia-based short haul unit, Riad Asmat, acknowledged during a CAPA TV interview last month that a pilot shortage has been a challenge this year as the airline has expanded. Malaysia AirAsia’s in-service fleet has expanded from 84 to 94 aircraft in 2018, driving a +17% increase in seat capacity for the first nine months of the year as average aircraft utilisation rates have also increased.

Mr Asmat, who joined AirAsia at the beginning of 2018, said the airline has “managed well” by growing its fleet to 94 aircraft. “The challenges to be honest is on resourcing it with pilots,” he said. “This is a challenge in the region right now. There are not enough pilots out there so I have to manage what I have currently but we’re doing a pretty good job all the way to December and to first quarter next year.”

Mr Asmat said Malaysia AirAsia (which is also now known as AirAsia Malaysia) plans to expand its fleet by another five to six aircraft in 2019. He added the fleet plan for next year includes the airline’s first A321neo, which will be configured with 230 seats and is slated for delivery in 3Q2019.

CHART – Malaysia AirAsia’s current 94 aircraft fleet consists of 71 180-seat A320ceos and 23 186-seat A320neos. Its huge order book for 376 aircraft includes aircraft that will be allocated to overseas affiliatesSource: CAPA – Centre for Aviation Fleet Database

The AirAsia Group has 100 A321neos on order, which will be used by several of its airline subsidiaries or affiliates on high frequency routes and to slot constrained airports. Mr Asmat said the first A321neo for the Malaysian subsidiary will be deployed on domestic routes connecting peninsular and east Malaysia such as Kuala Lumpur-Kota Kinabalu. Kuala Lumpur and Kota Kinabalu are Malaysia’s two largest cities and they are currently connected by Malaysia AirAsia with 16 to 17 daily flights, making it the LCC’s largest route.

The A321neos will enable AirAsia to reduce its already very low unit costs and better manage pilot staffing issues as the airline can increase seat capacity by 24% to 28% (compared to the A320neo and A320ceo) without mounting additional flights. A321neos also enable Malaysia AirAsia to more efficiently utilise overnight parking spots, which are in short supply at its four secondary bases.

Along with its main hub at Kuala Lumpur International Airport Terminal 2 (KLIA2), Malaysia AirAsia bases aircraft at Kota Kinabalu, Kuching, Johor Bahru and Penang. Mr Asmat said the Johor and Penang bases were expanded this year and will continue to grow while the Kota Kinabalu base will increase to 10 aircraft in 2019. However, he said there are increasing infrastructure challenges at these airports.

“We have four hubs in Malaysia outside KLIA2 and we will continue to grow them. We just require the right facilities to be put in place because most of the facilities available now are very limited in terms of parking bays, especially overnight parking bays,” Mr Asmat said.

At Kota Kinabalu, Malaysia AirAsia’s largest base after KLIA2, the airline has proposed reopening, refurbishing and expanding the low cost carrier terminal (LCCT). AirAsia was forced to move from the LCCT to Kota Kinabalu’s main terminal in 2015 and has since been trying to persuade the airport authority and local government to let it move back.

AirAsia is still expanding at Kota Kinabalu despite having to use the more expensive main terminal, but the LCCT would open up more opportunities including possible A330s from long haul sister airline AirAsia X.  “Hopefully the state government will acknowledge the required facility for us to cater to our growth and their growth. At the end of the day it’s a win-win for them,” Mr Asmat said.

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