Companies

AirAsia X aims to swoop on Beijing, Shanghai routes

By Zhou Yan and Wang Zhuoqiong (China Daily)
Updated: 2011-04-29 11:07

KUALA LUMPUR - China will become the largest market for the long-haul budget airline AirAsia X, if the Malaysia-based carrier's applications to open routes in Beijing and Shanghai are approved by the governments of both countries.

"We are ready to go once we've got approval," Azran Osman-Rani, chief executive officer of AirAsia X - a franchise of AirAsia, which is Asia's largest low-cost carrier - told China Daily on Wednesday. "If so, China will surpass Australia to become our No 1 market."

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The country now accounts for about 25 percent of AirAsia X's business, second only to Australia's 30 percent, according to the Civil Aviation Administration of China (CAAC) Journal.

The airline is also considering other destinations in secondary cities such as Xi'an in Northwest China and Shenyang in Northeast China, to strengthen its current presence in Tianjin, Hangzhou and Chengdu.

AirAsia X made its first international flight in 2007 and now operates a fleet of 11 aircraft.

Osman-Rani said the Chinese market holds huge potential for the airline. "The number of passengers from Hangzhou and Tianjin has seen strong growth, with Chengdu catching up quickly," he said.

In 2010, the budget carrier made 720 flights carrying about 217,000 passengers in and out of Hangzhou - a passenger number exceeding that of its previous largest destination, Australia's Gold Coast.

Half of the carrier's Hanzhou passengers are international travelers and half domestic, thanks to the city's role as a high-tech base and its proximity to the Yangtze River's heart Shanghai.

Most of the passengers to and from Tianjin, a neighbor of the nation's capital, are Malaysian or Singaporean, he said. The company's passenger volume through Tianjin saw growth of 40 percent year-on-year in 2010, according to a report from the CAAC Journal.

With about 70 percent of its passengers from Chengdu being Chinese, the airline has promoted the city in Southwest China as the home of the panda and a tourist destination to Malaysians since opening its route to the city.

AirAsia X's robust growth in the Chinese market comes not only from the growing trade ties between China and Malaysia, but also the growing interest in travel both in China and Southeast Asian countries.

In addition, the budget airline is benefiting from the growing tendency of Chinese travelers to book their flights online, the CEO said.

"About 50 percent of our passengers from China booked their flights through the Internet in 2008," Osman-Rani said. "Now it's up to about 90 percent."

"Apart from cutting our cost, the Internet has been vital tool because it is more direct and interactive," he told the CAAC Journal.

In a time when the cost of aircraft fuel is soaring, Air Asia X is emphasizing quality service as a selling point. "The market is very tough. We have had to change our marketing strategy," Osman-Rani said.

Its methods include raising airfares by attracting family travelers who are less price-sensitive than students, and focusing on providing reliable and comfortable service.

"Keeping the aircraft light is crucial," Osman-Rani said. "We have to carefully weigh every single thing." To conserve fuel, the airline has removed the footrests beneath passenger seats to minimize the weight of the aircraft.

Osman-Rani said AirAsia X will not go public in Malaysia or elsewhere until the first half of next year. "Due to the challenges in the aviation industry, we have not finalized where and when we will get listed," he said. "But we are looking for a dual listing, one in Malaysia and the other has yet to be determined."