Thursday 28 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on February 5, 2018 - February 11, 2018

AS its closest rival Malaysia Airlines Bhd sets out to regain market share in Australia by adding capacity, AirAsia X Bhd (AAX) is doing otherwise. The long-haul, low-cost affiliate of AirAsia Bhd is unfazed by the possibility of the national carrier overtaking it to become the new market leader as boosting yields is its top priority for now.

AAX CEO Benyamin Ismail says the airline will continue to lead in Australia despite concerns over how cuts in its seat capacity to Sydney, Perth and the Gold Coast would affect its market share.

“We have cut frequency on the Kuala Lumpur-Perth route from 14 flights per week to seven, but we are still comfortably leading in that market. Our flight frequency to Melbourne hasn’t changed and we are still No 1 (on that route).

“Even though Malindo (Airways Sdn Bhd) flies to Brisbane now, it makes a stopover in Bali while we fly non-stop to nearby Gold Coast. Direct flights are the best option, so I am not worried,” he tells The Edge.

On Jan 9, Malaysia Airlines announced the relaunch of its flights to Brisbane from June this year. The airline will initially operate four weekly flights on the KL-Brisbane route and, eventually, upgrade the service to daily.

Starting this month, AAX is reducing its flight frequency to the Gold Coast by 36% to seven flights per week from 11 currently, and to Sydney to 11 flights per week from 14.

Benyamin says apart from improving yields, the group aims to find an optimum level for AAX to operate in the Australian market.

“Australia currently generates the biggest revenue for AAX. The issue with the Australian market is that the seasonal swings are very strong. What I want to do is to find the balance in terms of capacity, because we don’t want to operate high-frequency flights and suffer from overcapacity and low yields during the lean season,” he explains.

“Take Sydney, for example. We reduced our frequency on the route because the cost of operating out of Sydney is very high. We think we can generate more revenue by deploying our capacity to China during the lean season,” he adds.

Nevertheless, AAX will continue to build brand awareness and loyalty in Australia. “This year, we will embark on a campaign designed to build our brand in Australia. Once we have completed the exercise and established a stronger presence there, we would consider adding more capacity when we have more aircraft,” says Benyamin.

Last Friday, AAX co-group CEO Tan Sri Tony Fernandes was reported as saying that the airline is looking at buying A330s, A350s as well as Boeing 787s to expand its fleet.

 

 

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