Axing of routes is pure business decision, says Air Asia boss

KUALA LUMPUR: The decision by AirAsia X to suspend four of its loss making international routes, is purely a business decision and must be viewed positively by Malaysians, says co-founder and chief executive officer of AirAsia, Tan Sri Tony Fernandes.

He said allegations that the move by AirAsia's sister company to drop the Kuala Lumpur - Mumbai, New Delhi, Paris and London routes, was a move to accommodate and establish a business strategy with Malaysia Airlines (MAS), was totally untrue and "irritating". "Azran Osman Rani (AirAsia X's CEO) made a business decision. We were the first to introduce a low-cost long-haul airline model and now the Singaporeans are following suit.

"In this case, he discovered that the best profitability is to have between four to eight hour (routes), with one type of engine and aircraft, which is the Airbus 330. "So, this has nothing to do with MAS or AirAsia. On the flip side, Malaysia Airlines CEO, Ahmad Jauhari, is hearing that the routes suspension is to accommodate AirAsia," he added.

Tony was speaking to reporters after delivering a keynote address at the 2012 Retail Strategy Series, organised by Maybank Investment Bank and Maybank Kim Eng, here on Saturday. He said that it was good that MAS and AirAsia can collaborate in certain areas, but wrong to say, this would destroy competition.

Asked about his aspirations for 2012, Tony said AirAsia had a positive start to the year, with January sales expected to be a record, when compared to the corresponding months of previous years. "I think we will have a record January. I was looking at the tremendous sales coming from the North Asian region and was very delighted with the level of demand.

"We will continue to grow every year. Last year, we recorded 32 million passengers, an increase from 2010. "Thus, I am bullish on the growth of AirAsia this year and in fact, for the next ten years," he added. He said the low-cost airline had just finished its ten-year plan with its 70 managers.

"To date, the future looks very good. Its up to us to keep our costs down, make airports play a part as it is critical to the growth of an airline, and keep fares down. "We cannot grow if we increase our fares. In fact it is against my philosophy," Tony said. 

-Bernama.