Hot response to AirAsia X’s Sydney route

PETALING JAYA: Over six thousand seats have been sold on the KL-Sydney-KL route just two hours after AirAsia X opened the sector for bookings yesterday. “The demand is just too strong and the system (appears) almost crashing,'' AirAsia X chief executive officer Azran Osman-Rani said in a text message from Sydney yesterday.

It has not been easy for AirAsia X to get Sydney in the first place. It took over three years of serious lobbying to get this route as its once rival but now partner, Malaysia Airlines (MAS), was against opening up the sector to competition. Now that the sector is opened, it is surprising that players like MAS and even Jetstar have not dropped fares yet as that was what market observers had expected. MAS operates direct services while Jetstar offers a connection to Sydney via Singapore. A check done on MAS website revealed that its lowest one-way fare on the route is RM729 for early April while Jetstar's is RM1,221 for the KL-Singapore-Sydney-Singapore-KL connection.

The real reason AirAsia X is rushing to get flying into Sydney after obtaining all the necessary approvals is because a new low-cost long-haul airline, Scoot, will be taking to the skies mid-year.
“It's the first mover advantage strategy and they want to get into the market ahead of competition from Scoot and that is when the real fight begins,'' says a industry observer. Scoot is Singapore Airline's low-cost long-haul carrier that has chosen Sydney as its first flight out of the republic. Yesterday, AirAsia X launched the KL-Sydney-KL route with a promotional fare one-way of RM199 for flights till end-June. It will begin flights there on April 1 on a daily frequency, confirming a StarBiz report. Sydney is fourth destination for AirAsia X to Australia after Gold Coast, Melbourne and Perth. Its next stop, according to Azran, is Adelaide.

Meanwhile, Bloomberg reported that AirAsia X would put off a US$200mil Islamic bond issue planned for March by at least 12 months after the airline abandoned routes from Kuala Lumpur to London, Paris, Mumbai and New Delhi. It would put off the issue from until 2013, Azran said at an event in Sydney yesterday. The funds were originally intended to purchase two planes flying the London and Paris routes. “We are putting that particular bond issuance on the slow burner,” he said. “We do have planes that will be delivered in 2013 so we may simply shift the facilities to 2013 when we take delivery.”

AirAsia X announced last Thursday that it was cutting its flights to Europe, citing the cost of complying with the European Union's emissions trading system and rising taxes.
-thestar online.