AirAsia X dumps Europe – Blames Emissions Trading

AirAsia at Kuala Lumpur | Air Asia X Dumps Europe | Air Travel News

AirAsia X Axes London, Paris plus India

The long-haul affiliate of AirAsia, known as AirAsia X, will be suspending flights to both Europe and New Delhi and Mumbai in India.  High APD in the UK combined with the European Union’s Emissions Trading Scheme are cited as reasons to discontinue service to Europe at the End of March.  India is being axed, according to the carrier, because of high handling fees and visa issues between India and Malaysia.

As we’ve addressed in other articles, we knew the European Union emissions trading scheme was going to be problematic, as well as UK’s Air Passenger Duty (APD).  Some carriers will simply withdrawal, while other carriers, like the National carriers of China will simply refuse to pay for the Emissions Trading Scheme, which could provoke a trade war.

According to a company release, AirAsia X plans to re-align its network to focus on core markets.  Passengers with tickets to London and Paris after the end of March, Mumbai after the end of January, and New Delhi after March 22nd should contact Air Asia X to make other arrangements.  In the event other changes are made, we suggest you keep on top of any travel bookings you may have made to these destinations with AirAsia X.

Despite problems with “travel restrictions” over Visa’s, it’s important to note AirAsia still operates A320 flights to Bangalore (BLR), Chennai (MAA), Kochi (COK), Kolkata (CCU) and Tiruchirappalli (TRZ).   AirAsia X on the other hand is using larger Airbus A330 twin aircraft to India and the even larger A340 quad to Europe.

Air Asia X’s CEO Statement

Azran Osman-Rani, CEO of AirAsia X said “AirAsia X remains focused on maintaining its global leadership position in the low cost, long-haul segment. We intend to concentrate capacity in our core markets of Australasia, China, Taiwan, Japan, and Korea where we have built up stable, profitable routes within an infrastructure that supports low cost services. We intend to open up new routes within these markets, as well as add frequencies on existing routes. Announcements of our future expansion plans will be made soon.”

“The continued high jet fuel prices and the weakening demand for air travel from Europe, brought about by the current economic situation together with exorbitant government taxes, have placed cost pressures on operating long-haul low cost flights between Asia and Europe, compromising our ability to offer the low fares AirAsia X is known for.”

He adds, “The implementation of the Emissions Trading Scheme and the escalating Air Passenger Duty taxes in UK, which will rise yet again in April 2012  has forced our decision to withdraw our services to Europe.”

“As for Delhi and Mumbai, the continued visa restrictions for travel between India and Malaysia, and the increase in airport and handling charges have resulted in a structure not conducive to the low cost model.”

Azran concluded that, “The airline is hopeful in reinstating services to India once these structural issues can be resolved.”

Was the A340 Right? Missed Opportunity Cost?

For a long-haul arm of a discount carrier, we believe the A340 was the wrong aircraft, but it fit well for them at the time with a surplus of A340’s on the market and lower fuel costs.  Besides the high operating costs of the A340 – for a low cost carrier – we understand bookings to both London and Paris have been weak, plus it’s important to note the routes between Australia / Asia and Europe are highly competitive between carriers in Australia, Asia, Europe, and the behemoths of the Middle East including Emirates.

As mentioned above, service still continues to Bangalore (BLR), Chennai (MAA), Kochi (COK), Kolkata (CCU) and Tiruchirappalli (TRZ) in India with AirAsia, but using the smaller and fuel efficient aircraft.  The Visa problems and ground handling costs still affect these routes, but the smaller A320 is a better fit.  With the New Delhi (DEL) and Mumbai (BOM) routes, the carrier cites high costs at these specific airports along with a 280% increase as of April 2012, making ground handling costs more expensive than Australia.

We believe AirAsia X is looking at other markets, specifically in Australia as well as China where demand is increasing, to deploy their aircraft.  It’s of our opinion long-haul low cost carrier’s are viable, but the aircraft used needs to fit the market and at the moment, the most fuel efficient long haul birds are in high demand with fleet renewal projects.  One only needs to look at Richard Branson’s Virgin Atlantic, especially in the early days.

On a final note, later this year, Kuala Lumpur based Malaysia Airlines, the full-service, primarily long-haul carrier, is set to become a member of the oneworld alliance.

The following is AirAsia X’s final European and Indian schedules from Air Asia X’s hub at Kuala Lumpur’s Low Cost Carrier Terminal:

Mumbai- Four weekly services will be suspended with the last flight on 31 January, 2012
New Delhi- Daily services will be suspended with the last flight on 22 March, 2012. Flights in March will be reduced to four weekly services.
London- Six weekly services will be suspended with the last flight on 31 March, 2012
Paris- Four weekly services will be suspended with the last flight on 30 March, 2012


The above table is subject to change.

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