Malaysia’s long-haul, low-cost airline AirAsia X is preparing to launch flights between Sydney and Kuala Lumpur sometime around the middle of this year, a move that will ramp up pressure on Jetstar. Sydney was the obvious jewel in the Australian crown for AirAsia X, which already serves Melbourne, Perth and the Gold Coast. Qantas budget subsidiary Jetstar is already bracing itself for the arrival of Scoot, the low-cost Singapore Airlines offshoot.
AirAsia X’s desired Sydney route is still subject to regulatory approval. Some reports have said the airline could start flying to Sydney as early as April, but the start-date has not been confirmed.
At the same time, AirAsia X is axing long-haul flights to Europe and India. Other low-cost carriers too are casting a harsh eye on their long-haul routes to Europe. The European financial crisis and adverse exchange rates for the euro mean that Europeans are less inlclined to take long-haul trips to far-flung places.
Similar prospects led Air Austral, the carrier based in the French Indian Ocean territory of Reunion Island, to decide to axe operations on Reunion-Sydney-Noumea and Reunion-Bangkok routes from March 2012.
The prospect of more competition from the likes of Air Asia X and Scoot are putting pressure on Qantas. The Sydney Morning Herald reported that Goldman Sachs analysts downgraded their recommendation on Qantas from “buy” to “hold” late last week. High fuel prices, weaker economic outlook and expectations of lower demand for premium travel were among the reasons cited.
AirAsia chief Tony Fernandes also has stakes in Malaysia Airlines (MAS) and its unit Firefly, having become a substantial shareholder in MAS following the recent MAS-AirAsia share-swap deal. Fernandes was recently quoted as saying that Qantas would be better off basing its Asian operations in Malaysia than Singapore, if it goes ahead with the premium carrier it plans to set up in the region.
In November, Malaysia’s Sun newspaper reported plans by Fernandes to set up “a new super-premium full-service carrier” that would compete head-on with Qantas’s upcoming Asia-based equivalent.
Written by Peter Needham
(Source: eglobaltravelmedia.com.au)
Singapore Scoot Airlinewill be another new budget airline. Good to see this. Hope that the competition will help to make the price of tickets go lower and benefit us consumers.
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