AirAsia charts path from regional to global airline network

LOW-cost brand AirAsia is morphing into a global player by connecting its shorthaul and longhaul networks, and entering into joint ventures to establish multiple hubs in key cities.

Giving the conference’s opening keynote yesterday on the changing travel landscape, AirAsia X CEO, Azran Osman Rani, said: “Traditionally LCCs said we’re just these simple regional networks; we fly people from point to point…With AirAsia X, we found there were tremendous advantages in linking up the longhaul to the shorthaul model.”

He added that a huge percentage of Australian passengers flying AirAsia X into Kuala Lumpur were taking connecting flights on AirAsia to nearby destinations such as Bangkok, and even farther north to China, South Korea and Japan.

“An LCC that doesn’t have a longhaul component will suddenly find itself at a significant disadvantage. For example, in South-east Asia, how does a standalone LCC compare to an AirAsia network which is not only capturing the market within South-east Asia but able to tap markets from Australia, North Asia and the Middle East who are also flying within the South-east Asia network.”

Closely related is AirAsia’s strategy of adopting a multi-hub model in cities across Asia, with its longhaul arm acting as a feeder. Azran said this would involve “using joint ventures as a way of bringing in partners and dealing with a lot of the regulatory issues on foreign ownership”.

– Read more in TTG Asia May 18, 2012

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