LONGHAUL low-cost carrier, AirAsia X will suspend services to India and Europe by the end of March in response to the combined impact from a weak global economy, rising jet fuel prices and soaring taxes, and instead, focus on developing its core markets.

The network realignment will see the suspension of AirAsia X’s four-weekly services to Mumbai after January 31, four-weekly services to Paris after March 30 and six-weekly services to London after March 31. The carrier’s New Delhi’s daily links will be reduced to four-weekly in March, and will be suspended after March 22.

Despite enjoying healthy load factors of over 80 per cent on the carrier’s London and Paris services in 2011, CEO Azran Osman-Rani explained that the changes were necessitated by “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, (which) have placed cost pressures on operating long-haul low cost flights between Asia and Europe”.

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

While flights to New Delhi and Mumbai were amended due to “continued visa restrictions for travel between India and Malaysia, and the increase in airport and handling charges (a 280 per cent increase in airport fees will take effect in April)”, Azran said services could be reinstated “once these structural issues can be resolved”.

Passengers booked on these flights will be offered a full refund or an alternative travel option on another AirAsia X route or another carrier where available.

Meanwhile, the carrier would continue to hold firm in its core markets of Australasia, China, Taiwan, Japan and South Korea, said Azran, who added that plans to launch new routes within these markets and additional frequencies were on the horizon.

THE Malaysian Association of Tour & Travel Agents (MATTA), in collaboration with Malaysia’s tourism ministry and Tourism Malaysia, will organise the World Islamic Tourism Mart 2012 (WITM 2012) from May 31 to June 1 in Kuala Lumpur.

The event is projected to enhance the potential of the Muslim tourism sector within the context of a global population of 1.6 billion Muslims and their growing affluence.

MATTA president, Khalid Harun said: “WITM 2012 is (being) organised to cater to the vast untapped Muslim tourism market.”

Added international trade and industry deputy minister Mukhriz Mahathir, “WITM 2012 is a one-stop platform or event in Malaysia for all sectors of the tourism industry to meet, network, promote, showcase, market and sell their products and services to the Muslim tourism market.”

The mart will incorporate three components – a business-to-business networking session where buyers meet sellers, a consumer exhibition and a one-day conference. An estimated 500 quality buyers from the global Muslim tourism diaspora, including Malaysia, are expected to attend.

The mart is set to be annual feature in Malaysia.

“WITM is here to stay and will be a yearly event. This is the commitment of MATTA to the tourism industry,” Khalid said.

Reporting by N. Nithiyananthan

THE Lufthansa Group expects to incur additional expenses of 130 million euros (US$166 million) this year from having to buy emission rights. It will pass this on to consumers.

From the start of this year, aviation is included in the Emissions Trading Scheme (ETS) and all airlines are required to hold emission rights in the form of CO2 certificates for flights to and from Europe.

In 2012, 82 per cent of the necessary certificates will be awarded to airlines free. Airlines will have to buy another 15 per cent of the certificates, with three per cent being reserved for new airlines.

“As these allocations are based on average emissions for the years 2004 to 2006, the Lufthansa Group will have to buy at least 35 per cent of the certificates it needs to represent its growth in recent years.

“As competition is tough – especially from non-EU companies, whose operations are only subject to limited emissions trading rules – Lufthansa will have to pass on the costs via higher ticket prices, as recommended by the EU. Lufthansa will therefore include the cost of purchasing the certificates in its existing fuel surcharge as of the beginning of 2012. However, it has no immediate plans to increase this surcharge,” said a statement from the group.

GOVERNMENT regulations on airport security, emissions and taxes are a key issue negatively impacting global airlines’ revenues over the next 18 months, according to a bi-annual Sabre Airline Solutions survey of executives at nearly 80 regional and global airlines worldwide who were asked to rank what positively and negatively impacts airline revenue.

This is the first time that government regulations has ranked in the top three challenges that will negatively impact an airline’s business revenues. The top three negative issues are, in order, fuel prices (81 per cent), government regulations (72 per cent) and airport/passenger security (59 per cent).

Some 43 per cent of Asia Pacific airlines who took part in the survey identified government regulations a key challenge their airline will face over the next 18 months.

Many airlines from around the world are opposed to the recently launched EU Emissions Trading Scheme (ETS), which requires airlines flying into European airspace to pay for carbon emissions.

A number of airlines worldwide have also faced a string of proposed or new airline taxes which threaten to increase the cost of air travel considerably, depressing travel demand in an already unstable economic environment.

“Airlines already invest significantly to reduce their carbon emissions, so rather than imposing one-off taxes and compliance schemes that hamper this investment, governments would be better placed having more sustainable policies, such as incentives for the research and development of alternative fuels, and adopting policies around NextGen air traffic control,” said Sam Gilliland, chairman and CEO of Sabre.

On the flipside, the areas having the greatest positive impact on airline revenues are, in order, revenue/yield (81 per cent), customer loyalty and retention (81 per cent) and IT investment (76 per cent).

JAPAN Travel Bureau (JTB) Foundation is forecasting a 2.7 per cent growth in outbound demand this year to 17.4 million travellers, based on a full-year 2011 estimated result of 16.95 million.

For inbound, it is forecasting a 26.5 per cent increase in arrivals to Japan to 7.9 million this year, although this is still way below the peak in 2010 of 8.61 million.

“Japan will need a little more time to surpass the pre-quake arrivals,” JTB Foundation said in a statement.

In contrast to the sound recovery of outbound, inbound demand to Japan marked the worst
performance among past major crises.

The five major source markets for Japan, namely, South Korea, China, Taiwan, the US and Hong Kong, comprise more than 70 per cent of the total inbound, but while monthly growth rates from Hong Kong, China and Taiwan were back to positive in October 2011, the other major source markets have stayed in negative, as of November 2011.

The foundation said China would lead the inbound recovery. “The Japanese government has gradually been easing its visa policy for China to boost the number of visitors to Japan. Although Japan lost approximately a fourth of its Chinese arrivals in 2011, the relaxation of visa policy together with significant growth potential of the Chinese outbound market will lead to a strong recovery in 2012, surpassing the number of arrivals in 2010.

“Taiwan is another market which is expected to see more arrivals in 2012 than 2010. But arrivals for other major source markets will not reach the pre-quake level in 2012, although they will all show double-digit growths due to the bounce back effect,” it said.