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Difficult to justify an Air Asia product in Europe right now: CEO

10 Jul 2019 by Michael Allen
Air Asia A320

A capacity glut in the European aviation market means it is hard to justify an Air Asia product there now, the airline group’s chief executive officer has said.

“Obviously, it’s a dream of mine to go back to London – it’s kind of my second home – it’s just we can’t make money right now,” Tony Fernandes said at RISE 2019, a tech conference in Hong Kong, on Tuesday afternoon.

Air Asia X, the group’s low-cost long-haul airline, previously flew from Kuala Lumpur to London and Paris, but cancelled the routes in 2012 due to “soaring taxes and higher jet fuel prices”, according to Reuters. The service was flown by Airbus A330s and A340s and offered lie-flat (but not fully flat) seating in business class.

“I think there’s so much capacity in Europe right now [that] it’s hard to justify an Air Asia product,” Fernandes added.

Tony Fernandes at RISE 2019 in Hong Kong / Photo by Michael Allen

Above: Tony Fernandes (right), group chief executive officer of Air Asia, during an on-stage interview at the RISE 2019 conference in Hong Kong

Last month, Air Asia X’s chairman Tan Sri Rafidah Aziz said that before the company makes any decision on re-entering the European market, it needs to consider various factors including the operational costs and the projected revenue, according to The Star Online.

“We must also look at the total picture whether it can meet the challenges such the changes in oil prices, the various taxes in Europe airports and so on,” she said.

“For example, the planes that were flying to London and Paris previously was not the right plane. The cost factor was the one that literally killed us from the market. Moving forward, we have to be realistic in making our decisions for the long term.”

Fernandes added at RISE 2019 that, in terms of European destinations, Eastern Europe excites him.

“I would say that’s the first part of Europe we would go to,” he said.

Business Traveller Asia-Pacific submitted a request to interview Fernandes to the RISE conferences organisers before the event, but we did not receive a reply. In response to emailed questions about Fernandes’ comments, an Air Asia spokesperson said:

“Direct flights to Eastern Europe are now possible with the arrival of our first Airbus A330neo later this month. We are working on a number of exciting network and product plans that will take full advantage of the Airbus A330neo’s extended range and cost efficiencies.

“AirAsia’s first Airbus A330neo is expected to enter service at the end of this month. The aircraft will be based at Bangkok’s Don Mueang International Airport and operated by AirAsia X Thailand.”

In 2016, Air Asia X filed to operate a daily service linking Kuala Lumpur with Barcelona via Istanbul. However, that route was never operated, the Air Asia spokesperson confirmed.

airasia.com

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