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<cite>January 13, 2012 - 11:57AM</cite>
AirAsia X axes flights and the real loser is the traveller
Friday Reflections - By B.K. Sidhu
LONDON, Paris, New Delhi and Mumbai are off limits to low fares after March.
AirAsia X (AAX) finally dropped a bombshell yesterday saying it was axing those routes. Mumbai will be off its radar screen by end-January and the rest in March.
This has come after the airline's denial on cuts.
I first broke the news on Dec 10 that AAX was “looking at giving up some routes, such as Mumbai and Europe, in exchange for Sydney and some China routes.''
Many of us can still remember the excitement when AirAsia head honco Tan Sri Tony Fernandes announced that AAX would fly people to London for as low as RM9.90 one way in 2007. Then AAX brought smiles to so many faces. However, yesterday it only brought sadness.
Students studying in Britain had been happy and so were their relatives and friends. It was like a dream come true because at premium airfares, not many can afford to fly to London.
The same was for the Delhi route and there were many happy travellers going to India every two months at one-way fares of only RM74 before tax.
But all these are going away.
After the announcement, Fernandes was busy defending the route cut on Twitter, saying “AirAsia is separate from AAX'' and warned that “AAX pulls out of India due to high airport charges. Malaysia heading that way if cost not brought under control.''
The reasons AAX gave for the cuts were high jet fuel prices, weakening demand for air travel from Europe led by the current economic situation together with exorbitant government taxes.
“All these have placed cost pressures on operating long-haul low-cost flights between Asia and Europe, compromising our ability to offer the low fares AAX is known for,'' it said.
To some that is a lame excuse as all that costs (airport and fuel charges) can be passed on to the traveller. Every airline faces that challenge so it is nothing unique. They should just say the routes are bleeding and they can't go on.
It is a major let-down for the travellers after all the hype about low cost and low fares, though any business has the right to make viable commercial decisions. All these axing and sharing appear to be part of the share swap and collaboration agreement inked in August last year. Under the arrangement both AirAsia/AAX and MAS will work together and not fight so the element of competition will be blurred.
So AAX gives up some slots to MAS in return for Sydney (AAX flying there on April 1 and ticket sales begin next week), Beijing and eventually Jeddah. It's a trade-off. Some are also quick to conclude that it is another long-haul low-cost model failure after two failures seen with Skytrain by Sir Freddie Laker and Hong Kong's Oasis airline. It may not be, because AAX says it intends to focus on core markets such as Australasia, China, Taiwan, Japan and South Korea and Fernandes twits that “... AAX is learning. It's now got the magic formula and will soar. One aircraft type and the right range.''
In all this the loser is the traveller as you can forget about zero fares, RM10 or other cheap fares. Brace up for higher fares and premium services or else hope and pray the Middle Eastern airlines will offer promotional fares throughout the year. As a last resort, take a bus to Singapore and explore the options there is Jetstar, Indigo and, coming soon, Scoot.
The question is, are we heading to a monopoly state again in the sector for some routes? I wonder what the Competition Commission is up to these days.
http://biz.thestar.com.my/news/story.asp?file=/2012/1/13/business/10254798&sec=business
AirAsia X axes flights and the real loser is the traveller
Friday Reflections - By B.K. Sidhu
LONDON, Paris, New Delhi and Mumbai are off limits to low fares after March.
AirAsia X (AAX) finally dropped a bombshell yesterday saying it was axing those routes. Mumbai will be off its radar screen by end-January and the rest in March.
This has come after the airline's denial on cuts.
I first broke the news on Dec 10 that AAX was “looking at giving up some routes, such as Mumbai and Europe, in exchange for Sydney and some China routes.''
Many of us can still remember the excitement when AirAsia head honco Tan Sri Tony Fernandes announced that AAX would fly people to London for as low as RM9.90 one way in 2007. Then AAX brought smiles to so many faces. However, yesterday it only brought sadness.
Students studying in Britain had been happy and so were their relatives and friends. It was like a dream come true because at premium airfares, not many can afford to fly to London.
The same was for the Delhi route and there were many happy travellers going to India every two months at one-way fares of only RM74 before tax.
But all these are going away.
After the announcement, Fernandes was busy defending the route cut on Twitter, saying “AirAsia is separate from AAX'' and warned that “AAX pulls out of India due to high airport charges. Malaysia heading that way if cost not brought under control.''
The reasons AAX gave for the cuts were high jet fuel prices, weakening demand for air travel from Europe led by the current economic situation together with exorbitant government taxes.
“All these have placed cost pressures on operating long-haul low-cost flights between Asia and Europe, compromising our ability to offer the low fares AAX is known for,'' it said.
To some that is a lame excuse as all that costs (airport and fuel charges) can be passed on to the traveller. Every airline faces that challenge so it is nothing unique. They should just say the routes are bleeding and they can't go on.
It is a major let-down for the travellers after all the hype about low cost and low fares, though any business has the right to make viable commercial decisions. All these axing and sharing appear to be part of the share swap and collaboration agreement inked in August last year. Under the arrangement both AirAsia/AAX and MAS will work together and not fight so the element of competition will be blurred.
So AAX gives up some slots to MAS in return for Sydney (AAX flying there on April 1 and ticket sales begin next week), Beijing and eventually Jeddah. It's a trade-off. Some are also quick to conclude that it is another long-haul low-cost model failure after two failures seen with Skytrain by Sir Freddie Laker and Hong Kong's Oasis airline. It may not be, because AAX says it intends to focus on core markets such as Australasia, China, Taiwan, Japan and South Korea and Fernandes twits that “... AAX is learning. It's now got the magic formula and will soar. One aircraft type and the right range.''
In all this the loser is the traveller as you can forget about zero fares, RM10 or other cheap fares. Brace up for higher fares and premium services or else hope and pray the Middle Eastern airlines will offer promotional fares throughout the year. As a last resort, take a bus to Singapore and explore the options there is Jetstar, Indigo and, coming soon, Scoot.
The question is, are we heading to a monopoly state again in the sector for some routes? I wonder what the Competition Commission is up to these days.
http://biz.thestar.com.my/news/story.asp?file=/2012/1/13/business/10254798&sec=business
