It looks like the rising costs and Western economy has helped burst the Air Aisa bubble as it drops its poor performing long haul routes. The move will see AirAsia X withdrawing services to India (Mumbai and Delhi) and Europe (Paris, London) from its Kuala Lumpur hub as follows:
AirAsia X will offer passengers who hold bookings after these dates an alternative travel option at no additional cost to mitigate the inconvenience caused as a result of these route withdrawals. Every passenger affected will receive an e-mail stating options that are available to them, including a full refund, a reroute to another AirAsia X destination (e.g, in Australia and North Asia), or a move to an alternative carrier where available.
According to Air Asia these changes will improve operating cost efficiencies and consolidate its network to focus on markets where it can build a leadership position in 2012.
Azran Osman-Rani, CEO of AirAsia X said:
“AirAsia X remains focused on maintaining its global leadership position in the low cost, long-haul segment. We intend to concentrate capacity in our core markets of Australasia, China, Taiwan, Japan, and Korea where we have built up stable, profitable routes within an infrastructure that supports low cost services. We intend to open up new routes within these markets, as well as add frequencies on existing routes. Announcements of our future expansion plans will be made soon.”
“The 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, have placed cost pressures on operating long-haul low cost flights between Asia and Europe, compromising our ability to offer the low fares AirAsia X is known for.”
“The implementation of the Emissions Trading Scheme and the escalating Air Passenger Duty taxes in UK, which will rise yet again in April 2012 has forced our decision to withdraw our services to Europe.”
“As for Delhi and Mumbai, the continued visa restrictions for travel between India and Malaysia, and the increase in airport and handling charges have resulted in a structure not conducive to the low cost model.”
“The airline is hopeful in reinstating services to India once these structural issues can be resolved.”