The aviation landscape is littered with the jetsam of failed attempts to launch low-fare, long-haul scheduled air services, but the industry’s track record has not deterred AirAsia X from entering the fray.
Ventures such as Freddie Laker’s Skytrain in the 1970s and the US carrier Peoplexpress in the 1980s to the recent start-ups Oasis Hong Kong and Zoom Airlines, have all collapsed.
Low fare is easy. It is low cost that is the problem, coupled with the enormous pressure that can be exerted on start-up airlines by the incumbent full service network carriers.
Traditionally, long-haul scheduled airlines make all their profits from the front of the aircraft, from their premium business class passengers, whose inflated fares subsidise very low prices at the back of the plane in the economy cabin.
Without the business cabins, low-cost rivals have found it hard to make money.
The failure rate does not stop aviation pioneers from dreaming, however. The promise of a low cost, long-haul service exercises a powerful attraction on the imaginations of some of the most successful practitioners of the well-proven short-haul low cost business model.
Michael O’Leary, chief executive of Ireland’s Ryanair, the market leader in Europe, said recently he had a business plan in the drawer ready to go, but he believed it could only be put into operation if he was able to buy a fleet of wide-body jets at rock bottom prices.
The recession may be playing into his hands, as the market for new aircraft softens.
The business would operate direct, point-to-point services and would not engage in connecting flights through the Ryanair European bases in order to avoid the complexity and costs of the existing network carriers, which feed traffic across their main hubs.
While Mr O’Leary looks west from Europe he has been beaten to the punch in Asia by one of his most successful imitators, Tony Fernandes, the founder of AirAsia, which began regional short-haul services from Kuala Lumpur in 2001 and has already grown to a fleet of 87 single aisle jets. Beyond Malaysia it also has affiliate airlines in Indonesia and Thailand.
His original dream was low cost, long-haul, however, and a year ago he began to put it into operation with the launch of flights by AirAsia X.
He also offers premium seats at the front of the cabin, but he insists he is sticking zealously to the bible of low cost operation. There is no interlining of traffic with all the complexity of passenger and baggage transfers at a hub airport. If passengers connect they do it themselves, book two separate flights and collect and check in baggage themselves.
There are no free lounges. Food and drink are bought on board, and above all he is aiming to “sweat the assets” in unprecedented fashion, by attempting to get 18-and-a-half hours daily utilisation out of his aircraft. The aircraft makers say even the most ambitious long-haul airlines have only achieved up to 17 hours hitherto and the norm would be more like 15 hours.
Mr Fernandes claims the model is already proving itself in Asia on flights of 7-8 hours. The next challenge is to bring it to Europe. The London/Kuala Lumpur service is being launched initially with five flights a week with one aircraft leased from Air Canada, but it is expected to become a daily service when a second aircraft is procured next year.
Mr Fernandes said the eventual vision was to seek to operate a virtual shuttle between Stansted and Kuala Lumpur with as many as five flights a day drawing feeder traffic from elsewhere in Europe and Asia.
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