Tuesday, August 11, 2009

AirAsia turns Singapore into a virtual hub

11 August 2009

Despite the fact that AirAsia does not have an airline based in Singapore, the City State is turning now into one of the busiest gateways for the red-and-white, low-cost carrier. “Singapore['s] position has changed a lot over the last two years with authorities also realizing the benefits of a strong development for low cost airlines,” explained Azran Osman-Rani, CEO of AirAsia X, AirAsia’s long-haul subsidiary.

For years, Singapore was only served out of Bangkok by Thai AirAsia thanks to a very liberal bilateral agreement between Singapore and Thailand, which provided free capacities between both countries to any Singaporean or Thai carrier. It was then followed by a slight relaxation of rules between Indonesia and Singapore, providing the opportunity for Indonesia AirAsia to link Singapore to Pekanbaru. The big boom came, however, with the decision of Malaysia and Singapore to free capacities between both countries. AirAsia now flies eight times a day from Kuala Lumpur to Singapore, turning this route into the group’s busiest international route. The AirAsia group today offers flights from Singapore to 14 destinations - 2 to Thailand, 5 to Indonesia, and 7 to Malaysia - a number to be compared with Jakarta, AirAsia's third-largest air base, with flights to 16 destinations…

Newest additions to the Singapore network are Miri (Sarawak) and Tawau (Sabah), which has gained, for the first time, a non-stop international flight. In total, the AirAsia Group offers a total of over 400 weekly frequencies from Singapore, the equivalent of 13 daily returns. Last March, AirAsia Group CEO Tony Fernandes, shared its vision to offer up to 50 return frequencies a day at Changi Airport. Meanwhile, AirAsia this year expects to transport some two million passengers from and to Singapore. “Our current strength in Singapore relies more and more on business travelers who are switching their travel habits because of the recession. Up to 30 percent of our passengers on our global network are business travelers,” added Osman-Rani.

Could AirAsia’s next big step then be the set-up of its own subsidiary in the City State? It is still too early to speak about it. “But Singapore authorities are becoming more and more flexible," said Osman-Rani. Beyond Singapore, the AirAsia Group will continue to strengthen its domestic network in Indonesia and add more destinations to India and China out of Malaysia and Thailand. “We have [a] plan to serve at least 9 cities in India and 5 more cities in China,” added AirAsia X CEO. In the longer term, AirAsia X is likely to expand to the Gulf area before opening a new destination in Europe.

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