Wednesday, April 7, 2010

AirAsia X cries foul over Sydney, Seoul

03 April 2010

PETALING JAYA: AirAsia X (AAX) has not received the Government’s approval to fly to Sydney and Seoul although the long haul budget carrier had expected to fly to the Australian city by June this year.

“We had expected the approvals by the end of March and without a formal word from the Government we are unable to keep to our June time line,’’ AAX chief executive officer Azran Osman Rani told StarBiz yesterday.

To him, this is a “big blow to consumers who continue to have limited choices and from the tourism perspective, it is sheer loss in opportunities to grab tourism market share.’’

Presently, Malaysia Airlines (MAS) flies 12 direct flights on the KL-Sydney route.

The other airline with the rights, Jetstar, stopped plying the route in 2008 and has yet to resume flights.

Comparatively, there are 52 and 42 weekly flights from Singapore and Bangkok to Sydney respectively.

As for Seoul, MAS and Korean Air ply the KL-Seoul route with 12 weekly flights, whereas 58 and 31 flights are mounted from Bangkok and Singapore respectively to Seoul.

“The gap between tourist arrivals from Sydney/Seoul to Singapore and Bangkok versus Kuala Lumpur is big because they have three times more direct flights,’’ Azran said.

Judging from the importance the newly launched New Economic Model (NEM) puts on tourism, he said “the decision not to allow AAX to fly to Sydney and Seoul is not just a setback for the airline but also to KL International Airport whose ambition to become a regional hub is constantly being challenged by Singapore and Bangkok.’’

Citing the Prime Minister’s speech at the launch of the NEM that the private sector should drive growth and innovation, Azran reckoned that “here is a clear example of one airline that is not given the rights yet the government is pushing for tourism and investing in Legoland and Iskandar to boost tourism, cargo and trade. There appears to be a lack of consistency in what the PM wants and what is being done.’’

The battle for rights to fly Sydney and Seoul is not a new one.

But on Thursday Azran surprised many by lashing out via his tweets on Twitter, alleging that “the (incumbent) is blocking us because they say that route must be protected.”

He argues that what may have not been fully considered in the policy debate is the importance of trunk routes to create economic activity rather than just having a sheer number of routes to peripheral cities.

“What we really want is a rational and clear policy on route allocation that is based on the interest of the country and not the interest of an individual airline,’’ Azran said.

MAS senior general manager network and revenue management Amin Khan responded to Azran’s allegations via e-mail, saying “it is somewhat intriguing that AAX has been making these statements in Malaysia, and outside the country.

“We believe that both airlines can compete and collaborate, and we believe that is what the Government wants us to do when they had set out the vision of wanting to build two strong national champions.’’

Azran claims that the airline has managed to bring in a lot more tourists despite flying to peripheral routes.

“We have been told a number of nonsensical things like we are flying transit traffic and not bringing in the tourists.

“Why don’t they measure everything, all the data is on the Tourism Malaysia website.

“Just to cite an example, had we not flown to Australia in 2009, would the tourist arrivals from Australia surged by 25% since the incumbent did not add capacity during that period?’’

“The sad part is that our policy makers are not given a full set of facts to make good policy decisions and that is the kind of baseless arguments that have been levelled against us.

“We welcome an opportunity to address the issues instead of being held back and not being able to present our case fully,’’ he said.

Khan has pointed out that “AAX can fly to many routes that are currently not served.

For example, there are no direct services from KL to Manchester, Zurich, Madrid, Athens, Oslo, Vienna, Amman, Cairo, Pusan, Fukuoka, Nagoya, Nice and Oakland.”

“This in itself will give customers better choices.

“We believe that AAX has requested and received approvals for many of these routes but they have not offered these services,’’ he added.

Khan said “we are currently competing on a number of routes, and at the same time, we also continue to fly on routes where we are not necessarily making money to provide customers with choices, and to attract tourists.’’


The Star

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