No Slowing Down on AirAsia X

AIRASIA X Sdn Bhd hopes to grow sales by 10 times to US$1 billion (RM3.62 billion) by the end of 2010, after it achieves its target of becoming a billion-ringgit company next year, said its chief.

While close to 30 airlines globally have gone out of business over the past year, AirAsia X has geared itself to reach RM1 billion in sales next year by expanding routes.

"The psychological test will be reaching the RM1 billion mark for 2009, barely two years into operation. But we will do it and target US$1 billion for the year after that," chief executive officer Azran Osman Rani told Business Times last Friday.

The long-haul low-cost carrier's optimism knows no boundaries, especially given that industries are bracing for what has been dubbed the worst financial crisis since the Great Depression.

AirAsia X, which operates to Australia's Gold Coast, Perth and Melbourne and China's Hangzhou, will end the year with some US$100 million (RM362.2 million) in sales.

As the carrier takes delivery of 25 A330-300s scheduled from now till 2013, AirAsia X will expand progressively to easily 30 destinations with a minimum of daily flights.

"Our model is to be the trunk that connects Southeast Asia with key Asia-Pacific markets such as Australia, China, India, Korea, Japan and the Middle East," Azran said.

He said AirAsia X will connect the main hubs in Asia Pacific with Kuala Lumpur while its affiliate budget carrier AirAsia provides connectivity across Southeast Asia.

AirAsia X is looking to fly to five cities in Australia, four to five cities in China, three to four in India, one or two in Korea, two or three in Japan and the Middle East respectively.

The three A330-300s to be delivered next year will be used for route expansion to India, either Korea or Japan and another city in China.

While Azran acknowledges that AirAsia X wants to establish a foothold in Europe, the carrier does not have the capacity to do so just yet.

"It will be a challenge because the range is beyond the A330-300 which can only fly up to nine hours. So we have to take a variant of it, the A340-300, which has four engines and can fly further but this means it will burn more fuel," he added.

He said the long-term solution would either be the A350 or the Boeing 787. Both provide the same range as the A340 but are more fuel-efficient.

"With that, we can easily go to a dozen cities in Europe and half a dozen cities in North America and to Africa as well," he said.

However, AirAsia X has not made any decision to buy or lease A350s or B787s, especially since A350s will only be commercially available after 2015.

For its short-term needs, AirAsia X will use a leased A340 for its flights to the UK, starting March 2009.

"If UK proves to be so successful and oil prices remain reasonable, then it is not inconceivable for us to extend our footprint into central and eastern Europe," Azran said.

Its expansion hinges on how many A340s it gets hold of, as this is the only plane that deviates slightly from the A330s.

"The size, the cabin and the cockpit are the same so we can use common pilots. While we are actively looking for more A340s, there are very few out there," he said.