REFILE-Air Asia X CEO says long-haul, low-cost going strong

BERLIN - AirAsia's long-haul, low-cost unit has so far weathered the global economic crisis as it taps into a customer segment that has not yet stopped travelling, said Air Asia X head Azran Osman-Rani.

Yields for pre-sold tickets through the rest of 2009 are up 20 percent, and the average proportion of seats on each plane -- the load factor -- is up 4 percent from the year-earlier period, he said at the ITB travel fair on Friday.

While airlines are struggling to remain profitable as businesses and consumers rein in their spending on travel during the recession, Osman-Rani remains determined.

"You just have to fight harder and scream louder," he said, adding his airline lured customers on board with promotional offers linked to major sporting events or concerts.

However, the world's airlines lost up to $8 billion in 2008, the International Air Transport Association said last week.

Business travel in particular has slowed, with booking system provider Amadeus saying business bookings dropped around 20 percent in January and February from the year-earlier period. And the trend was still pointing downward, it said on Thursday.

Not all long-haul, low-cost carriers have escaped the downturn. Irish carrier Aer Lingus said on Wednesday its long-haul business was "struggling" and it may have to cut more capacity in the segment.

Osman-Rani said one of the reasons that Air Asia X was doing better was that it targeted consumers who were not looking for the same premium services and comforts one would expect on higher priced airlines such as Lufthansa

"The people who are flying Lufthansa now will still fly Lufthansa (in the future). We're creating a whole new market," he said.

Nonetheless, the company is working hard to keep customers buying plane tickets and just launched a route to London Stansted from Kuala Lumpur five times a week, the longest long-haul flight by a budget airline.

Parent company AirAsia said on Wednesday it expected to expand its services and remain resilient this year as it saw good demand for budget air travel despite the recession.

Budget carrier Ryanair's Chief Executive Michael O'Leary has also said in the past he could help create a sister company to launch a long-haul low-cost airline if cheap aircraft became available in 2009.