Airasia X aims to rule the skies

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A global brand with a Malaysian legacy – that is the image AirAsia X is trying to build as the long-haul budget airline reaches for the skies by re-inventing traditional concepts of aviation alliances.

Azran Osman Rani, AirAsia X Chief Executive Officer, said AirAsia X’s long-haul model is the perfect tool with which to connect regional networks around the world and expand the brand image of the airline as more than just a low-cost carrier.

“The joint venture model for AirAsia X is quite unique because it is a long-haul airline and it acts as a trunk that connects regional feeds,” said Mr Azran, whose company reached revenue of almost RM4 billion in 2010.

“Most airlines tend to be nationally based and operate in one market. What AirAsia is doing is figuring out how you can create joint ventures with other carriers that rides on the AirAsia brand but allows us to have multiple hubs and a multinational presence.

“We are effectively creating a new airline global model.”

The mother brand, AirAsia, was founded in 1993 but only started to make a global impact after being bought for the princely sum of one Malaysian ringgit in 2001 by Tony Fernandes – Malaysia’s very own Richard Branson.

The airline already has a presence in Thailand (Thai AirAsia, owned by private investors and the management), and Indonesia’s Awair (Indonesia AirAsia), both partnerships being 51 per cent locally owned. Joint ventures are also being planned with carriers in the Philippines and Vietnam.

Connecting The Airways

Strategic partnerships between airlines are not new. The world’s biggest cartel, Star Alliance, had 27 members as of June, 2011, including Singapore Airlines, Thai Airways International, Continental and Air New Zealand. Other major groups include Oneworld and Skyteam.

Such alliances are agreements between different airlines in providing connectivity and convenience for passengers. However, in these cases the alliances never out-brand the airlines themselves.

What sets AirAsia and AirAsia X apart is that the AirAsia name IS the global alliance in addition to being the Malaysian national low cost carrier.

“We are pushing beyond the LCC model,” said Mr Azran. “You are creating what airlines are traditionally trying to build with alliances. Airlines are nationalistic and don’t want to have a common brand.

“We are trying to build a global brand using the common AirAsia theme based on the principles of the global alliance model but effectively using the joint venture structure.”

AirAsia was borne out of the need for low-cost travel within Asia following the success of airlines such as RyanAir in Europe and SouthWest in the US. AirAsia’s initial success prompted other Asian countries to launch similar carriers with Singapore’s Tiger Airways emerging as a serious rival.

Bigger Market Share

Mr Azran, however, said AirAsia’s expansion into Australia and Europe means the Malaysian-based airline is exposed to a much larger and diverse market of travellers.

“Tiger Airways depends on the intra-Asean market but AirAsia takes people from Australia, North Aisa, Europe and other places,” he said.

“More than 50 per cent are taking short-haul flights so we are tapping a much bigger customer base than others would have access to.”

Apart from two airports in London and three in Australia, AirAsia X also flies to Christchurch in New Zealand.

The airline’s success, said Mr Azran, is the result of the huge feeder network that branches from its long-haul flights to various destinations and the fact that the Malaysian capital of Kuala Lumpur is merely one of dozens of cities from where travellers can reach other places in Asean, Asia and Europe.

Global Brand

Although AirAsia and AirAsia X are well on the way to becoming a global brand, if they are not already, the company is proud of its Malaysian heritage.

“Malaysia, as a country, is pioneering the revolution in the global airline landscape,” said Mr Azran. “The innovation is originating here and others are trying to emulate it.

“Singapore Airlines just announced that they too want to create a completely different low-cost airline because they know it is a market in which they cannot afford to miss out on.

“They can give it a shot and many others will but they have seen that wherever AirAsia X flies, despite the economic turmoil, we are getting huge double-digit growth rates in terms of passenger volumes and tourist arrivals.

 

“We are a low-cost airline. We are the Wal-Mart of the skies. We still have the lowest fares and provide plenty of value”

Mr Azran said despite AirAsia’s growth, the airline will remain true to its fundamentals, which is reflected in its motto:  Now, everyone can fly

“First and foremost, we are a low-cost airline. We are the Wal-Mart of the skies. We still have the lowest fares and provide plenty of value. We won’t move away from this,” said Mr Azrin.

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Reading Time: 3 minutes

A global brand with a Malaysian legacy – that is the image AirAsia X is trying to build as the long-haul budget airline reaches for the skies by re-inventing traditional concepts of aviation alliances.

Reading Time: 3 minutes

A global brand with a Malaysian legacy – that is the image AirAsia X is trying to build as the long-haul budget airline reaches for the skies by re-inventing traditional concepts of aviation alliances.

Azran Osman Rani, AirAsia X Chief Executive Officer, said AirAsia X’s long-haul model is the perfect tool with which to connect regional networks around the world and expand the brand image of the airline as more than just a low-cost carrier.

“The joint venture model for AirAsia X is quite unique because it is a long-haul airline and it acts as a trunk that connects regional feeds,” said Mr Azran, whose company reached revenue of almost RM4 billion in 2010.

“Most airlines tend to be nationally based and operate in one market. What AirAsia is doing is figuring out how you can create joint ventures with other carriers that rides on the AirAsia brand but allows us to have multiple hubs and a multinational presence.

“We are effectively creating a new airline global model.”

The mother brand, AirAsia, was founded in 1993 but only started to make a global impact after being bought for the princely sum of one Malaysian ringgit in 2001 by Tony Fernandes – Malaysia’s very own Richard Branson.

The airline already has a presence in Thailand (Thai AirAsia, owned by private investors and the management), and Indonesia’s Awair (Indonesia AirAsia), both partnerships being 51 per cent locally owned. Joint ventures are also being planned with carriers in the Philippines and Vietnam.

Connecting The Airways

Strategic partnerships between airlines are not new. The world’s biggest cartel, Star Alliance, had 27 members as of June, 2011, including Singapore Airlines, Thai Airways International, Continental and Air New Zealand. Other major groups include Oneworld and Skyteam.

Such alliances are agreements between different airlines in providing connectivity and convenience for passengers. However, in these cases the alliances never out-brand the airlines themselves.

What sets AirAsia and AirAsia X apart is that the AirAsia name IS the global alliance in addition to being the Malaysian national low cost carrier.

“We are pushing beyond the LCC model,” said Mr Azran. “You are creating what airlines are traditionally trying to build with alliances. Airlines are nationalistic and don’t want to have a common brand.

“We are trying to build a global brand using the common AirAsia theme based on the principles of the global alliance model but effectively using the joint venture structure.”

AirAsia was borne out of the need for low-cost travel within Asia following the success of airlines such as RyanAir in Europe and SouthWest in the US. AirAsia’s initial success prompted other Asian countries to launch similar carriers with Singapore’s Tiger Airways emerging as a serious rival.

Bigger Market Share

Mr Azran, however, said AirAsia’s expansion into Australia and Europe means the Malaysian-based airline is exposed to a much larger and diverse market of travellers.

“Tiger Airways depends on the intra-Asean market but AirAsia takes people from Australia, North Aisa, Europe and other places,” he said.

“More than 50 per cent are taking short-haul flights so we are tapping a much bigger customer base than others would have access to.”

Apart from two airports in London and three in Australia, AirAsia X also flies to Christchurch in New Zealand.

The airline’s success, said Mr Azran, is the result of the huge feeder network that branches from its long-haul flights to various destinations and the fact that the Malaysian capital of Kuala Lumpur is merely one of dozens of cities from where travellers can reach other places in Asean, Asia and Europe.

Global Brand

Although AirAsia and AirAsia X are well on the way to becoming a global brand, if they are not already, the company is proud of its Malaysian heritage.

“Malaysia, as a country, is pioneering the revolution in the global airline landscape,” said Mr Azran. “The innovation is originating here and others are trying to emulate it.

“Singapore Airlines just announced that they too want to create a completely different low-cost airline because they know it is a market in which they cannot afford to miss out on.

“They can give it a shot and many others will but they have seen that wherever AirAsia X flies, despite the economic turmoil, we are getting huge double-digit growth rates in terms of passenger volumes and tourist arrivals.

 

“We are a low-cost airline. We are the Wal-Mart of the skies. We still have the lowest fares and provide plenty of value”

Mr Azran said despite AirAsia’s growth, the airline will remain true to its fundamentals, which is reflected in its motto:  Now, everyone can fly

“First and foremost, we are a low-cost airline. We are the Wal-Mart of the skies. We still have the lowest fares and provide plenty of value. We won’t move away from this,” said Mr Azrin.

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