This is a financial sleight of hand by Capital A, the holding company that owns AirAsia, but it will have an impact on the business of all the airlines. And in turn on its customers.
Capital A has approved the transfer of all its aviation activities to a new entity: AirAsia Group Sdn Bhd. ("AirAsia Group"). The latter will bring together all the Group's existing companies in ASEAN (South-East Asia). These include AirAsia Bhd in Malaysia, Thai AirAsia, Indonesia AirAsia, Philippines AirAsia and the latest addition, AirAsia Cambodia. As well as the group's long-haul subsidiary, AirAsia X- which had its own financial autonomy.
In future, Capital A will focus on management of non-aeronautical activities. While retaining a consulting or organisation activity in air transport. This now excludes airline operations.
The historic agreementapproved by the Boards of Directors of Capital A and AirAsia X, should catalyse AirAsia into its next phase of growth. Its ambition is to become the number one low-cost carrier in Asia and one of the world's leading carriers. However, this reorganisation must be approved by all shareholders. But they have everything to gain.
The AirAsia Group will be an enlarged airline structure which will find synergies in network management and fleet optimisation of the various carriers. As a matter of fact, the modification of approximately 10 % of an Airbus A321neo order into an A321LR (long-haul) on an order book of more than 400 aircraft gave the merger a boost. According to Tony Fernandes, ex-CEO and now special advisor to Capital A, " with the new fleet, we can really link the whole of ASEAN to the rest of the world. This goes beyond the big cities and includes the smallest ones too." he explains.
New routes between Europe and South-East Asia?
The aircraft can be used on intra-ASEAN routes as well as to secondary destinations in North Asia, Australia and Central Asia. While the future Airbus A330neo will make it profitable to launch new routes in Europe. Particularly from secondary towns, as Tony Fernandes points out. At the end of the 2000s, the company carried out trials with the launch of lines from Kuala Lumpur to London Gatwick and Paris Orly. But at the time, they were not profitable. And these lines were long gone...
The possibility of operating long-haul flights between Europe and Bangkok or Bali (the most attractive tourist destinations) with a more fuel-efficient aircraft is reshuffling the deck.. It allows a genuine future network of routes between South-East Asia and the rest of the world in the next five years. All the while establishing the AirAsia group as the largest airline in South-East Asia.
AirAsia Cambodia takes offOn 2 May, the latest addition to the group, AirAsia Cambodia launches its first flights from Phnom Penh to Siem Reap/Angkor and Sihanoukville in Cambodia. For the moment, the new entity only serves domestic routes with a fleet of two Airbus A320s. By the end of the year, this should rise to 5 aircraft. And open new international routes starting next quarter. Air Asia Cambodia hopes to carry 1.8 million passengers in its fiscal year. Cambodia expects to welcome more than 6 million tourists by 2024. |
