Air Asia Plans To Return to New Zealand After A Gap Of Five Years: Likely To Choose Auckland Than Christchurch For Kuala Lumpur Service

Malaysia’s low-cost airline AirAsia X is planning a return to New Zealand, after a gap of five years. Armed with a new strategy. the low cost carrier of Malysia will be looking to sustain its presence after it pulled out its short-lived service between Christchurch and Kuala Lumpur in 2011.

According to AirAsia X acting chief executive Benyamin Ismail, the airline may resume flights, either by the end of 2015 or early 2016. "New Zealand's in my plans. I'm just deciding whether I want to do it towards the end of the year - we have the capacity for it - or whether we want to do it at the start of next year," said Ismail.

Auckland Service Likely

Aviation Analyst Brendan Sobie is of the view that, in its second innings, AirAsia X would opt for Auckland rather than returning to Christchurch for running the Kuala Lumpur service. According to the analyst, Auckland is more attractive to AirAsia as it is relatively under-served and has the promise of higher yields compared to other medium-haul markets. The positive impact will be that AirAsia will be able to stimulate new demand in the New Zealand-Malaysia-Southeast Asia sectors with the lure of lower fares. But he said, Air Asia X's presence could also lead to an oversupply of seats on the Kuala Lumpur--Auckland route, now which is now serviced by Malaysia Airlines. The result will be a lowering of fares.

After Jetstar Airways scrapped its Auckland- Singapore service, there has been no low cost carrier service in New Zealand to connect with South East Asia markets. AirAsia may also offer more connections beyond Kuala Lumpur, to places like as Singapore and Bangkok.

Air Asia X operates a fleet of A330-300 aircraft of 377 seats, in which 365 are economy and 12 are of flat business class seats. Auckland Airport spokeswoman Katie Moore also said it is in discussions with a number of international airlines “about the possibility of them flying to Auckland."

Meanwhile, the short haul carrier AirAsia also evinced interest to fly from New Zealand. But it wants to connect Australia in its services new strategy for linking Asian destinations. It could mean more bargain fares for holidaymakers. Chief executive Tony Fernandes stated that the services might be launched in 2015 itself. Fernandes was in Sydney recently. He said direct flights from Asia to New Zealand have not been a success in the past and the best option could be to operate them with a stopover in Australia.

Change in Business Strategy

Meanwhile, the renewed plans of AirAsia and sister long-haul Malaysia AirAsia for new destinations are accompanied by the carriers strategy to shrink the fleets in 2015 while adopting a new capacity and pricing strategy. Both carriers are keen to restore yields, which took a beating in late 2013 and 2014 due to heavy competition and overcapacity in the Malaysian market.

The carrier is still adding capacity by improving aircraft utilisation levels. But passenger numbers are likely to remain flat as the focus on yields will result in a reduction in load factor. While Air Asia X was highly unprofitable in 2014, its sister Air Asia was the only profitable airline in Malaysia, according to a research by the Centre of Aviation.

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