Medium-haul is best in long-haul, low-cost game: Fernandes

The AirAsia X Group is wary of true long-haul, low-cost services, with a strong preference for focusing on medium-range regional routes. “Long-haul Europe is just not in our plans,” says co-CE Tony Fernandes. “We are pioneers in the long-haul, low-cost market, but the reality of the model is medium-haul routes of six to eight hours – that is the sweet spot.” He notes that the carrier will have the legs to reach Europe from Southeast Asia from 2019, when it plans to start receiving its re-engined Airbus A330-900. “With the A330neo we’ll have an option to go a little further,” he says. Fernandes sees some potential for long-haul operations with Thai AirAsia X to eastern European countries such as the Czech Republic, or the Nordic countries. Still, he believes there is little point opening services to major cities, such as London or Paris, “where you’re not going to do anything special with your fares. You go to a place where you can really make a difference.” Fernandes questions how many long-haul, point-to-point markets really exist, pointing out that carriers such as SIA, Emirates, and Cathay Pacific carry large numbers of transfer and interline passengers on major city pairs through their respective hubs. Therefore, the model that the AirAsia X group carriers need to follow is what he refers to as “high frequency, country dominance” routes, that are well connected with sister company AirAsia's networks in Southeast Asia.<br/>