Neither AirAsia Bhd nor its associate AirAsia X is jumping in at the chance of taking over all the unprofitable international routes that Malaysian Airline System Bhd (MAS) has given up in the last two years because some of those routes do not make commercial sense.
"We apply for routes that make sense to us, where we believe we can create new markets and offer consumers choice. It does not make sense to have our strategy being dictated by another airline's failures," AirAsia X chief executive officer Azran Osman-Rani told The Edge Financial Daily .
AirAsia X is the long haul budget carrier of AirAsia. He added that it also did not make sense to stop AirAsia X from flying on overlapping routes when foreign airlines were allowed to compete directly with MAS.
Azran was responding to comments by Transport Minister Datuk Ong Tee Keat that AirAsia was "welcomed" to apply for those routes cut by MAS.
Ong told the Dewan Rakyat in a parliament session yesterday that it was up to AirAsia to apply to take over the routes before the requests could be considered.
Those international routes deemed unprofitable by MAS include the Kuala Lumpur-Manchester, KL-Vienna, KL-Nagoya, KL-Xi'an, KL-Kolkata, KL-Padang, KL-Ahmedabad as well as Kuching-Perth, Kuching-Sydney, Langkawi-London and Penang-London flights.
Azran said except for the KL-London route, other European routes were not commercially viable, as its planes to be used for ultra-long haul destinations would not have enough seats to make those routes profitable.
It plans to use an Airbus 340 plane, which would have 390 seats for the KL-London route, which is expected to start commercial service early next year.
"What we want is trunk routes such as Sydney, Melbourne, New Delhi, Mumbai, Tokyo, Shanghai and Beijing, not those non-trunk routes that MAS has abandoned," Azran added.
He said it was vital to enable AirAsia to connect passengers on those trunk routes in order not to lose out to its low cost competitors such as Jetstar and Tiger Airways that were aggressively expanding their networks.
"Competition is biting at our heels. The government should make strategic decisions based on what is good for the country, not reactive to what MAS can or cannot do," Azran added.
Meanwhile, AirAsia chief executive officer Datuk Seri Tony Fernandes said the access to routes should be driven by the principle of safeguarding consumer interest to ensure that there were choices available and competition to keep airfares in check.
"Limiting access to any airline would deprive air travellers of choice and reasonable fares. The issue of non-competition between AirAsia and MAS should not arise because there is overwhelming concrete proof that all routes where our airlines compete, the overall market has grown by leaps and bounds
"MAS has also benefited as it is now making money in the domestic sector, whereby previously it was losing despite being the sole operator," he added.
Fernandes said it would also be a "travesty" to hold back AirAsia X from certain routes, while at the same time, Malaysia Airports was providing incentives to foreign carriers to fly routes that competed head-to-head with MAS.
"Moreover, history shows that these foreign carriers such as British Airways, Air France and now Jetstar have no loyalty to KLIA - retreating at the first sign of trouble," he added.
