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AirAsia X Sees Money in Making Budget Flights Less Austere

AL AIN — A frill or two won’t break the bank and might even add to profits. That’s the message from AirAsia X, a pioneer in the low-cost, long-distance air travel market.

The Malaysian airline is taking the seemingly heretical step for a low-cost carrier, or LCC, of introducing limited numbers of seats that recline fully flat. It also aims to offer pay-per-view in-flight entertainment.

“Nothing’s engraved in stone when it comes to LCCs,” AirAsia X Chief Executive Officer Azran Osman-Rani told an industry conference in Al Ain.

AirAsia X, which plans to start flying next month between the Malaysian capital Kuala Lumpur and Abu Dhabi, is betting that some passengers on its long-haul flights will want a bed and be willing to pay for it.

To accommodate this demand, it expects to install 12 “lie-flat” seats on its Airbus A330-300s and 18 fully reclining seats on the A340 aircraft that it operates to London. This revamp will cost “a couple of million dollars per plane,” Osman-Rani told reporters on the sidelines of the conference.

An average, round-trip ticket for a lie-flat seat between Kuala Lumpur and London could sell for £900, compared to an average price of £350 for a normal economy class seat, he said.

Similarly, AirAsia X wants to offer movies to passengers who are willing to pay extra for them.

“Maybe it’ll work. Maybe it won’t work,” he said of these frilly innovations. “But we’ll have fun trying.”

Osman-Rani’s airline is an affiliate of AirAsia, the biggest budget carrier in the Asia-Pacific region and a trend-setter for low-cost aviation.

AirAsia X is currently studying the possibility of operating what Osman-Rani called a “virtual hub” at Abu Dhabi or another airport in the Middle East. Rather than base crews and engineering equipment at such a hub, the carrier would use it mainly to refuel and take on new passengers for onward flights.

“I just don’t think we have the scale to compete with the likes of all these LCCs… that have a home here,” he said, gesturing at conference participants from budget airlines based in the Middle East.

A virtual, or semi-hub, might make sense as an alternative to a full-fledged hub. “It’s an option,” he said. “We haven’t made up our minds but are actively studying.”

AirAsia X also is eying additional destinations in this region.

“There’s probably a market to add a couple of more airports in the Middle East… We’d like to get Jeddah,” he told reporters, noting that his carrier has already applied for landing rights at the Saudi port city. He declined to identify any other cities on his regional wish list.

The airline is exploring other ways to generate business, including improving flight connections, and therefore possible feeder traffic, with other airlines.

“We’ve not even scratched the surface of that in the Middle East. How do we facilitate connections?... I think there’s a lot of opportunities there to exploit,” Osman-Rani said.

AirAsia X will start service to Abu Dhabi on November 24, flying five times weekly from Kuala Lumpur.

· bruce@khaleejtimes.com