AirAsia X reportedly suspended plans to launch Kuala Lumpur-Manchester service due to the UK Government’s plans to increase its Air Passenger Duty (APD) (Airwise, 25-Oct-2010). Manchester Airport's Head of Government and Industry Affairs, Brian Conway, stated the carrier had been in talks with the airport for “many months” but chose to launch services to Paris Orly Airport instead due to the government tax being too high. UK Transport Secretary Philip Hammond responded stating the government is aware it is making UK airports and airlines more highly taxed than competitors, but it needs to meet its twin goals of cutting the deficit and meeting aviation growth while also meeting climate change targets. He added the government has started developing a new national aviation policy, to be introduced by the end of 2012. Mr Hammond said the new policy would encourage growth at regional airports.
AirAsia X drops plans for Manchester due to tax
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AirAsia X 2016 outlook: turnaround predicted as Australia improves, China grows, 5th freedoms launch
Long haul low cost airline group AirAsia X is confident that it will be able to complete a turnaround in 2016, boosted by a more balanced network, improved conditions in its main markets, and lower fuel prices. AirAsia X was highly unprofitable in 2014 and most of 2015, prompting restructuring, along with a spate of aircraft deferrals and cancellations.
In its original home market of Malaysia, AirAsia X restructured its network and cut capacity in 2015. The parent airline is resuming growth in 2016, but a large portion of the additional capacity will be allocated to new fifth freedom routes, which wisely reduces its reliance on the challenging Malaysian market.
The affiliates in Indonesia and Thailand will undergo relatively modest growth as the group’s overall fleet expands by only three aircraft. A new, more disciplined approach to capacity expansion at AirAsia X has emerged, with a focus on new routes connecting existing AirAsia destinations and pursuing fifth freedom opportunities in markets underpenetrated by LCCs.
AirAsia diversifies its Australia operation & regains New Zealand presence with Gold Coast-Auckland
The AirAsia branded airlines, through their various entities, are resuming expansion in Australia and re-entering New Zealand with a new fifth freedom route connecting the Gold Coast with Auckland. Gold Coast-Auckland is a much bigger market, and less risky option, than the Kuala Lumpur-Christchurch route that AirAsia dropped in 2012, ending a highly unprofitable one year foray in the New Zealand market.
AirAsia cut back significantly in Australia in early 2015, erasing an earlier nearly 100% increase in seat capacity in the Malaysia-Australia market, which led to yield declines and heavy losses. Following the Gold Coast-Auckland launch, AirAsia will again be close to 2014 capacity levels in Australia, but with a much more rational approach, relying less on Malaysia.
AirAsia’s new, more balanced Australia operation with four routes from Australia to Malaysia, four to Indonesia, and one to New Zealand, gives the LCC group a stronger and more viable position in a strategically important market. Australia could potentially be subject to further expansion from AirAsia, but this is not likely to be in the Malaysia-Australia market.