Paris Orly Field

AirAsia X route changes spotlight ownership complexity post MAS deal, but also growth opportunities

Doomsayers will be quick to look at a series of route cancellations from Malaysia-based AirAsia X and proclaim the demise of the modern low-cost long-haul model AirAsia X pioneers. The context for the changes – ending service to London Gatwick, Mumbai, New Delhi and Paris Orly – expands beyond fuel costs, rising taxes in Europe and new visa restrictions in Malaysia. AirAsia X was already struggling in Europe and particularly in India. The recent cross-ownership deal between Malaysia Airlines (MAS) and the AirAsia Group was also clearly a big factor.

That is not to suggest AirAsia X's changes are simply a matter of submission to MAS. The biggest advantage, besides brand awareness, of the high profile London and Paris routes was their ability to put passengers on multiple AirAsia short-haul flights as they travelled around southeast Asia. MAS' deployment of the A380 later this year will lower unit costs to London, narrowing the gap with AirAsia X, currently using more fuel-thirsty A340s. With the AirAsia-MAS partnership, and plans for the two to facilitate passenger transfers, the AirAsia group can still gain feed on its short-haul network while AirAsia X will benefit from redeploying capacity in Asia Pacific and, notably, China.

Rail link plans fall through but demand remains high

For the air transport industry to remain competitive with what is an increasingly ‘preferred’ mode of transport in the EU and beyond – rail – the air-rail link is, ironically, a saviour. In two recent cases such links have been postponed or called into question by a bidder, but there are still plenty of schemes in the pipeline, with Europe leading the way in this field.

The scheme that has been postponed is one at Dublin, Ireland, where the Transport Minister confirmed early in Nov-2011 that investment in transport infrastructure generally will be scaled back significantly over the next five years. Overall spending on transport capital will fall by almost 50% from EUR1.5 billion in 2011 to EUR0.8 billion in 2016. As part of this reduction, the Government will postpone the new rail link to Dublin International Airport. Prime Minister Enda Kenny stated, “We cannot afford to do all that we want to do. This plan is based on what the country can afford. We face a large budget deficit, dependent on support funding and operate in a very challenging international environment."

Air France looks to regional points to counter LCC, TGV threat

Air France has announced plans to move away from its Paris-centric strategy and moved into regional French market in a bid to counter the growing threat of low-cost carriers in its home market, which remains one of Europe’s few remaining spaces for growth in the sector.

Air Malta troubles worsen as unions flex muscle and LCCs grow

Air Malta’s troubles have become more acute as the struggling carrier’s unions increase their opposition to large-scale redundancies. Prime Minister Lawrence Gonzi has stated the present situation is increasingly worrying, particularly in light of the EUR77 million the government has poured into the airline since Jun-2011.

Aéroports de Paris traffic affected by unrest in Middle East and North Africa

Aéroports de Paris (AdP) reported a 0.8% increase in passenger traffic in Mar-2011 to 6.8 million. International traffic (excluding Europe) fell by 3.4%, according to AdP, due to geo-political unrest in some parts of Africa and the Middle East. On Africa and Middle-Eastern routes, traffic slumped by 8.1% and 19.6%, respectively.

World Airport Rankings 2010: Hong Kong eclipses Memphis as the world’s busiest cargo hub

It’s official: Hong Kong International Airport (HKIA) is the world’s busiest cargo hub – ending Memphis International Airport’s 18-year reign at the top of the world rankings. HKIA’s rise to the top reflects surging exports from China’s Pearl River Delta, while Hong Kong-based Cathay Pacific became the world’s largest international air cargo carrier last year, overtaking Korean Air.