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AirAsia starting flights to Chengdu, Xi'an

By Lu Haoting (China Daily)
Updated: 2009-06-04 11:46

Workers unload baggage from an AirAsia airplane in Kuala Lumpur. [Bloomberg News]

AirAsia, the largest low-cost carrier in Asia, plans to continue its expansion in China this year by flying to two new destinations in the country while other airlines ground jets and cancel flights amid the global economic downturn.

The Malaysia-based airline will start flying to Chengdu and Xi'an from Kuala Lumpur in the second half of this year. It will also launch flights from Thailand to Shenzhen, Guangzhou and Hangzhou, to which the airline is already flying from Kuala Lumpur, by the end of the year.

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"We will continue expanding. We still believe there is a big market out there and will maintain the philosophy of offering low fares to stimulate demand," AirAsia Chairman Dato' Aziz Bakar said yesterday.

As one of the fastest growing airlines in Asia, the seven-year-old AirAsia reported a 33 percent year-on-year growth in sales and posted $59 million net profit in the first quarter of this year while other large full-service carriers suffered plummeting revenues or even slipped into the red.

"People still have to travel. They are just becoming more sensitive to prices," Bakar said.

AirAsia which used to mainly target leisure travelers and small- and medium-sized business owners, has seen a rising number of corporate travelers as large corporations cut travel spending and switch from legacy carriers to low cost services. But he declined to give specific figures on the breakdown of its passenger types.

Asian businesses are expected to reduce their travel spending by as much as 20 percent this year to cut costs amid the global economic downturn, according to a report by business travel management company Carlson Wagonlit Travel.

AirAsia, operating a fleet of 72 aircraft, has placed a huge order of 175 Airbus A320 jets and 25 A330 wide-body aircraft. Delivery of the airplanes is to complete by 2013.

Last year it launched six new routes to China, which was the most aggressive expansion by a foreign carrier. It began to fly to Tianjin in April.

Shanghai-based Spring Airlines is the only Chinese budget carrier. AirAsia's smaller rivals, Tiger Airways from Singapore and Cebu Pacific from the Philippines, are also operating in China.