KUALA LUMPUR, Malaysia: AirAsia X, Malaysia's first long-haul budget airline, hopes to begin commercial operations by the year-end and aims to sell shares to the public within five years, a senior executive said Friday.
Chief Executive Raja Mohamad Azmi also said the airline will ink an agreement Monday to purchase 15 wide-bodied aircraft, with deliveries starting in September 2008, but he declined to give details on the type of aircraft or the price.
Industry sources said AirAsia X is expected to buy 15 Airbus A-330 aircraft, which will cost around US$2.5 billion (€2.1 billion) at list price.
Raja Azmi said he hopes commercial operations could begin before the end of the year if the airline could lease at least one aircraft at the right price.
The carrier was originally scheduled to start flying to destinations in Britain and China from July with a handful of leased aircraft. But the cost of leasing such aircraft is too high and it has said it may wait until late 2008 when it operates its own planes.
Raja Azmi said he expects AirAsia X to be profitable from the first year. Malaysian regulations require companies seeking to sell shares to the public to be profitable for three years.
"Under our five-year plan, we hope to list AirAsia X," he told Dow Jones Newswires in a phone interview.
AirAsia X is the biggest bet made by the founders of Asia's most successful budget airline, AirAsia Bhd. It is owned by Fly Asian Express, a company controlled by AirAsia founder Tony Fernandes, and has a 30-year license to use the AirAsia brand and facilities.
The new airline is seen as a test of whether the highly successful low-cost airline model can be profitable on long-haul flights, which are dominated by full-service airlines.
To keep costs low, AirAsia X will fly to secondary airports in high-density cities across Europe and China and will use its aircraft for as long as 16 hours per day, Raja Azmi said. It hopes to carry some 500,000 passengers in the first year.
AirAsia sold shares to the public in November 2004, three years after launching operations. The airline has 52 aircraft but the fleet will more than double as it continues to take delivery from a firm order of 100 Airbus A320s. The airline already flies some 9 million passengers annually to more than 40 destinations across Asia.
Source:
The Associated Press , International Herald Tribune
20 April 2007
http://www.iht.com/articles/ap/2007/04/20/business/AS-FIN-Malaysia-Budget-Airline.php
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