AirAsia Axes Flights to Europe and India

(1/13/2012)

Reflective of a deepening economic crisis in Europe, Asia’s leading low-cost airline, Malaysia-based AirAsia has announced that they will cease flight services to Europe and India in February 2012.

• Kuala Lumpur-Mumbai four-time weekly flights will be suspended on January 31, 2012.
• Kuala Lumpur to New Delhi daily services will cease on March 22, 2012. Flight in March will be reduced to four flights per week.
• The six weekly flights Kuala Lumpur to London end on March 31, 2012.
• The four weekly flights Kuala Lumpur to Paris end on March 30, 2012.

The airline has followed up the announcement of flight cessations by emphasizing they will continue to focus its low-cost long-haul service on its existing services to Australasia, China, Taiwan, Japan, and Korea “where we have built up stable, profitable routes within an infrastructure that supports low cost services."  The airline says services to these areas will be enhanced in the near future.

Meanwhile, AirAsia is blaming the end of service to Europe on high jet fuel prices, declining demand for air travel and exorbitant government taxes have made it impossible to offer their extremely low fares between their Kuala Lumpur base and Europe.

The Indian government’s restrictive, complicated and expensive visa restrictions between Malaysia and India together with escalating handling and airport charges were cited by AirAsia as “not conducive to the low cost model.”

Since the commencement of flight to London by AirAsia in March 2009, oil prices of US$40/barrel have since tripled. Fuel costs are estimated to represent 50% of operating costs on long-haul flights.

The cancellation of flights can not also be divorced from plan to increase the U.K. Air Passenger Duty from the current £92 per departing passenger to £184, effective April 1, 2012. This follows an increase in carbon taxes on the Emission Trading Scheme introduced by the European Union on January 1, 2012.