AirAsia X To Cut Service Down Under

21st Nov 2014

The Australian market seemed to offer a sustainable future for AirAsia X's long-haul operations when it launched its maiden service in 2007 from Kuala Lumpur to Gold Coast.

In recent years, however, the Aussie market seems to have dwindled for the long-haul carrier. They find it harder and harder to fill the seats of its wide-body A330 aircraft that service these routes. In fact, its losses from Australian operations had quadrupled during the last fiscal year.

The airline currently flies to five destinations in Australia, namely, Adelaide, Gold Coast, Melbourne, Perth and Sydney.

A reliable source was quoted as saying that the airline is already planning to cut back service on its Australian operations without giving details.

There has been a rumor milling around in Australian media that AirAsia X is going to downsize its Australian operations.

Lately, the long-haul brand has spawned two local subsidiaries, Thai AirAsia X and Indonesia AirAsia X. Thai AirAsia X commenced operations in June this year while Indonesia AirAsia X is set to launch its maiden service in December, also this year.

AirAsia X is not the only low-cost carrier operating in Australia which is piling up losses. Even its home-grown player, Qantas' wholly-owned subsidiary, Jetstar, is also doing poorly in its home turf. Singapore Airlines' budget affiliate, Scoot, similarly experiences hardship but is much better off than the other two.

According to sources, there are too many players in a market with too few customers that would sustain such operations.