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New Long-Haul Budget Airline Debuts in Malaysia

Malaysian aviation tycoon Tony Fernandes Friday launched a new long-haul budget airline named AirAsia X, which will start flying to destinations in China and Britain in July.

The new carrier is owned by Fly Asian Express, or FAX, a small airline serving rural routes in Malaysia, and will collaborate with AirAsia, which Fernandes, 42, rescued from bankruptcy in 2001 and turned into the region's biggest low-cost carrier. He owns part of both airlines.

"We are proud in being able to continue to lead and revolutionize aviation industry in Asia, just as we did with AirAsia," Fernandes told a news conference.

"Ultimately the launch of AirAsia X will bring independence to the long haul low cost traveler by providing a choice of service for their long-haul travel requirement," he said.

He said AirAsia X expects 500,000 passengers in first year of operations, which will ultimately cover China, India, Europe and Australia.

Average ticket prices will be about half the price of full service airlines, he said.

Online sale of tickets will begin next month for initial service to Tianjin and Hangzhou in China, and to either Manchester or London in the United Kingdom. If AirAsia X ends up flying to London, it will operate from Stanton airport, said Fernandes, who is the majority owner of Fly Asian Express with a 50% stake.

Under an agreement, AirAsia will franchise its brand to FAX for operating AirAsia X, whose network will cover destinations which are more than four hours flying time from Kuala Lumpur.

Fernandes said AirAsia X is expected to buy 20 aircraft, either Boeing 777-300ER or Airbus 330-300, with shareholders' money. A decision on the type of aircraft will be taken by the end of the month.

AirAsia X will ensure that passengers "enjoy a level of comfort and convenience suited for long haul travel," he told the news conference.

Transport Minister Chan Kong Choy, who also attended the news conference, hailed the new airline as a "historic" venture, which he said will give impetus to the Malaysian economy by boosting tourism.

He said AirAsia X is unlikely to have an impact on flag carrier Malaysia Airlines because their routes don't clash.

Fly Asian Express will be the latest airline in Asia to operate budget long-haul flights after Oasis Hong Kong Airlines began flights to London from Hong Kong in October.

FAX currently operates Fokker 50 and Twin Otter turboprop planes in rural Malaysia. It started operations in August when AirAsia subcontracted its rural air rights.

AirAsia has about 40 jets now, and has committed to buy 100 Airbus 320 planes as part of a fleet expansion. AirAsia expects passenger volume to hit 18 million in 2007, from 10 million in 2006.