Monday, January 21, 2013

AirAsia Scraps Plans for Singapore Unit

SINGAPORE—AirAsia Bhd. has dropped plans to set up an airline in Singapore, citing high costs and weak market potential.

"We are concentrating on markets which have big domestic markets and big populations and markets that are more liberal and market orientated," Chief Executive Tony Fernandes said by email. It is "very clear that we are in the right markets and capital should go into those countries to maximize return."

The Civil Aviation Authority of Singapore didn't comment on Mr. Fernandes's statement about Singapore's costs.

AirAsia, based in Sepang, Malaysia, has expanded rapidly since Mr. Fernandes and partners bought the carrier in 2001. It is the region's largest budget carrier by market share. The carrier has ventures in the Philippines, Japan, Thailand and Indonesia as it seeks to tap growing demand for aviation in the thriving region.

AirAsia operates more than 100 jets and is Airbus's biggest customer world-wide for single-aisle aircraft. In December the airline ordered 100 Airbus A320 jets. That added to a 2011 order for 200 jets with a total value of $18 billion at list prices, though big customers typically are offered significant discounts.

AirAsia was keen to establish a unit in Singapore to better compete with its main rivals, including the Jetstar unit of Australia's Qantas Airways Ltd., and Tiger Airways Holdings Ltd. in which Singapore Airlines Ltd. has a 32.7% stake. AirAsia is the biggest low-cost carrier by number of flights to Singapore but having a unit based in the country would have allowed the carrier to fly to more destinations from the city-state.

More than 50 million passengers traveled through Singapore's Changi Airport last year, according to Changi Airport Group, which operates the airport.

Source:   http://online.wsj.com

No comments:

Post a Comment