AirAsia helps Kuala Lumpur towards 30 million; Singapore route soon to be fully liberalised

Image: Air Asia Promotion
AirAsia X launched a five times weekly service from Kuala Lumpur to Hangzhou, China in February. AirAsia X Chief Executive Officer, Azran Osman-Rani, said: “We’re very committed to develop this first direct service from Southeast Asia to Hangzhou, and entice as many people to x-perience the AirAsia X long-haul service to Hangzhou, the tourism capital of China, with convenient links to commercial centres in Shanghai and Suzhou.”

Kuala Lumpur International Airport (KUL) was opened in 1998 to replace the ‘downtown’ airport at Subang where traffic had more than doubled in just seven years from 7.5 million passengers in 1990 to 15.8 million in 1997. Ironically, the opening of the new airport coincided with a major economic downturn in parts of Asia and Kuala Lumpur’s traffic fell over 8% in 1998.

Traffic was also impacted in 2001 by ‘9/11′ and in 2003 by SARS. However, since 2003 traffic has grown by an impressive 54%, driven by the rapid expansion and success of Asia’s biggest LCC, AirAsia, which began flying from KUL in 2002.

Chart: Kuala Lumpar Traffic
Source: Malaysia Airports Holdings Berhad

Domestic duopoly with AirAsia and Malaysian Airlines

Image: Air Asia Group CEO et al
AirAsia launched Kuala Lumpur-Kuantan services in June. AirAsia Group CEO, YBhg Dato’ Sri Tony Fernandes said: “By opening up the market and enhancing this route, we are able to stimulate domestic travel and tourism activities that will definitely contribute to the country’s economy. The Kuantan route for instance, could encourage more visits from both local and foreign tourists to the state of Pahang, which in turn will give a boost in the state’s revenue.”

The domestic market accounts for just over one-third of KUL’s traffic. Malaysia Airlines serves 13 domestic destinations from KUL all of which are also served by AirAsia. AirAsia also serves two additional destinations. Using mostly 180-seat A320s AirAsia has a capacity share of 53% in the domestic market from KUL though its frequency share is 49%, compared to Malaysia Airlines’ 51%. The top three domestic destinations, which account for nearly half of all domestic flights from KUL are Kota Kinabalu, Kuching and Penang each of which are served with over 100 weekly departures.

International routes

Image: Cake cutting
Kuala Lumpur International Airport celebrated its 10th anniversary on 30 June. Dato’ Azmi Murad, Senior General Manager of Operation Services, Malaysia Airports, said: “It is exhilarating to observe KLIA flourish to become one of the well-known airports in the world after merely ten years of operations, an accomplishment not many airports around the world can claim. I’m confident that KLIA will continue to progress and further establish itself as an icon in the world of aviation.”

Passengers on international flights account for almost two-thirds of KUL’s traffic. There are direct flights from 38 different countries with the leading country markets being Indonesia (19.6% of capacity), Thailand (12.2%), Singapore (10.9%) and China (9.1%). These four countries account for over half of all international capacity. Hong Kong, Australia, India, Vietnam, UAE and Japan round out the top 10.

The leading European markets are the UK and Netherlands which are both served double-daily. Frankfurt, Paris, Rome and Stockholm are also served non-stop but with lower frequency. All flights are operated by Malaysia Airlines with the exception of KLM, which operate one of the daily frequencies from Amsterdam (which then travels on to Jakarta). Lufthansa does serve KUL but via Bangkok. Maybe surprisingly there are no direct services to anywhere in North America.

Malaysia Airlines is the dominant airline on international routes with a 38% share of international capacity, offering non-stop flights to 48 destinations.

Airline Frequency share Capacity share Number of routes
Malaysian Airlines 35.8% 38.4% 48
AirAsia 26.1% 22.0% 29
Singapore Airlines 3.5% 5.3% 1
Indonesia AirAsia 6.1% 4.2% 6
Cathay Pacific 1.7% 2.6% 1
Thai Airways 1.7% 2.5% 1
Source: OAG Max Online for w/c 6 October 2008

Image: Free seats PerthThe AirAsia group is not only represented by AirAsia and Indonesia AirAsia but also by AirAsia X which began long-haul, low-cost services last November to the Gold Coast in Australia with an A330. In February flights to Hangzhou in China were added and in November services start to both Melbourne and Perth.

Since the middle of 2007 AirAsia has added international routes from KUL to Banda Aceh, Guangzhou, Guilin, Haikou, Ho Chi Minh City, Hong Kong, Krabi, Makassar, Manado, Shenzhen, Singapore, Vientiane, Yogyakarta. This has virtually doubled the airline’s international network.

Singapore route soon to be fully liberalised

Image: Jetstar Asia
Jetstar Asia will increase to three daily flights between Kuala Lumpur and Singapore from 1 December when the route becomes fully liberalised. It launched daily services on the route in February.

In February 2008 low-cost airlines were finally allowed to start operating between Kuala Lumpur and Singapore. Previously a cosy duopoly between the flag carriers, other carriers were belatedly allowed to operate the route.

Additional daily frequencies were limited to two from airlines in each country. AirAsia operated the two additional Malaysian frequencies while JetStar Asia Airways and Tiger Airways shared the Singapore frequencies.

From 1 December, when the route becomes fully liberalised, Tiger Airways will increase its frequencies to five daily flights. AirAsia will be increasing its services to six daily flights while JetStar Asia will increase to three daily flights.


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