MALAYSIA: Malaysia's budget airline says will expand routes to provide cheap international flights from Southeast Asian hubs to Europe

Malaysian budget carrier Air Asia Bhd on Friday (January 5) announced plans to expand its international routes in the hopes of cutting costs of flights from Southeast Asia to Europe. Air Asia, which introduced its low-fare, no-frills concept in December 2001, said it hoped to shuttle its travellers from South East Asian cities to European destinations, mainly the United Kingdom. The carrier hopes to offer fares to London from 80 USD to 450 USD, according an online report by the BBC. The company also said it has firm orders for 100 Airbus A320 aircraft, with options on 30 more. "One hundred is firmed, 30 option; so it depends on how you look at it. We can confirm the 30 plus another 70 but the other 70 be some firmed some option," Air Asia Group Deputy Chairman Kamarudin Meranun said in a press conference. Air Asia chief Tony Fernandes has said that the airline, which services some 500 million people in the Asia Pacific region, including Indonesia, Thailand, Vietnam and Malaysia, needed more aircraft in order to properly fuel growth. At a list price of around $65 million each A320 craft, an additional 70 planes would cost Air Asia $4.55 billion. In December, Fernandes said that any plane purchases would be paid for using bank loans. The additional 70 aircraft would potentially make the five-year-old airline one of the biggest fleets in Asia. The budget carrier's CEO said he was proud of their achievements in cutting airfare. "The fact that we can give a product that is 1.9 cents per ASK (available seat per kilometres), shows that we have been able to, through research and development, develop a product that has never been put there before. It shows the capability of Malaysian innovation that our cost is so low," said CEO Tony Fernandes. Air Asia was the first to offer unassigned seats and ticketless travel.

ITN Source | January 5, 2007