AirAsia, Virgin, EastJet ‘in Pact’ for Long-haul Flights

KUALA LUMPUR ~ Three of the world’s top budget carriers, including Richard Branson’s Virgin, will soon form a global alliance based in Malaysia to fly long-haul routes, a report said.

Branson, AirAsia’s boss Tony Fernandes and easyJet’s Sir Stelios Haji-Ioannou, a Greek-British tycoon, are in talks to realize the dream of forming what is claimed to be “the world’s first low-cost global network,” the Star newspaper said.

An announcement on the plan is expected to be made later this week by the Malaysian government and AirAsia officials.

Kamarudin Meranum, AirAsia’s deputy chief executive officer, declined to comment on the report but said the profitable budget carrier was always eying growth opportunities to boost revenue.

“I don’t discount the fact that AirAsia is always on the lookout for growth opportunities and we talk to various parties for mutual benefit,” he said.

“We thank the governments in the region and passengers for their continued support and we promise a lot of excitement this year,” he said.

Kamarudin said AirAsia’s expansion plans were designed to ensure Malaysia became the low-cost hub for Southeast Asia. Neighboring rival Singapore is also competition for the spot.

“We will ensure Malaysia becomes the low-cost hub of the region. One thing for sure, it will a Malaysian-led initiative in line with government aspirations of encouraging Malaysian companies going global,” he said.

The Star citing unidentified industry sources as saying the new joint venture would first fly between Kuala Lumpur and Manchester in Britain and Amritsar in India.

There are future plans for flights to Hangzhou near Shanghai, China, and Tianjin near Beijing, it said.

A source familiar with the discussions told the Star that fares on the long-haul network for destinations in China could be as low as 100 ringgit (US$28).

Fares to Britain would be between 300 ringgit and 2,500 ringgit, about half the price of the normal ticket on a regular airline.

If the plan to fly to London is realized, the source said AirAsia could use Luton airport just north of the capital as a hub because Virgin already operates a rail link from there to central London.

In return, the alliance would give Virgin and EasyJet access to Kuala Lumpur’s low-cost airport terminal, the gateway to “a dream Asian hub for their Europe to Australia routes,” the Star said.

AirAsia was launched as a budget carrier in December 2001 with just two aircraft now offers more than 100 domestic and international flights to destinations in Southeast Asia and China.

EasyJet, which started in 1995, was one of the first low-cost carriers in the world to sell tickets on the internet. It flies 224 routes between 67 key European airports.

Virgin Atlantic’s network covers the United States, Hong Kong, South Africa, the Caribbean and Australia.

Low-cost carriers have largely focused on short-haul routes but given their success, there has been much talk of a long-haul budget business model, with Oasis Hong Kong setting up late last year to fly initially to and from London.

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