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Malaysia's AirAsia plans to fly to China by February
Malaysia's AirAsia plans to begin flying to China by February, which will open up a giant market for the no-frills carrier as it heads for a listing in less than two weeks, a report said Saturday.
Chief executive Tony Fernandes was quoted by the New Straits Times as saying the airline was in the midst of securing approvals to fly to key Chinese cities such as Xiamen, Chengdu, Guangzhou, Chongqing and Hainan from Bangkok through its subsidiary Thai AirAsia.
`We do not expect to have difficulty in this area as there is a bilateral open skies air service agreement already in place between Thailand and China,` he said, adding that it expected to start flights before the Chinese Lunar New Year - a peak season travel in East Asia.
Fernandes said the carrier also planned to operate China-bound flights from Kota Kinabalu, the capital of Malaysia's Sabah state on Borneo island, pending the completion of expansion work at the airport there.
`We have also applied for government approvals to fly between Malaysia and China, and expect to do so sometime next year,` he said, adding that AirAsia chose Kota Kinabalu instead of Kuala Lumpur because it was closer to China.
He said AirAsia would start daily flights to Macau from Kuala Lumpur on December 15. The airline has already made daily flights from Bangkok to Macau since June - its third international destination out of Thailand after Singapore and Malaysia.
Analysts said AirAsia's entry into China would boost its revenue given strong trade ties and the 2008 Olympic Games in Beijing. Malaysia was China's seventh-largest export market last year, while the mainland was Malaysia's fourth biggest.
Fernandes said AirAsia, which aims to buy 80 new planes over the next few years, has still not decided whether to purchase from Boeing or Airbus despite reports that Airbus had won the deal.
'This is a big decision. We expect an announcement will be made by the end of January,' he said. AirAsia, which started with just two aircraft in 2002, now has a fleet of 24 Boeing 737-300s plying the region.
He reiterated the expansion plan was still on track despite AirAsia's initial public offering (IPO) raising less funds than first indicated.
AirAsia set the price for the institutional tranche of its IPO at 1.25 ringgit (0.33 dollars) per share and the retail tranche at 1.16 ringgit, well below the indicative price of 1.40 ringgit, to raise some 717.4 million ringgit.
It will debut on the stock exchange on November 22 to become the first budget carrier listed in Southeast Asia.
Kuala Lumpur 13/11/04
