Air Asia X’s budget flight to London is a wake-up call to SIA and good for competition

Long-haul budget airline unveiled
(BBC News) 5 Jan 07

Malaysian aviation tycoon Tony Fernandes has unveiled a new no-frills long-haul airline, Air Asia X.

The venture - a tie-up between Air Asia and Fly Asian Express (FAX) - will launch in July and fly to destinations in India, China and Europe.

The new airline aims to carry half a million passengers in its first year, Mr Fernandes said. (read on...)

My comments:

Hi friends,

Air Asia is proving to be the Ryanair of the East!

I will be anxiously waiting for the launching out of its new service to Europe and other new destinations.

Although budget travel is seldom suitable to professionals like us, it is still worth considering if one can plan one’s schedule way ahead.

Cheaper air travel does wonders for the whole world’s tourism trade and contributes significantly to many countries’ economy.

Singapore has benefited from many first time tourists who would never have stepped onto our shores if not for cheap fares. Many of my clients ( or patients) admit to bringing their whole family for a weekend of shopping at Orchard Rd on account of this.Of course they also drop in to see me at the same time.

Days of prohibitive air fares are almost over
SIA ( Singapore Airlines) have seen the trend and has already hedged it by setting up its own budget subsidiary, Tiger Airways. “If you can’t beat 'em, join 'em” is its philosophy and I am sure that budget travel will not cause more than a temporary setback in its bottomline.

I heard somewhere that the money earners for airlines are the business and first class passengers and that a full coach cabin ( economy class) causes each flight to merely break even.

How do LCC's make money?( without jeopardising safety)

The business model for Low Cost Carriers (LCC) is a mystery to me. How is it possible to be profitable by just flying budget passengers without compromising on safety? How much costs can be reduced and how efficient can one get?

Yet Ryanair has succeeded whilst the pioneer Sir Freddie Laker’s Laker Airways had gone bust in 1982. Maybe Laker was ahead of his time.

Cost cutting is the buzzword now as in a recent flight to/from the USA on Northwest Airways, I was asked to pay US $5 if I wanted alcoholic beverages. Service ranged from good to average. But there was a very polite and chatty stewardess named Michelle (in Minneapolis-Narita leg) who made flying a pleasure for many passengers!

Online ticket booking sites like zuju.com are also forcing "brick and mortar" travel agencies to be lean and mean. No more fat commisions like in the past. Even SIA is doing a raving business through direct online booking.

Cheers,


Dr.Huang Shoou Chyuan
7 Jan 07