AirAsia Japan eyes long-haul budget flights in 2013

AirAsia Japan Co, the start-up airline backed by the region’s biggest low-cost carrier, will add long-distance flights in 2013 as it seeks to lure holidaymakers and budget travelers with cheap flights.

The airline may offer services to Thailand, Indonesia and Singapore after introducing widebody Airbus SAS A330 planes, Chief Executive Officer Kazuyuki Iwakata said in interview yesterday. The company will begin short-haul routes from Tokyo’s Narita airport in August with single-aisle A320s.

AirAsia Japan may order the A330s with part-owner AirAsia Bhd to help win lower prices, Iwakata said without elaboration. The Japanese carrier is also counting on AirAsia’s regionwide operations and marketing to help it carry 10 million passengers annually within five years.

“We don’t view our competitors as ANA and JAL as much as resorts such as Tokyo Disney Resort,” Iwakata said, referring to full-service carriers All Nippon Airways Co and Japan Airlines Co. “We’re aiming at families who want to enjoy the weekend or people who play Pachinko - we want them to be able to think about taking a flight as easily as they would hop on a bus.”

The new airline, part-owned by ANA, intends to lure passengers with fares as much as two-thirds cheaper than traditional carriers. It will compete with Skymark Airlines Inc, Japan’s biggest budget carrier, and Jetstar Japan, a low- cost venture being set up by JAL and Qantas Airways Ltd’s budget unit. ANA is also backing Peach Aviation Ltd, another planned no-frills carrier that will serve western Japan.

Separately, Singapore Airlines Ltd also yesterday detailed plans for a new long-haul discount carrier, Scoot, which will begin flights next year.

AirAsia, based in Sepang, Malaysia, rose 4.3 per cent to 3.85 ringgit at close of trading in Kuala Lumpur. It has gained 52 per cent this year, the best performance among 30 stocks in the Bloomberg World Airlines Index. All Nippon has fallen 23 per cent, while the Bloomberg index dropped 29 per cent.

AirAsia Japan plans to fly to airports already served by affiliates as it expands on long-haul routes, so that it can cut costs through cooperation in areas such as procurement, Iwakata said. The airline will also use AirAsia’s group website for ticket sales to reduce expenses, he said.

The airline also intends to negotiate lower landing fees and it will base its headquarters near Narita airport, rather than in a more expensive downtown district, Iwakata said.

The carrier plans to have a fleet of 30 or more planes in five years. AirAsia in June placed an order for 200 Airbus A320neo planes worth $18 billion at list prices. Group head Tony Fernandes has said these aircraft will be used across different AirAsia carriers.

The group already has operations in Thailand, Indonesia and the Philippines. It also has a long-haul affiliate, AirAsia X Sdn, which has said it may open a base in Japan to work with the new venture there.