AirAsia X to add planes as it targets rapid growth

Chief Executive Azran Osman-Rani said AirAsia X decided to lease more A330-300 planes, to be delivered over the next two years, to grow its network in Asia as competition intensifies. By 2014, he said the airline will receive 14 aircraft, including the six leased planes, increasing its fleet to 28 planes.

The 10-year leasing deal with US-based International Lease Finance Corp. will cost $500 million, Azran said.

“We want to make sure we are completely ahead of the game. 2013 and 2014 will see a rapid phase of growth as we step up, doubling our fleet size in the next two years. It is going to cement our leadership and make sure we are No. 1,” he told reporters after signing the leasing pact. Competition is on the rise as some Asian flag carriers have set up or are in the process of launching budget airlines to grab a share of the fast-growing low-cost market.

Azran said the new planes will be used to increase flight frequencies and add new destinations in its core markets of Australia, China, Japan and South Korea. AirAsia X, which was launched in late 2007, carried 2.5 million passengers last year and hopes to grow this to 7 million by 2014, he said.

The airline, which is partly owned by the region’s largest no-frills carrier AirAsia and billionaire Richard Branson’s Virgin Group, earlier this year axed flights to Europe to focus on its Asian markets.

AirAsia Group Chief Executive Tony Fernandes said AirAsia X has no plans to return to Europe where many airlines are struggling with high taxes, soaring fuel cost and weakening demand due to a depressed economy. He said competition from Middle Eastern airlines such as Emirates which offer promotional fares to Europe also made it unviable for low-cost carriers to operate in the continent.

Fernandes said AirAsia X’s listing plans are still on the table but the timing will depend on market conditions. He declined to give further details.