AirAsia Adds Kunming to Expanding Chinese Network

Low-cost carrier AirAsia has confirmed it will continue its network growth in China with a new direct link from Kuala Lumpur to Kunming, the capital and largest city of Yunnan Province in Southwest China. The four times weekly service, operated with a 180-seat Airbus A320, will commence on December 10, 2012 and will bring the AirAsia Group’s Chinese network to 24 routes.

AirAsia made its debut in the mainland Chinese market in April 2005 when its Thai-based operation commenced flights between Bangkok and Xiamen, just a year after flights to Macau were also introduced from both Bangkok and Kuala Lumpur. It was not until July 2007 that another Chinese city was added to the network map in the form of Shenzhen but since then there has been rapid growth. AirAsia currently serves 13 destinations in China; nine from Malaysia, including three using the widebody equipment of AirAsia X and 12 from Thailand through Thai AirAsia.

This route will place AirAsia in direct competition with Malaysia Airlines. The Asian national carrier has been serving the route since January 2005, initially alongside China Eastern Airlines, but since 2007 it has had a relative monopoly between the two cities. It currently offers three weekly frequencies using a Boeing 737-800.

As the capital city of Yunnan, Kunming plays an important part in the development of the region and AirAsia will bring an affordable and convenient flight option to connect the business community between Kunming and Malaysia. “AirAsia is very positive about our growth in China, and the addition of this new route from Kuala Lumpur - Kunming further strengthens the point,” said Kathleen Tan, Group Head of Commercial, AirAsia.

“Kunming’s abundance of natural resources doesn’t only transform into great business opportunities, but also a great tourist attraction. Stunning views and a treasure trove of culture await travelers to Kunming, so we do hope that this will be another destination that our guests will explore and enjoy,” added Kathleen Tan.

In 2011 an estimated 43,000 O&D passengers travelled between Kunming and Malaysia with more than 85 per cent of this demand originating or ending their journey in the capital Kuala Lumpur. Malaysia Airlines currently has the largest share of the traffic between Kuala Lumpur and Kunming, an annual market of around 38,000 passengers.

“The addition of the Kuala Lumpur – Kunming route enables us to further strengthen our route network into China,” said Aireen Omar, Chief Executive Officer of AirAsia Berhad. According to the AirAsia boss, AirAsia is the largest foreign airline by capacity into China. “We will continue to work hard to maintain this,” she added.

As the table below illustrates, the low-cost group is currently the tenth largest international operator in China, but according to OAG schedule data for October 2012, it was not ranked as the number one foreign carrier into China by capacity, but actually ranked fifth behind airlines from Taiwan, Singapore and South Korea. Even when you remove Hong Kong and Macau from the analysis and concentrate on mainland China alone, AirAsia Group is ranked behind Asiana Airlines, Korean Air, All Nippon Airways, China Airlines and Singapore Airlines this month.