AirAsia Eyes Indian Subcontinent And Central Asia
CHIANG MAI, Thailand—AirAsia Group is eying destinations in the Indian subcontinent and Central Asia as part of the next phase of its expansion as it prepares to launch a joint venture (JV) carrier in Cambodia later this year.
AirAsia Chief Commercial Officer Karen Chan tells Aviation Week Network that Bangladesh and Pakistan offer a huge opportunity for the LCC, while Uzbekistan and Kazakhstan are also potential target markets.
Earlier this month, Tony Fernandes, CEO of AirAsia’s parent Capital A, teased that the company plans to launch two new AOCs in 2024 without specifying the countries. The LCC group already has units in its home country Malaysia, as well Indonesia, Thailand and the Philippines.
“We are looking at the Indian subcontinent,” Chan says. “With the increase of the middle class in both Bangladesh and Pakistan, there is an opportunity to leverage that because of their population sizes. Before COVID, we only flew once a day to Bangladesh but from February that has increased to three.”
“The labor traffic is significant," she adds. "Can we use the labor traffic outbound from Bangladesh, Nepal and Pakistan, as well as inbound to Bangladesh as a stepping-stone to go to the Middle East? We’re therefore looking at that as a possible hub.”
Chan says that AirAsia is also exploring Central Asia and has previously held discussions with authorities in Kazakhstan and Uzbekistan.
“We’ve been talking to the Uzbeks and Kazakhs for many years and now with the whole situation in Ukraine, there are 300,000 Russians stuck in Kazakhstan,” she says. “Europe has closed the doors on Russia so where can they go? I think there’s an opportunity, but it may not be in the immediate future.”
AirAsia currently serves Dhaka (DAC), the capital of Bangladesh, three times per day from Kuala Lumpur (KUL), while Thai AirAsia flies daily from Bangkok Don Mueang (DMK). However, no other destinations in Bangladesh, Pakistan, Uzbekistan or Kazakhstan are served at the present time.
AirAsia announced in December plans to establish AirAsia Cambodia in partnership with Sivilai Asia. It hopes the JV carrier will provide greater access to Cambodia’s domestic market and connect it to the international markets across ASEAN, North Asia and beyond.
“Although Cambodia isn’t the biggest market in terms of population size, it provides a very good connecting hub for us for traffic from North Asia,” Chan says.
“Beyond Phnom Penh, Sihanoukville is turning into the next Macau, the mini Las Vegas. We see the potential for a lot of connecting traffic, as well as for leisure and entertainment. It also won’t just be about international flights as we will offer domestic service," she says.
“We’re going to start small and build to maybe 13-15 aircraft over the next five to seven years. But we do feel that this is a strategic location for Indochina.”
The full interview with AirAsia CCO Karen Chan is in the first issue of Routes Daily, a digital magazine bringing the latest news from Routes Asia 2023, taking place in Chiang Mai, Thailand from Feb. 14-16.