Christchurch Bags AirAsia X

Christchurch pulled off a coup this week announcing that AirAsia X will begin services to the South Island in March next year. The frequency and routing have yet to be revealed but the new service marks a major new airline for Christchurch. The Hub reveals why AirAsia X has chosen Christchurch

THE MALAYSIA-AUSTRALASIA MARKET

Christchurch will represent an interesting move for AirAsia X and will be its first foray into the New Zealand market. The long-haul subsidiary of AirAsia already operates its A330 equipment into the Australasian market with scheduled non-stop services from its Kuala Lumpur base to the following markets

Source Flightbase 14-20 October 2010

AirAsia X has already demonstrated the volume that it can place into new markets. The low-cost operator already has a 53% share of the total Malaysia to Australia market with over 135,000 O+D passengers travelling between the two countries between July 2009 and July 2010. In 2007, the Malaysia to Australia market was much smaller with just 60,000 O+D passengers travelling during the same 12 month period with Malaysia Airlines having an 82% share. Since the introduction of AirAsia X into the market, Malaysia Airlines now has just a 26% share of the Malaysia to Australia market.

THE MALAYSIA TO NEW ZEALAND MARKET

Malaysia Airlines is currently the only carrier offering non-stop services between Malaysia and New Zealand in the shape of a five-times weekly service from Kuala Lumpur to Auckland with B777 equipment. Malaysia Airlines currently has a 73% share of the total O+D market between Malaysia and New Zealand as the table below demonstrates;

Source IATA BSP data (Airport IS) JULY 2009-2010

AirAsia X will be set to stimulate the traffic between the two regions, operating a cost base that Malaysia Airlines will not be able to match, and through AirAsia in Kuala Lumpur can offer significant connectivity within Asia, meaning that it is not reliant on the point to point traffic which is low.

WHY CHRISTHCHURCH FOR AIRASIA X

The move into Christchurch is a significant move for AirAsia X. The route will be heavily supported by New Zealand Tourism, as the route will largely be based around inbound traffic to New Zealand which could constitute up to 80-90% of local traffic.

The entry into Christchurch is a move away from AirAsia X recent policy to enter large cities such as Mumbai, Seoul and Tehran. With a potential route to Sydney still being blocked due to bi-lateral restrictions, Sydney's loss is no doubt Christchurch's gain. If AirAsia X had been given approval to serve Sydney there is no doubt that this route would have been announced.

The entry of AirAsia X into New Zealand is a huge boost for New Zealand Tourism, as it will bring a new type of tourist to the market. Similar to the Jetstar Singapore to Auckland service, AirAsia X will leverage its strong regional network to a market in New Zealand which is fragmented in terms of tourism.

For Christchurch, the hard work will commence now and there will be a strong obligation upon New Zealand Tourism to commence market stimulation in support of this new service.