ROUTES ASIA: What’s keeping AirAsia X’s CEO awake at night?

Unlike most CEOs of legacy carriers who are most likely laying awake at night thinking about the record high oil prices that have been seen over the past few weeks, AirAsia X Chief Executive Officer, Azran Osman-Rani, says he “does not worry about things that affect everyone”. Instead, his biggest concern is rather to do with marketing. “I think about globalising the brand while at the same time localising it and keeping its essence,” he commented yesterday during the Routes Asia Strategy Forum in Incheon, South Korea.

His obsession with maintaining the airline’s core brand in new and varied markets is a result of AirAsia X’s rapid expansion in the Asia-Pacific and Europe regions over the past two and half years. The growth is set to continue, said Osman-Rani, with 27 additional aircraft already on order and a view to making additional orders in the future.

For the next round of aircraft coming into the fleet, Osman-Rani said AirAsia X is looking for markets within five to eight hours flight time from Kuala Lumpur that can demonstrate the ability to create sufficient volume and demand to fill a daily service throughout the year. “Destination appeal is also incredibly important to us,” he said. “Tehran is an excellent example of where we were able to essentially create a new destination, but generally any new route for us needs to be able to show clear volumes from the start.”

A good example of a city that was able to demonstrate the strength of its market from day one is, appropriately enough, Incheon. Osman-Rani said it had proved to be one of the airline’s fastest selling routes and had been enjoying load factors of over 80% on a daily service with a 377-seater aircraft.

“South Korea has proved its ability to generate and attract large number of tourists from all over South East Asia,” he said, adding that about a third of the traffic on the route is Korean outbound passengers. He went on to say that AirAsia X has managed to achieve direct sales of 90% in South Korea, thanks to the nation’s phenomenal Internet penetration.

AirAsia X’s CEO continued by stating that the airline does intend to place an additional aircraft order in the future following its forthcoming IPO. This could, potentially, lead to AirAsia X considering establishing another hub besides Kuala Lumpur but, he said, this would most likely be outside of South East Asia.

“We could look beyond KL as a hub. North East Asia or the Middle East could work, or even North Africa or Southern Europe,” he said. “You can imagine the possibilities, for instance in Lisbon – you could connect from Asia and then travel onwards to Brazil.”

A full report of Azran Osman-Rani’s Q&A session with ASM’s vice president consultancy, Gordon Bevan, will feature in the next edition of Routes News.