AirAsia founder eyes low-cost Dubai-like hubs in Bangkok, Kuala Lumpur
Sign up now: Get ST's newsletters delivered to your inbox
AirAsia was forced to restructure debt, lay off employees and return some aircraft to lessors during the Covid-19 pandemic.
PHOTO: REUTERS
Follow topic:
Singapore – AirAsia hopes to emulate Dubai’s success in connecting the world, but in a low-cost format from places like Bangkok and Kuala Lumpur, as the budget carrier looks to move on from its tumultuous pandemic years.
Founder Tony Fernandes envisages funnelling connecting passengers through Bangkok and Kuala Lumpur airports en route to the destinations that AirAsia and its long-haul arm AirAsia X serve.
Mr Fernandes said AirAsia’s sweet spot is flights between 1½ hours and six hours long.
“What I’m trying to do, which will be the first time in the world, is to create a hub in Kuala Lumpur and Bangkok like Dubai and Qatar,” he said in an interview in the Thai capital.
“Bangkok has kind of a hub, Singapore obviously has, but these are premium hubs. No one has really done a low-cost hub.”
AirAsia was forced to restructure debt, lay off employees and return some aircraft to lessors during the Covid-19 pandemic.
The carrier’s parent Capital A dropped plans to list via a blank-cheque firm and will instead merge with sister unit AirAsia X and reduce its share capital by US$1.4 billion (S$1.88 billion) to exit the Malaysian stock exchange’s financial distress classification.
Mr Fernandes, who is in Bangkok for the 22nd Forbes Global CEO Conference, predicts a full recovery in 2025 and forecasts that 2026 will be the industry’s “golden year”.
Geopolitical headwinds have helped AirAsia, with more travellers choosing to fly within Asia rather than heading to the US or Europe, he said.
“We had five years of hell. But we’re back and we’re looking to grow,” Mr Fernandes said. The company has rehired all the 2,600 employees it fired during the pandemic, he added, and now employs 23,000 people.
Along with bringing connecting traffic through the planned hubs in Bangkok and Kuala Lumpur, Mr Fernandes also expects to grow by adding more traffic to secondary cities, citing the example of flights from Chiang Mai to China.
Last week, AirAsia X commenced its maiden foray into the African continent – as it looks beyond Asia for growth.
Despite the supply chain issues and jet shortages that are hampering carriers around the world, Mr Fernandes said that he feels AirAsia has enough planes for growth at the moment, adding that there is also sufficient capacity in the second-hand market. BLOOMBERG
