Indonesia AirAsia X to suspend all routes from 01SEP

[soorox]

Hi All, please note that Indonesia AirAsia X will cease all routes from September 1.

"Indonesia AirAsia X regrets to inform that your AirAsia flight from Melbourne/Sydney to Denpasar (DPS) on (insert date) at (insert time) Hours has been cancelled due to the suspension of the route effective 1 September 2016.

The route suspension is part of a network restructuring aimed at improving operational efficiencies.

Indonesia AirAsia X would like to offer affected guests the following service recovery options:
1. Move flight to an earlier date before 1 September 2016 without any additional charges, subject to seat availability.
2. Reroute via Kuala Lumpur on AirAsia flights within 14 days before or after the original flight dates, based on seat availability.
3. Credit shell – A deposit equivalent to the value of the confirmed booking which can be used as payment for any AirAsia tickets or products, valid up to 6 months (180 days) from the date of issuance.
4. Full refund equivalent to the value of the confirmed booking and in form of the original payment"

 

[MEL_Traveller]

Odd huh? You'd think an airline with cheap fuel, cheap staffing costs, ultra high density and no services or amenities (unless paid for), would be sorta making a profit?

 

[soorox]

Odd huh? You'd think an airline with cheap fuel, cheap staffing costs, ultra high density and no services or amenities (unless paid for), would be sorta making a profit?

It's more political, the Indonesian government insisted that it needed 10 planes or have its AOC revoked (same story for other Indonesian carriers with less than 10 planes), they got around this by wet leasing Indonesia AirAsia A320's. The routes are tracking along well, but there is uncertainty about the viability of sustaining such an operation and therefore the decision was to cease XT operations altogether and to focus on the profitable Malaysian and Thai operations.

Stupid rule that the Indonesian government has imposed if you ask me...

 

[MEL_Traveller]

It's more political, the Indonesian government insisted that it needed 10 planes or have its AOC revoked (same story for other Indonesian carriers with less than 10 planes), they got around this by wet leasing Indonesia AirAsia A320's. The routes are tracking along well, but there is uncertainty about the viability of sustaining such an operation and therefore the decision was to cease XT operations altogether and to focus on the profitable Malaysian and Thai operations.

Stupid rule that the Indonesian government has imposed if you ask me...

Ok, point taken. But still... LCCs seem to be expanding everywhere in the world. Finding 10 planes to operate wouldn't seem like such a major issue. But i guess they have stiff competition fro Lion Air et al.

 

[Cool Cat Phil]

I haven't been able to locate any references to this announcement, although if true , wouldn't surprise me with what must be a brutal blood bath in terms of Yield.
The MEL > DPS route for instance has three LCC's competing on this route which makes for some very steep discounting.

 

[soorox]

I haven't been able to locate any references to this announcement, although if true , wouldn't surprise me with what must be a brutal blood bath in terms of Yield.
The MEL > DPS route for instance has three LCC's competing on this route which makes for some very steep discounting.

All affected passengers have been given an email with the message as per above in the original post, they have been notified. You should check out the AirAsia FB page, its going wild.

Word on the street is that Malindo will operate MEL-DPS-KUL. Although a quick sigh of relief for GA, JQ and TT, it might be short lived as OD might be announcing its new Australian routes soon.

 

[Cool Cat Phil]

All affected passengers have been given an email with the message as per above in the original post, they have been notified. You should check out the AirAsia FB page, its going wild.

Word on the street is that Malindo will operate MEL-DPS-KUL. Although a quick sigh of relief for GA, JQ and TT, it might be short lived as OD might be announcing its new Australian routes soon.

Wow, interesting times ahead.

 

[dajop]

Ok, point taken. But still... LCCs seem to be expanding everywhere in the world. Finding 10 planes to operate wouldn't seem like such a major issue. But i guess they have stiff competition fro Lion Air et al.

Yes but also they choose to operate the brand on different airlines/entities for different types. Air Asia's operate narrow bodies. AirAsiaX's operate wide bodies. Many airlines operate both types, including GA and JT . If they just operated as Air Asia (which they don't for a variety of good reasons I assume), then they would definitely have >10 planes.

 

[moa999]

Yes but also they choose to operate the brand on different airlines/entities for different types. Air Asia's operate narrow bodies. AirAsiaX's operate wide bodies. Many airlines operate both types, including GA and JT . If they just operated as Air Asia (which they don't for a variety of good reasons I assume), then they would definitely have >10 planes.

The number of entities (and separate exchange listings and shareholding structures) that Air Asia has is mind boggling, and very difficult to understand

 

[MEL_Traveller]

Yes but also they choose to operate the brand on different airlines/entities for different types. Air Asia's operate narrow bodies. AirAsiaX's operate wide bodies. Many airlines operate both types, including GA and JT . If they just operated as Air Asia (which they don't for a variety of good reasons I assume), then they would definitely have >10 planes.

I believe EY it considering something similar - going to use Alitalia as an additional means to boost capacity on the market to AU as it's own is technically exhausted (to major cities at least). I guess if you are looking to make money you have to comply with the rules, however technical they are.

It's just a shame the passenger gets caught up in the middle - although Air Asia seems to be doing the right thing here by offering alternative flights - not leaving pax entirely stranded.

 

[travelislife]

The number of entities (and separate exchange listings and shareholding structures) that Air Asia has is mind boggling, and very difficult to understand

I reckon it is done as an easy way to isolate each entity if one goes bust.

And there are numerous political influences in Asia and partnerships with money from various investors which probably makes it easier to have individual entities.

 

[Quickstatus]

I reckon it is done as an easy way to isolate each entity if one goes bust.

And there are numerous political influences in Asia and partnerships with money from various investors which probably makes it easier to have individual entities.

Using subsidiaries/entities while using the name of the bigger company has long been a feature of the airline industry. The multitude of small entities cannot make for a safe industry. I guess thats why the Indonesian government wants each to have >10 aircraft. But is this enough?

What is the critical mass of aircraft numbers that makes for a robust and safe airline? on the other hand rapid growth and lots of airplanes does not either.

 

[Mattg]

The load factors on Air Asia X's flights to Bali have been pretty low.

Here are the loads for the most recent three months where statistics are available. (The first number is the average inbound load and the second is the average outbound load factor for the month.)

March 2016 54%/65%
Feb 2016 53%/47%
Jan 2016 80%/61%

Meanwhile, these were the loads of other airlines flying between Australia and Indonesia in March:
Garuda - 61%/72% (including Jakarta flights)
Air Asia (from PER and DRW) 65%/65%
Jetstar - 78%/81%
Tigerair - 55%/87%
Virgin Aust - 73%/79%

In the busy January period, Jetstar's loads were 91%/73% and in February loads were around 80%.

 

[Quickstatus]

Good to see an Australian airline(subsidiary) doing well against cheaper LCC. Hopefully passengers are discerning the difference between budget vs cheap and nasty.

 

[Boris spatsky]

I reckon it is done as an easy way to isolate each entity if one goes bust.

And there are numerous political influences in Asia and partnerships with money from various investors which probably makes it easier to have individual entities.

It's undoubtedly due to the issue of Air Operator Certificates and country of aircraft registration as well as government route approval. They need separate entities to fly domestic routes. Aviation regulation is a complex beast.

The 10 aircraft rule was implemented in Indonesia IIRC to ensure that airlines flying RPT routes have enough critical mass (crew, training, maintenance staff etc) to ensure a viable entity. Smaller airlines had been operating on scant resources to try and get up and running, which had increased the accident rate. I agree with it - i don't think it is a 'stupid rule' for Indonesia.

 

[Quickstatus]

The 10 aircraft rule was implemented in Indonesia IIRC to ensure that airlines flying RPT routes have enough critical mass (crew, training, maintenance staff etc) to ensure a viable entity.

Boris S, do you think the philosophy behind "x" aircraft rule should be applied to a larger airline which may have less than "x" aircraft in a type?

 

[dajop]

It's undoubtedly due to the issue of Air Operator Certificates and country of aircraft registration as well as government route approval. They need separate entities to fly domestic routes. Aviation regulation is a complex beast..

Air Asia is complicated. But I don't think they need separate entities to fly domestic routes, just separate entities to fly from or within different countries. For example Air Asia Indonesia flies narrow bodies both domestically and internationally (eg to DRW and PER). As does Air Asia Thailand and of course Air Asia (original bases in Malaysia) and then the Air Asia JVs in India, Japan, Philippines.

AirAsiaX Indonesia is a JV between Air Asia Indonesia and Air AsiaX... likewise for Air AsiaX Thailand .... given that Air Asia Indonesia itself flies between Indonesia and Australia I wonder if it is capacity restrictions, operational reasons l, investor needs or other reasons that they maintain separate carrier for wide body operations.

 

[Cool Cat Phil]

Plenty of news articles now confirming Air Asia's demise on this route.

http://m.smh.com.au/business/aviati...ey-and-melbourne-to-bali-20160602-gpahjk.html

http://m.thenewdaily.com.au/life/2016/06/03/air-asia-cancels-bali-flights/

JQ and TT will be pleased.

 

[Boris spatsky]

Boris S, do you think the philosophy behind "x" aircraft rule should be applied to a larger airline which may have less than "x" aircraft in a type?

No, because a larger airline will undoubtedly have a mature check and training department (hopefully) - it's not the number per type as such, rather the total.

 

[Boris spatsky]

Air Asia is complicated. But I don't think they need separate entities to fly domestic routes, just separate entities to fly from or within different countries. For example Air Asia Indonesia flies narrow bodies both domestically and internationally (eg to DRW and PER). As does Air Asia Thailand and of course Air Asia (original bases in Malaysia) and then the Air Asia JVs in India, Japan, Philippines.

AirAsiaX Indonesia is a JV between Air Asia Indonesia and Air AsiaX... likewise for Air AsiaX Thailand .... given that Air Asia Indonesia itself flies between Indonesia and Australia I wonder if it is capacity restrictions, operational reasons l, investor needs or other reasons that they maintain separate carrier for wide body operations.

I think cabotage rules do not allow foreign carriers to operate domestic sectors in most instances. So Air Asia Malaysia couldn't fly to Bangkok then onto coughet (and pick up new pax in Bangkok). Hence why Air Asia Thailand may have been used. As i said, it's complicated!