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AirAsia Plans to Expand Fleet

June 21, 2004|From Associated Press

KUALA LUMPUR, Malaysia — Malaysian budget airline AirAsia plans to buy up to 80 aircraft, increasing its fleet more than fourfold as it spreads its wings across the region, the carrier's chief executive said Sunday in a news report.

The company probably would acquire the planes over the next four to eight years from either Airbus or Boeing Co., Tony Fernandes told the New Sunday Times newspaper.

AirAsia currently operates 17 Boeing 737-300 jets, but a bigger fleet will help the company reach its goal of becoming "a dominant low-fare airline in Asia," Fernandes was quoted as saying.

The mammoth order -- likely to be among the largest placed in the region this year -- highlights the rapid growth of no-frills air travel in Asia.

AirAsia spokeswoman Jeamie Lee confirmed the comments Sunday, adding that the airline hopes to sign a contract for new purchases by the end of this year.

Fernandes reportedly said AirAsia is focused on developing its existing routes in Malaysia, Indonesia and Thailand, but will consider new destinations in the future when it has more planes.

"Right now, we're short of aircraft," he was quoted as saying by the Sunday Star newspaper. "We could do so much more if we had more aircraft, so we're busily looking for more."

AirAsia carried 1.8 million passengers last year. Fernandes has said he expects the figure to double to 4 million this year, and reach 6 million in 2005.

Fernandes stressed that the Kuala Lumpur-based company's regional expansion would not be hampered by an unexplained delay in its efforts to win landing approvals from the government in neighboring Singapore.

"I don't think we are wanted in Singapore," Fernandes was quoted as saying. "If Singapore doesn't want us there, that's fine. There are many other countries that want AirAsia, and they will benefit from AirAsia."

AirAsia serves Johor Baru, the Malaysian city immediately north of the city-state, but has been unable to secure landing rights for Singapore's Changi Airport.

Singapore ministers have said they welcome the development of the low-cost air travel industry, and are also determined to preserve Changi's role as one of Southeast Asia's busiest airports.

One Singapore low-cost carrier, Valuair, started flights from Changi in May, and two more -- one backed by flag-carrier Singapore Airlines and another by Australia's Qantas Airways -- are set to start flying by year-end.

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