AirAsia X chief executive Azran Osman-Rani was in London this week to show off the pioneering long-haul, low-cost carrier’s new flat-bed seats (demonstrated here by Azran himself) onboard one of its Airbus A340s. Azran gave journalists a tour of the new interior at Stansted as the aircraft was being readied for its return flight to Kuala Lumpur. The A340s features 18 of the new seats in its premium cabin (along with 309 economy seats), offering a seat pitch of 60″ and which stretch out to 77″ in full bed mode. The seat, which also features universal power sockets, is part of premium package it offers which it aims to tap into the cost-conscious business traveller and also includes preferred seat assignment, priority boarding and baggage services and onboard meals/drinks. There is no built-in IFE at the seat, though portable players are available for hire. The carrier estimates this comes in at roughly half the cost of traditional legacy carrier business class tickets. “These products have to be very high margin products for legacy carriers,” says Azran, adding he can’t believe the cost of the AirAsia X seats is so different from those of its legacy carriers. “They really have been able to charge a premium.” (Coming soon: I will be posting a video interview with Azran giving more details about the new seat and its strategy shortly)
All but one of the airline’s fleet of A330/A340s are now equipped with the seat, together with a revamped economy class (if you look carefully at my bad photo here on the right you can just about make out the big X pattern the red headrests make).
The long-haul operator continues efforts to develop self-connections among its passengers – around 80% of its Stansted-Kuala Lumpur passengers connect on elsewhere – and has begun trialling an optional “transit faciliation service” under which self-connecting passengers would not have to collect bags to transfer them on to the additional flight (the bags would be tagged separately at the originating airport). It is being tested on flights through to Australia and the airline believes it could be a way to ease the process for self-connecting passengers without adding complications to its own structure. “It [the tickets] would still be two sectors, but we may charge for that [service] and you get your bags through,” Azran explains. It also continues to promote connecting destinations beyond Kuala Lumpur in its advertising, as evidenced by this advert in the London taxi which took us to the Stansted event (there were three in total, all adorned in AirAsia X colours).
AirAsia X has just announced plans for an IPO, probably timed for the second half of next year. Azran says while the original business plan would have been to group together with AirAsia, it is opting to give investors the opportunity to invest in the two different types of business (short-haul and long-haul). “Ultimately we need to raise capital and now the decision is we go for an IPO,” explains Azran. “The only link is at the front end, with the brands and the website. So behind the scenes we will be a lot more separate.” As part of this AirAsia X will take over employment of its own wide-body aircraft pilots, cabin crew and ground staff as well as its commercial and marketing team.
Azran would not be drawn on the possible size of the IPO, but says the timing is linked to market conditions and its own profit development as the listing will be based on its 2010 performance and outlook for 2011. The carrier generated revenues of RM720 million ($225 million) and a net profit of RM87 million in 2009. It hopes to roughly double revenues in 2010 and retain similar net profit margins.