AirAsia shies away from Australian domestic market

Kuala Lumpur
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Malaysia-based low-cost carrier AirAsia is unlikely to go into the domestic Australian market, as it chooses to focus on growth in southeast Asia.

The airline had previously raised the possibility of entering the domestic market in Australia, as Australia-based Virgin Blue increasingly moves away from its low-cost roots. Qantas' low-cost subsidiary Jetstar and Tiger Airways Australia are the other two low-cost players in the market.

However, AirAsia group CEO Tony Fernandes indicates that the airline does not plan to enter the competition in Australia anytime soon.

"It makes more sense to run an airline here in southeast Asia, and that's where we will stay for now," he says.

Referring to Singapore-based Tiger Airways' operations in Australia, Fernandes says: "They have something in Australia which is eight hours away [from Singapore] and now they are doing something in Thailand. It just says 'catastrophe'."

Tiger recently unveiled plans to launch a Bangkok-based joint venture carrier with Thai Airways International, which will begin operations next year.