AirAsia X outlines growth strategy

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AirAsia X has outlined its growth strategy for the coming years as it takes its first step towards an initial public offering.

In a prospectus issued last week, the carrier said it intends to have twice daily services on the majority of its 12 existing routes. These core routes are to major cities such as Tokyo and Taipei where the large population and existing market of travellers will absorb the increased capacity. A consistent load factor of above 80% on these routes also signals strong demand, it added.

The Malaysian low-cost long-haul carrier is also looking at expanding into new routes within existing markets. These include to Adelaide in Australia, Nagoya and Fukuoka in Japan, Busan in Korea and Chongqing and Xian in China.

"We believe that expanding into new routes within existing markets will allow us to be more effective in marketing and efficient in operations given our established track record in these markets," said the carrier.

In the medium term, AirAsia X has plans for new hubs outside Malaysia. Examples include Indonesia, Thailand, Japan and the Philippines, where it can leverage on the existing presence of the AirAsia group that will provide it with "additional feeder traffic".

Prospective hub airports will need to be in a marketable location, have an established short-haul feeder network and have cargo operations.

The carrier also intends to grow its fleet to 32 aircraft by 2016. It now operates a fleet of nine Airbus A330-300s and has 18 -300s and 10 Airbus A350-900s on order.