No AirAsia Australia subsidiary for now despite Tiger woes

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Low-cost carrier AirAsia is still studying a potential subsidiary in Australia, but the recent woes of grounded Tiger Airways Australia will not accelerate a potential move into the Australian market.

"Regarding AirAsia Australia, it remains a possibility although not in the short term," said Azran Osman Rani, chief executive of AirAsia's long-haul associate carrier AirAsia X.

Last year, Osman Rani disclosed AirAsia was monitoring the emerging shift of Virgin Blue, since rebranded as Virgin Australia, which is foregoing the leisure market for a greater share of the corporate market. Such a move could reduce competition and pave the way for a new entrant.

Australia and New Zealand are unique in being the only countries in the world to permit majority foreign-owned domestic airlines. Such carriers, however, are prohibited from operating international services.

The Australian market has seen a short-term capacity reduction as a result of the Civil Aviation Safety Authority (CASA) grounding Tiger Airways Australia over safety concerns. CASA has applied to Australia's Federal Court to extend Tiger's grounding until 1 August. The court is to hear the case on 22 July.

CASA's grounding followed two incidents of Tiger breaching minimum safe altitudes while on approach to land. The airline was issued a show cause notice by CASA in March.

AirAsia X was involved in two minimum safe altitude incidents last year at Queensland's Gold Coast airport, which the Australian Transport Safety Bureau is still investigating and due to complete this year.

Osman Rani said CASA audited AirAsia X's operations and renewed the carrier's air operator's certificate.

"They also acknowledged that the approaches into OOL [Gold Coast] are challenging," Osman Rani said.

AirAsia X has addressed that by including specific modules for Gold Coast approaches in its flight simulator programmes. This enhancement to its operations is on top of its recurrent training that is regularly conducted with its pilots.

Although Osman Rani did not directly compare AirAsia's operations with Tiger Airways Australia, the grounded carrier uses a shared training facility in Melbourne, according to Tiger director of operations Tim Berry in his testimony to a senate inquiry on pilot training and aviation safety.