Malaysian no-frills carrier AirAsia is to triple its Boeing 737-300 fleet to 21 aircraft over the next two years to provide capacity for its growing domestic network that will focus on point-to-point services.

AirAsia has six 737-300s in service with a seventh due from Tombo Leasing next month that will be used on services to new destinations in East Malaysia that are popular with tourists, says AirAsia chief executive Tony Fernandes. Seven more -300s will arrive this year, and seven are planned for 2004. Three of the 2003 deliveries will be purchased and four leased, while all next year's batch will be leased. Fernandes will be squeezing suppliers hard: "We price aggressively," he says.

Aircraft will be financed with the proceeds from the 20% stake in the airline being sold to investors. AirAsia had a profitable second half of 2002, which is expected to make the sale popular.

Larger 737s are unlikely to join AirAsia. "We will stick to the 737-300s unless we get a really great deal on -400s," says Fernandes. However, he expects to add current model 737s in the long-term.

AirAsia will focus more on point-to-point services as its fleet grows and over the year it fills the last gaps in its network, including Penang and Johore Bharu, which will be pitched as the island state's low-fare gateway.


Source: Flight International