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Friday January 13, 2012

Escalating costs force AirAsia X to halt flights to Europe and Mumbai

KUALA LUMPUR: AirAsia X will stop flying to London, Paris and Mumbai from its Kuala Lumpur hub soon.

Four weekly services to Mumbai will be suspended, with the last flight on Jan 31.

The six weekly services to London will be stopped, with the last flight on March 31, as well as the four weekly services to Paris, with the last flight on March 30.

Daily services to New Delhi will be suspended, with flights reduced to four weekly services beginning March.

AirAsia X will offer those with bookings after the last flight dates an alternative travel option at no additional cost and all affected guests will receive an e-mail stating their alternative options, including full refunds, reroutes to other AirAsia X destinations, or a move to an alternative carrier where available.

It was reported in December that AirAsia X was losing as much as RM20mil on its London route and could stop flights to London, Paris, Delhi and Mumbai as early as next month over concerns, including profitability.

AirAsia X chief executive officer Azran Osman Rani said the changes were to improve operating cost efficiency and consolidate its network to focus on markets where it could build a leadership position this year.

He added that continued high jet fuel prices, the weakening demand for air travel from Europe due to the current economic situation and exorbitant government taxes had placed cost pressures on those operating long-haul low-cost flights between Asia and Europe.

He also said the implementation of the Emissions Trading Scheme and escalating Air Passenger Duty taxes in Britain had forced their decision to withdraw services to Europe.

“As for Delhi and Mumbai, the continued visa restrictions for travel between India and Malaysia and the increase in airport and handling charges have resulted in a structure not conducive to the low-cost model,” Azran said.

In Sepang, Transport Minister Datuk Seri Kong Cho Ha said the Government would not interfere with AirAsia X's decision to discontinue some international routes.

He added that termination of flights to certain destinations was “nothing new”.

Kong said the airlines industry was very dynamic and cutting routes could be part of their business strategy when the routes were not profitable.

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