Tony Fernandes: “No one has really done a low-cost hub” — AirAsia plans to create a low-cost version of Dubai-style hub in KL & Bangkok

MALAYSIA: AirAsia plans to create a low-cost hub in Bangkok and Kuala Lumpur while replicating the success of global transit centres like Dubai and Qatar.

According to Bloomberg, founder Tony Fernandes said the move, which will be the first time in the world, will connect passengers through Bangkok and Kuala Lumpur airports to destinations served by AirAsia and its long-haul arm, AirAsia X.

He added that the airline’s focus is on flights lasting between 1.5 and 6 hours.

Mr Fernandes said, “Bangkok has kind of a hub, Singapore obviously has, but these are premium hubs. No one has really done a low-cost hub.”

AirAsia faced major challenges during the Covid pandemic, including restructuring debt, cutting jobs, and returning planes to lessors.

Its parent company, Capital A Bhd., dropped plans to go public through a blank-check firm, choosing instead to merge with its sister unit AirAsia X and reduce its share capital by $1.4 billion to exit the Malaysian stock exchange’s financial distress list.

At the 22nd Forbes Global CEO Conference in Bangkok, Mr Fernandes said he predicts a full recovery for AirAsia by next year and called 2026 a potential “golden year.”

He added that geopolitical factors have benefited AirAsia, as more travellers are choosing to fly within Asia instead of heading to the US or Europe.

“We had five years of hell. But we’re back, and we’re looking to grow,” he said.

Part of the airline’s recovery plan includes rehiring employees. AirAsia has brought back all 2,600 workers it let go during the pandemic, raising its workforce to 23,000.

In addition to the new hubs, AirAsia plans to expand its presence in secondary cities. Mr Fernandes mentioned flights from Chiang Mai to China as an example.

The airline also recently entered the African market, with AirAsia X launching its first flights to the continent last week.

Mr Fernandes said that despite global supply chain issues and jet shortages affecting airlines, AirAsia currently has enough planes to support its growth.

He also noted that the second-hand market provides sufficient capacity if needed. /TISG

Read also: “The root cause is coming from the supply chain”— Supply chain challenges strain Asia’s airlines

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