First, let’s get acquainted with Air Asia X. You probably have heard of the wildly successful Air Asia. It has been growing its ultra low cost carrier operation throughout Southeast Asia using a fleet of Airbus narrowbodies. It also is working on a joint venture in Japan to start an operation there, and it recently announced its start-up plans for its subsidiary in the Philippines. The focus is generally on shorter haul flights within the region, using a model similar to what Ryanair has done so well in Europe.

But a few years ago, Air Asia decided to start Air Asia X, an airline that would use A330s to fly longer distances. Long haul, low cost airlines have been far from successful. In fact, excluding what may have been the original low cost carrier, Icelandair, there have been just about no successes in this arena.

Air Asia X, however, thought it could make things work, and it has grown rapidly. Here’s a route map I put together using the always awesome Great Circle Mapper.

As you can see, most routes focus on the Asia/Pacific region. I realize that’s a large region, but as Qantas will tell you, the fortunes of Asia and Australia are all tied together. Meanwhile, everything to the west except for that one flight to Tehran is going away.

I think we’re looking at two different reasons for what’s occurring here. The Indian market is a complete disaster right now. There’s too much capacity, too many unhealthy airlines, and a simply brutal competitive environment as a result. I don’t care how low your costs are – that is not a place you want to participate at the moment. On top of that, the CEO cited rising airport costs and visa restrictions on Malaysians (it was served from Kuala Lumpur) as another strike against the market.

It’s no surprise that Air Asia X walked away from those cities, but I would bet that we’ll end up seeing them back in that market eventually. It’s just too big, and it will again be a healthy market, even if it takes a decade.

Then there’s Europe. Europe is not an easy place for any long haul airline to survive. Taxes are high (yes, I’m especially looking at you, United Kingdom), and they’re getting higher with the introduction of the carbon trading system this year.

In addition, Europe is further away than most other spots on the Air Asia X map. That means fuel costs are high and climbing. With costs high, the only way to make a living is to keep revenues even higher. But there is a lot of service between Europe and Asia already, so the competitive environment has already suppressed fares, similar to what we see over the North Atlantic in non-summer months.

A roundtrip from Kuala Lumpur to London on random dates in September starts at $1100 in coach on a full service airline going nonstop. Meanwhile, it’s 1,000 miles less from Kuala Lumpur to Christchurch, no other airline flies it nonstop, and the prices start around $1250 on a full service airline with a connection. That’s the kind of market that’s much easier to stimulate and still get a good fare to cover costs.

Even a market like Taipei is better. That market has nonstops from three airlines with Malaysia starting at $500. But EVA and China Airlines publish fares over $1,000 and it’s less than a third the distance of going from Kuala Lumpur to London. That’s also not a terrible market for stimulation.

Europe is just tough for long haul, and I think Air Asia X shows real guts for simply pulling out. Many other airlines would just keep flying the route for pride reasons. There shouldn’t be any place for that, and Air Asia X gets it.

So we’ll continue to see Air Asia X grow with medium haul routes in the region, but I wouldn’t expect to see any successful efforts to go truly long haul at any time in the near future.

For those who aren’t familiar, Air Asia is the monster of the low cost carrier world in Southeast Asia. They started out with a couple used 737s, but they’ve now grown into a behemoth. They should be flying 100 airplanes by the end of this year, most of which are A320s. They have plenty more on order as well, effectively trying to turn themselves into the Asian version of Ryanair (though, funny enough, unlike Ryanair, with European-built airplanes). They’ve also recently started Air Asia X for long haul low cost flying with A330s. (Strange fact: Air Asia X inexplicably sponsors the Oakland Raiders despite a) them not flying anywhere on this continent and b) the Raiders absolutely sucking.)

Jetstar has taken a different path. They are a very rare specimen – a successful low cost airline within an airline. They are a part of Qantas and are about half the size of Air Asia in terms of fleet. They have a bunch of A320s buzzing around Australia, and they added long haul flying on A330s. They’ve grown their Jetstar Asia (and Jetstar Pacific in Vietnam) product in the same region as Air Asia, but they don’t actually overlap that much.

Jetstar started the consolidation party by merging with Valuair a few years back. You’ll still see Valuair flying airplanes but the branding is Jetstar these days. Now, Jetstar is getting together with Air Asia, but it’s not like you think.

This alliance is supposedly all about cost savings. They’re going to get together to try to build purchasing power for fuel, ground handling, airplanes, and more. The airplane piece is particularly interesting in that they’re really going to try to push the development of the successor to the 737 and A320 airplanes. They want the next generation so they can drive down costs.

There are some really good points in a blog post over at Plane Talking covering the announcement. Air Asia is really focused on driving down costs – lower costs means they can lower fares and stimulate travel. They’re gonna make money on volume. And it’s been working for them so far.

This does put an abrupt end to the rumors swirling about Air Asia and Virgin Blue coming together to create an ultra low cost carrier in Australia. That’s probably a good thing. There’s already a blood bath in that country, so they don’t need any more rock bottom fares.

All eyes are now on Tiger Airways, the biggest competitor in the region. Tiger not only flies around Southeast Asia, but they opened up an Australian division as well. They don’t appear to be making money on that, and this is likely to put more pressure on them. If Air Asia and Jetstar can lower costs and fares, that can’t be good for Tiger.

Now, will this spill over into a customer-facing alliance? I don’t see why it wouldn’t some day. Though Qantas has done a good job with Jetstar, why not join forces with Air Asia and let the leader in the space run your low cost carrier? Keep a stake and watch your fortunes rise. But for now, there’s nothing to announce on that front. We’ll see how long it takes.

So YOU wanna be a pilot? Simple. What do you have to do? Blog. What? Thats [sic] it? Yes, you’re reading it right. Blog.

Scary thought, right? I mean, this seems like a very strange way to find someone to command an airplane full of dozens of people. To be fair, it’s not really as bad as it sounds. The winners of this contest just get their foot in the door for an interview. I assume at that point, something like decent flying skills will actually be required. But I can’t imagine that something this gimmicky is good for public perception of the airline.

What really gets me is the poorly-edited, low sound quality video they’ve included to promote the contest:

What’s the first reason the man with the sun glasses who appears to fly for the airline likes being a pilot? “Because of the girls.” The second reason? “’cause of the bling-bling and because of the money.” I know it’s a joke (sort of), and I’m sure this kind of talk could go on behind the scenes at any airline, but come on, Air Asia. You have passengers watching this video, and that hardly gives off an aura of competency.

The good news is that there are some rules behind this competition, but of course those are buried in the fine print. Yes, you actually do have to meet minimum standards as set by the government of Malaysia and you must have received decent grades in school. And like I said, this just gets you in the door for an interview. So it’s not really as bad as it looks, but it sure does look bad.

Heck, I might fit in with these clowns myself. I’d be tempted to give it a shot except for one slight problem. You have to be proficient in Bahasa Malaysia. And according to the comments, it seems like you have to be a Malaysian national. Well, so much for that.

[Thanks to Bangalore Aviation for the tip]

I see something like that and I have to wonder if an airline in the US could do this. Technically? Maybe. Practically? No chance in hell. If a US airline wanted to take a stab at it, it would have to be completely privately funded with no federal money being used for operations. A US airline would also have to find a place where there’s a big population base and land is affordable. Bzzt. Try again. Even then I’m not sure if this would be allowed under anti-trust rules.

Back in the day, Boeing, United Air Lines, and Burbank Airport were all part of the same company. The government broke that one up, but I’m not sure whether that would still happen today. Anyone know the rules on this? Could an airline actually build their own airport in the US is they so choose?

Rumors had been flying all week that Virgin Atlantic, easyJet, and Air Asia had been plotting a massive alliance for long haul low cost flights. While Virgin and easyJet have denied involvement for now, Air Asia’s plans are now coming out. Here they are . . .

It may not look like much, but it’s exactly what they’re doing. Let me break it down. Malaysia regional carrier FlyAsianXpress (FAX) will fly long haul international low cost flights. Instead of using the FAX name, they will try to capitalize on Air Asia’s strong brand in southeast Asia and operate as Air Asia X.

How is this going to happen? Well, conveniently, Tony Fernandes, owner of Air Asia, also owns half of FAX. So, he’s effectively taken this tiny regional airline and used its certificate to gain long haul route authorities from the Malaysian government.

Where exactly are they going to fly? It’s unclear right now. One article says that Malaysia’s Transport Ministry has given rights to FAX to fly to destinations that “do not include international flights currently handled by Malaysia Airlines.” There are other sources, however, that say that first flights will be to London and China. Malaysia Airlines flies twice daily to London/Heathrow, so maybe they’re going to let FAX fly to London/Gatwick to avoid direct competition. Another article says the official statement includes China, India, and Europe.

No matter what, this airline is guaranteed to bring some seriously low fares to these routes. Yet another article says fares could be as low as RM9.99 to London. That’s just shy of USD3, so I can’t imagine that’s real, but they will be lower than you can get anywhere else right now.

The strange thing is that FAX appears to be considering either 777-300ER or A330-300 aircraft in two class configuration. Those aircraft are hardly in the same class. A 777-300ER can hold around 451 that layout while an A330-300 will hold near 335. Those are pretty big differences and I don’t understand why they would be using those two in their consideration set.