AirAsia X To Suspend Services To Europe, Parts Of India

Kuala Lumpur: AirAsia Bhd.'s (5099.KU) long-haul associate AirAsia X said Thursday it will terminate routes to Europe and parts of India, citing high jet fuel prices and weakening demand for air travel.
The budget airline's move comes after AirAsia Bhd., Southeast Asia's largest budget airline by fleet size, said it has been struggling with rising fuel costs, which has also impacted Malaysia's flag carrier Malaysian Airline System Bhd. (3786.KU).
"The continued high jet fuel prices and the weakening demand for air travel from Europe, brought about by the current economic situation together with exorbitant government taxes, have placed cost pressures on operating long-haul low-cost flights between Asia and Europe, compromising our ability to offer the low fares AirAsia X is known for," AirAsia X Chief Executive Azran Osman-Rani said.
The implementation of an emissions trading program and escalating passenger duty taxes in the U.K., which will rise again in April 2012, "has forced our decision to withdraw our services to Europe," he said.
"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," he said. The airline will look to re-instate these routes "once these structural issues can be resolved."
12/01/12 Ankur Relia/Dow Jones/Capital.gr

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Categories: Foreign Jan 2012