
AirAsia X (D7) will suspend services to the UK and France from March 31, citing the European Union Emissions Trading Scheme (EU ETS) (ATW Daily News, Dec. 22, 2011) and escalating air passenger duty taxes (ATW Daily News, Sept. 1, 2010).
The Malaysia-based airline serves London Gatwick six times a week and Paris Orly four times a week. D7 will also suspend its four weekly services to Mumbai and daily New Delhi service. The changes are part of a restructure to move operations from loss-making routes to focus on more profitable regional routes.
D7 CEO Azran Osman-Rani said the carrier remains focused on maintaining its global leadership position in the low-cost, long-haul segment.
“The implementation of the Emissions Trading Scheme and the escalating air passenger duty taxes in UK, which will rise yet again in April 2012, have forced our decision to withdraw our services to Europe,” Azran said.
“We intend to concentrate capacity in our core markets of Australasia, China, Taiwan, Japan and Korea where we have built up stable, profitable routes within an infrastructure that supports low-cost services. We intend to open up new routes within these markets, as well as add frequencies on existing routes. Announcements of our future expansion plans will be made soon.”
One of those new routes will be Kuala Lumpur to Sydney.
According to Azran, the continued high jet fuel prices and the weakening demand for air travel from Europe—brought about by the current economic situation and “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.”
Regarding India, Azran said that “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. The airline is hopeful in reinstating services to India once these structural issues can be resolved.”
Discuss this news 18
Isn't it about time the EU
By TiggerIsn't it about time the EU and especially the UK government woke up to the fact that these ludicrous taxes are stifling the economy.
How about some non-stops to
By Warren GHow about some non-stops to KL from North America?
There will be many more
By Anonymous 2There will be many more announcements like this I suspect as the intra-airline trading of available carbon credits is used up.... only then will the real effects of ETS come to light. I predict massively spiralling costs, and substantial cutting of 'less valuable' routes as credits become a rarer commodity like slots at LHR. Only the most profitable airlines are likely to survive in the long run and the rest will be swallowed up - probably resulting in a total reversal of the planned benefits of Open Skies agreements.
well the ... EU asked for it
By TJwell the ... EU asked for it ! there are and should be better ways to fill up the empty tills of the EU I guess....
Nothing like it Europeans just go at it !!!!!
That's what I call killing
By RayThat's what I call killing one of the geese that lays the golden egg. For the Britsh travelling public they will be left at the mercy of very high ticket prices as the other airlines will be left with no choice but to pass these costs on to the travelling public.
I just flew AAX and the load
By KumarI just flew AAX and the load factor was pretty good. They were running near full flights. If they cannot make profits even then, it is the government which is to blame for these exorbitant taxes on long haul flights. AAX is going in right direction in stopping the flights as the UK govt. introduces slab based taxes w.e.f 01/04/2012. The new taxes penalises only long haul flights and thus causing hardships for people like me to take transit flights which will work out cheaper.
Air Asia does not have
By 747/777 TechAir Asia does not have aircraft capable of non-stop North America to KL flights.
This shows again that a long
By andreas w. schulzThis shows again that a long haul LCC operation is operating with paper thin margins too. Every change in that balance, like rocketing fuel, ETS or other taxes makes the total operation unprofitabel. Asia / Pacific is a better operation for Air Asia X. Especially Europe in a highly competititve environment (incl. the Gulf carriers, etc.) and tons of additional taxes makes life for this kind of LCC operation not easy.
MY perception is that in
By AdriaMY perception is that in Europe the intercontinental traffic is dominated by the majors, BA-IB, AF-KL, LH so it is extremely difficult to gain any market share, as it was proved with the experiences in the hot market between US and Europe... not ready yet for low cost international..
The EU isn't blinkered: the
By Frank BowronThe EU isn't blinkered: the taxation policy is deliberately designed to reduce air travel - as part of the mad scheme to prevent climate change. The Neanderthals failed to adapt to the changes in their environment and became extinct. Homo Sapiens adapted to the changes and survived. How much longer we can survive is questionable.
Air Asia X was not that
By ruudAir Asia X was not that attractive anyway when you shopped around at the full service airlines. They are slaughtered by Emirates which invents the long haul hub-spoke system, from Europe to Australasia and Africa, combined with low capital costs, efficient airliners, cheap personnel, fuel (?). They are the true low cost airline....
Tigger, its not only the UK
By TJTigger, its not only the UK govt. but the Germans as well....come to think of it all Europeans are trying their best to fill up their empty pockets right now. how sad though, for all the one time Mighty Europeans !
Maybe KUL-ANC..... LOL
By AnonymousMaybe KUL-ANC..... LOL
Carbon emission tax is so
By ThomasCarbon emission tax is so low, it can't be the reason. Also, all airlines pay, giving no advantage to D7's competitors. The Europe-Asia sector is simply very competitive and long-haul low cost offers few economies. D7 prices were higher than EK and others - for an inferior product. KL is also not a very polular destination, making me question the rational for theses services in the first place. No, the carbon tax is just a great tag line to end an ill defined experiment. But I am sure D7 will do well short haul.
Watch this space, today is
By David ConnollyWatch this space, today is Friday January 13th and France has just lost its AAA credit rating and the EU is going on with its ETS BS ? This is a wedge at the core of the Eurozone, leaving Germany alone. Don’t worry, the EC’s EU ETS will fizzle out as a damp squib, like all Euro Wank. China in general and its flag flyer-literally-Air China in particular have decided to get on with business and simply ignore this latest EU parasite, mascurading as a virus. The EU, needless to say is as always talking through its derriere, it has to, as it has no tactical balls, nor strategic brains and is very especially needy of attention to affirm its irrelevance, when the working world is too lethargic-after working-to be apathetic to care.
I’m scheduled on CAO 1042 tomorrow, Saturday 14th, EDDF-ZBAA, I’ll get the latest then. The world, like Air Asia X, need not be concerned, simply, don’t pay, and wait for the EC to give up/surrender, as usual and then impose a time-wasting Muppet Tax of €1 on all ex-EU flight on April 1 2012.
EU taxes don't apply to
By ted the europeanEU taxes don't apply to services their to India.
I hope the EC leaders - Ms
By AnonymousI hope the EC leaders - Ms Hedegaard particularly - get to read the posts on here, especially the very astute ones from David - who I totally agree with. They need a serious wake-up call before EU gets in an even deeper mess through their arrogant and insitutionalised posturing and mind-numbingly dumb policies. I've been trying to raise awareness in the industry for the past 2 years about the damage ETS will cause, and few people are aware, or even remotely interested, how serious the problem will become. And yes everyone, I am British and living in the EU..
Interesting comments but your
By AnonymousInteresting comments but your use of the English language terrible!
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