Air Asia X A330-300. By Rob Finlayson

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 [on] 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.”