Xcintillating PhoeniX: The X Factor at AirAsia X

Whether long haul low cost operations were viable was an open question for many years. Without many of the benefits available to LCCs on short haul routes widebody flights over long distances appeared far more challenging. This was proven by the failure of start-ups like Oasis Hong Kong, however when Jetstar started long haul services in 2006 it was the beginning of a change, which is rapidly overtaking Asian airline ops. By 2015 we have Jetstar, Scoot, NokScoot, Cebu Pacific but most of all there is AirAsia X and its affiliates in Indonesia and Thailand.

AirAsia X was formed in 2007 as a joint venture between several parties including AirAsia's Tony Fernandes and the Virgin Group. Initial operations began connecting Kuala Lumpur with the Gold Coast in Australia on September 15, 2007. Long haul routes were begun to Europe (Paris and London) with other expansion in India, Australia and closer to home in Asia. The airline has exceptionally low costs however in January 2012 it changed its focus by withdrawing ultra-long haul flights to Europe and New Zealand (the latter Christchurch service was only a year old). This was due to high fuel prices and weak demand but was symptomatic of limitations with the low cost long haul model. On longer flights the non-flexible costs are increased and the airline's ability to stimulate demand was also reduced by high fuel prices.

This contraction of long distance flying has however allowed AirAsia X to refocus on medium haul routes and become the dominant low cost widebody airline in the world. In 2013 it also took over from full service Asian airlines like Cathay Pacific and Malaysia as the fourth largest foreign airline operating into Australia. 

The airline has shown impressive skill at keeping its costs low whilst gaining excellent fleet flexibility. It has also pioneered the low cost network carrier model with over 50% of its traffic now connecting to other AirAsia X or Air Asia flights. Passenger traffic has grown likewise with an increase of 23% in 2013 alone. Not only this but like its sister AirAsia cross-border joint ventures have become a way to grow itself and it now has sister airlines in Thai AirAsia X and Indonesia AirAsia X. On the more negative side the airline has not been profitable three out of the past four years (2011, 2013, 2014) as it pursued growth and dealt with high oil prices.

As fuel makes up about 50% of the airline's costs recent falls in oil prices should benefit the airline. As of late 2014 the airline's biggest markets were Australia (36.5%) and China (21.6%) though Japan, South Korea and Taiwan all had significant shares between 12 and 9.5%. China in particular is likely to be a major growth spot in the near term.

AirAsia X's commitment to growth is shown by its fleet. It started operations with the excellent A330-300 but also added two ex Air Canada A340-300s in 2009 for its long haul routes. The A340s have recently been returned to their lessors and the A330 fleet had grown to 23 A330s by September 2014. Not only that but it has 37 A330-300s and 10 A350-900s on order and is to be the launch customer for the new A330-900 for which it has 55 aircraft on order!

9M-XXT is an A330 delivered in August 2014 in a special colour scheme called the Xcintillating PhoeniX which was a result of a public competition. The winner received a free flight to visit the Airbus headquarters in Toulouse. She is an impressive looking aircraft and represents well AirAsia X's startling rise to challenge the full service airlines in the Asia region.