Malaysian long haul carrier Air Asia X has planned to scrap its unprofitable routes to Europe and India. The carrier that is planning to list itself in the near future independently from its low cost pioneer parent Air Asia, is ceasing operations to Mumbai from January 2012, while services to New Delhi, London and Paris will cease in March 2012.
The airline is citing weak European economy/reduced demand, continued high fuel prices and high airport and government taxes including 1 Jan 2012 carbon tax as the reasons for discontinuation of its services.
London and Paris were the only European destinations that the low carrier was flying and this effectively puts an end to its ambitions to fly to those sectors unless the current European crisis subsides or a decision is taken with regards to the EU carbon tax.
The airline plans to focus back on its core strengths in Australasia,China, Taiwan, Japan and Korea and also introduce new routes in these sectors to build up on its strength with taking on current long haul services from Jetstar and soon to be launched Singapore Airlines subsidiary Scoot.
With regards to India, the airlines strategy was flawed right from the start, In markets like India where low-cost carriers also use agents and travel sites to sell their capacity, Air Asia tried to go solo and bombed big time with poor load factors. The airline tried to tackle the market with its usual strategy but forgot that the Indian markets are not the usual low cost markets with the typical low cost facilities and hence suffered from high airport costs and fuel charges.
The airline plans to continue operating its remaining routes in India but with Indian airlines also moving in these sectors it remains to be seen how does it plan to tackle them.
Australian national carrier Qantas has cancelled ALL its flights until further notice. This kind of reaction to a union strike is unprecedented and has effectively led to grounding of the entire fleet. The airline advises its customers that “customers booked on Qantas flights should not go to the airport until further notice and should contact their local Qantas office for further assistance”. Qantas Link and Jetstar flights would continue to operate as normal.
This brings the Qantas management head-on with the striking unions which have been striking in demand for better wages. With this the battle is now out in open and it can be expected that the Government of Australia may step in soon to mediate between the workers and the management and will definitely cause huge losses both monetary and reputation wise for the airline which has been in talks with the unions for the last 15 months.
In the meanwhile the airline is offering a full refund to any passenger who chooses to cancel their flight because it has been directly affected by the grounding of the fleet or avail Full re-booking flexibility for those who wish to defer their travel but given the current scenario where the suspensions are indefinite i really doubt how the re-booking would work. Also the airline will be providing assistance with accommodation and alternative flights, as well as other support to passengers who are mid-journey.
Meanwhile another Australian carrier Virgin Australia has started offering “Stranded Passenger” fare for Qantas travelers which can be availed by passengers “currently at a port away from home and hold a Qantas ticket to return home initially within the next 5 days” More details are awaited about this fare and the airline intends to keep updating the same on its website http://www.virginaustralia.com/
Virgin Australia is in talks with its alliance partners which include Etihad, Air New Zealand and Singapore Airlines to find out if they can help add extra flights “as soon as possible”.
Qantas seems to be really having a tough days ahead of it and it really needs to work its way through all this to get back in action and win its customers back.
Phillipine Airlines announced that it will be reducing the number of selected domestic and international flights for a limited period as the flag carrier prepares for the transfer of its catering, ground handling and call center reservations units to third party service providers on October 1, 2011.
It has disclosed that the number of domestic flights would be temporarily reduced by about 30 percent while international flights would be cut provisionally by 12 percent. The international destinations to be affected by the flight frequency reduction are Hong Kong, Bangkok, New Delhi, Macau, Singapore, Los Angeles, Vancouver, Guam, Sydney, Melbourne and Incheon (from Cebu).
The airline plans to refund the money for people travelling on the affected flights by setting up special counters in Manila or through the respective Travel Agents. In my opinion this move is not going to go down well with the affected people, given that the airline is losing its market share to the Low Cost Carriers like Cebu Pacific and Qantas subsidiary Jetstar and to other full service rivals like Singapore Airlines, such moves will trigger further exodus of passengers.
No doubt that the outsourcing will help the troubled carrier cut down on costs but better planning and mangement for such a move would have really helped. The press release by the airline can be found here.