AirAsia Group Bhd is targeted on expanding in its own backyard, with Vietnam the present priority after Southeast Asia’s largest budget carrier suffered a setback in its push into China.
“We are primarily an Asean airline,” group CEO Tony Fernandes said in a Bloomberg TV interview with Juliette Saly at a conference in Singapore, referring to the Association of Southeast Asian Nations.
“That’s where our sweet spot is. Our next real goal can be to get to Vietnam first.
Establishing the corporate in Vietnam would mean AirAsia would have subsidiaries in five key Southeast Asian markets – including Malaysia, Indonesia, Thailand and the Philippines – helping it strengthen its position within the region.
In August, AirAsia said the preliminary agreement for the enterprise with China Everbright Group and the Henan government signed last 12 months had expired and wouldn’t be prolonged.
“It’s dramatic to say that it has fallen apart, but our relationship with Everbright is still very, very strong and there are many opportunities,” Fernandes said on Friday. “Someone just texted me and said we want to talk to you about China,” he said, without providing further details.
While China is at all times a possibility and continues to be on the forefront of AirAsia, the corporate have to be cautious in its approach to this market, he said.
Other highlights from the interview:
* “High oil levels are not necessarily a bad thing for us,” Fernandes said. “Obviously this will have an impact on our results in the short term, but we are looking good for the fourth quarter and for 2019 we are very pleased with where we are heading.”
* In the case of AirAsia, demand could be very high and the corporate has great ancillary business
* The company is considering combining the Travel360 platform with the Big Loyalty program
* The data revolution is really exciting for AirAsia, which can have the opportunity to profit from the wealthy data it has developed over the past two to a few years
* Collaboration with other carriers will not be the AirAsia model and would complicate the business
* The Kuala Lumpur-London route is a dream and doesn’t make financial sense in the meanwhile; AirAsia X would must change its price significantly to stay competitive, which it didn’t expect to realize.
* “We are in discussions in the meanwhile in regards to the 321, it’s early days, but in the meanwhile we’re still very committed to the 330,” Fernandes said, referring to the Airbus planes. “This will be our primary aircraft for AirAsia X, but we are interested in the 321.”
