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Malaysian Airline Tycoon Opens New Asian Budget Airline

The Malaysian Airline Tycoon, Tony Fernandes, launched a discount airline, called Air-Asia X, on Friday. The airline will begin flying to destinations in China, India and Europe by July 2007. Air-Asia X is a cooperative venture between Air-Asia, the region`s largest budget airline, and FAX, a small airliner operating within Malaysia. Fernandes owns 50% of FAX and is the sole owner of Air-Asia, which he purchased as a bankrupt company in 2001 and has since turned it into one of the most profitable airline companies in Asia today.

In a statement he issued, Fernandes said Air-Asia X will cooperate with other budget airlines in order to increase coverage. It was also reported that Air-Asia X may purchase Boeing 777-300 and Airbus 330-300 passenger jets. Air-Asia currently owns 40 jets and has already committed to buying 100 Airbus 320s. The company expects passenger volume to reach 18 million in 2007, as apposed to 10 million in 2006. On Wednesday, the Wall Street Journal published a report that the company may double its Airbus A320 fleet to 200 jets in a deal estimated at $6.7 billion.

The Malaysian minister of transport announced in an official statement that the Malaysian government granted FAX authorization to run long distance budget lines to Asia, Australia and Europe. The minister said that the new service will forward Malaysia`s predominant position in the regional budget airline market. A industry source said that Air-Asia has conducted a survey on long distance flights, and found that they were viable. The company intends to offer flights to London and China. Fernandes said there is humongous potential in long-distance discount air-travel.