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AirAsia plans to expand fleet as China leads demand surge

05/26/2016| 7:24:07 PM|

Southeast Asia’s biggest LCC plans to add more planes, seeking to increase flights, destinations to tap growth in China

AirAsia, Southeast Asia’s biggest budget carrier, plans to expand its fleet as it taps demand in a region projected to surpass the U.S. as the world’s biggest air-travel market in two decades, led by China.

The airline is looking to add five aircraft this year and as many as 10 more in 2017 “depending on demand,” Chairman Kamarudin Meranun said in an interview in Kuala Lumpur Wednesday. The company is also planning to increase the number of destinations in China from 18 and frequency of its flights in the world’s second-biggest economy, he said.

“We see the strongest growth in China,” he said. AirAsia, which is scheduled to release its quarterly earnings later on Thursday, currently has about 170 aircraft in its fleet.

AirAsia is among airlines in the region adding more aircraft as economic growth and rising incomes make air travel affordable to more people. Last month, Xiamen Airlines, a unit of China Southern Airlines, ordered 10 single-aisle jets worth about $851 million from Boeing Co., while the U.S. planemaker and its European rival Airbus Group SE split a $9.9 billion order for wide-body jetliners from China Eastern Airlines.

International visitor demand into the Asia Pacific region is forecast to grow at an average rate of 4.6 percent each year to more than 657 million by 2020, according to a report released last month by Pacific Asia Travel Association. 

Southeast Asia will continue with its dramatic increase in foreign arrivals, improving its relative share from just under 20 percent in 2015 to around 22.5 percent by 2020, when it will rival the share of the Americas at that time, the report said. By 2034, one in five passengers in the world will be traveling to, from, or within China, according to the International Air Transport Association.

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TAGS: AirAsia | China | LCC
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