As analysts point to an initial public offering as early as next month, the Malaysia-based carrier has become the first foreign low-cost carrier to fly to China.
It's planning the first in December ¨C flying daily from
Kunming in south-western Yunnan province to Bangkok, group chief executive officer Tony Fernandes said.
The next stops may be Haikou, Guangzhou,
Chengdu and
Chongqing to and from Kota Kinabalu and Penang where there is a big demand for routes to southern China, he said.
There are a lot of airports in China that need us, that would love us. We will go where we are wanted, where we can provide a low fare, he said on the sidelines of the annual meeting hosted by the World Economic Forum in Beijing.
AirAsia would not be flying to
Beijing and
Shanghai for now as they have no airports that cater to no-frills airlines.
According to reports, the single-trip fare for
Kunming to Bangkok is likely to be priced around US$20, based on its Macau-Bangkok flights launched in July.
AirAsia's coup seems to have come from a change of heart at the China Civil Aviation Authority.
The aviation regulators had announced in January this year that they would allow budget carriers to fly domestic routes, but these were likely to be from China,
Hong Kong or Macau.
The keeness to look beyond comes in the wake of booming demand for air travel in the world's fastest-growing major economy.
Fernandes's foray is likely to open the floodgates for other South-east Asian budget carriers to get into the China market especially as it's getting a little crowded with new entrants.
In China, people like everything to be five-star, big brand and huge. But there are hundreds of airports that can be developed into low-cost airports, Fernandes told The Straits Times.
The challenge is to educate the Chinese authorities that they don't have to have fancy assets and that there's a huge market here.
But to get that huge market, you have to have low-cost. To have low-cost, you don't need five-star or six-star structures.
China's airports could handle 210 million inbound and 100 million outbound passengers by 2020, according to Civil Aviation Administration of China minister Yang Yuanyuan.
Airports handled 87 million people entering the country and 87.3 million travelling out last year, the administration's 2003 annual report showed.
Also eyeing the China market through a low-cost venture is Virgin Blue. It's said to be taking the
Macau route to enter the mainland.
Virgin Blue is negotiating with Air
Macau and its shareholders to allow it to establish a new low-cost airline next year but it would have to negotiate with Air
Macau to waive its 25-year concession as the only carrier to be based there.
Macau Airport itself would most likely welcome a new airline, as Air
Macau currently operates to only nine of the 31 Chinese destinations for which it holds flying rights.
Qantas, which will launch its low-cost Jetstar model later in the year, has also said that all parties had the stomach to expand the carrier into a major player in Asia, possibly servicing China in the future.
