Malaysia's low-cost airline AirAsia Friday launched a new long-haul budget airline named AirAsia X, which will begin flying to destinations in China, India and Europe in July.
AirAsia X will be a collaboration between AirAsia, owned by Tony Fernandes, and Fly Asian Express (FAX), a small airline serving rural routes in Malaysia.
"The launch of AirAsia X will bring independence to the long haul low-cost traveller by providing a choice of service for their long haul travel requirements," Fernandes said at the launch.
The airline has received approval to fly to several destinations in Europe, China, India and Australia, he said.
Raja Mohamad Azmi Raja Razali, chief executive officer of FAX, signed a memorandum of understanding with AirAsia, sealing a cooperation that allows AirAsia to franchise its brand to FAX.
AirAsia X currently remains under the management of FAX. However, talks are underway for AirAsia to take up to a 30 percent stake in the new airline, said AirAsia chairman Pahamin Rajab.
The first flight from Kuala Lumpur to Europe is scheduled for July, with the cheapest ticket fare going at 9.99 ringgit ($2.7) one-way. Wider and more spacious seats will also be made available at premium prices.
The airline is in the midst of discussions with Boeing and Airbus to decide which aircraft will be used.
AirAsia X will begin operations with three planes, but has plans to increase its fleet to 20 within the first year of operations, Fernandes said.
AirAsia X is scheduled to start putting its tickets for sale at the end of February on AirAsia's online booking website. The company is targeting 500,000 passengers in its first year of operations, said Fernandes.
Food, drinks and inflight entertainment would be offered on the flights on request and on payment.
Fernandes also acknowledged that talks were underway between AirAsia, Virgin and EasyJet to form the world's first low-cost global network.
"Many ideas and thoughts are being exchanged. The timing for a world-class (budget airline) network is not very far away," he said.
AirAsia has about 50 jets now, and has committed to buy 100 Airbus 320 planes as part of a fleet expansion. It expects passenger volume to hit 18 million in 2007, from 10 million in 2006.