Indonesia AirAsia Extra will enter the competitive Australia-South East Asia market with Bali-Melbourne as the low-cost carrier’s inaugural route.
The newest affiliate of the AirAsia X group of airlines will launch with five times a week service between the Victorian capital and popular Indonesian tourist spot with Airbus A330-300 aircraft from December 26 2014.
The carrier will be the second AirAsia X group airline to operate to Tullamarine, with Malaysia-based AirAsia X offering twice daily services from Melbourne to Kuala Lumpur.
AirAsia X chief executive Azran Osman-Rani, who launched the inaugural route in Melbourne on Monday, said Indonesia AirAsia Extra would boost capacity on the route by 28 per cent and give the the airline a 22 per cent market share in terms of total seats on Melbourne-Bali.
“Melbourne has been one of our most successful markets with our current service to Kuala Lumpur and this is an important advancement in our multi-hub strategy,” Osman-Rani said in a statement.
“We have a great partnership with Melbourne Airport and have much confidence in the opportunities here.”
Jetstar, Virgin Australia and Garuda Indonesia currently operate from Melbourne to Bali’s Ngurah Rai International Airport.
Indonesia AirAsia Extra’s entry comes at a time where the market is still absorbing the extra capacity from Australia to South East Asia, with most carriers from the region, including AirAsia X, posting operating losses in 2014.
“Southeast Asia has become an intently competitive market, forcing AirAsia X to cut fares as it rapidly added capacity,” CAPA – Centre for Aviation said in a research note dated September 25.
“While market conditions should improve at least slightly some competitors are likely to continue to respond aggressively.”
Indonesia AirAsia Extra is the third affiliate for the long-haul low-cost airline group, which concentrates on flights of more than four hours, following the launch of Malaysia AirAsia X in 2007 and Thailand AirAsia X in June 2014.
All operate Airbus A330-300 aircraft with 12 premium flat-bed seats and 365 economy seats.
AirAsia X is a separate company from the AirAsia group of airlines, which fly narrowbody A320 aircraft on short-haul routes from operating bases in Malaysia, Indonesia, Thailand, Japan, the Philippines and India.