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Indonesia AirAsia X will cease flights to both Melbourne and Sydney from Denpasar, Bali on September 1.
The airline explained in a statement that: “The suspension of these services is part of a network restructuring aimed at improving operational efficiencies at Indonesia AirAsia X.”
Given Indonesia AirAsia X’s only other international destination is currently Jeddah, Saudi Arabia, which the airline serves on an occasional basis, the announcement raises questions about the long-haul low-cost carrier’s future.
A joint-venture between Malaysia-based AirAsia X and Indonesia AirAsia, Indonesia AirAsia X operates just two single-class 377-seat Airbus A330-300s. It continues to make losses but its financial performance did improve in the first quarter of this year.
“Indonesia AirAsia X’s net loss for 1Q16 narrowed by half to USD4.6 million from USD9.4 million in the same period last year as overall operations improved,” Kamarudin Meranun, group CEO of AirAsia X, said in a statement on May 24 detailing AirAsia X’s first quarter results for 2016.
“However, Indonesia’s operational environment remains challenging due to restrictions imposed by Indonesian regulators,” he said.
“Moving forward, we remain [focussed on] exploring strategic initiatives to sustain our earnings momentum for sustainable growth in Malaysia and Thailand,” Meranun explained, referring to AirAsia X’s Malaysian and Thai operations, “while we re-evaluate the operation in Indonesia.”
Indonesia AirAsia X began flying to Melbourne in March 2015 and to Sydney in October 2015. The launch of flights to Melbourne was delayed by several months while the airline awaited CASA approval of its Foreign Aircraft Air Operator’s Certificate.
Passengers booked after September 1 on the airline’s five times weekly services to both Sydney and Melbourne are being offered full refunds, an airline credit or the opportunity to fly to Bali via Kuala Lumpur.
Tigerair Australia was quick to offer affected Melbourne-Bali AirAsia X passengers “a 20 per cent discount on any fare currently available on the Tigerair Australia website … provided they can show proof of their AirAsia itinerary”.
Garuda and Qantas-owned Jetstar also operate between Melbourne and Denpasar, while Virgin Australia, Jetstar and Garuda all operate between Sydney and Denpasar.
Gail Gavin
says:I had a surprise 60th booked from the 23rd December to 7th jan 2017. I am devastated and hope to get a full refund for all of our party but am having trouble getting in contact with air asia. Would appreciate any info as to what to do next.
Jarred
says:You need to earn more than you spend.
or
You need to spend less that you earn.
so
You or any company can stay in business.
inherentchoice
says:Is any other airline going to increase their capacity on these routes to Bali after September?
jcook
says:While I am a regular flyer on Air Asia x and Air Asia Malaysia or Air Asia Thai , I will not Fly on Air Asia x Indonesia or Air Asia Indonesia . Nor will I fly on any Aircraft registered in Indonesia . More recently ,ABC did an expose` on Indonesian Airline Safety and I expect this has had an effect on Air Asia X Indonesia bookings .
Vannus
says:They’re obviously having ‘financial difficulties’!
Good luck getting a refund…….
Cutting flight routes’ is usually the first sign of an airline’s demise.