Air Asia Rules Out Hong Kong Flight

[george]

AirAsia rules out HK flight

SEPANG, MALAYSIA: -- Budget carrier AirAsia will not fly to Hong Kong because of high landing costs, the company's chief said, and warned that the airport there risks losing out to rival hubs unless it sheds its ``arrogant'' attitude and welcomes low-cost airlines like his.

Malaysia-based AirAsia Bhd, the region's biggest no-frills airline by fleet size, also remains years away from operating in India, but plans to launch flights to Cambodia, Laos and Vietnam by mid-2006, chief executive Tony Fernandes said in an interview with the Associated Press on Tuesday.

Air Asia currently has routes covering Malaysia, Indonesia, the Philippines, Thailand and Macau, Hong Kong's neighbour. Its joint venture with Thailand's Shin Corp, Thai AirAsia, began flying between Bangkok and Xiamen, China, last year, making it the first foreign low-cost carrier to fly to mainland China.

AirAsia's discussions to gain an entry into Hong Kong ended abruptly last year. Its talks with Hong Kong Airport Authority resumed last month but apparently ended in a deadlock.

Fernandes said AirAsia's chances of flying to Hong Kong are ``zero right now.''

``I don't think they're serious,'' he said. ``They're not doing anything, they're not trying to understand what we want,'' Fernandes said, adding that Hong Kong's airport demands ground handling service fees that are ``many, many more times'' what AirAsia pays in Macau.

He declined to provide specific figures.

The Hong Kong Airport Authority, responding to Fernandes' comments, yesterday denied that it discriminates against budget airlines, stressing that its airport charges are ``transparent and equitable to all.''

Seven carriers that operate low-fare flights currently use the Hong Kong airport, the authority said in a statement, adding that it would ``continue to work with all potential business partners, be they full service carriers or low-fare airlines.''

Fernandes said the airport's refusal to lower costs was ``typical of an arrogant, old-fashioned airport,'' and accused its top management of acting like an ``old colonial.''

Fernandes said AirAsia is asking for reduced rates because its planes spend relatively little time on the tarmac thanks to quicker turnarounds. The airline is also willing to operate during off-peak hours and use parking bays and check-in counters that are less popular.

Meanwhile, airports in Macau and mainland China, which are a short ferry ride away from Hong Kong, are ``hungry for business'' and eager to embrace budget carriers, Fernandes said.

``The competition around them is waking up real fast,'' he said. ``You miss the boat and your competitors catch up.''

While the airline plans to expand routes in Southeast Asia, it will stay away from India, a massive market that has seen a proliferation of budget carriers despite lack of infrastructure, Fernandes said. ``We're not ready (but) we will be one day.''

Fernandes confirmed AirAsia will receive its first Airbus A320 planes in December, adding that they would probably be used initially for routes on Malaysia's eastern states on Borneo island.

The airline, which plans to phase out its current fleet of Boeing 737-300s over the next five years, signed a purchase order for 60 Airbus aircraft last March.

--AP 2005-08-11

[pnustedt]

I used Orient Thai - HK to BKK ret. last week. In HK they use the gate furthest away from check-in, which is not really a hassle. However, in Bkk you are dropped on the runway and catch a bus to the terminal.

Return flight you catch a bus from a gate downstairs in Term. 2 which is pretty awful and the bus stopped on the runway for 45 minutes while they got the plane ready - the terminal was full! Most people were standing (luckily I got a seat).

I certainly wouldn't want to lug suitcases to/from Macau or Mainland China from HK for a flight.