Tuesday, 30 September 2014

This Is A Real Low Cost Carrier

AirAsia X is the king of low costs

AirAsia X has the lowest unit costs in the industry. It is the only airline in the world with CASK below USD4 cents.

This is aided by AirAsia X operating longer average stage lengths (about 5,000km) than other LCCs. AirAsia X’s shortest route is three and a half hours.

Other players in the medium/long-haul segment are not publicly traded or do not provide separate figures for narrowbody and widebody operations. But AirAsia X primarily competes against Asian full service carriers which have unit costs that are two to four times higher. AirAsia X is the only LCC on all 22 of its routes – although it does compete against other LCC groups on several connecting city pairs.

AirAsia X’s costs inched up in 2Q2014 due primarily to higher fuel prices. But cost controls and productivity improvements have resulted in lower staff, sales and marketing costs. The group expects lower CASK in 2H2014.

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