29 November 2014
|Long Haul Low Cost (LHCC) Malaysian carrier AirAsia X Bhd becomes the first airline to blink as it feel the heat on the robust Australian market after its rival in the Philippines, Cebu Pacific enters the fray opening direct flights from Sydney to Manila.|
And the results has been abysmal for the Malaysian carrier who relies on connection feeds from its hub in Kuala Lumpur, including those coming from the Philippines.
The shifting passenger preference to direct flights offered by low cost carrier competitor Cebu Pacific led the airline to freeze capacity expansion and cut flights to Australia next year beginning with a reduction of one daily flight out of Sydney.
The airline currently flies up to twice daily, from Sydney, Melbourne, Perth, and daily from Adelaide and the Gold Coast to Kuala Lumpur.
Cebu Pacific started flying to Sydney in October amidst the already difficult position of AirAsia X to the region racking up net losses of US$108 million for the first nine months of 2014.
AirAsia X has joined Philippine Airlines in tempering its growth projections selling two A330-300 for delivery in 2015 and deferring others.
The airline has revised its capacity projections for next year with planned plane deliveries of six aircraft instead of eight next year, distributed to Thailand and Indonesian subsidiaries. Both subsidiary will also receive four instead of eight A330 in 2016 and five A330 instead of eight in 2017.
Earlier, Jetstar Airways abandons Manila from its hub in Darwin due to poor sales and stiff competition with Philippine Airlines.