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Will AirAsia X Succeed at Conquering the US Market?

Will AirAsia X Succeed at Conquering the US Market?

As you probably know, we had the opportunity to speak with Benyamin Ismail, CEO of AirAsia X in a phone interview on May 9, 2017. Mr. Ismail was attending the Aviation Festival Americas in Miami, Florida as a speaker on the topic of Long haul low cost (LHLC).

The focus of our discussion with Benyamin Ismail was about their plan to connect Malaysia to the USA, via low-cost flights using high-density Airbus A330 airplanes.

CEO Profile

Benyamin Ismail
CEO, AirAsia X
Photo Credit: AirAsia X

Mr. Ismail became CEO of AirAsia X in September 2015, after serving the airline in an investor relations leadership role for about seven years. Prior to that, he was an investment banker and dealt with the airline as one of his clients. Probably one of the youngest CEOs in the airline industry, Benyamin Ismail was in charge when the Malaysian airline to its first all-year profits in 2016. The airline has not been profitable since its initial public offering (IPO), which took place in 2013.

Airline Profile

A member of the AirAsia Group, AirAsia X started operations in 2007 and offers long-haul, low-cost flights to 22 destinations across Asia, Australia, New Zealand, Africa and the Middle East. AirAsia X operates a core fleet of 30 high-density Airbus A330-300 airplanes. As of January 2017, the airline has flown more than 19 million passengers. AirAsia X has received several top awards for consecutive years since 2013.

As a post-interview update, AirAsia X reported respectively a 22% rise in revenue and a 94% drop in net profits for the first quarter of 2017 compared to the same period last year.

Long haul flights to the USA

Now the young, confident and ambitious CEO is actively preparing AirAsia X on a quest to conquer the US market.

In addition to securing their air service approval from the US Department of Transportation (DOT), Mr. Ismail told us that their upcoming flights to Hawaii have already been sold out for the first six months of service. An exploit, which indicates that their prospect customers are highly interested in flying this new route of AirAsia X.

Mr. Ismail justified their choice of the Hawaiian by the fact that the highly touristic destination was underserved mainly from Southeast Asia. Therefore, their flights originating from Kuala Lumpur will connect Honolulu via Japan.

Profitability and Customer Service

Profitability Prospect

As far as profitability is concerned, the Asian carrier is counting on their high-density aircraft and low-cost model to keep units costs significantly low. And at the same time, they will be tapping an origin-destination (OD) market, which is keen on flying to Hawaii and that can afford to pay a reasonable fare for the journey.

Stance on Customer Service

When asked about his brand of customer service, Benyamin Ismail responded reassuringly that ‘’the customer is always right’’ is his own mantra, which he ensures his staff and public-facing employees recognize and live by. He also acknowledged the fact that it is difficult to please everyone, but at least they would always do everything possible to serve their customers well.

Future plans and Summary

Looking Forward

In addition to initiating flights to Hawaii, Mr. Ismail shared briefly on their future plans. For instance, they would like at some point to service the West Coast of the USA and possibly reach the East Coast in a distant future. AirAsia X would also like to serve destinations in Europe, an important one being London.

Post Interview Update: as of June 18, 2017, Mr. Tony Fernandes, Founder and CEO of the AirAsia Group revealed in a series of tweets that the Malaysian airline will no longer pursue its plans to serve the West Coast of the USA and Europe. They will rather focus on the Asian Market. [

Summary

It was a very pleasant, warm and informative experience for Airline Profits magazine to have CEO Benyamin Ismail as a special guest, just a few hours after he landed in Miami, Florida for the Aviation Festival Americas 2017 to share on their plan to serve the US market with long haul low cost (LHLC) flights.

Click on the following link to access our full interview with Benyamin Ismail.

 

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Kofi Sonokpon

Kofi Sonokpon

Managing Editor of Airline Profits, the first aviation magazine devoted to improving airline effectiveness and profitability, Kofi Sonokpon has more than 20 years of international experience in aviation. Kofi holds an IATA sponsored Master of Business Administration (MBA) in Air Transport Management from the John Molson School of Business at Concordia University in Montreal. Kofi Sonokpon is also an author and speaker on the topics of leadership, effectiveness, and profitability.