Virgin Group invests in AirAsia X; first route to Australias Gold Coast
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Southeast Asia,
AirAsia
(CAPA) AirAsia X introduced its newest investor Richard Bransons Virgin Group in Kuala Lumpur on Friday, 10-Aug-07. Virgin will take a 20% stake in the carrier, in a transaction rumoured to be worth USD6.9 million. Virgin has been seeking to establish in Asia for the past two years, and this will be a welcome step for the Group, albeit limited at this stage.
Although talk of synergies and linkages had dominated discussions of the long-rumoured deal, it appears that most of the non-financial benefits will be in the branding/name recognition area. AirAsia founder and CEO, Tony Fernandes, confirms that interface opportunities will – at least in the medium term – be limited.
AirAsia X also announced that the Malaysian Government had awarded it rights to serve London’s Stansted International Airport. This will challenge flag carrier Malaysia Airlines, which has enjoyed a lucrative monopoly on the London (Heathrow) route.
The launch is planned for late-September/early-October 2007. The airline has not been able to secure more than one A330-300, due to the tight leasing market. AirAsia X’s first purchased aircraft will not deliver until Aug-08.
This will slow expansion beyond its first routes (Gold Coast in Queensland, Australia and, probably, Hangzhou in China). Services to India (most likely Amritsar) and Japan or Korea will require a second aircraft. Mr Fernandes says that services to Europe – with London Stansted now almost certain to be the first destination – will not commence until the carrier has received the second of its purchased A330s.
Date posted: 13-Aug-07
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Virgin Group invests in AirAsia X; first route to Australias Gold Coast 
