News
Indonesia AirAsia X to cease scheduled operations in 2019
November 30th 2018
Indonesia AirAsia X, the long-haul unit of Indonesia AirAsia, this week announced that the airline will become a non-scheduled carrier in early 2019, citing challenging market conditions. Read More »
"With the challenging operating environment in Indonesia, primarily due to the series of natural disasters that occurred in proximity to Bali, the company is underway to evaluate the available options for our Indonesian associate to ensure sustainability of the company," AirAsia X CEO, Nadda Buranasiri confirmed this week. He added that the airline's last scheduled flight from Denpasar to Tokyo Narita would end in January.
Indonesia AirAsia X has already returned its fleet of eight A320ceo to parent Indonesia AirAsia, leaving the airline with just a pair of A330-300s, which are on lease from Aviator Capital and KDAC Aircraft Leasing.
Under Indonesian law, non-scheduled carriers are required to maintain a fleet of at least three aircraft, of which at least one must be owned.
Indonesia AirAsia X has never been profitable. There have been frequent management and strategy changes at the carrier.
Earlier this year, then CEO of the airline, Pak Dendy Kurniawan, told Orient Aviation: "We have two A330-300s that can fly 10 to 11 hours. We use them on Bali-Narita (Tokyo) direct flights, which take 7:20 hours. They are underutilized."
To address this issue, IAAX opened Jakarta-Narita on May 1, which it terminated again in October. The carrier had previously cancelled its Sydney and Melbourne services in favour of higher yielding North Asia destinations, but retained Bali-Perth with A320s.
“Our Malaysian brothers still fly to Melbourne and Sydney. We believe it is more strategic to let them do the job and fly more tourists from Australia to Bali via Kuala Lumpur,” Pak Dendy said in June. “We will look at returning to Australia, maybe when we have four, five or six wide bodies.” Obviously those additional aircraft will stay with mainline AirAsia in Malaysia now.
Competition in Indonesia is intense and consolidation is much needed. Last week, Garuda Indonesia Group announced that it would be taking management and financial control of struggling Sriwijaya Air Group, although Garuda itself is hardly in good financial standing.
