AirAsia X of Malaysia is taking a gamble on a barely tested business model by buying 25 brand new wide-bodied airplanes worth US$3.5 billion.
The carrier placed the bet on Nov 2 when it took off for its maiden flight from Kuala Lumpur International Airport to Gold Coast, Australia, that marked the beginning of Southeast Asia’s first long-distance budget carrier service.
AirAsia X took to the skies just 15 months after the idea of setting a long-haul no-frills service was first floated.
Industry critics are now watching to see whether long-haul no-frills flights will succeed in the market, as perceived by AirAsia X’s investors, including Virgin Group and AirAsia, the region’s largest low-cost carrier (LCC). Senior executives of AirAsia acknowledge that AirAsia X is indeed a gamble, albeit a calculated one with potential to win.