Bahrain bids for long-haul profits

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What does the ‘X' stand for, then?

I'm afraid I haven't a clue, but I can tell you that AirAsia X aims to fly 10 million passengers a year within five years, and expects to list its shares on the Malaysian stock exchange by 2010.

And how are they getting on?

Well, the airline's first flight (to Australia's Gold Coast) will take place in November this year, so there's still a way to go. However, the Malaysian long-haul budget carrier confirmed last week that it was to sell stakes of 10% each to Japan's Orix Group and Bahrain's Perigon Capital for a total of US$75m.

They need the cash, do they?

The deal, which values the airline at US$375m, is aimed at raising funds for a fleet expansion that will see the airline target Britain, China and Australia as key trunk routes to and from southeast Asia.

So who might Perigon be joining in the boardroom?

AirAsia X is 60%-owned by Aero Ventures, a concern launched by Malaysian entrepreneur Dato' Anthony Francis Fernandes - aka ‘Tony Fernandes'. The airline also counts British billionaire Richard Branson as a shareholder, through his Virgin Group, and Malaysia's AirAsia owns the remaining 20% stake.

And what's in it for Bahrain?

The industry has high hopes for AirAsia X - it is one of the first carriers in the world to tailor a low-cost model to long haul travel, and it is hoped that the airline will fast-track Malaysia into a global low cost travel hub through its operations from the low cost terminal at Kuala Lumpur International Airport. It could be a lucrative gateway into the Asian market for Perigon.

I see. And what exactly constitutes ‘long haul'?

AirAsia X's network focus covers destinations that are more than four hours in flight duration from Kuala Lumpur, offering daily point-to-point frequencies to popular destinations in China, India and Europe.

Are they Airbus or Boeing boys?

In May, AirAsia X confirmed that it had ordered 15 Airbus A330-300 aircraft, five more than had been originally planned. The aircraft are scheduled for delivery from the fourth quarter of 2008, and the carrier has said that it will make a decision on whether to buy a further 10 A330-300 aircraft by end of 2007. AirAsia X will also take charge of two leased Airbus A340s by December next year.

What's the benefit of the AirAsia brand?

AirAsia has progressively launched value added services into its flight options. It became the first airline in Malaysia to offer the ability to check-in online and print out boarding passes, and a new ‘Xpress Boarding' scheme has been launched to enable passengers to get priority boarding with nominal fees. On AirAsia X flights, passengers are also given a choice of purchasing extra baggage spaces, meals, comfort kit, and seat number.

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