A planned restructuring of Malaysia Airlines has been welcomed by the boss of low-cost rival AirAsia, saying the changes should be good for his business.
Chief executive Tony Fernandes, who founded AirAsia with just two aircraft in 2001, also dismissed concerns that airlines in the region are expanding too rapidly, saying he was “not very worried” about the rate at which carriers are adding to their fleets, the Financial Times reported.
Fernandes cited the proposed $1.9 billion turnaround of MAS following the mysterious disappearance of one of its aircraft in March and the shooting down of another in July -and evidence of fare rises at state-owned airlines Thai Airways and Garuda Indonesia – as signs of more market discipline.
“I think the competitive landscape is a much better environment than it was,” he told the FT.
“With Malaysia Airlines rationalising, with the Thai political situation better, with the Indonesian political situation getting better, it’s a good a time for me. Government owned airlines are now being made to be profitable and rational.”
AirAsia has expanded into Indonesia, the Philippines, Thailand and India, as the group capitalises on the ability of a growing middle class to afford air travel for the first time. It is also trying for the second time to launch a joint venture in Japan.
Some analysts question whether airlines including AirAsia and Lion Air, the Indonesian low-cost carrier, are expanding too fast.
But Fernandes insisted concerns were overblown.
“I would say one or two airlines have over ordered but, you know, the market has a strange way of solving it by people cancelling orders,” he said.
“Lion Air has cancelled its 787s, for instance, we’ve delayed some [Airbus A320] deliveries. So I’m not worried about capacity because people have to make money eventually.”
He admitted he was “behind the curve” in India, where an AirAsia joint venture with Tata group launched services in June.
“But I still have an opportunity to be number two or number three and in a market of 1 billion people [in India] and that’s fantastic,” said Fernandes, also chairman of Premier League football club Queens Park Rangers.