On November 10, 2019, AirAsia X launched double daily flights between Kuala Lumpur and Singapore.
These flights operate, as revealed in AirAsia Group’s filing with Bursa Malaysia today, as part of a profit sharing agreement between AirAsia and AirAsia X.
AirAsia X’s Profit Sharing Agreement with AirAsia
AirAsia X’s newest – and, at just one hour, the shortest – route between Kuala Lumpur and Singapore was made possibly thanks to a transfer of two slot pairs from its sister airline, AirAsia.
Considering that, contrary to popular belief, AirAsia Group (the owner of AirAsia) and AirAsia X are two separate companies, both listed on the Malaysian stock exchange, the former needed to get something in return for the slots.
That “something” is a 50% share of net operating profit that AirAsia X will make on the route.
The agreement is initially in effect for one year during which the companies believe it will generate 2,420,853 Malaysian ringgit (about 584,000 US dollars) in profit on what is already AirAsia’s most profitable route.
According to AirAsia X’s announcement, the new agreement will help its aircraft utilization since:
Allocated aircraft time for KUL-SIN-KUL schedule are between 08:00 am to 16:00 pm of which the aircraft will be on ground and can’t be used to operate long haul routes.
In addition to that, the company also believes offering an AirAsia X flight from Singapore will help increase the number of passengers connecting to AirAsia X’s destinations in China, India, Japan, and South Korea among others.
AirAsia, on the other hand, will be benefit from being able to offer more seats on what is the busiest international air route in the world.
More specifically, the capacity on the two daily rotations will more than double from the 180 seats of AirAsia’s A320 to the 377 seats of the AirAsia X’s A330. In addition to that, passengers will also be able to choose to fly in Premium Flatbed, AirAsia X’s version of business class.
AirAsia X Kuala Lumpur – Singapore Schedule
AirAsia X will operate one of the rotations between Kuala Lumpur (KUL) and Singapore (SIN) in the morning and the other in the early afternoon.
The morning rotation will operate with the following schedule:
- D7672 / KUL – SIN / 8:00AM – 9:05AM
- D7673 / SIN – KUL / 10:05AM – 11:10AM
The afternoon rotation will operate with the following schedule:
- D7678 / KUL – SIN / 12:40PM – 1:40PM
- D7679 / SIN – KUL / 2:40PM – 3:45PM
So far, it seems like one airframe will do both of the Singapore rotations in between an early morning arrival from and a late evening departure to China.
Being the busiest international air route in the world, AirAsia X will face plenty of competition on the new route. In addition to AirAsia and AirAsia X, the Kuala Lumpur – Singapore route is also served by:
- Other local low-cost airlines like Scoot and Malindo Air
- The flag carriers Malaysia Airlines and Singapore Airlines which recently signed a revenue sharing agreement for flights between the two countries
- Foreign carriers like Ethiopian and Air Mauritius that have fifth freedom rights to carry passengers between the two airports
Summary
Considering that increasing frequency on the route is likely not an option for AirAsia, utilizing AirAsia X’s larger, underutilized aircraft and splitting the profits sounds like a worthwhile experiment.
In fact, I wouldn’t be surprised if the two airlines explored more such partnerships in the future.
As for passengers, the economy class seats on the A330 are likely a bit less comfortable than those on the A320 as they are narrower. At the same time, though, those willing to pay up will now have the option of flying in business class.
While the seat itself won’t make much difference since the flight time rarely exceeds one hour, with the added benefits of luggage allowance and a meal, it might be worth the price difference for some people. Especially so since in some cases, the difference is as low as 50 dollars.
