AirAsia X Bhd., the long-haul arm of Malaysian budget airline Air Asia Bhd., said the time was not yet ripe to establish operations in the Philippines despite the interest of a local affiliate for them to set up shop in Clark International Airport in Pampanga, a top executive said.
AirAsia X CEO Azran Osman-Rani, who was in the Philippines last week to participate in a business forum, said several hurdles remained for its business model to work in the country, including crucial airport slots and bilateral rights with countries like Japan and Australia.
“Definitely, the market potential in the Philippines is there. But I think one of the key things is going to be access, especially with bilateral rights,” Rani told reporters.
“If we don’t resolve slots and availability, everything else cannot work,” he added.
Rani confirmed that there were internal discussions together with local affiliate Philippines AirAsia for the long-haul carrier to operate in Clark.
“We have submitted a paper to [Philippines Air Asia] but now we just want to have a better understanding [of the issues],” he said, without elaborating.
AirAsia’s Philippine unit recently shifted its focus in the country after formally suspending “temporarily” its struggling operations in Clark International Airport last month.
It will instead focus on supporting AirAsia Zest, formerly Zest Airways, which operates regional and domestic routes and has valuable slots in Ninoy Aquino International Airport in Manila. AirAsia Bhd has a minority stake in AirAsia Zest.
Because AirAsia Zest operates in Manila, it is in a better opportunity to capture traffic as Naia remains the country’s busiest airport because of its location within the capital region. Clark International Airport, being developed as a secondary airport to Naia, is located more than an hour away by land.
“The ability to be very flexible in slots, to create that maximum aircraft utilization, is very important to the success of the long haul model,” Rani said.
Philippines AirAsia vice chair Michael Romero last month told reporters that their strategy in Clark “was not working” and that they were convincing AirAsia X to operate in Clark.
AirAsia X flies to China, Australia, Taiwan, Korea, Japan, Nepal, Jeddah with a fleet of 13 Airbus A330-300s, information on its website showed.
AirAsia Zest operates a fleet of 13 aircraft and currently servicing nine domestic and four international routes. Among domestic carriers, it operates most flights to and from Kalibo which is a gateway to the popular resort island of Boracay.