Budget carrier AirAsia X to pull out of India, Europe

Asia's largest budget carrier AirAsia X said on Thursday that it is pulling out of India and Europe due to higher fuel prices, weakening demand and structural restrictions. CEO of AirAsia's long-haul affiliate, AirAsia X, Azran Osman-Rani said in a statement that the airline would withdraw services to Mumbai of India at the end of this month and abandon routes to New Delhi, London and Paris on March 22, 31 and 30 respectively. The Malaysia-based airline started flights to London in March 2009 and Mumbai and New Delhi in 2010. "The continued high jet fuel prices and the weakening demand for air travel from Europe, brought about by the current economic situation together with exorbitant government taxes, have placed cost pressures on operating long-haul low cost flights between Asia and Europe, compromising our ability to offer the low fares AirAsia X is known for," Azran said. The airline also blamed the implementation of the European Union emissions trading scheme and the escalating air passenger duty taxes in the United Kingdom, which would be hiked again in April as reasons that the airline is pulling out of London and Paris. The EU emissions trading scheme was launched in 2005 that requires large emitters of carbon dioxide like airline companies to pay an amount of emission allowances equivalent to their carbon dioxide emissions to the government each year. Azran said the airline is leaving New Delhi and Mumbai-bound routes due to the continued visa restrictions for travel and the increase in airport and handling charges but added that the services would be reinstated once if the "structural issues" are solved. He said that the airline would concentrate on profitable routes in Asia and Australasia. "We intend to concentrate capacity in our core markets of Australasia, China, China's Taiwan, Japan and South Korea where we have built up stable, profitable routes within an infrastructure that supports low cost services," Azran said. "These changes will improve operating cost efficiencies and consolidate its network to focus on markets where it can build a leadership position in 2012," he said, indicating that the expansion plans would be made known at a later date. AirAsia's announcement came a month later after Malaysia Airline suspended flights seven cities including Cape Town, Johannesburg and Buenos Aires to curb losses.