Long Haul Low Cost The Time has

Come

Presentation by :Suresh NairGeneral ManagerIndia, Sri Lanka & BangladeshAirAsia BerhadAviation Show MENASA 2016@The Address 22Nov 2016

First Long Haul Low Cost CarrierLaker Airways- SKYTRAIN

The Beginning!

• 1966 Freddie Laker Launches Laker Airways

• 1973 Laker Airways Operated its first Advance Booking Charter ( ABC) Flight

• 1977 First daily Laker Airways SKYTRAIN Low Fare Schedule Service between London Gatwick and JFK with an incredibly low fare of £ 32.50 in winter and £ 37.50 in Summer

1983 People Express NYC to Gatwick US$ 149

Fast Forward to 2005 Oasis Hong Kong Launches Hong Kong- Gatwick

Tony launches AirAsia X in 2007

AirAsia X Spreads its Wings!

• Introduces the first serious Long Haul Low Cost Product with A330-300 on Kuala Lumpur-Gold Coast Australia Route

• Fast Expansion seen with the addition of 19 Destinations across Asia and Australia

• Fleet Size of 29 A330-300’s• Carried over 15 Million Guests since its start of

operations in 2007

• 2011 JetStar launches Singapore-Melbourne and Singapore-Auckland

• 2012 Singapore Airlines launches Scoot to compete with AirAsia X

• 2013 Norwegian Air Shuttle launches Long Haul Services and Expands in the European and Transatlantic market

• 2014 AirAsia X expands with the addition of Thai AirAsia X with launch of Bangkok-Seoul and Bangkok- Osaka/Narita flights

• 2015 Scoot expands launching Nok Scoot in Thailand

• 2015 AirAsia X launches Indonesia AirAsia X with flights Bali-Taipei

• Middle Eastern carriers like Fly Dubai looking at long haul routes with start of Dubai-Bangkok

• Thai AirAsia X has launched Bangkok-Muscat and Tehran with AirAsia X also operating KL Tehran

• AirAsia X reaches out to Africa with the launch of Kuala Lumpur - Mauritius

FSCs in the Low Cost Arena

• Carriers like Air Canada- Rouge and Lufthansa- Eurowings testing the low cost long haul market

• Air France-KLM may enter the low cost long haul market to compete with French Blue and Norweigen

LCC/LCC Group operating scheduled routes of at least 7,000km: ranked by length of longest route

Rank Lcc/Lcc Group Longest Route Distance Outbound Block Time

Inbound Block Time

Aircraft Type

1 Eurowings Cologne-Phuket 9386Km 11:50 12:30 A330-200

2 Norwegian Copenhagen-Los Angeles

9024Km 10:40 11:20 787-8

3 Jetstar Airways Melbourne-Honolulu

8871Km 10:05 10:55 787-8

4 Air Canada Rouge

Toronto-Athens 8122Km 9:40 9:50 767-300ER

5 Azul Sau Paulo Campinas-Lisbon

7921Km 9:55 10:35 A330-200

6 Cebu Pacific Manila-Riyadh 7775Km 10:15 9:50 A330-300

7 WestJet Vancouver-London Gatwick

7617Km 9:30 10:00 767-300ER

8 Scoot Singapore-Jeddah 7355Km 9:00 9:25 787-8

9 Jin Air Seoul-Honolulu 7350Km 9:00 9:45 777-200ER

Challenges to Long Haul Low Cost

• Long Haul flights involve higher cost of operations

• Quick turnaround of Aircraft not feasible on Long flights

• Highly fuel efficient Aircraft required for profitable operation of long haul routes

• Point to Point traffic to fill up the big capacity not available on many routes

• Inflight entertainment and Catering needs is required on flights more than five hours

• Crew layover and rotation is additional cost

• Identification of strategic routes for long haul low cost operations is key to success

Advantage Long Haul Low Cost

• Lower oil prices offer a major plus to the long haul low cost airlines

• New fuel efficient aircraft are also congenial to growth of long haul LCCs

• Thru connectivity to the network now being offered by long haul LCCs

• High density cabins with more seats offer a lower price advantage per seat

Long Haul LCC Routes in MENA

• High demand routes – Riyadh/ Dammam to Manila and Jakarta

• Middle Eastern points to Kathmandu, Nepal• Offering long haul low cost connections from

Chinese cities via the Middle East to African destinations