AirAsia will soon have to compete with a new Malaysia-based low cost carrier, MYAirline, which plans to begin commercial operations by the end of this year, Nikkei Asia reported recently.
AirAsia is currently the region’s leading budget airline, but MYAirline CEO Rayner Teo suggested his company could have the edge by selling cheaper airfares, better real-time customer support and punctual flights.
“We believe we can easily offer cheaper flights based on cost structure,” Teo, also the carrier’s co-founder, was quoted as saying.
MYAirline has also hired former top AirAsia executives, which could give the carrier some crucial insights into the highly competitive budget aviation industry.
Among them is Kathleen Tan, MYAirline’s chief executive adviser. Nikkei Asia reported that Tan logged 13 years working for AirAsia founder Tan Sri Tony Fernandes.
Then there is cabin operations manager Izwan Razak, who was on AirAsia’s payroll for 17 years.
Teo also worked at the airline for 15 years until July 2019, leaving as group head of sales, the Japanese business paper reported.
MYAirline has received a licence to operate from the Malaysian Aviation Commission, the paper reported.
The carrier had described its business model as “ultra low cost”.
The fleet will start out small, with just three secondhand Airbus A320s, but the company said it aims to increase its fleet size to 50 within the next five years.
“We have signed some attractive deals with very large lessors,” Teo was quoted as saying.
But Nikkei Asia also reported analysts noting that it will be an uphill task for the industry newcomer to dislodge more established carriers like AirAsia and Malaysia Airlines.
“The airline is being marketed as an ultra-low-cost carrier, which is an interesting concept as AirAsia’s average cost per seat is one of the lowest in the industry and hard to beat,” Shukor Yusof of Endau Analytics was quoted as saying.