Ma'Salaamah, says Air Asia X to Abu Dhabi

It’s all very well that Air Asia X conveniently blames the disastrous adventure into Abu Dhabi and the feet of the equally disastrous airplane in the Airbus A340, but the fact of the matter remains that the long haul, low cost market is years away from maturity.

Air Asia X’s pull-out was always on the cards. It didn’t have the minerals to take on Emirates in Dubai, so it opted to create a hub in Abu Dhabi. It dropped plans for a hub not long afterwards and now has dropped the stop-off point altogether.

Equally, with incumbent carrier, Etihad Airways, at Abu Dhabi airport, there was no way on God’s Green Earth that the Emirati’s would let a sub-class carrier enter their playground to divert traffic from their growing base.

While consumers have indeed become more astute about how their income is spent on air travel, in the Middle East at least, where traffic volumes have grown and yields have not declined as much as the Europe or Asia, customers still insist on paying a little bit extra for quality service – there isn’t an Arab carrier that doesn’t have class or prestige.

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This exit, while painful for Air Asia X, serves as a timely reminder that while chasing volume for keeping seat costs down may look attractive, it doesn’t address the fixed costs of operating an anaemic service to a competitive region like the GCC, nor does it generate revenue.

If Ryanair or Southwest Airlines haven’t made the leap to long haul, low cost, just what did Air Asia X delude itself with in thinking it could work on a bigger scale?

Frankly, it’s not important – what is important is that the exercise was a complete and utter failure. And a costly one at that.

As the old adage goes, better luck next time – except in this case, there won’t be a resumption of services anytime soon thankfully.

This column was written by FBE Aerospace chief analyst Saj Ahmad.