Malaysia launches new long-haul budget airline, AirAsia X

Malaysian aviation tycoon Tony Fernandes has launched a new long-haul budget airline named AirAsia X, which will start flying to destinations in China, India and Europe in July, a statement said Friday.

AirAsia X will be a collaboration between AirAsia, the region's biggest low-cost carrier, and Fly Asian Express, or FAX, a small airline serving rural routes in Malaysia.

Fernandes is the majority owner of Fly Asian Express Sdn. Bhd. with a 50 percent stake. He is also the brain behind AirAsia, which he bought as a bankrupted company in 2001 and turned it into the most profitable and biggest low-cost carrier in Asia. He is one of the main shareholders in the airline.

"FAX signed an MOU (memorandum of understanding) with AirAsia which allows AirAsia to franchise its brand to FAX," said a joint statement.

"AirAsia X's network will cover destinations which are more than four hours in flight duration from Kuala Lumpur, offering daily point-to-point frequencies to popular destinations in China, India and Europe," it said.

The statement said AirAsia X will also tie-up with low cost carrier partners at destinations in order to increase connectivity and route network.

AirAsia X is finalizing its requirement and aircraft under consideration include the Boeing 777-300ER and Airbus 330-300, the statement said.

"AirAsia X will offer an innovative product-offering, ensuring passengers will enjoy a level of comfort and convenience suited for long-haul travel," the statement quoted Fernandes as saying without elaborating.

Other details were expected to emerge at a news conference scheduled to be addressed later Friday by Fernandes and the ministers of tourism and transport.

On Thursday, unlisted Fly Asia Express was given permission by the Malaysian government to fly undisclosed routes in Asia, Australia and Europe. The airline currently operates turboprop planes in rural Malaysia, and started operating in August when AirAsia subcontracted its rural air rights to the new airline, which operates Fokker 50s and Twin Otters services in eastern Malaysia.

AirAsia has about 40 jets now, and has committed to buy 100 Airbus 320 planes as part of a fleet expansion.

AirAsia expects passenger volume to hit 18 million in 2007, from 10 million in 2006.