AirAsia X’s return to Australia to help push international airfares down

Travel to parts of Asia, including Malaysia and Japan, may soon become more affordable as low-cost carrier AirAsia X restarts its Australian routes.

This week, AirAsia X resumed its direct services from Kuala Lumpur to Melbourne and Perth following a pandemic pause, and has also brought back its KL-Auckland via Sydney route.

The routes will operate three times weekly, with plans to ramp up to daily services by December. They join the airline’s existing KL-Sydney route, launched in September.

AirAsia X’s chief executive, Benyamin Ismail, says the airline is optimism about restarting its single remaining pre-COVID route, KL to the Gold Coast, by February next year.

“All the other routes that we stopped during COVID are beginning in the next one or two weeks. Tokyo, Taipei and more Japanese routes are coming online,” Ismail said.

It’s the latest in a wave of low-cost carriers launching international routes to Australia.

Jetstar’s inaugural flight from Seoul to Sydney took off this week, just as Korean low-cost airline T’way Air announced a new four-weekly Sydney-Seoul service from December 24, marking its first long-haul service.

Closer to home, Virgin Australia’s first flights back to New Zealand launched this week, with services from Brisbane and Sydney touching down in Queenstown.

The added flight capacity is promising news for Australians, aviation experts say, with the potential to counter the recent sky-high fares caused by blistering demand and capacity constraints.

August fares from Asia to Australia remain 26 per cent above the same period in 2019, according to the latest data available from aviation analytics firm Cirium.

Exclusive data from travel platform KAYAK shows the average cost of return economy international flights from Australia has surged to about $2,132 – 67 per cent above 2019 prices (based on October 18-31 travel).

“Simple economics is the reason for the high fares,” said Mike Arnot, an airline industry commentator and Cirium spokesman.

“AirAsia X provides a good example. Prior to the pandemic, that carrier flew some 50,000 seats per month into Australia but closed shop during the pandemic.

“When that much supply comes out of a market, prices shoot up — in this case a whopping 58 per cent between Kuala Lumpur and Australia.

“Expect fares will fall very quickly and sharply on those routes as AirAsia X returns.”

Rico Merkert, an aviation expert at the University of Sydney, says the additional flight routes between Australia and Asia may also be good news for Qantas customers traveling to Europe.

“The added capacity will not only be good for re-connecting these two regions but also for traffic on the Kangaroo route to and from Europe, as airfares to that part of the world are currently very high, too, especially in the premium cabins, Merkert said.

AirAsia X’s warning cheaper fares may still be a year off, as airlines grapple with logistical hurdles around getting grounded fleets back into service.

“A lot of carriers are still bringing their planes back into service. [But] getting back into service and getting a slot at a maintenance hangar is not easy,” said Ismail.

Ismail said the budget carrier’s resumption in Australia was delayed by travel visa processing issues.

“Visas have been a problem for international passengers coming into Australia,” said the CEO, who cited waits of up to three months for visas and an increase in visa rejections.

“I was not prepared to start [Australian services] early because I was worried I couldn’t fill the planes, because of an increase in visa rejections. But now I see that things are improving. We’ve seen it in our flights,” Ismail said, referring to the healthy uptake of the carrier’s KL-Sydney service since September.

The Department of Home Affairs has been contacted for comment.