Malaysia's no-frills carrier, Air Asia, will start flying regional by January 2004. Air Asia plans to buy up to 8 aircraft to service these new regional destinations (Air Asia will expand its current fleet of 6 aircraft of 15 by year end, and the additional 8 aircraft will bring the total aircraft count to 23). Those regional destinations that had been earmarked for the regional expansion include Semarang, Surabaya, Bandung, Medan and Bukit Tinggi in Indoneasia; Phuket and Chiang Mai in Thailand. Singapore will not be included in the regional expansion since Air Asia plan to develop Johore Bahru as one of its hub.
In the domestic market, Air Asia will inaugurate flights from Kuala Lumpur (KUL) to Alor Star next month; Sandakan and Sibu in April; Johore Bahru and Bintulu in May. It's unlikely that Air Asia will add new destinations from KUL after this expansion, but it will develop Kota Kinabalu, Johore Bahru and Penang as its domestic hubs and fly from these hubs.
Also, Air Asia seem to take SIA's "warning" lightly when the latter carrier warned Air Asia that it can turn SilkAir into a low cost carrier in a very short period of time to meet any challenge from any budget carriers, i.e. Air Asia. "So, my advice to Cheong is to keep to their territory. They are best on the international front. But it is nice to have people with calibre and experience like Cheong commenting on us. We are just a four men of straw" as quoted by Air Asia's chairman.
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