AirAsia in Talks on Route to Dubai

By Rory Jones and Nicolas Parasie

DUBAI--AirAsia Bhd. is in talks to relaunch flights to the United Arab Emirates from its hubs in Southeast Asia, and has this time chosen Dubai rather than Abu Dhabi for its Western expansion.

The low-cost airline's founder Tony Fernandes was in Dubai Wednesday to talk to officials about flying Airbus Group NV A330 jets into one of the emirate's two airports, Dubai International or Al Maktoum International.

AirAsia also hopes to eventually win a license to set up a hub in Dubai that could serve Europe and Africa, according to Mr. Fernandes. Dubai would be added to its current hubs in Malaysia, Thailand and Indonesia, and planned operations in Japan and India, he added.

"I could bring a lot of Asians to Dubai," Mr. Fernandes said in an interview. "There are opportunities for airlines like AirAsia."

AirAsia X, the company's long-haul arm, quit flights to Abu Dhabi in 2010 after just a few months of operations. Abu Dhabi, the home of Etihad Airways, is investing $3 billion in new airport infrastructure to meet the growth of its flagship carrier.

Less than a 100 miles away, Dubai is planning to construct the world's largest airport at a cost of $32 billion. Due for completion in six to eight years, the airport will eventually house the operations of Emirates Airline, the world's largest carrier in terms of international flight traffic. Dubai's low-cost carrier Flydubai also is aggressively expanding routes and has more than hundred Boeing Co. aircraft on order.

"Dubai is building the largest airport in the world and it can't just be for Emirates Airline, Flydubai," said Mr. Fernandes.

AirAsia has more than 300 Airbus A320 jets on order. In July, the airline said it plans to buy 50 of the new version of Airbus's A330 long-range jet, a deal with a combined list price of US$13.8 billion, although airlines typically get significant discounts for bulk purchases.

Mr. Fernandes said he expected the new A330neo aircraft, dubbed "new engine option," to begin delivery in 2017. With a flying range of up to 11 hours, the A330neo would be ideal to build a network from Dubai into Europe and Africa, he added.

Write to Rory Jones at [e-mail]

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