AirAsia X is withdrawing its services to India (Mumbai and Delhi) and Europe (London and Paris) from its hub at Kuala Lumpur, as part of its network realignment.
The long haul, low fair affiliate of Air Asia has blamed falling demand in Europe, the high oil price and the added costs of UK Air Passenger Duty (APD) and the European emissions trading scheme (ETS) for its decision to pull out of Europe.
Meanwhile it blamed visa restrictions for travel between India and Malaysia and increased handling charges for its decision to cap India flights.
Its last flight from London will operate on March 31, while its last flight from Paris will be March 30th.
Passengers who have advance bookings from these destinations will be offered a full refund or the choice to switch to an alternative carrier.
Chief executive Azran Osman-Rani explained: “Weakening demand for air travel from Europe brought about by the current economic situation, together with exorbitant government taxes, have placed cost pressures on operating long-haul low-cost flights.
“The emissions trading scheme and escalating APD, which will rise again in April, have forced our decision to withdraw services to Europe.”
Osman-Rani added that the airline would focus on capacity in its core markets, opening up new routes here as well as adding frequencies.
He also confirmed that the airline hoped to re-instate services to India once structural issues that clashed with the low cost model had been resumed.
AirAsia X’s core markets are: Australasia, China, Japan, Taiwan and Korea.
A spokesperson for Gatwick Airport commented: “We are very disappointed to be losing AirAsia X, which has been operating a direct route from Gatwick to Kuala Lumpar since October last year. AirAsia X has made the reasons behind its decision clear.
“The continued high fuel prices in 2011, weakening economic conditions in Europe and the impact of Air Passenger Duty (APD) alongside the Emissions Trading Scheme (ETS) carbon tax in the UK has resulted in the withdrawal of operations at Gatwick on 31 March 2012.
“We hope we can welcome AirAsia X back to Gatwick. As a founding member of the Fair Tax on Flying Alliance, Gatwick is campaigning for the cost of the Emissions Trading Scheme to be offset against those of the Air Passenger Duty in the March 2012 Budget.
“We believe the Treasury must pay far closer attention to the impact of this issue as the decision by AirAsia X is clear evidence that the burden of additional taxation in all its forms is a material consideration for long haul airlines flying to the UK.
“We remain committed to helping our airlines grow, to investing in our facilities and delivering great service for passengers. Over five million passengers travel every year to over 40 long haul destinations from Gatwick and we continue to improve our long haul offer with Hong Kong
Airlines operating a daily flight to Hong Kong from 8 March, in addition to Air China operating daily between Gatwick and Beijing from May. More recently Korean Air has announced a three times a week service from Gatwick to Seoul which will start on 29 April this year”.