Indonesia AirAsia's Surabaya-Singapore route still suspended

PETALING JAYA: Indonesia is yet to lift the suspension on Indonesia AirAsia's Surabaya-Singapore route and the airline is still working with the authorities to settle the issues surrounding the suspension, said AirAsia Bhd group CEO Tan Sri Tony Fernandes.
Speaking to reporters at Tune Group's Open Day and official opening of Wisma Tune yesterday, Fernandes said it is "business as usual" for its Indonesian operations. He did not give any indication on when the suspension would be lifted.
In January, Indonesia's transport ministry suspended the airline's route license pending an investigation on the QZ8501 accident in December last year.
According to the transport ministry, AirAsia was only permitted to fly the route on four days of the week, not including Sunday when the accident occurred.
Meanwhile, Fernandes said the ban on Thailand-registered airlines by Japan, South Korea and China would not affect Thai AirAsia because its routes are limited to destinations within a four-hour radius.
The ban was imposed due to safety concerns highlighted by the International Civil Aviation Organisation.
"It is high time that Asean countries get together to form an Asean regulatory authority...it is a great opportunity for the region to come together and create something like the European Aviation Safety Agency (EASA) and have a strong regulatory authority," he said.
On future initial public offerings (IPOs), Fernandes said Tune Talk Sdn Bhd and Tune Hotels Regional Services Sdn Bhd are its next candidates.
He said the group is discussing possible IPOs for the two business units but there is no specific timeline for it.
On AirAsia X Bhd's routes, Fernandes said it aims to fly to Hawaii and one destination in Europe within the next eight months.
"We are excited about Europe, we've got to be back in Europe. AirAsia X, very soon, we hope within the next year, we will be in the US, Europe and Asia. The globalisation of AirAsia X is well on its way. By being in the US and Europe it just changes the whole brand profile quite dramatically," he said.
"Within the next eight months, I believe we will be in Hawaii...London is very close to our heart and there's one other European destination we won't announce now," he added.
The long-haul low-cost airline had previously flown to London and Paris but the routes were canceled in 2012 after continued losses for the routes. Earlier in February, it was reported that AirAsia X had started the application process to fly to Hawaii.
Affin Hwang Capital maintained its buy call on AirAsia Bhd with a lower price target of RM2.55 from RM3.15 previously. It lowered its FY15-17E earnings forecasts by 17% to 22%, on lower average fares and stronger US dollar assumptions.
"Over the past three months, despite the cheaper jet fuel price, AirAsia's share price has taken a beating due to foreign selling, the further strengthening of the US dollar against ringgit as well as the entry of a new airline - flymojo," it said in its research note yesterday.
However, it believes that the negative news have already been reflected in the share price.
The stock closed 0.44% lower at RM2.28 yesterday, with a total of 4.98 million shares traded.