AirAsia drops plan for Singapore unit

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http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/1249301/1/.html

AirAsia, Asia's largest low-cost carrier, was initially keen to establish a unit in Singapore, which would have allowed it to compete with rivals including Jetstar and Tiger Airways and fly to more destinations from the city state, the Wall Street Journal said.

However they have scrapped that plan due to high operating costs and lack of domestic market potential in the island republic.

"We are concentrating on markets which have big domestic markets and big populations and markets that are more liberal and market-orientated... capital should go into those countries to maximise return," Tony Fernandes, group chief executive, was quoted as saying in Monday's Wall Street Journal.

Malaysia-based AirAsia flies throughout Asia and has already set up subsidiary budget carriers in Indonesia, the Philippines, Thailand and Japan.

The carrier, one of the biggest customers for European aircraft maker Airbus, has a fleet of 112 A320s and is expecting 266 more aircraft to be delivered up to 2026.