Malaysian long-haul airline AirAsia X intends to double the frequency of its flights to Sydney and Melbourne later this year, much quicker than first planned.
The move will be a boon for passengers searching for cheap fares and another challenge to Jetstar on its home turf. Stronger competition threatens to crimp the earnings of the budget airlines that increased their capacity on flights to Australia in recent years.
AirAsia X plans to increase the number of services to Melbourne and Sydney from one to two flights a day, and to Perth from nine flights a week to 14.
The AirAsia long-haul offshoot gave details of its plans in an initial prospectus filed with Malaysia's Securities Commission last week. AirAsia X has previously aimed for twice-daily flights from Kuala Lumpur to each of these capital cities by the end next year.
The airline also disclosed its results for the three months to March, which show the Australian routes are still its most profitable but that conditions were tougher than in the same quarter in 2012.
Pre-tax profits from Australia fell by 65 per cent to 20.4 million Malaysian ringgit ($6.8 million) for the March quarter, the unaudited accounts show. Despite tough competition, the airline said it believed it could "profitably increase frequencies" on 12 of the 14 routes it flies within the Asia-Pacific region to twice a day.
In the filing, AirAsia X said that it consistently filled more than 80 per cent of seats on core routes, including those to Melbourne and Sydney, which "signals strong demand that can absorb increased capacity".
Increasing capacity on routes to Australia has hinged on the delivery of new aircraft. AirAsia X's fleet will increase in number from 10 to 32 aircraft by 2016.
Apart from the plans to boost the number of flights to Sydney, Melbourne and Perth this year, AirAsia X also confirmed that Adelaide was a destination "we may be able to expand" to.
The airline has five flights a week to the Gold Coast but it did not give any hint about whether it planned to alter the number of its services to that destination.
AirAsia X and its parent AirAsia are in a race with Jetstar and Singapore Airline's budget offshoot Scoot for scale in Asia, or what it has described as a "real-estate game".
The surge in the number of flights by foreign budget airlines is encouraging Australians to travel overseas in record numbers. It is also helping to boost airports' earnings, including Sydney and Melbourne's.