AirAsia to suspend Kuala Lumpur-Sydney route amid cost cuts

AirAsia will suspend flights between Kuala Lumpur and Sydney, citing higher cost pressures, weaker demand and a need to realign its network and fleet. The route was launched in 2012 and has been operated four times weekly by medium-haul unit AirAsia X using Airbus A330-300 aircraft.

The airline said it would shift resources instead to routes with stronger demand, including Kuala Lumpur-Melbourne and Kuala Lumpur-Perth, where frequencies are set to increase from December. Once AirAsia X exits the Kuala Lumpur-Sydney market, the route will still be served by Malaysia Airlines, which operates 20 weekly flights, and Batik Air Malaysia, with five.

The move is part of a wider restructuring at AirAsia Group. In its second-quarter earnings, the company said it plans to remove 25 older aircraft from its fleet this year, including 17 early lease returns, in response to higher fuel prices. It has previously said its A330s will eventually be phased out entirely as it moves to an all-narrowbody fleet.

As part of what it calls a network reset, AirAsia expects third-quarter capacity to fall between 20% and 25% compared with the same period last year. The group has already permanently cancelled 33 routes it deemed unviable, operated by its Indonesia and Philippines units, and suspended a further 17 routes across the group.

AirAsia X general manager Benyamin Ismail said the current operating environment required difficult decisions. He pointed to the accelerated retirement of older, less fuel-efficient widebody jets alongside the network adjustments.