AirAsia to announce new service on Friday

Kuala Lumpur, Jan 2: Malaysian budget carrier AirAsia said on Tuesday it would make a major announcement on a new service on Friday after a report that it was considering an alliance with Britain's easyJet and the Virgin group ''It's a huge announcement. The transport minister will be attending the event in Kuala Lumpur at 10 a.m. (0200 GMT) on Friday.'' a company spokeswoman said by telephone. ''It's about a new service.'' She declined to give further details. AirAsia's Chief Executive Tony Fernandes declined on Monday to comment on a Malaysian newspaper report on the alliance.

The Star, quoting unidentified sources, said the three airlines were in talks to form a global no-frills alliance that would offer cheap flights within Asia as well between Europe to Australia via Kuala Lumpur.

It said the tie-up would give AirAsia access to London's Stansted airport. In return, Richard Branson's Virgin and easyJet would have access to Kuala Lumpur airport's low-cost terminal which is the home for AirAsia, it added.

Fernandes told Malaysia's New Straits Times on Saturday that there was a potential for a budget long-haul air service model.

''It's a matter of time before someone comes up with a good model for a low-cost carrier and I hope the innovation would come from Malaysia,'' he told the newspaper.

But a spokesman for easyJet said on Monday the British airline had not discussed any such alliance with AirAsia.

''We are not in any talks with AirAsia or Virgin,'' he said.

The Times newspaper in London reported on Tuesday that Virgin had re-entered talks with AirAsia about taking a stake in the group, which was founded in 2001 by Fernandes, who began his career in the finance department of Virgin Records.

Virgin Blue, Virgin Group's Asian unit, had discussed investment possibilities with AirAsia in 2003 but this did not materialise at that time.

It is believed a link-up with AirAsia will give Virgin access to Malaysia as well as other countries in the region, including Thailand and Indonesia, The Times said.

A Virgin spokesman refused on Monday to deny Virgin Atlantic has held talks with AirAsia.

REUTERS >