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ow-cost carrier Indonesia AirAsia (AAI) announced it would end its Medan-Hong Kong route, one of its longest
routes, amid surging oil prices.

AAI corporate communications manager Audrey Progastama Petriny said Sunday that AAI would end the route on Sept. 12.

“The Medan–Hong Kong route, on which we use an Airbus A320 with more than four hours’ flight time, is Indonesia AirAsia’s route with the highest fuel consumption,” Audrey told The Jakarta Post.

She added that although the route’s load factor had reached 70 percent, AAI could not cover all expenses without significantly increasing fares.

“Our commitment as a low-cost carrier is to sell affordable seats. We are very cautious about adjusting fares,” Audrey said. “Our customers can still fly AirAsia to Hong Kong via Kuala Lumpur.”

She played down speculation that competition on the route was to blame, saying that the Medan-Hong Kong route was a unique route that no other airline served. “We will consider reopening the route once oil prices are stable,” she said.

Following the suspension of the route, Audrey said, the Airbus A320 narrowbody aircraft serving the route would be reassigned to serve the Medan-Kuala Lumpur route twice a day and the Medan-Penang route twice a day.

She added the airline would also gradually increase the frequency of its Medan-Bangkok route from three times a week to daily.

AAI called on passengers who had purchased Medan–Hong Kong flights scheduled for after Sept. 11 to refund their tickets at AAI sales offices at Polonia airport and Garuda Plaza Hotel, both in Medan.

AAI will also allow its customers to apply for “credit shells”, in which customers can exchange their cancelled tickets for other routes within three months of the credit shells being activated.

Last year, AAI closed the Jakarta-Medan and Jakarta-Surabaya routes, saying it was part of the airline’s business strategy to focus on international routes.

Earlier on Thursday, AAI inked a deal with PT Asuransi Dayin Mitra and PT CIMB Sun Life to launch the AirAsia Insure insurance programs aimed at protecting passengers even after they had disembarked.

“We want to offer a sense of calm and safety to our passengers. With AirAsia Insure, we hope ‘now everyone can fly and breathe AirAsia’,” AAI CEO Dharmadi said in a press release.

Asuransi Dayin Mitra will handle travel insurance while CIMB Sun Life will deal with life insurance policies. The scheme would protect customers from accidents, trip cancellations, lost or damaged luggage and flight delays.

A passenger could receive compensation of up to Rp 600,000 (US$70) for a delay lasting more than two hours caused by AAI.

AirAsia now has five hubs in Indonesia: Jakarta, Bali, Medan, Bandung and Surabaya.

Earlier this year, the carrier announced plans for an IPO in the fourth quarter of this year, targeting to raise between $150 million and $200 million from the sale of a 20 percent stake in the company.

AAI projects an increase in the number of passengers to 4.5 million this year, a 15 percent increase from last year. (swd)