Fly high at low cost 10-05 22nd Feb 2008

Malaysian airline AirAsia, Asia’s largest low-cost airline, has indicated its wish to partner with Virgin Blue, marking the start of what could be Australia’s next airfare war. The domestic market has already seen the entry of Indonesia’s Lion Air and Singapore’s Tiger Airways.

AirAsia’s next move will depend on Toll Holdings and when it will sell down its majority stake, returning control to founder Sir Richard Branson. Despite this, the airline emphasises that it is not interested in buying into Virgin Blue.
 
"At this stage we're not actively pursuing anything,” said AirAsia spokesperson Azran Osman-Rani. "We are definitely keen but a lot of that hinges on what happens with Toll and who is going to take control of Virgin Blue."
 
Virgin’s upmarket efforts have been to secure corporate passengers from Qantas, while the introduction of an ultra-budget arm will most affect Qantas’ low-cost brand, Jetstar.