Virgin, EasyJet And AirAsia Said To Be Getting Cozy

Richard Branson's Virgin is said to be in talks with Stelios Haji-Ioannou of Europe's second-largest carrier, EasyJet, and Tony Fernandes of Malaysia's AirAsia over an alliance to form global, low-cost airline alliance.

According to Monday report in Malaysian Newspaper, The Star, AirAsia would get access to London's Stansted airport in trade for access to Kuala Lumpur' low-cost terminal for Virgin and EasyJet. The deal would offer cheap, no-frills, long-haul flights both within Asia, and from Europe to Australia via Kuala Lumpur.

Quoting industry sources, The Star says the new alliance will first set up routes between Kuala Lumpur and Manchester in Britain and Amritsar in India. There are also plans to fly to Hangzhou near Shanghai, and Tianjin near Beijing.

If plans to add routes to London are successful, the alliance might also use Luton as a hub and utilize Virgin's already-in-service rail link to central London.

Other media sources are saying the talks are well-advanced with operational flights as close as July.

For now it seems at least one of the major players is a little shy about his new dance parters. Reuters calls to AirAsia's Fernandez met with a stoic, "No comment."

Fare estimates for the new routes vary among sources, but the average seems to suggest a seat on flights from Kuala Lumpur's low-cost terminal will range from $83 for the nearest destinations, to $695 to long-haul airports like London. Industry observers say this is a fraction of the cost of fares on full-service carriers.

FMI: www.virgin.com, www.easyjet.com, www.airasia.com