Take-off for Malaysian long-haul budget carrier AirAsia X has been delayed, possibly until September 2008, as delays in Airbus's new A380 super-jumbo have disrupted the aircraft leasing market, a top executive said today.

At its launch in January, the carrier promised flights to Britain beginning this July but Raja Mohamad Azmi said the service has been put back because aircraft leasing costs were higher than projected because of the A380 problems.

"We remain committed to begin the long-haul service. The new take-off date is by September 2008 when we begin to receive delivery of our new aircraft," said Azmi, chief executive officer of Fly Asian Express (FAX), the operating company for the service.

AirAsia X initially aimed to begin service with three leased aircraft, either the A330-300 from European manufacturer Airbus or the 777-200 made by Boeing of the United States.

But Azmi said that because of the delays to the A380, the leasing market had been stretched as customers searched for replacement planes, pushing up prices.

"A lot of airline operators are looking for A330's and Boeing 777s."

The double-decker A380 has been plagued by production problems and setbacks to its delivery schedule. Singapore Airlines is now set to receive the first A380 for commercial use in October instead of early last year.

Azmi said he is also preparing to sign a deal for 20 aircraft for the new long-haul carrier, a deal worth about four billion dollars. "We will shortly ink the contract for the purchase of the aircraft."

He declined to reveal the choice, having said last month the airline had completed an evaluation between the A330-300 and 777-200.

Cheap fare to London

AirAsia X was unveiled in early January by low-cost aviation pioneer Tony Fernandes who launched AirAsia as a regional budget carrier more than five years ago.

He said at the time that the long-haul airline expected to carry half a million passengers in its first year of operation to initial destinations including Britain and China.

The airline said seats on flights to Britain would be available on the Internet from February with fares as low as RM9.99.

The airline will be operated by FAX, also founded by Fernandes and which currently operates rural air services on Borneo island. FAX is headed by Azmi, who is also a shareholder in AirAsia.

Azmi said the success of a long-haul budget carrier depended on its ability to manage costs, having the right aircraft and seating configuration.

"We are still looking at leasing the aircraft to begin the service before the new aircraft roll in but the leasing terms must be right and they must be a good aircraft," he said.

Confident of success

Azmi is not the first to try budget long-haul travel but analysts say the model remains to be proven despite its success on short-haul flights.

"We have not changed our mind. We are fully confident the model will work. We will not compromise our operation strategy," he said, calling the delay inevitable. "We want to make sure we get it right."

Azmi said it was crucial the AirAsia X venture succeeds.

"We are putting in a lot of money. We will soon place our deposit for the new aircraft," he said.

AirAsia was launched as a budget carrier in December 2001 with just two aircraft but now offers more than 100 domestic and international flights to Malaysia, Thailand, Indonesia, Singapore, Cambodia, Vietnam and the Philippines.

"Remember they said AirAsia will not succeed," Azmi recalled. "We are sure AirAsia X will succeed. No question about it."