No-frills AirAsia will start flying regionally by January 2004 as its two-phase expansion plan broadens its network through joint ventures with airlines in Indonesia and Thailand, a report said today.

In the process, AirAsia plans to buy up to eight additional aircraft to service its new regional routes, AirAsia chairman Pahamin Rajab was quoted as saying by the New Straits Times .

"Our immediate plan will be to fly between domestic hubs such as Kota Kinabalu, Senai and Penang. o­nce we obtain the government's approval to fly from these hubs, we will proceed to the second phase of our expansion," he said.

At present, AirAsia operates six B737-300 and will expand the fleet to 15 by the end of the year. These additional eight aircraft, to be used for the regional expansion, will bring its fleet to 23.

Long-term plan

Pahamin said the second phase of the plan, where AirAsia ties up with its counterparts in Indonesia and Thailand, would allow the budget airline to go beyond a three-hour flight to other destinations within the region.

"This is so that we can go further and further. It is our long-term plan to be an Asian airline," he said.

Destinations earmarked for its regional expansion include Semarang, Surabaya, Bandung, Medan and Bukit Tinggi in Indonesia, and Phuket and Chiang Mai in Thailand.

On the domestic front, AirAsia is also scheduled to begin its services to Alor Star in March, Sandakan and Sibu in April, and Johor Baru and Bintulu in May.

Pahamin dismissed talk that AirAsia seemed to be expanding too fast, saying: "I think we are at the right pace. Our expansion is very moderate and calculated." AFP