Australia 'most profitable country' for AirAsia X

Australian travellers have snapped up most of the tickets for AirAsia X's new service between Sydney and Kuala Lumpur.

AirAsia X, the long-haul affiliate of Kuala Lumpur-based AirAsia, finally landed at Sydney Airport on Monday after a four-year struggle to win Malaysian government approval to fly the route.

Chief executive Azran Osman-Rani says there has been strong ticket sales since the flights went on sale in January, raising hopes the daily service could soon be doubled.

Forward bookings indicated load factors - an industry term to describe how full planes are - were running at about 80 per cent for the first month of operations, Mr Osman-Rani said after arriving in Sydney on the inaugural flight.

Australians had bought just over half the 100,000 seats sold since the flights were launched in January.

Air Asia X has cut routes in recent times - dropping London, Paris and Christchurch among others from its network.

However Australia, which Mr Osman-Rani said was the airline's most profitable country, was earmarked for growth through increased frequency to existing destinations Melbourne, Sydney, Perth and Gold Coast.

Moreover, an AirAsia X service to Adelaide was also on the cards.

Currently, only AirAsia X and Malaysian Airlines offer a Kuala Lumpur-Sydney service.

Qantas pulled out of the route several years ago, while its low-cost offshoot Jetstar launched a service in 2007 but dropped it a year later.

However AirAsia X and Malaysian will face increased competition for customers travelling between Asia and Australia when low-cost carrier Scoot begins a daily Sydney-Singapore service.

And as each of the airlines battle it out for customers, they will also have to deal with the ongoing problem of higher fuel costs.

Mr Osman-Rani said the way for low-cost-carriers such as AirAsia X to survive was to become an acceptable substitute for those who normally flew on full-service airlines.

"The way to survive is to say we have got to be able to win over the bottom end of the full service market," he said.

"That's what is going to make or break the model."