AirAsia (AK, Kuala Lumpur International) founder Tony Fernandes has warned Lufthansa (LH, Frankfurt International) against venturing into the longhaul, low-cost market claiming the venture would prove "risky" to the German carrier. Lufthansa recently announced it was in talks with Turkish Airlines (TK, Istanbul Airport) over the redevelopment of their joint venture, SunExpress (XQ, Antalya), into a budget longhaul carrier. Initial operations will use either B767s or A330s though Lufthansa has said it is considering reactivating up to nine mothballed A340-300s for active duty.

However, during the announcement of an order for fifty A330neos for AirAsia X (D7, Kuala Lumpur International) at current Farnborough International Airshow 2014, Fernandes told Reuters that having a full-service and a budget carrier operating in the same group would invariably lead to competition between the two.

"I know why they want to do it but it's dangerous to have a low-cost and a full-service carrier in the same group because invariably you compete with each other," he said. "I think it's very risky, I would advise against it. I think history has shown that any full-service carrier that has gone into low cost has suffered but I can see why it's tempting. We're successful low cost but you don't see me trying to start a full-service carrier," he added.

Fernandes said the A330neos on order could be used in the resumption of flights to Europe which would bring it into direct competition with Lufthansa's new longhaul budget carrier.

In contrast to Lufthansa, which is in the process of restructuring its Eurowings (EW, Düsseldorf) subsidiary into a regional European LCC, AirAsia is aggressively pursuing expansion into various neighbouring markets following the launch of its latest subsidiary, AirAsia India (Bengaluru International).

According to China's National Business Daily , it has now emerged that AirAsia has approached Chinese budget airline, Spring Airlines (9C, Shanghai Hongqiao), with a view to setting up a 49/51 joint venture carrier. While Spring confirmed contact with the Malaysians, it did not confirm having any business cooperation with them.