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AirAsia X delays launch

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LONDON, England (CNN) -- AirAsia X, the region's newest budget airline, has shelved plans for a July launch.

The airline was scheduled to start its service from Kuala Lumpur to Europe and China this summer, but it now seems more likely that it will launch in 2008.

While the low-cost start-up airline believed they had the right business plan in place, it became clear there was a "minor technical issues" - no planes.

The airline had planed to begin its services to China and the UK with just a few leased aircraft, either Airbus A330-300s or Boeing 777-300s, but the cost was thought to be too high.

"We are looking at the cost structure... we want the right aircraft and we won't start until the right mix of aircraft is finalized," the airline's chief executive Raja Mohamad Azmi told Dow Jones newswires.

Mr Azmi blames for the rise in cost of leasing wide-bodied aircraft on Airbus. The failure of the European plane maker to deliver its new superjumbo A380s on time has meant that many airlines are hanging on to their current fleet, plus more airlines are looking to lease large capacity aircraft to fill the gap.

Many industry observers thought the summer launch of the airline to be overly ambitious when it made the announcement in January.

"The delay is not really surprising," Brendan Sobie of Airline Business Magazine told the BBC.

"The expectations of being able to start a service in July seemed unrealistic given the lack of availability of aircraft."

AirAsia X are planning to splash out on 15 aircraft, but they probably will not delivered until the end of 2008 and will cost about $850 million.

Ultimately the airline hopes to have a network covering Asia, Australia, China, Europe, India and the Middle East and plans to offering return ticket prices between $80 and $450 between Malaysia and the UK.

AirAsia X is owned by regional airline Fly Asian Express (FAX), which is part owned by tycoon Tony Fernandes who controls South East Asia's biggest budget airline AirAsia.

AirAsia X has a 30 year franchise to use the AirAsia brand and its Web site for online bookings.

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AirAsia operates 51 planes, but AirAsia X has had trouble getting the right aircraft.

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