AirAsia is looking at re-establishing its hub in Penang on the back of strong demand for direct flights to the island regionally.

AirAsia Malaysia chief executive officer (CEO) Riad Asmat said despite the overwhelming demand from other countries in the region for direct flights to Penang, the airline's capacity is limited with only two aircraft operating from the island currently.

"When compared with pre-COVID levels, our operations in Penang right now are at about 60 per cent in terms of scheduled flights and we aim to increase it to 80 per cent by year-end. A third aircraft will enable us to achieve that target sooner.

"In the first quarter of next year, things will likely stabilise even more considering ASEAN is more open now and not that strict when it comes to COVID-19 protocols," he told the media after signing a memorandum of collaboration (MoC) with Penang Global Tourism CEO Ooi Chok Yan.

The MoC encompasses greater commercial collaboration and partnerships between the airline and the tourism body to create new business opportunities, develop joint sales and marketing campaigns, strengthen flight connectivity, and boost the state's economy through tourism.

As a start of the collaboration, AirAsia is currently offering value fares to Penang from RM59 all-in-one way until Aug 21, 2022, for the travel period between Aug 22, 2022, and April 18, 2023.

Meanwhile, Riad said that since the gradual resumption of its services to/from Penang, the airline has flown over 584,000 guests into the state, including more than 87,000 international arrivals, since the border reopened in April this year.

State Tourism and Creative Economy Committee chairman Yeoh Soon Hin said AirAsia has been instrumental in the growth of the state's tourism industry, and the state government is looking forward to working closely with the airline in promoting Penang as a preferred tourism destination.

"I applaud AirAsia for continuously strengthening its connectivity to and from Penang with 184 weekly flights as a group. This has resulted in about 31 per cent of overall passenger arrivals between January and July this year.

"I am also pleased to announce that the total passenger arrivals into Penang have increased 287 per cent from January to June 2022," he added.