AirAsia X finalises order for new jets

Carrier to buy 100 units of A330neo from Airbus for RM122bil

SEPANG: AirAsia X Bhd (AAX), the long-haul arm of low-cost carrier AirAsia Group Bhd, has finalised its order of 100 A330neo long-haul wide-body passenger jets for US$30bil (RM122bil) from European planemaker Airbus – a deal that the low-cost carrier had been deliberating over the past couple of years.

AirAsia Group chief executive officer (CEO) and AAX co-group CEO Tan Sri Tony Fernandes said the new aircraft would replace its existing ageing fleet and provide better cost savings.

“We’re looking at 14% savings in fuel, about 5% savings in maintenance and a variety of savings here and there. This will bring total savings in costs of about 11% and 12%,” he said at a media briefing.

Fernandes said AAX would receive delivery of the first batch of planes by the third quarter of next year.

“We’re looking at taking delivery of three planes next year. These will be exclusive to our Malaysian operations.

“The following year, we’ll be getting six planes that will be going to Thailand, Indonesia and Malaysia. Then in 2021, we’re looking at delivery of 10 aircraft.”

Fernandes said the deal would be funded through cashflow and leasebacks.

“The leasing market is phenomenally competitive right now and we’ve received some great offers; there’s plenty of leasing and debt capital.”

All the A330neo aircraft ordered by AAX are the larger A330-900 model. AAX will be the first airline in Asia to operate the aircraft.

The A330neo is the latest version of the twin-aisle A330 family. It incorporates new generation RollsRoyce Trent 7000 engines, a new optimised wing and increased use of lighter composite materials.

Together, these advances bring a reduction in fuel consumption of 25% compared with older generation aircraft of similar size.

With the new aircraft, Fernandes said AAX would be able to make long-haul trips to destinations such as London, which it had scrapped back in 2012.

“The new aircraft allows us to go to places like Brazil, Namibia and London.”

When asked if the low-cost carrier had plans to relaunch its London route, Fernandes said: “We’re not announcing that we’re launching flights to London, but with these new planes, it would be possible.”

Apart from Airbus, Fernandes said the low-cost carrier was also in talks with Boeing, revealing that AAX “came close” to reaching a deal with the latter.

“We’ve had lots of years of analysis. But after two years, we’ve decided to go with Airbus. There were a lot of discussions.”

Fernandes said the deal with Airbus would help to bolster AAX’s business model further.

“We’ve been looking at the AAX model for the last 12 months and we’ve been working on how to make the model stronger. As strong, if not stronger, than AirAsia.

“AAX has had a chequered past, so over the last 12 months, we’ve been focusing on getting the model right. We have tremendous confidence in the future of AAX,” Fernandes said.

AAX’s net profit rose 301.49% to RM41.5mil, predominantly due to higher efficiency on its operations for the first quarter to March 31.

Its revenue increased 7.17% to RM1.27bil. This saw its earnings per share increasing to one sen from 0.2 sen previously.

AAX’s strong revenue came on the back of a 13% growth in the number of passengers carried to 1.59 million, exceeding the available seat km (ASK) capacity growth of 10%.

The company’s cash position increased to RM426.14mil from RM336.42mil previously. For the period, the company maintained its load factor of 84%.

Average passenger fare dropped to RM527 from RM544 previously, while ancilliary revenue per passenger reduced to RM169 from RM173 previously.

Revenue passenger km (RPK), meanwhile, increased 9% to 7.66 million, while ASK increased 10% to 9.12 million.

Cost per available seat km (CASK) decreased 2% year-on-year to 13.27 sen due to improved cost efficiency on the back of higher aircraft utilisation despite the higher fuel price recorded in the first quarter of the year.

Ex-fuel, CASK was also lower by 10% year-on-year to 8.11 sen, driven by a stronger ringgit against the US dollar.

AAX shares ended unchanged at 35.5 sen yesterday. AirAsia shares, meanwhile, closed two sen up to RM3.23.