OIL PRICE BOOST: Carrier may spread wings to Hawaii, Sapporo and return to London, Paris
AIRASIA X Bhd plans to fly to Hawaii and Sapporo, Japan, next year in a bid to strengthen its bottom line, says AirAsia group chief executive officer Tan Sri Tony Fernandes.
This follows the current review of the airline’s network following the decline in global oil prices, he said during a visit to The New Straits Times Press, here, yesterday.
“We are very blessed at the moment with oil prices coming down and that is helping us tremendously. When I introduced the recovery plan (for AirAsia X), the oil prices were much higher. Now, they are coming down and that is a boost for us,” he said.
Fernandes said plans are in the works to resume flights to Gatwick, London, next year.
AirAsia X will also re-look plans to fly to Paris and build its presence in the Indian continent next year.
“AirAsia X is planning several exciting destinations next year and we are working very hard to re-ignite London and Paris. I think these are both good routes that are very popular among Malaysians. I believe it will be a profitable journey.
“As for Sapporo, we know that Malaysians love snow and this would be a good opportunity for us to expand into that region,” he added.
The long-haul low-cost carrier had trimmed its route network over the last two years to focus on mid-haul flights to Australia, China, Japan, South Korea and Taiwan.
It cancelled flights to London, Paris, New Zealand, Iran and some parts of India, citing cost pressures due to the rising oil prices, high departure taxes and lower demand, amid a financial crisis.
“We have been cutting cost and slowing down growth a little bit as we were hampered by MAS’ (Malaysia Airlines) fare structure. I think, when MAS restructures, it will give AirAsia X an opportunity to compete against a commercial airline as opposed to right now, where they are selling fares at a lost.
“We hope MAS will rationalise and focus on profitability next year. Obviously, the twin disasters (of flights MH370 and MH17) have put a little dampener on Malaysia, but I see things bouncing back.
“People have short-term memories. A lot of the uncertainties in aviation have gone away so we are going back to our basics, which is offering low fares and stimulating demand.”
AirAsia X posted a net loss of RM210.85 million for the third quarter ended September, its fourth straight quarterly loss, on higher operating expenses, finance costs and foreign exchange losses.
It had recorded a net profit of RM26.4 million in the same period a year earlier.
The airline said after announcing the results it would freeze domestic capacity expansion and cut flights to Australia next year. It expects to turn around in the current quarter.
Fernandes said AirAsia X’s business in China, which currently contributes 19 per cent to its revenue, was growing.
“We also see a big opportunity in India now with AirAsia India. It has developed our brand dramatically and we hope to get more rights to develop our business in India next year. That will give us additional revenue and hopefully, our margins will improve,” he said.
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