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Tag: airasia

  • AirAsia grounding most flights from March 28 to May 31

    AirAsia grounding most flights from March 28 to May 31

    AirAsia Group Berhad is suspending most of its flights from March 28 to May 31.

    In a statement on its website, the company said the Covid-19 pandemic had led to unforeseen extensive and increasing border restrictions by various countries.

    “This flight suspension is necessary to ensure the sustainability of the business and is the right thing to do to ensure the well-being of our guests and employees, which will remain the top priority of our business during this challenging time.

    “With governments imposing travel and movement restrictions including movement control order, AirAsia is also playing its part in helping to curb the spread of the virus in order to keep flying safe for everyone.

    “We will continue to evaluate the situation closely and we are prepared to reinstate our services as soon as the situation improves, subject to the necessary regulatory approvals, ” it said.

    All affected guests are being notified by email and SMS.

    They have the option of converting their flight booking into a credit account that is valid for future redemption for 365 days or moving their flights for an unlimited number of times without any charges to another date prior to Oct 31.

    According to the statement, short-haul flights of AirAsia will be suspended for all domestic and international flights from March 28 to April 21.

    As for the medium and long-haul flights, most AirAsia X Malaysia (D7) trips are suspended between March 28 and May 31.

    Meanwhile, the company also announced that both the management and senior employees of AirAsia Group have volunteered a salary sacrifice, ranging from 100% at the very top to 15% to further manage and contain costs.

    “This will help ensure that we can ride out this prolonged period of extremely low travel demand and at the same time minimize the impact on our employees, especially those in junior positions, ” the statement said.

  • AirAsia set to lose over RM1.1 billion

    AirAsia set to lose over RM1.1 billion

    AirAsia Group could report steeper losses in excess of RM1.1 billion in 2020, following its decision to ground its aircrafts worldwide due to the Covid-19 pandemic, according to Affin Hwang Capital.

    The research firm said in a note today that the drastic move highlights the dire operating environment faced by the airline industry.

    In tandem, it reiterated a “sell” on AirAsia’s shares with a lower 12-month price target to RM0.49.

    Meanwhile, Philippines AirAsia, Thai AirAsia, PT Indonesia AirAsia and AirAsia India have similarly reduced their flight frequencies.

    “To further manage and contain costs, the management and senior employees of AirAsia have volunteered for a salary cut, ranging from 100 percent at the very top to 15 percent,” it said.

    AirAsia yesterday announced it was temporarily suspending all international and domestic flights operated by AirAsia Malaysia from March 28 to April 21, 2020. Other airlines within the AirAsia Group will similarly reduce their flight frequencies.

    Affin Hwang Capital expects AirAsia to negotiate with its suppliers to reduce their operating costs, for instance operating leases, airport charges, fuel, operation and maintenance costs.

    “We now expect AirAsia to report larger losses in 2020-2021 after incorporating lower revenue in view of the temporary suspension of flights and dire industry outlook; and lower operating costs arising from savings in staff cost, operating leases, fuel and operations and maintenance expenses,” it said.

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  • AirAsia to operate limited number of flights until March 31

    AirAsia to operate limited number of flights until March 31

    Low-cost carrier AirAsia Group Bhd will be operating a limited number of domestic and international flights during the 14-day Movement Control Order period aimed at curbing the spread of the Covid-19 infection.

    When contacted, a spokesperson for the airline said the limited operations are subject to change due to the fluidity of the situation.

    “Affected guests will be promptly notified via email or SMS. AirAsia strongly encourages guests to update their contact details using the “My Bookings” feature on airasia.com to ensure that they receive timely notifications.

    Guests may check on their flights via the “Flight Status” feature, as well as available flights on the airasia.com website and mobile application.

    For the further and latest information on options and eligibility related to Covid-19, guests can visit the Covid-19 “Customer Guide,” the spokesperson responded.

    In a note to investors yesterday, AmInvestment Bank Research said it is projecting a wider loss of RM985.4 million for AirAsia for its financial year ended Dec 31, 2020 (FY20), from RM784.2 million previously. For FY21, the research house is forecasting a smaller net profit of RM258.9 million, from a net profit of RM482.3 million previously.

    It said the earnings downgrade is to mainly reflect a 10% contraction in passengers for FY20, from a 5% contraction previously, against a backdrop of weak demand for air travel currently followed by the cancellation of Visit Malaysia Year 2020 (VMY2020).

    “We believe the cancellation of VMY2020 will add pressure to airlines including AirAsia that are already suffering from the weak air travel demand due to the Covid-19 outbreak. AirAsia has already seen a double-digit year-on-year decline in its passengers since February,” it added.

    The research house cuts its fair value on the budget carrier to 50 sen, from 94 sen previously and maintained its “sell” call on the airline.

    AirAsia shares closed at 52 sen yesterday after dropping nine sen or 14.8%. It saw 48.54 million shares done.

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  • AirAsia Updates Rebooking Policy

    AirAsia Updates Rebooking Policy

    AirAsia has updated its rebooking policy so that customers with tickets issued on or before 22 March 2020, with a departure date between 23 March and 31 May 2020, can select from the following two options:

    Unlimited Flight Change: Customers can change their ticket to any travel date before 31 October 2020 on the same route for an unlimited number of times without any additional cost subject to seat availability; OR

    Credit Account: Retain the value of the flight booking in the customer’s AirAsia BIG Member account for future travel with AirAsia to be redeemed within 365 calendar days from the issuance date. The travel date of the new booking can fall on any date within the published flight schedule on airasia.com.

    The above information is only applicable for direct online bookings made via airasia.com. For group bookings or those made with travel agents, the traveler must contact their booking agent directly for further assistance.

    As this is a rapidly changing situation, travelers should make sure that their airline has their correct contact information and should carefully monitor their airline’s website and social media accounts for any new updates.

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  • Malaysia Airlines and AirAsia limit number of flights till March 31

    Malaysia Airlines and AirAsia limit number of flights till March 31

    Malaysia Airlines will significantly reduce its overall network, following the nationwide movement control order from March 18 to 31.

    International flights to India are suspended until the end of the month and flights to the Philippines are suspended between March 21 and 31, following the respective governments’ ban on travel to and from Malaysia.

    Malaysia Airlines group chief executive officer Captain Izham Ismail said the situation has been “rather fluid” since the airline has had to make last-minute cancellations to abide by the restrictions.

    “We are doing our best to re-route passengers via reallocation onto other carriers. We are also adjusting our low-load flights by canceling and merging them to manage costs while managing our customer expectations, ” he said.

    Prior to the order, Malaysia Airlines has suspended services to Saudi Arabia, South Korea, and parts of China (Beijing and Daxing), as well as the Kota Kinabalu-Shanghai route due to border controls.

    The carrier also reduced capacity to Australia and New Zealand due to the self-isolation policy of the two countries.

    To date, the company has canceled over 4,000 flights.

    “Our Global Contact Centre has been at the brunt of this situation with the number of calls peaking at 25,000 daily and up to 2,000 e-mail daily in the past three weeks, ” Izham said.

    He added that it will take the company longer to process refunds due to the sheer volume of requests.

    “I assure them that we are not here to take advantage of the situation. In fact we are one of few airlines that have offered unlimited flexibility in travel date change and waiver of certain fees, ” Izham said.

    Due to the significant capacity cut, Malaysia Airlines and all sister companies under the Malaysia Aviation Group’s back-office operations have also been reduced alongside flight and airport operations.

    A majority of its workforce globally are working from home in line with various governments’ requirements.

    Passengers with bookings may initiate changes online via the Covid-19 waiver assistance form available on the carrier’s website.

    Meanwhile, AirAsia has also significantly cut down its number of domestic and international flights.

    “AirAsia will be operating a limited number of domestic and international flights from today until 31 March, which are subject to change due to the fluidity of the current situation.

    “Affected guests will be promptly notified via email or SMS. AirAsia strongly encourages guests to update their contact details using the “My Bookings” feature on airasia.com to ensure that they receive timely notifications,” the airline said in a statement.

    For further and latest information regarding options and eligibility related to COVID-19, AirAsia guests can visit the Covid-19 Customer Guide on its website.

    A quick look at their booking page shows that there are only two flights a day from Kuala Lumpur to Kota Kinabalu, Kuching and Penang (and vice versa). Flights to other cities and towns including Johor Baru, Kota Bharu, Alor Setar, Kuala Terengganu, Sibu, Miri and Bintulu have all been suspended until April 1.

    Currently, there is one flight a day to Sandakan, Tawau and Labuan from KL but even these routes may be suspended within the next few days.

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  • AirAsia forecasted to widen loss this year

    AirAsia forecasted to widen loss this year

    Airasia Group Bhd’s losses could sink further to almost RM800 million this year as the coronavirus has spelled doom for the global aviation sector.

    It is forecasted to suffer RM796 million losses in the financial year 2020 (FY20), over threefold from a loss of RM261 million in the previous fiscal year, Nomura Securities Malaysia Sdn Bhd said in a research report.

    Nomura transport analysts Ahmad Maghfur Usman and Divya Thomas said the expected figure is substantially wider than the consensus forecast of an RM2 million loss in FY20.

    Unit seat revenue across the group’s affiliates is expected to drop by 11% to 12% year-on-year (YoY) in FY20, compounded by weaker loads and yields between -3% and -5%.

    “Malaysia’s recent move to restrict tourist arrivals is expected to worsen near-term traffic, in our view, with only a modest recovery seen from this coming July, as the recent number of new coronavirus cases has spiked substantially,” the analysts said in the report published yesterday.

    They said AirAsia’s long-haul sister company AirAsia X Bhd (AAX) will likely be in dire need of a cash injection to stay afloat.

    The analysts said a privatization move for the company may not sit well with minority shareholders as they prefer the long- and short-haul low-cost airline entities to remain separate listed entities.

    Ahmad Maghfur and Thomas said an inter-company loan is the only likely avenue for AirAsia to rescue AAX.

    As it is, AirAsia is expected to weather the crisis with a net cash balance of RM2.2 billion as of FY19, based on actual borrowings without significantly deteriorating its balance sheet.

    On a positive note, the analysts said the current crisis would weaken AirAsia’s key competitors’ positions and allow the company to win market share.

    They added that the company’s high cash position would also present acquisition opportunities that could be utilized to lock in fuel price hedges for the longer term.

    Nomura rated AirAsia downwards from ‘Buy’ to ‘Reduce’ with a revised target price from 70 sen to 63 sen a unit, or 10%.

    MIDF Research analyst Adam Mohamed Rahim said AirAsia’s earnings are forecasted to reduce to RM145 million in FY20 due to lower passenger volume.

    Adam did not rule out the possibility of AirAsia redeploying its aircraft for domestic routes, especially during festive periods following the inbound and outbound travel restrictions.

    He said passengers carried in March 2020 will decline under the 14-day movement restrictions order.

    “Based on our preliminary analysis, the drop in total passenger traffic for Kuala Lumpur International Airport 2 (KLIA2) could reach more than -30% YoY for March 2020.”

    “As a result, we have lowered our total passengers carried forecast for FY20 by around -19%,” he said in a report yesterday.

    KLIA2 registered three million passengers in March last year where 66.2% were international passengers

    MIDF revised AirAsia’s target price from RM1.03 to 63 sen per share, but maintained a ‘Neutral’ call.

    Meanwhile, AirAsia said flights to both domestic and international destinations remain operational and are subject to further review with strict compliance on the travel restriction as announced by Putrajaya.

    The company said guests whose flights have been affected will be contacted with service recovery options and assistance.

    “We continue to monitor the public health situation closely and adhere strictly to all advice by all governments, as well as local and international health organizations. AirAsia has and will continue to quickly make adjustments as needed, in response to government travel directives,” president (airlines) Tharumalingam Kana- galingam said in a statement yesterday.

    Guests affected by travel restrictions with international bookings to or from Malaysia made before March 16, departure on or before April 30 only, will be offered move flight or credit account options.

    AirAsia’s office-based staff nationwide have been asked to work from home, while staff from departments crucial to operations will continue to work on rostered duty from segregated locations in accordance with the company’s business continuity plan.

    AirAsia’s share price closed at 62 sen yesterday, down 10.7% or 7.5 sen with a market capitalization of RM2.09 billion.

  • AirAsia shares drop further, salary cut for top management

    AirAsia shares drop further, salary cut for top management

    AIRASIA Group Bhd’s share price dropped to the lowest level in 48 months despite the low-cost carrier’s move to cut operational costs and shield the company from being battered by the coronavirus outbreak.

    Carriers across the globe are in panic mode as millions of people cancel their flights as the virus wreaks havoc around the world.

    AirAsia’s shares closed yesterday’s trading at 97 sen, down 2 sen from the 99 sen recorded on Monday — compared to around RM4.41 in February 2018. The company’s market capitalization plummeted to RM3.42 billion.

    Shares of AirAsia’s long-haul unit AirAsia X Bhd declined to 7.5 sen.

    AirAsia’s acting CEO Tharumalingam Kanagalingam in an internal memo to the carrier’s staff warned of the need to cut expenditures.

    The carrier had reduced wage costs, suspended Free Munch for all non-operations managers and above; restricted unnecessary duty travel canceled big social events for the year and suspended external training unless required by law or regulation.

    He said the company’s highest earners have agreed to take a pay cut, but did not provide any quantum. In the replacement of traveling, employees should use voice or video conferencing.

    Kanagalingam, who is popularly known as Bo Lingam, said the measures are put in place to reduce costs, conserve funds and protect the future of the business.

    He said the company has reviewed every option to minimize the impact on its employees.

    “These measures are not permanent. Senior management and I will review them periodically until the situation normalizes.

    “But we may need to announce additional measures if things continue for longer or get worse. Your manager or HoD (head of department) will explain this exercise to you in more detail,” Kanagalingam said in.

    In a press statement on Monday, the acting CEO said the cost-containment measures would have zero or minimal impact on most AirAsia employees, especially those in the lower-income bracket.

    He said AirAsia continues to monitor the developments and employ aggressive marketing and education strategies to instill the confidence of flying back in the traveling community.

    “To further spur local and regional tourism, capacity is now being redeployed to domestic and intra-Asean flights. We are also continuously engaging industry stakeholders and tourism authorities for incentives, as well as marketing and promotional collaborations,” he said.

    AirAsia is expected to register a core net loss of RM1.1 billion following lower demand and yields in Malaysia, Thailand and the Philippines on significant exposures to flights to China, Hong Kong and Macau, CGS-CIMB Research said in a note last month.

    An analyst said the market outlook for AirAsia is “definitely grim for 2020”. “This year will be a watershed year. It is a matter of mitigating from deeper losses,” the analyst said.

    Its competitor Malaysia Airlines Bhd has also slashed the salary of the senior management staff by 10% and removed all allowances effective this month.

    The national flag carrier canceled more than 1,600 flights and the figure is expected to rise further.

    Group CEO Captain Izham Ismail said in a video message to the carrier’s staff that MAB has reduced 7.1% of its capacity in the first quarter this year, including 53% of the capacity to China and 23% for North Asia, namely Korea and Japan.

    Malindo Airways Sdn Bhd was reported to have asked its staff to take up to a 50% pay cut and two weeks’ unpaid leave.

    As part of the pay cut, Malindo employees were asked to reduce their number of working days by up to 15 days a month, Reuters reported.

    The International Air Transport Association has projected a total global lost revenue of between US$63 billion (RM265.6 billion) and US$113 billion in the passenger business, more than double than its previous assessment of US$29.3 billion revenue loss.

    Markets in Australia, China, Japan, Malaysia, Singapore, South Korea, Thailand and Vietnam are estimated to see a 23% reduction in passenger numbers that translates to a loss of US$49.7 billion in revenue.

    Last month, the Malaysian Aviation Commission reduced Malaysia’s passenger traffic growth forecast from between 5% and 6% to between 4.6% and 5.7% this year as a direct impact of Covid-19.

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  • AirAsia offers six million promotional seats

    AirAsia offers six million promotional seats

    Asia’s leading low-cost carrier, AirAsia, is offering guests six million promotional seats, including zero-fare seats, to many popular destinations in Malaysia as well as overseas.

    AirAsia said customers can enjoy the promotional seats for travel beginning March 8, 2020, to July 1, 2021.

    “Booking is open for the public from March 9 to March 15, 2020, while booking for BIG members and BigPay begins on March 8,” it said in a statement today.

    It said BIG members can enjoy discounted domestic flights from as low as RM12 one way to fly from Kuala Lumpur to Johor Bahru, Penang, Langkawi, Alor Setar, and Kota Bharu.

    BIG members can also enjoy fares as low as RM71 one way when they fly AirAsia X from Kuala Lumpur to overseas destinations, including Fukuoka, Seoul, and the Gold Coast.

    Besides Japan, South Korea and Australia, international destinations covered under the promotion include Thailand, Indonesia, Cambodia, Vietnam, India, and Taiwan.

    Meanwhile, free seats are available when one books a SNAP (flight plus hotel) package from RM129 per person.

    airasia.com chief executive officer Karen Chan said AirAsia understands the current sentiments of its customers so it provides ample opportunity for people to book in advance for an affordable getaway with the travel period up to July 2021.

    “The best way to snap the lowest fares and best value travel deals is to plan ahead and book early as with this latest BIG Sale 2020,” she said.

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  • Airasia India Passes Major Security and Safety Audit

    Airasia India Passes Major Security and Safety Audit

    The AirAsia Group’s safety strategy continues to pay off with AirAsia India following hot on the heels of AirAsia Thailand to pass a major international safety audit.

    The accreditation under the International Air Transport Association’s Operational Safety Audit leaves just one member of the AirAsia Group, AirAsia Japan, still going through the process.

    It is expected to achieve accreditation soon to make the entire AirAsia Group IOSA compliant.

    AirAsia India follows AirAsia Thailand’s announcement in February and comes after similar achievements by AirAsia X Thailand in December 2018,  AirAsia Philippines in November 2018, AirAsia Malaysia in September 2018, AirAsia Indonesia in August 2018 and AirAsia X (Malaysia) in 2015.

    The IOSA certification audit is an internationally recognized and accepted evaluation system designed to assess the operational management and control systems of an airline.

    The biennial safety audit is compulsory for IATA members and airlines that have completed the audit have a safety record almost four times better than those that have not.

    It covers eight key areas: corporate organization and management systems, flight operations, operational control – flight dispatch, aircraft engineering and maintenance, cabin operations, ground handling, cargo operations and operational security.

    AirAsia India, a joint venture between India’s Tata and Sons Private Limited and AirAsia Investment Limited, began operations in 2014.

    It currently flies to 21 destinations and boasts a fleet of 29 A320 aircraft.

    “We are proud to announce that we have successfully completed the IATA operational audit,’’  AirAsia India chief executive Sunil Bhaskaran said about the accreditation.

    “We will now strive to ensure that we always maintain the highest standards of safety and operational integrity at all times.”

     

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  • AirAsia X offers a year’s unlimited flights for $181 in response to coronavirus

    AirAsia X offers a year’s unlimited flights for $181 in response to coronavirus

    AirAsia X is offering unlimited international flights for a year for just 499 ringgit ($A181) as the coronavirus hits passenger numbers.

    Passengers will be able to fly from the airline’s home base in Malaysia to Australia, Japan, China, India and South Korea as many times as they like.

    The bad news is the deal is not available to Australians, only to Malaysia-based members of the airlines’ BIG loyalty scheme.

    The AirAsia Unlimited Pass went on sale Saturday and will only be available until March 7. Among the various terms and conditions, passengers will still have to pay taxes, airport fees and charges. They will be able to use the pass until March 2, 2021.

    “This is unprecedented,” said AirAsia X Malaysia CEO Benyamin Ismail in a statement. “However, AirAsia has always been known as the disruptor and we want to restore traveler’s confidence amid the current sentiment towards flying.

    “Travelling is still very safe as long as everyone travels responsibly and is kept updated by World Health Organisation (WHO) or respective government’s travel advice.”

    Meanwhile, AirAsia X said it will defer delivery of 78 Airbus A330neo planes and consider other changes to reduce its fleet, as the coronavirus outbreak adds pressure on the loss-making carrier.

    AirAsia X said late on Thursday it might sell two A330s that could fetch up to $US100 million ($153 million) and return five others to lessors early, adding it was already in negotiations with lessors about a targeted 30% cut in lease rates.

    The airline canceled 600 flights for March, according to an investor presentation published after it reported a higher quarterly net loss. AirAsia X flagged lower forward bookings and pressure on fares in the presentation.

    The virus has deepened the challenges facing the airline and sister carrier AirAsia Group, whose Chief Executive Tony Fernandes and Chairman Kamarudin Meranun have both stepped aside for at least two months amid investigations into a corruption scandal. Airbus was alleged to have paid a $US50 million bribe for plane orders.

    Brendan Sobie, a Singapore-based independent aviation analyst, said AirAsia X was highly exposed to China and other markets in North Asia significantly impacted by the coronavirus but the carrier was also in a weak financial position prior to the crisis.

    AirAsia X shares fell by 5 percent on Friday to a record low after it posted a net loss of 95.8 million ringgit in the quarter ended December 31, increasing from an 88.1 million ringgit loss a year ago.

    Flights to and from mainland China accounted for about 30 percent of AirAsia X’s capacity before the outbreak of the virus. It has a fleet of 24 A330 planes.

    The carrier last August reached a revised deal with Airbus to take 78 A330neos and 30 long-range A321XLR narrowbodies, down from earlier plans for 100 A330neos. AirAsia X is Airbus’ biggest customer for the A330neo, a more fuel-efficient version of the older A330 model.

    AirAsia X said delivery of the A330neos would be deferred and it would move toward a dual-fleet strategy with A321s set to replace its A330s on routes of four to six hours when demand recovers.

    “We believe advanced aircraft technology has changed business dynamics as we can now fly narrow-body aircraft longer,” AirAsia X Malaysia CEO Benyamin Ismail said in a statement.

    An AirAsia X spokeswoman said the airline was evaluating market conditions and had yet to confirm the duration of the A330neo delivery deferrals. An Airbus spokesman said the manufacturer does not comment on delivery schedules for individual airlines.

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  • AirAsia X cuts 2019 loss despite revenue decline

    AirAsia X cuts 2019 loss despite revenue decline

    AirAsia X narrowed its operating loss to MYR90.1 million ($21.3 million), despite a decline in passenger numbers which affected its total revenue.

    The loss posted in 2019 is an improvement to the MYR204 million loss made in 2018.

    Revenue for the year ended 31 December 2019 declined 4% to MYR4.4 billion, as the number of passengers fell 8.3% to 6.07 million due to capacity cuts it undertook, and weaker travel demand in the first nine months of 2019.

    Total expenses fell 5.8% to MYR4.05 billion, on lower expenditures related to fuel, user charges, and other operating expenses.

    Unit cost without fuel were 1.9 cents, and including fuel, this was 2.5% lower year-on-year to 3.1 cents. While RASK was unchanged at 3 cents, RPKs were down 3%. Seat load factor was flat at 81%, and that seat capacity declined 2%.

    Net loss, however, swelled to more than MYR489 million, on significant increases in finance costs and the adoption of a new accounting standard on leases.

    As of 31 December 2019, the company’s cash and cash equivalents stood at nearly MYR308 million, up from the MYR253 million last year.

    Overseas units in Indonesia and Thailand saw a mixed performance. Indonesia AirAsia X cut its losses while Thai AirAsia X reversed its previously profitable streak.

    Indonesia AirAsia X reduced its operating losses by more than half to MYR36.7 million, after ceasing scheduled services for charter and wet-lease operations at the start of 2019. Revenue for the year stood at MYR76.6 million, while loss before tax was MYR47.3 million.

    Thai AirAsia X posted an operating loss of more than MYR137 million for 2019, reversing the operating profit of MYR48.7 million in 2018. Revenue grew 17.3% to MYR1.79 billion, while loss before tax came in at MYR86.5 million.

    AirAsia X’s Malaysia chief Benyamin Ismail says the airline has seen “significant improvements” in its business performance, as it focused on improving yields in core markets. It also began a Kuala Lumpur-Singapore service to support the route’s strong demand, as well as Kuala Lumpur-Tokyo Narita.

    In its outlook detailed in an investor presentation, AirAsia X plans to cancel unprofitable routes such as Jaipur, Lanzhou and Tianjin, and explore route suspensions as it tries to overcome the challenges from the coronavirus outbreak.

    It notes that China represents a third of its capacity, and this “poses [a] severe impact” on the company. An “aggressive” capacity management will be made in the first half of 2020, with more than 600 flights cancelled in March.

    To stimulate air travel demand and boost its short-term cashflow, it will also conduct aggressive promotions and waive off fees for its FlyThru transfer service.

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  • AirAsia X Asks To Put Off Aircraft Lease Payments

    AirAsia X Asks To Put Off Aircraft Lease Payments

    AirAsia X leases 17 A330-300 aircraft from nine lessors. While the majority of lessors have one or two aircraft each flying under AirAsia X colors, BOC Aviation and ICBC Leasing have three aircraft each at AirAsia X.

    We have approached AirAsia X to confirm this. They declined to address our questions, citing a blackout period pending release of the latest financial information later in February.

    One unidentified lessor says they value their relationship with AirAsia X. However, the depth and breadth of that relationship does not extend to, say, letting the airline skip lease payments for three months.

    AirAsia X is the long-haul sibling airline to AirAsia. AirAsia X has been around for over 12 years and now flies to 22 destinations around the Asia Pacific rim with its 24 aircraft.

    Even before the coronavirus outbreak in January, AirAsia X was encountering financial turbulence. The airline lost nearly USD$39 million in the first half of 2019. This was a ten-fold increase on its loss for the first half of 2018.

    Ongoing financial problems at AirAsia X have caused the airline to ask for lease payment holidays before.

    The coronavirus outbreak and subsequent downtown in travel demand will deepen AirAsia X’s financial woes and is likely behind this latest request from the airline.

    AirAsia X is highly reliant on Chinese tourism, dedicating 30% of its available seat capacity to the country. China is usually Malaysia’s third-biggest source of tourists. Now flights on nine of AirAsia X’s twelve Chinese routes are either suspended or canceled.

    Besides China, most of Malaysia’s tourists come from within Asia. As a low-cost tourist airline, AirAsia is a proverbial canary in the coalmine when tourist travel patterns shift.

    There is considerable speculation that the coronavirus and its impact on airlines will send some over the financial edge. Some of this speculation has come from the CEOs of stronger airlines. One CEO said he expected “weaker” airlines in the Asian region to be consolidated or go out of business.

    Despite its mediocre financial performance, AirAsia X does have significant financial firepower behind it. The airline was floated on the Malaysian stock exchange in 2014. The largest shareholder is Tune Group (the investment company for AirAsia’s Tony Fernandes and Kamarudin Meranun). AirAsia itself and various AirAsia subsidiary businesses all have significant stakes.

    AirAsia X probably has the financial muscle to pull through the current downturn in travel demand. But it will not be easy. Having to go cap in hand to aircraft lessors to ask for a payment holiday is a sign of that.

    It makes me wonder how airlines under the Lion Air group are going to survive. Two of them in mind are Malindo (of Malaysia), and Thai Lion Air. They don’t publish their financial results, do they? Or do they?

    0  Reply
    17 hours ago
    RH Hastings

    As per the recent Airbus bribery settlement (31Jan20) and in addition to their financial issues AirAsia executives may have been bribed by Airbus to buy planes. So, the UK Serious Fraud Office (SFO) and Malaysia’s government’s are investigating further. Reports suggest their payment was to AirAsia executives’ now defunct Caterham F1 car racing team. Do airline manufacturers or their representatives rank the financial and airline’s regional reputation during sales negotiations? In the west it is common to research via the likes of a Dun & Bradstreet report to ascertain reliability and condition of a seller or buyer.

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  • AirAsia Cancels Flights to South Korea Over Covid-19 Coronavirus

    AirAsia Cancels Flights to South Korea Over Covid-19 Coronavirus

    AirAsia Passengers can find the latest updates via Twitter: @AirAsia_Thai and Facebook: facebook.com/airasia. They can contact customer support on Twitter: @AirAsiaSupport, while they can check flight status through “Flight status” on the website: airasia.com.

    Thai AirAsia has canceled all flights to South Korea from March 6-27 due to the Covid-19 coronavirus outbreak. The cancellation in flights comes after the South Korean government issued a travel advisory to its citizens.

    Last week Thailand’s outbound tours were left in limbo after South Korean airlines suspend flights to Thailand amid coronavirus fears. The countries’ Health Ministry urged South Koreans to refrain from traveling to regions with confirmed coronavirus cases.

    South Korea has prioritized guarding against the entry of the virus from regions other than China. Using screening measures for passengers who have traveled to; Thailand, Singapore, Japan, Hong Kong, Taiwan, Malaysia, and Macau.

    AirAsia X has offered three options for passengers affected by this cancellation:

    (1) Passengers can postpone the travel date on the same route for one time within 30 days without additional costs. However, it will depend on seat availability on the flight and the conditions specified.

    (2)  Passengers can keep their points in the AirAsia BIG point reward account for travel in the future. Which must be booked within 90 calendar days from the original schedule. However, passengers can schedule the new travel date after the expiry date if the flight schedule is still available.

    (3)  AirAsia Passengers can request a full refund for all flights to and from South Korea.

    The airline will inform concerned passengers about the cancellation via email or SMS.

    Meanwhile, passengers can request offers via Ava Live Chat at support.airasia.com. In case of booking through a dealer or online travel agent, passengers must proceed with the agent that they had booked with. However, the airline will monitor the situation closely and update information periodically.

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  • AirAsia offers up to 30% off for flights from KL

    AirAsia offers up to 30% off for flights from KL

    AirAsia Group Bhd is offering 30% off all its flights out of Kuala Lumpur from now until Feb 23, except those operated by AirAsia India and AirAsia Japan.

    The special sale is for travel between Feb 24 and Sept 30.

    In a statement today, AirAsia said the discounted base fares are for short-haul flights from Kuala Lumpur to destinations such as Johor Baru, Bintulu, Kuantan, Maldives, Krabi and Kolkata.

    “Our goal is to make travel more affordable and seamless than ever before as we continue our transformation to become a leading online travel package platform — now offering much more than just airfares,” airasia.com CEO Karen Chan said.

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  • AirAsia active, falls 2.52% on potential RM1.1b loss amid Covid-19 outbreak

    AirAsia active, falls 2.52% on potential RM1.1b loss amid Covid-19 outbreak

    Shares in low-cost carrier AirAsia Group Bhd (AAGB) fell by as much as 2.52% at mid-morning following a report by CGS-CIMB Research that flagged a potential core net loss of RM1.1 billion for the aviation group amid the ongoing Covid-19 outbreak.

    As of 10.45am, shares in AAGB fell 3 sen to RM1.16, giving the group a market capitalization of RM3.88 billion.

    AAGB saw 14.77 million shares traded and is the sixth most actively traded counter on Bursa Malaysia today.

    At the time of writing, AAGB is just one sen away from its one-year low of RM1.15 on Feb 4, 2020.

    CGS-CIMB Research had opined in a note to investors that it was expecting AAGB to post a core net loss of RM1.1 billion in the financial year ending Dec 31, 2020 (FY20), from its previous expectation of a RM147 million core net profit.

    This was due to the impacts of the Covid-19 outbreak on passenger movements, particularly as AAGB’s operations in Malaysia, Thailand and the Philippines have significant exposure to the North Asia region, which includes China.

    These impacts include lower passenger demand and yield.

    The research house had also slashed its target price (TP) on the low-cost carrier to RM1.03, from RM1.58 previously, while maintaining its hold call on the stock.

    The lower TP is based on a lower 2020 price-to-book value (P/BV) of 0.73 times (from 1 times), which is two standard deviations below its P/BV mean since 2013.

    “AAGB is less able to tolerate unexpected changes to demand and yields given that its profitability has already been ravaged by the higher cost of leasing planes, with virtually all of its planes having been sold and leased back in the past two years. AAGB has already lost its lustre among investors, and Covid-19 will turn conditions far more hostile,” CGS-CIMB said in a note Feb 17.

    In terms of analyst coverage, AAGB has 22 analysts covering it — with 10 sell calls, 10 hold calls and only two buy calls.

    Its consensus TP stands at RM1.41 — with TPs among the analysts ranging from RM1 to RM2.16.