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  • AirAsia seeking govt loan

    AirAsia seeking govt loan

    Airasia may have enough cash to last them for most of 2020 but it is currently seeking out a loan from the Malaysian government to cushion the impact from the challenging economic environment.

    The low-cost carrier’s chief executive officer Tan Sri Tony Fernandes(pic) said there was no need for bailouts and what most airlines were looking for were loans.

    “We think the cash will last us for the most part of this year and when the sales return, then we’re okay.

    “It’ll be great to get a loan as well and we’re working on that with our government. We think liquidity is available in Malaysia and Thailand, ” he told Bloomberg Markets in an interview.

    And amidst the tough environment that airlines are operating in, Fernandes remained optimistic, adding that AirAsia was lucky to have restructured its business a lot and moved towards the digital end.

    He also said the airline’s cost structure is robust enough and the group is restructuring further.

    He admitted that the coronavirus disease (Covid-19) pandemic was currently the worst crisis he has ever been through.

    “We have a lot of ideas to get going again.

    “It’s going to be an uphill slog but we remain optimistic. It’s always better to have more cash.

    “We have enough at the moment but we’ll be very happy to raise some.

    “And it’s about getting our planes flying again, that’s the most important thing right now.

    “Growth will come later, ” he said.

    Fernandes also said that AirAsia had made its representations to the government and he was sure that something would come out.

    “Tourism is 15.8% of the gross domestic product (GDP) and AirAsia itself is 1.8% of that GDP.

    “So we’re sure our suggestions will be listened to, ” he said.

    On its non-airline businesses such as e-wallet, F&B and cargo, Fernandes said the businesses were doing very well and the beauty was, they did not burn a lot of cash on that side.

    He added that they were far from others but the challenging environment currently might give them the chance to catch up.

    Asked about the talks of a merger between AirAsia and Malaysia Airlines, Fernandes said he was not aware of it as AirAsia was just focussed on getting themselves in order as he had never looked at mergers and acquisitions as a solution.

    “But at this point, we’ll keep all options open, but it’s not being discussed at the moment.

    “I think it will be very silly of me and the board to close all options, ” he said.

    On the long haul carrier AirAsia X Bhd, Fernandes said it was doing very well over the last fourth quarter and the beginning of January prior to Covid-19.

    He said it was rationalizing its fleet and most of AirAsia X’s flights have become medium-haul.

    “We’re changing the fleet, we’re bringing down routes to shorter distances and we think we’ll be beneficiaries in some ways because people want to save some money.

    “When we return, a low-cost product would be more viable and we think in the immediate future, travel will be very regional and won’t be cross-continental so we think we’re in a good spot, both AirAsia and AirAsia X, ” he said. Asked if there were any considerations for AirAsia to switch from Airbus’ A330 to Boeing’s 787, Fernandes replied no, stressing that AirAsia has an “interesting relationship” with Airbus and it has a large order book with them.

    “Whether its Boeing or Airbus, I can’t see anyone taking new planes at least for a while. I don’t think any airline is looking at growth right now.

    “The airline industry has to recover, numbers have to come down and business models will have to change. The world is changing but we’re prepared. You can put your head in the sand and cry or you can get up there and do something, ” Fernandes said

  • Two more AirAsia carriers suspend operations from April

    Two more AirAsia carriers suspend operations from April

    Indonesia AirAsia and Thai AirAsia are the latest among the AirAsia Group carriers to suspend operations, leaving just AirAsia Japan in service.

    Indonesia AirAsia will suspend domestic flights until 21 April and international flights until 17 May. Thai AirAsia will halt all domestic services during the month of April, having suspended international flights since 22 March. Indonesia AirAsia’s grounding will not have a significant impact on Indonesia, as Lion Air dominates the market.

    The grounding of Thai AirAsia will have a more significant impact on Thailand, as the airline accounts for 19% of Thailand’s total capacity in February.

    Thai AirAsia’s parent Asia Aviation says the airline is implementing cost reduction measures. This includes voluntary pay cuts for management and senior employees, halting non-essential employee travel, and imposing a hiring freeze.

    Asia Aviation expects a reduction in Thai AirAsia’s variable expenses, which makes up around 70% of its total cost. General administrative expenses could also be reduced through a work-from-home scheme for employees.

    To cope with the suspension, the company is building up its liquidity levels. At the end of 2019, its cash on hand and current investments were collectively valued at Bt3.98 billion ($122 million).

    It says: ”Thai AirAsia also has unutilized revolving credit facilities with banks and has the ability to mobilize the liquidity further by way of the credit facility backed by the remaining no-encumbrance owned aircraft and/or other approaches in the future.”

    It discloses that a transaction announced in January, for the sale-and-leaseback of nine aircraft and the outright sale of one, has been completed in March, with net proceeds totaling Bt3.6 billion.

    Moving forward, Thai AirAsia will not take delivery of any aircraft this year and will study the number of aircraft it needs. The parent company adds that any significant capital expenditures will either be suspended or delayed.

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  • AirAsia Indonesia suspends all flights starting April 1

    AirAsia Indonesia suspends all flights starting April 1

    Amid the alarming spread of COVID-19 across the country, low-cost carrier AirAsia Indonesia announced on Saturday that it would suspend all its QZ flight code services starting April 1.

    The carrier’s domestic and international routes will be temporarily suspended until April 21 and May 17, respectively.

    “AirAsia Indonesia will continue to monitor the development of the situation and conduct steps to anticipate what’s required to continue our flight services,” read the statement.

    The airline said affected passengers would be notified by email and SMS. Passengers can access support.airasia.com to either reschedule their flight before Oct. 31 at no additional charge, or convert the amount paid for the flight into a credit account that can be used for the next 365 days.

    Those who booked their flights through booking group services, travel agencies or other third parties are advised to contact the respective parties.

    Passengers who need to travel in the near future are advised to reschedule their flight to a date prior to April 1.

    Meanwhile, on March 20 national flag carrier Garuda Indonesia announced that it would continue to operate some of its services, including to Australia and Netherlands.

  • Thai AirAsia X Schedules Airbus A330 Charter Flights To Croatia

    Thai AirAsia X Schedules Airbus A330 Charter Flights To Croatia

    Bangkok-based long-haul airline Thai AirAsia X has scheduled four charter flights between Bangkok and the Croatian capital Zagreb in May and October. However, seeing that AirAsia recently announced it is suspending almost all flight operations, will these actually go ahead?

    AirAsia is temporarily parking almost all of its fleet as a consequence of severe travel restrictions imposed by countries across the world to which AirAsia affiliate airlines operate.

    Earlier this month, the airline had an incredible promotion called the Big Sale with deals on flights scheduled until 1st of July 2021. Tickets were being sold with either very heavy discounts, or completely free. Passengers only had to pay the tax charge, which on some flights amounted to as little as $2.83.

    Flights from Kuala Lumpur to Seoul in Korea, and to Australia’s Gold Coast, Perth, Melbourne, Sydney, and Taipei in Taiwan, were priced at just $16 during the sale. However, even though these reductions were incredible, they clearly were not enough to stimulate sufficient demand for air travel. Thus, AirAsia is now parking much of its fleet.

    Unlike AirAsia, Thai AirAsia X has actually suspended all flights, not just international ones. The suspension started on the 16th of March and will last for three months. It is therefore unclear whether the scheduled charter flights from Bangkok to Zagreb will even take place.

    Five rotations have been scheduled for the planned Thai AirAsia X charter services from Bangkok to Zagreb.

    The dates are the 1st of May, the 6th of May, the 11th of May, the 13th of October and the 19th of October. Clearly, the scheduling is done to cater for tourist demand outside of the peak holiday season. An Airbus A330 will be operating the flights on all dates.

    Thai AirAsia X is relying on evidence of existing demand to support these charter services. Presently, passengers wishing to reach Zagreb from Bangkok have a variety of connecting options of reasonable affordability.

    For example, for a seven-day journey departing Saturday 3 October and returning Saturday 10 October, options include:

    • Emirates ($750): a 14-hour journey with a stop in Dubai of under two hours
    • Turkish Airlines ($750): a 14-hour overnight journey with a stop of under two hours in Istanbul Airport for (though this might be a very short stopover given the difficulties Istanbul’s new airport is facing)
    • Turkish Airlines ($680): a 15.5-hour daytime journey with a stop in Istanbul of under three hours
    • Qatar Airways ($700): a 15-hour journey with a 1.5 hour stop in Doha
    • Austrian Airlines ($675): a 13-hour journey with a one-hour stop in Vienna
    • Eva Air and Croatia Airlines ($2,000): a 13.5-hour journey with a 1.5-hour stop in Vienna
    • Air France ($785): a 17-hour journey with a three-hour stop in Paris
    • Lufthansa and Croatia Airlines ($785): a 17.5-hour journey with a four-hour stop in Frankfurt

    For a relatively small market, and given that Zagreb Airport is not highly attractive to airlines, this is a highly satisfactory range of services. Stopovers as short as one hour are on offer, and competition from carriers of various alliances keeps prices reasonably low.

    Thai AirAsia X will be entering an already crowded market.

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  • AirAsia Group hibernates fleet

    AirAsia Group hibernates fleet

    AirAsia Group announced, at the weekend, it is temporarily hibernating most of its fleet across its entire network in Asia, in view of the COVID-19 pandemic that led to extensive border restrictions.

    The actual fleet downtime differs with each of the group’s member airlines.

    AirAsia Malaysia suspended all flights, international and domestic, 28 March and that continues to 21 April.

    AirAsia Philippines suspended all flights 20 March, and that continues to 14 April

    AirAsia Thailand suspended all international flights from 25 March to 25 April and now suspends all domestic services from 1 to 30 April.

    AirAsia Indonesia suspends all domestic flights 1 to 25 April and international flights from 1 April to 17 May.

    AirAsia India suspended all flights 25 March for 21 days. (The airline flies only domestic routes)

    AirAsia X Malaysia suspended most flights from 28 March until 31 May. The airline only services international routes.

    AirAsia X Thailand suspended all flights 16 March for three months. Its DMK-ICN service suspended until 19 April.

    Issued on behalf of the entire AirAsia Group and the AirAsia X Group the statement said: “With governments imposing travel and movement restrictions including home quarantine orders, AirAsia is also playing its part in helping curb the spread of the virus in order to keep flying safely for everyone.”

    The group added that it was prepared to reinstate services as soon as the situation improves and subject to the necessary regulatory approvals.

    Passengers have the option of converting flight bookings 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 31 October 2020.

    The changes to bookings are made via AirAsia virtual Allstar AVA on airasia.com or support.airasia.com. However, passengers mainly through social media posts that virtual chatbot AVA could not keep up with the influx of requests with no back-up system manned by people to relieve the pressure.

    The group added that the “temporary fleet hibernation is the right thing to do to ensure the well-being of our passengers and employees.”

    Both management and senior employees of AirAsia Group have volunteered a salary sacrifice, ranging from 100% at the very top to 15%.

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

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  • 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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