business

AirAsia X upbeat about outlook 

SEPANG: AirAsia X Bhd has started 2023 on a solid financial footing following the success of its major debt restructuring and renegotiations of its financial commitments after a tough three-year battle with the Covid-19 pandemic.

Chief executive officer, Benyamin Ismail said the best decision for the long-haul low-cost airline was to get a 99 per cent cost cut to give it a fresh start.

"Our fresh start is not a fresh start where we get funding but it's a fresh start where we have a clean balance sheet, new negotiated terms and we bring down the cost structure of the business," he told The New Straits Times in an interview recently.

AirAsia X's cost structure has gone down by 35 per cent with cost per available seat kilometre (CASK) lowered to 1.42 sen from 6.95 sen while its revenue per available seat kilometre (RASK) rose 13 per cent to 19.96 sen.

The airline, which has been operating since 2007, currently has 14 Airbus A330 aircraft in its fleet whereby nine are operational and the rest are undergoing maintenance and waiting for the approval from the Civil Aviation Authority of Malaysia (CAAM) to fly.

The budget carrier has carried some 500,000 passengers since Malaysia's borders reopened on April 1 2022.

AirAsia X announced its debt restructuring plan in 2020 that involves shaving off RM63.5 billion debt to RM33.65 billion as well as renegotiating commitments with creditors as well as deferring aircraft deliveries.

The carrier, which is one of the many commercial airlines worldwide that was hard hit during the pandemic, had RM974.5 million injection from its existing shareholders in November 2021 as it does not receive any external financial support.

"In this current situation, we're in a better place. I think a lot of it is driven by the restructuring itself…If you ask where we are (in terms of our) position now, I think we're at a very comfortable position now," Benyamin said.

AirAsia X posted its first net profit ever after three years of RM153.48 million on the back of RM339.29 million revenue for its sixth quarter ended 31 Dec 2022 driven by surging air travel demand.

The airline announced its largest quarterly net loss of RM5.67 billion for the quarter ended March 31 2021 while revenue dropped 29.6 per cent to RM38.49 million as majority of its fleet were grounded due to the global lockdown.

Moving forward, Benyamin said all airline subsidiaries under its sister company Capital A Bhd would be put under AirAsia X holding group together with AirAsia X.

The holding group would be renamed AirAsia Aviation Group as part of the companies' restructuring plan.

The airlines that would form the group besides AirAsia X are AirAsia Malaysia, AirAsia Thailand, AirAsia Philippines, AirAsia Indonesia and Thai AirAsia X.

Benyamin said the airlines would continue to operate individually after they become part of the same group since each airline has its own air operating certificate (AOC) while the routes and fleet would maintain as it is.

"There will be status quo. All the leases will also be at each individual (airline) AOC level because we'll also have our balance sheets," he said, adding that the restructuring plan would be submitted to Bursa Malaysia soon.

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