FULL BACKING: Founders expect AirAsia X to fly back into profit next year on new turnaround plan
AIRASIA X Bhd founders Tan Sri Tony Fernandes and Datuk Kamarudin Meranun are confident that the carrier will fly into profitability by end-2015 with its new turnaround plan.
The prominent leaders in Asia’s low-cost carrier (LCC) scene said they would spend more time to help AirAsia X get back on its feet, although Fernandes brushed off talk of a management shake-up for the airline.
“We fully support the current management and there are no plans for management change at the moment,” Fernandes said at a press conference after the launch of AirAsia Bhd’s Asean Pass, here, yesterday.
He also rubbished reports that the airline was having problem paying its staff and considering a management reshuffle.
AirAsia X, the long-haul low-cost arm of the AirAsia group, posted a third-quarter net loss of RM210.85 million from a RM26.44 million net profit in the same period last year.
For its nine months, the airline recorded a net loss of RM350.92 million from a net profit of RM44.34 million a year ago.
Its share price dropped 7.86 per cent to a historical low at 64.5 sen on Wednesday. Yesterday, the stock fell three sen to close at 61.5 sen.
The 2015 turnaround plan will include revising AirAsia X’s revenue strategy, which will see it increasing sales by cutting costs and consolidating with AirAsia.
There also will be plans to increase its ancillary income, which is one of the revenue generators for most LCCs globally, and slow its fleet size growth by deferring aircraft orders for the next two to three years.
“There are also external factors such as the fuel price. Our profits are greatly influenced by fuel prices and the current US$93 (RM313) per barrel of jet fuel will tremendously help us turn around by next year,” Fernandes said, adding that details on the plan would be announced soon.
Maybank Investment Bank Bhd (Maybank IB) said AirAsia X’s nine-month loss was larger than expected and its unencumbered cash was at an all-time low, with gearing soaring to 2.1 times as at end-September.
It forecast a 46 per cent higher core net loss of RM419 million for full-year 2014 versus a RM22 million net loss last year.
Maybank IB has put a “sell” call on AirAsia X with a target price of 57 sen.
Meanwhile, the AirAsia Asean Pass, launched yesterday, will enable travellers to use pre-purchased credits at a fixed-rate for flight bookings to more than 137 destinations in Asean.
It is expected to be commercially launched by January 15 and be available at RM500 for 10 credits and RM900 for 20 credits (each credit is worth RM50).