Image Courtesy: Air Asia
AirAsia resumed its domestic schedule service on specific routes in Malaysia. Also, starting today the airline will be resuming service to Thailand, then the Philippines and Indonesia on May 16th and May 7th respectively. All flight resumptions are subject to approval from the authorities.
The airline has strict health and social distancing protocols and controls in place in compliance with the regulations. Flights will be resumed on specific domestic routes. Flight routes will increase gradually to include international destinations once the travel restrictions are approved.
Datuk Kamarudin Meranun, Executive Chairman of AirAsia Group said: “Flexibility remains the key to our business model. Our strong foundation coupled with robust relationships with suppliers and partners have enabled us to return to service stronger amid these unprecedented challenging times. We do not intend to take any new aircraft deliveries this year with the target to end 2020 with 242 aircraft, a net reduction of 1 aircraft from last year. We are re-looking at our orderbook with Airbus. The decision to sell and lease our aircraft in late 2018, has provided us greater flexibility to scale back growth than owning aircraft today. We were also able to lock in the best price for those aircraft at prime market conditions while eliminating the residual risk of owning aircraft.
“We have also restructured a major portion of the fuel hedges with our supportive counter-parties and are still in process of restructuring the remaining exposure. This will help deal with the excess of hedged volume against expected fuel consumption post-COVID-19 and reduce the hedging losses if fuel price remains at today’s prices. Further measures in managing and containing cost include both the management and senior employees of AirAsia Group volunteering a salary sacrifice, re-negotiating contracts and deferring all non-essential expenditures.
“We expect all these initiatives to result in at least a 30% cost reduction YoY in 2020.”
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