AirAsia X has cut a significant number of routes and reduced its fleet size. The airline has placed on hold delivery of 78 Airbus A330neos as part of an effort to reduce costs to counter the effect of the coronavirus.
According to the carrier’s latest financial statement, plans include delaying its A330-900 deliveries, selling two A330-300s, and the early return of a further five aircraft to lessors. The aircraft sales could reach a market price of US$100 million while the airline expects new lessor agreements to slash its lease rates by 30%. The airline did not elaborate on the duration of the A330-900 delivery deferrals but did add that it was working on additional short-term wet-lease agreements while renegotiating the company’s lease maintenance reserves. AirAsia X operates a fleet of 24 A330-900s, revised its deals with Airbus in August 2019 to take 78 A330-900s and 30 long-range A321XLR narrowbodies rather than 100 A330neos.
AirAsia X plans to focus on a dual-fleet strategy and replace its current fleet of 377-seat A330 service on medium-haul thin routes using the 236-seat A321. It will also use the A321s on routes within a six-hour radius from its Kuala Lumpur hub. Further, plans call for slashing a number of non-profitable routes including Tianjin and Lanzhou in China, and Jaipur in India. The airline said it had already terminated more than 600 flights from March and will undergo an aggressive capacity-management programme for the first half of 2020 to mitigate challenges posed by the coronavirus.
“The Company expects major headwinds for the first half of 2020 amidst the outbreak of novel coronavirus, on top of the persisting global economic slowdown as well as irrational competition within the local aviation industry,” said AirAsia X Group CEO Nadda Buranasiri. “A downtrend has been observed on passenger bookings in the forward months, as all tourism-related businesses face the impact of the virus outbreak.”
