AirAsia X wet leases A330 aircraft to AirAsia Bhd

epa05161802 A motorist moves past an AirAsia billboard in Kuala Lumpur, Malaysia, 15 February 2016. AirAsia grew from two aircraft and three destinations in December 2001 to 107 aircraft with over 80 destinations across 22 countries. EPA/AHMAD YUSNI

KUALA LUMPUR: Low-cost airline AirAsia Bhd has entered into a US$4.93mil (RM20.54mil) aircraft wet lease agreement with its long-haul sister company AirAsia X Bhd (AAX) to mitigate operational constraints during peak travel season.

As part of the agreement, AirAsia will engage AAX’s services to wet lease one A330 aircraft to operate the Kuala Lumpur–Kota Kinabalu route from March 17 to June 12, 2016.

(“Wet lease” occurs when an aircraft owner provides both aircraft and crew.)

AirAsia and AAX told Bursa Malaysia that the wet lease would cost US$4.93mil calculated at US$5,600 (RM23,337) per block hour.

The wet lease agreement includes flight crew, maintenance of the aircraft, insurance, ground handling services and checked baggage charges. It, however, excludes costs of on-board meal services.

The carriers said AAX would service the flights according to the terms and conditions of carriage and under the agreement.

AAX may terminate the agreement due to a breach by providing an immediate notice to AirAsia.

“In the event the operation of the aircraft is delayed or cancelled due to factors directly attributable to AirAsia, its employees, agents, or subcontractors, whether caused by damage to the aircraft or operational or technical reasons, AirAsia shall be required to pay AAX the cost which is directly attributable to such delay or cancellation,” the companies said.

The transaction will not have any material financial impact to AirAsia’s financials.

In a separate filing, AirAsia said it had launched its first share buy back. (click here for news)