PETALING JAYA: Amidst the ongoing merger and acquisition where AirAsia X Bhd
(AAX) is acquiring Capital A Bhd’s aviation business, AAX has committed to fully activating its fleet by the second half of this year.
In a filing with Bursa Malaysia, the airline, which saw its Practice Note 17 (PN17) status uplifted last November, reported that as of the end of March, its fleet size stood at 18 aircraft, with 16 already activated.
It said the focus remains on the full activation of its fleet by the second half of the year.
"The group expects to activate one aircraft in July 2024 and the final one in November 2024," the filing noted.
AAX said the activation of its full fleet is imperative for the implementation of the group's network strategy, including the continued relaunch of key profitable routes in China.
“With the recent announcement of the visa-exemption policy to China until 2025, the group aims to capitalise on the potential the market has demonstrated historically,” it said.
Additionally, the group is also assessing new destinations to be incorporated into its network and apart from, most recently, Central Asia, the group looks forward to bridging the connectivity for more regions soon.
“This tracks the group's growth and expansion strategy, in line with its ongoing engagement with Capital A for the proposed acquisition of the latter’s aviation business, encompassing airlines such as AirAsia Malaysia Bhd and AirAsia Aviation Group Ltd which in turn includes Thai AirAsia, Indonesia AirAsia and Philippines AirAsia,” it said.
The proposed acquisition, announced on April 25, is envisioned to establish an enlarged group of airlines catering to a full spectrum of short, medium and long-haul air travel, and pave the way for elevated synergistic benefits through centralised decision making and more coordinated network plans.
AAX expects to secure long-term sustainability and capitalise on the anticipated air traffic recovery, by leveraging on the “AirAsia” brand and the ecosystem.
Moreover, through the M&A, the airline will gain access to an order book with over 400 aircraft deliveries that are currently under Capital A.
“This provides the group with unbounded expansion opportunities at a time when growth opportunities are limited due to bottlenecks in the aircraft manufacturer's supply chain which in turn delayed aircraft delivery for the group,” it explained.
For the first quarter ended March 31, 2024 (1Q24), AAX saw its revenue grow by 65.6% to RM908.9mil from RM548.8mil in 1Q23, driven by more ticket sales and growth in ancillary revenue.
Ancillary revenue for 1Q24 almost doubled to RM240.6mil from RM123.3mil in 1Q23, and increased by 9% from RM219.7mil in the preceding quarter.
However, net profit for the quarter under review plunged by about 75.6% to RM80.1mil from RM328mil in the previous corresponding quarter.
AAX said operating costs for 1Q24 were impacted by the weakening ringgit against the US dollar but were mitigated by better fuel pricing.
The price of fuel was US$108 per barrel in 1Q24 compared to US$131 per barrel in the preceding quarter.
“That being said, the group continues to be focused on cost management,” it added.
The airline reported a passenger load factor of 83% in 1Q24, up from 80% in 1Q23 and 82% in 4Q23.
The average passenger fare rose by 5% to RM650 from RM619 in 4Q23, but fell by 17% from RM785 in 1Q23.
