AirAsia Aviation Group Ltd group chief executive officer Bo Lingam (left) and group chief commercial officer Amanda Woo.
SEPANG: AirAsia Group’s short-haul network has recovered to 90% of pre-pandemic levels in 2024, with full recovery expected by year-end.
Meanwhile, its long-haul network has reached 92% of 2019 levels and is projected to hit 93% by year-end, according to AirAsia Aviation Group Ltd (AAAGL) chief operating officer Amanda Woo.
To note, AAAGL, the short-haul airline arm of Capital A Bhd
, is in the process of being consolidated into AirAsia X Bhd (AAX) under a RM6.8bil deal as part of Capital A’s regularisation plan to exit Practice Note 17 (PN17) status and streamline its aviation operations.
“For AirAsia Malaysia, we expect full recovery by 2025. As of the first quarter this year, we are already at about 90% of our pre-pandemic capacity,” Woo said during a media briefing on AirAsia Aviation’s outlook for 2025.
Meanwhile, she said AirAsia Thailand has surpassed pre-pandemic levels, with frequency and capacity currently about 8% higher than in 2019.
Woo said the airline is targeting nearly 30% growth for its Thailand operations against pre-pandemic levels by 2025.
“For 2025, our main focus is to ensure AirAsia Malaysia fully recovers and AirAsia Thailand continues to strengthen its market share,” Woo said.
As for AirAsia Indonesia, she said frequency recovery has reached about 75% of 2019 levels, with a target of 80% by 2025.
She noted that the group has significant plans for Indonesia, particularly in expanding connectivity from Denpasar to secondary cities in Australia.
“The game plan for Indonesia is for us to dominate our connectivity out of Denpasar into Australia, especially all the secondary cities, which are less connected,” Woo said.
“We recently launched Darwin to Denpasar, following Cairns last year. Soon, we will introduce Adelaide to Denpasar as well. Our goal is to enhance connectivity into Australia from both Malaysia and Indonesia.”
She said the airline is also focused on expanding its “Fly-Thru” service, which allows passengers to connect seamlessly without rechecking baggage or passing through customs.
According to Woo, the service accounted for 8% of total seat sales in 2019, with a target to increase this to 10% of total passengers by 2025.
This aligns with its chief executive officer (CEO) Bo Lingam’s vision to position Kuala Lumpur as a key aviation hub, comparable to Dubai.
Bo said AirAsia is responding directly to market demand and opportunities, targeting over seven million Fly-Thru guests this year, up from 4.3 million in 2024.
“Fly-Thru is expected to contribute 10% of passengers this year, leveraging Don Mueang International Airport in Thailand and Kuala Lumpur International Airport as key hubs to maximise traffic from North Asia, Australia, Central Asia and the Middle East,” he said.
“Our mega hubs in Kuala Lumpur and Bangkok-Don Mueang currently handle 95% of Fly-Thru traffic.
“At the same time, we will expand other hubs and aim to add over 1,700 weekly return flights and 323,336 weekly seats across the group by the end of 2025.”
On fleet expansion, Bo said AirAsia Aviation plans to add 14 narrowbody aircraft and one widebody aircraft this year, bringing its total fleet to 263 aircraft by 2025.
“So far, four aircraft have been delivered, the fifth is expected this month, and the rest will arrive progressively throughout the year,” he said.
The group is also reactivating 17 narrowbody aircraft and one widebody aircraft.
Addressing concerns over aircraft shortages, Bo said there are no issues with availability.
“If demand remains strong, we will explore the second-hand market and lease planes,” he added.
On additional new aircraft, Bo said discussions are ongoing with Airbus, Embraer and COMAC, with a decision expected in June this year.
Meanwhile, deputy group CEO Farouk Kamal said the airline is in the final stages of securing up to RM1bil in debt financing from an undisclosed local bank to refinance its US dollar-denominated borrowings.
He noted that existing US dollar debt carries interest rates of around 11% to 12%, whereas shifting to local financing could lower this to 7% to 8%.
“As we (Capital A) exit the PN17 status, the appetite from domestic bank lending will be there,” Farouk said.
Beyond bank loans, he said the airline is also considering other refinancing avenues, including the bond market.
“We are looking at loan lending, but we are also exploring the public bond markets,” he said.
AAAGL has guided an earnings before interest, taxes, depreciation and amortisation (Ebitda) of between RM4bil and RM4.8bil for its short-haul airline operations in 2025, supported by projected revenue of between RM22bil and RM24bil, as it expects short-haul flight frequency to return to pre-pandemic levels by year-end.
According to Farouk, AAAGL is targeting to carry 70 million passengers this year, an 11% year-on-year increase.
Meanwhile, he said AAX, which operates the group’s long-haul flights, has set an Ebitda target of between RM500mil and RM550mil for 2025, with revenue projected between RM3.5bil and RM4bil.
