KUALA LUMPUR: AirAsia X
targets US$500mil to US$600mil in debt restructuring after the budget airline bought the short-haul aviation business of Capital A, says deputy group chief executive officer Farouk Kamal.
AirAsia X, the medium-haul affiliate of Capital A’s AirAsia, plans to combine the firms’ seven airlines under one banner.
“We are also looking at a lot of refinancing initiatives ... to stretch out the tenure, to reduce the interest costs and to collapse all our debt instruments into one or two loan instruments,” Farouk said in an interview on Wednesday.
The AirAsia group has become one of Asia’s largest budget airline operators since its 2001 founding.
However, pandemic travel restrictions decimated AirAsia parent Capital A prompting Malaysia’s stock exchange to classify it as financially distressed.
Consolidation of all AirAsia-branded aviation businesses under AirAsia X will allow the airlines to focus on expanding operations and reducing costs, while Capital A focuses on reviving its finances.
AirAsia X plans flights to London from as early as the middle of this year, according to Farouk – more than a decade after it last operated flights to the British capital’s Gatwick and Stansted airports. It launched flights to Istanbul in November.
The airline will also develop a hub in Bahrain to improve connectivity to Central Asia, the Middle East, Europe and Africa, Farouk said.
AirAsia X expects to receive delivery of four Airbus long-range A321LR aircraft this year which would enable it to expand beyond Asia, Farouk added.
The airline, which has a 255-strong fleet, in July ordered 50 longer-range A321XLR aircraft and agreed the right to convert 20 models already on order to the single-aisle jet.
It is also working with planemakers for regional-type aircraft, Farouk said, as it considers ordering a further 150 jets.
Following consolidation, AirAsia X targets near-term revenue approaching US$6bil as well as an earnings before interest, taxes, depreciation and amortisation margin of 20% and a passenger load of over 80%, chief financial officer Low Kar Chuan said in the same interview.
Low said the airline aimed to repay all bank loans granted during the Covid-19 pandemic, when governments’ travel restrictions decimated income, within two to three years. — Reuters
