AirAsia X’s Post-Pandemic Strategy Focuses on Cost Containment and Fleet Expansion

25.08.2023 - 13:34 / skift.com / Peden Doma Bhutia / Tony Fernandes

Capital A’s long-haul budget carrier AirAsia X reported its return to black with a net profit of $71 million and a revenue of $119 million in the first quarter of 2023.  

The shareholders’ equity for the airline has also demonstrated a positive turnaround to $9 million, from a negative of $62 million in the preceding quarter. A positive development for the airline that’s due to file its regularization plan.

In April, the airline had requested stock exchange Bursa Malaysia for an additional three months to file its regularization plan.

Speaking to Skift earlier this year, Tony Fernandes, CEO of AirAsia parent company Capital A, had said this year AirAsia X expects to exit the Practice Note 17 (PN17) status, which classifies it as a financially-distressed firm.

Last year, Capital A had also submitted plans for a corporate restructuring, to pull all its airlines under one existing structure as Fernandes stepped down as the acting group CEO of AirAsia X.

Recently, the company announced a proposed placement of shares with key institutional investors, potentially raising up to $11 million of new capital to bolster its short-term working capital requirements.

“This would help to strengthen the balance sheet as the company continues to recover and grow its operations in this post-pandemic era, primarily for the reactivation and maintenance of its growing fleet,” Ismail had said.

The airline’s fleet reactivation strategy also remains on track to support the ramp up of flight frequencies, CEO Benyamin Bin Ismail said during an earnings call on Monday.

Having activated two more aircraft in the first quarter, the airline currently has 17 aircraft in its fleet of which 11 are operational, even as six are in line to commence operations.

The airline is currently servicing or awaiting service for three out of the six aircraft. Additionally, the remaining three planes are awaiting the Civil Aviation Authority of Malaysia’s approval to be inducted into business.

“We are taking additional aircraft as we speak on a yearly basis and will be looking at growing that number over the next few years to go back to 24,” Ismail said.

Targeting to bring 330neos in 2026, AirAsia X also said that it is in negotiations with Airbus to accelerate some of the order books forward.

“We also remain careful that maintenance, repair, and operations slots and activation capabilities is tough,” said the AirAsia X CEO.

Calling parent company Capital A’s engineering arm — Asia Digital Engineering (ADE) — the goldmine of the group, Ismail said that with ADE coming into the business, the airline hopes to start maintenance, repair, and operations of 330s by next year.

The airline also hopes to reach its maximum capacity recovery probably by the