AirAsia X anticipates full reactivation of fleet by year end

AirAsia X anticipates a full reactivation of its fleet by the end of the year with 18 operational aircraft. In its second quarter report, the airline said the full reactivation of its fleet will be the ""final hurdle"" for the airline's network expansion in the immediate term. ""We expect our two remaining aircraft to rejoin operations by the second half of the year and this is estimated to deliver further upside to our bottom line, further driven by the appreciation of the Malaysian ringgit and lower jet fuel prices,"" said AirAsia X CEO Benyamin Ismail. In the second quarter of the year, the Capital A Berhad group airline had 16 aircraft in operation with two in maintenance. Meanwhile, AirAsia X Thailand had six aircraft in operation with two in maintenance. AirAsia X Thailand's fleet is also expected to grow to 10 operational aircraft by the end of the year. The airline is currently negotiating with a lessor for the induction of one additional aircraft to the fleet for the first quarter of 2025, it added. Capital A recently closed a $443 million revenue bond, which it said would strengthen AirAsia's financial position and to facilitate in the company's reactivation of its fleet and refinance its lease liabilities. CEO of Capital A's aviation group Bo Lingam commented in the report: ""The recent success of closing the USD443 million revenue bond is a truly transformational step towards our continued growth."" In early August 2024, AirAsia X submitted the listing application and draft circular to Bursa Malaysia Securities Berhad, detailing its proposed acquisition of Capital A's entire equity interest in AirAsia Aviation Group and AirAsia Berhad to establish an ""enlarged aviation group"". The company said it will undertake the proposed acquisitions directly to expedite the process. ""Once completed, the enlarged aviation group will be well-positioned to attract strong interest from investors, leveraging the significant growth potential of the critical aircraft orderbook which paves the way for our growth ambitions towards becoming a leading player in the global aviation industry,"" said Ismail. Lingam added: ""In our next chapter, we will focus on fostering tight collaboration with the AirAsia X team to ensure a smooth transition given the impending corporate disposal to ensure we maximise operational and commercial synergies between the short haul and long haul groups."" AirAsia X said it is focussing on enhancing its network across more profitable regions where connectivity is limited and demand high. It added that it is ""venturing into unique markets"", citing its newly launched route to Nairobi in Kenya, and promising ""more to come."" It added that China was ""showing an encouraging return"" in its network with flights into the country regularly having a passenger load factor of over 90%. Capital A Berhad - consisting of its aviation group and Capital A companies - reported a net operating profit of RM52 million ($12.1 million), as well as an EBITDA of RM735 million ($170.5 million). However, it reported a net loss of RM542.5 million ($125.8 million), largely due to RM403.9 million ($93.7 million) in unrealised foreign exchange losses as well as losses related to non-operating aircraft costs. Despite the quarter being typically weaker for the airline and without a full activation of its 18 A330 aircraft, AirAsia X's revenues had still climbed 30% to RM669.1 million ($155.2 million), driven by a 42% increase in passengers carried, when compared to the second quarter last year. However, the company's EBITDA fell from last year's second quarter of RM101 million ($23.4 million), down to RM58 million ($13.5 million). AirAsia X's net profit was down slightly from RM6 million ($1.4 million) last year to RM5 million ($1.2 million) - driven by weaker currency exchange to the US dollar and slightly higher jet fuel prices. Total operating expenses were up 40% compared to the second quarter, with its cost per available seat kilometre (CASK) at 13.90 sen, up from 11.75 sen. Overall passenger load factor was up seven percentage points to 83% in the quarter. In addition, revenue per available seat kilometre (RASK) was up 4% to 15.19 sen, compared to the same quarter last year. AirAsia X Thailand revenue was up 8% to RM378.9 million ($87.9 million), while its net operating profit was down from RM34 million ($7.9 million) to RM8 million ($1.9 million) in the period. This was largely driven by its ramped up operations driving up maintenance and overhaul expenses, as well as aircraft fuel costs. However, net profit was RM11 million ($2.6 million), swinging from last year's second quarter loss of RM75 million ($17.4 million).