AirAsia X to cut fares further as fuel costs fall

PETALING JAYA: AirAsia X Bhd expects to gradually lower airfares following the recent decline in jet fuel prices, while restoring capacity that was reduced during the surge in fuel prices caused by the West Asia conflict.

AirAsia Aviation Group Ltd group CEO Bo Lingam said the airline had already reduced fares by 5% on June 15 and would continue reviewing prices weekly in line with fuel movements.

“Fuel prices have gone down. Hopefully everything in West Asia is getting better, and we can move on immediately after that. I can already see demand picking up over the weekend as well,” Bernama reported him as saying at a briefing in Sepang today.

Despite the high fuel prices and global disruptions which caused the airline to incur losses of RM150 million in March, Bo said AirAsia maintained a strong 83% load factor from January to May this year.

He said the airline had spent the past three months reviewing its network, suspending underperforming routes, and enhancing cost management measures.

Bo said the airline had also accelerated maintenance and fleet optimisation efforts, including the gradual retirement of older aircraft with higher fuel consumption and maintenance costs.

“We are sending back all the old aircraft that are 16 to 17 years old. There are about 12 such aircraft this year.

“We are making sure we streamline our routes and optimise our network because these older aircraft consume more fuel, making it pointless to keep them. Their maintenance costs are also higher,” he said.

Bo said AirAsia X would receive seven additional Airbus A321LR aircraft next year after taking delivery of two this year, allowing it to deploy more fuel-efficient aircraft on medium- and long-haul routes.

He said the airline expects to restore most of its reduced capacity by the end of August.

“What we are doing now is bringing back flights that we capacity-managed. As demand comes back, we will slowly restore capacity to original levels,” he said.

Bo said the group remained committed to its growth plans, including routes to Bahrain and London, scheduled to start in August.