KUALA LUMPUR: AirAsia Group Bhd's measures in managing and containing cost could provide the budget airline with at least 30 per cent savings, group executive chairman Datuk Kamarudin Meranun said.
The measures include a voluntary salary cut by both the management and senior employees, contracts renegotiations and deferment of all non-essential expenditures.
"We expect all these initiatives to result in at least a 30 per cent cost reduction year-on-year in 2020," said Kamarudin in a statement today.
.He said AirAsia would continue with the diversification of its revenue base amid tough period, with a more rigorous and market-friendly approach to expand its digital and ancillary businesses such as Santan, Teleport and BigPay.
Other than offering normal takeaways, Santan has launched a "drive-thru" service to cater to the increasing demands during the restricted movement order and help small vendors via initiatives such as marketing their food through the Santan website during the Ramadan month.
Menawhile, AirAsia today resumed its scheduled domestic flights in Malaysia with strict health controls and social distancing protocol.
The resumption of services will initially be for key selected domestic routes, before increasing gradually to include international destinations in the region.
However, AirAsia said its international flights would resume once the situation improves and governments lift borders and travel restrictions.
Subsequently, AirAsia services will resume in Thailand (May 1), the Philippines (May 16) and Indonesia (May 7), subject to approval from the authorities.
Kamarudin said the airline was working actively with all relevant regulators, local governments, civil aviation and health authorities, while adhering to guidance from the World Health Organisation (WHO) and International Civil Aviation Organisation (ICAO).
He said this ensured the highest standards of compliance and conformance are in place for every single flight we operate in our network.
"We will require guests to wear a mask and practise universally recommended protective precautionary measures including social distancing and observing high personal hygiene.
"All our aircraft, which are fitted with hospital-standard High Efficiency Particulate Air (HEPA) filters, will also be sent for a thorough disinfection every night stop," he added.
Kamarudin said flexibility remains the key to the airline business model, strong foundation coupled with robust relationships with suppliers and partners have enabled them returning to service stronger amid unprecedented challenging times.
"We do not intend to take any new aircraft deliveries this year with the target to end 2020 with 242 aircraft, a net reduction of one aircraft from last year," he said.
Kamarudin said AirAsia would relook into its orderbook with Airbus, adding that the decision to sell and lease its aircraft in late 2018 had provided the airline greater flexibility to scale back growth than owning aircraft today.
"We were also able to lock in the best price for those aircraft at prime market conditions while eliminating the residual risk of owning aircraft.
"We have also restructured a major portion of the fuel hedges with our supportive counter parties and are still in process of restructuring the remaining exposure," he said.
This will help deal with the excess of hedged volume against expected fuel consumption post Covid-19 and reduce the hedging losses if fuel price remains at today's prices.
AirAsia said its cargo and logistics unit Teleport would prioritise the transport of medical supplies to frontliners and emergency medical responders.
"AirAsia also participated in a number of recovery flights initiated by governments and private companies during the period, providing a boost to its charter service," Kamarudin said.
"To help as many local businesses as possible, we have launched the Save Our Shops (S.O.S) campaign by allowing them onboard our e-commerce platform OURSHOP with last-mile delivery by Teleport. AirAsia Foundation also launched an e-pay donation drive in collaboration with BigPay," he added.
Kamarudin said AirAsia contines to build on its strengths and especially in-house brand to emerge stronger when normalcy returns.
"We hope to continue to sustain the 1.3 million jobs and counting in the sector in the region, directly and indirectly, and double our economic contribution to Asean's gross domestic product from US$15.3 billion in 2018 to US$35 billion in 2030," he said.