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AirAsia X expects to break even in 2H 2014

FARNBOROUGH, London: AirAsia X, the long-haul unit of Asia's largest low-cost airline, AirAsia Bhd, expects to break even in the second half of the year.

Its chief executive officer, Azran Osman-Rani, said about two-thirds of the airline's capacity had reached maturity and profitability while one-third was still in 12-month loss-making investment mode.

An airline, when it launches a new route, will take about a year to determine the route's profitability or loss.

AirAsia X, which currently operates 23 A330 aircraft, invested in its affiliate, Thai AirAsia X and hoped to invest in a stake in Indonesia AirAsia X.

"Thai AirAsia X started with two planes and we hope the investment in Indonesia would be able to start by year-end and be fully operational next year," he told reporters after a signing ceremony with Airbus on the order of 50A330-900 neo, here today.

Azran Osman said AirAsia X's base in Malaysia was much bigger and would be able to absorb whatever start-up losses in Indonesia by the fourth quarter of this year.

Also present were AirAsia Group chief executive officer, Tan Sri Tony Fernandes, AirAsia X chairman Tan Sri Rafidah Aziz, Airbus president, Fabrice Bregier, and chief operating officer for customers, John Leahy.

On the latest deal, Azran Osman said the airline ordered 50 A330 neo worth US$13.8 billion to be delivered between 2018 and 2024.

He said the airline also signed a memorandum of understanding for an additional 50 purchase rights with Airbus.

"The beauty of the deal is that I have the flexibility of replacing our current engine orders instead of taking what were ordered before depending on the market.

I don't have to decide now whether to replace or supplement them," he said.

Azran Osman said the new A330 neo would also give AirAsia X the capability to fly to Europe as it was 26 per cent more cost-efficient than the A340 that were used to fly to London and Paris.

He said the latest deal with AirAsia X would further consolidate the position of the AirAsia Group as one of Airbus' largest airline customers in the world.

The A330-800 neo and the A330-900 neo are two new members of Airbus wide-bodied family launched in July with first delivery scheduled in the fourth quarter of 2017.

It incorporates latest generation Rolls-Royce Trent 7000 engines, aerodynamic enhancements and new cabin features.

Benefitting from the unbeatable economics and high reliability of the A330, the A330 neo reduces fuel consumption by 14 per cent per seat, making it the most cost-efficient, medium-range wide-bodied aircraft in the market.-- Bernama

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