AIRASIA X Bhd, the long-haul low-cost arm of AirAsia Group, is optimistic of delivering better fourth-quarter results this year against the same period last year.
Its chief executive officer, Azran Osman-Rani, said the quarter would reflect the maturity of many of the airline’s initial loss-making start-up routes introduced late last year.
“In our long-haul low-cost model, it takes about a year on average to break even whenever we expand new routes or flight frequencies because we have to stimulate some 100,000 new passengers on every aircraft that is in use.
“So, after about a year, we would start to recover or break even. The big part of our expansion had been in the fourth quarter of last year. By the end of this year, the one-year period would be complete. I am optimistic about the fourth-quarter results,” he said on the sidelines of the Future Travel Experience Asia 2014 conference, here, yesterday.
For the third quarter ended September 30 2014, AirAsia X posted a net loss of RM210.85 million compared with a small net profit of RM26.44 million in the same period last year.
Its revenue, however, rose to RM698.76 million from RM601.5 million a year ago.
Meanwhile, for the full nine months of this year, the airline posted a net loss of RM350.92 million on the back of a higher revenue of RM2.12 billion.
On future plans, Azran said the airline will focus on expanding its network in Northeast Asia, including China, Taiwan, South Korea and Japan, as well as in Indonesia and Thailand.
He said its short-term plan includes capacity management.
It means reducing the number of new aircraft delivery that it originally plans to take from next year, as well as reducing some of its capacity on routes that have excess capacity in the market during lean seasons.
“We will also re-
deploy some aircraft to more profitable leasing operations and bring them back during peak periods in the fourth quarter.”
On plans to re-
introduce the Kuala Lumpur-London and Kuala Lumpur-Paris routes, Azran said the airline’s A330-300s would not be able to fly non-stop to the two destinations.
“We need to figure out the right way to fly passengers at attractive prices.”