The AirAsia Group is “relooking” its orders for Airbus aircraft, as it gears up for return to service across its various networks.
The airline group also confirmed that it will not be taking delivery of any new aircraft for the rest of the year, and targets a fleet size of 242 aircraft by year-end.
This is a net reduction of one aircraft from end-2019, AirAsia Group executive chairman Kamarudin Meranun says.
Cirium fleets data indicates AirAsia has more than 350 A320neo family aircraft on order, the bulk of them A321neos. Long-haul subsidiary AirAsia X also has close to 80 A330neos on order.
The group’s earlier estimates indicate that AirAsia and AirAsia X were due to receive 14 aircraft in 2020, and a further 29 aircraft in 2021.
Kamarudin, who stopped short of providing more details on its discussions with Airbus, notes that “the decision to sell and lease our aircraft in late 2018, has provided us greater flexibility to scale back growth than owning aircraft today”.
The group has also restructured “a major portion of the fuel hedges” in a bid to cut down hedging losses should fuel prices remain at its current lows.
“Further measures in managing and containing cost include both the management and senior employees of AirAsia Group volunteering a salary sacrifice, re-negotiating contracts and deferring all non-essential expenditures,” says Kamarudin.
Taken together, the measures should help shave 30% off the year’s costs, he adds.
In early April, group chief executive Tony Fernandes made similar comments on aircraft deliveries.
During an interview on Bloomberg TV, Fernandes expressed skepticism about airlines taking delivery of aircraft anytime soon.
“It’s hard to be talking about new aircraft right now when demand is what it is, but we’ll have to see. No airline is talking about growth right now. It’s about hunkering down, being positive, and bouncing back when the lockdowns come out and we begin to beat this virus, which will eventually happen,” he said.
Nearly all of the AirAsia group carriers have had to suspend their operations in April through May as a result of travel restrictions and falling demand from the coronavirus outbreak.
Malaysia’s AirAsia will restart scheduled domestic service on 29 April, with the group’s other subsidiaries in Thailand, the Philippines and Indonesia gradually reinstating service through May.
“The resumption of services will initially be for key selected domestic routes, which will increase gradually to include international destinations around the region, once the situation improves and governments lift borders and travel restrictions,” the group states.