AirAsia X will ask lessors for lease reductions across its entire fleet as the coronavirus crisis puts a strain on its business.
The Malaysian low-cost long-haul carrier has targeted a 30% lease reduction and plans to renegotiate maintenance reserves.
It is also seeking the early return of five leased aircraft to save costs, according to an investor presentation released alongside the airline’s 2019 financial results.
Cirium reported earlier this month that AirAsia X approached lessors for lease rental deferrals, though it declined to confirm then.
In addition to renegotiating lease rentals, the LCC says it will defer delivery of its new generation Airbus A330-900neos and intends to sell two A330-300s for gross cash proceeds of up to $100 million. It adds that it has short-term wet lease arrangements in the pipeline.
“The Covid-19 outbreak has impacted AirAsia X particularly as we are one of the largest foreign airlines operating into China, a market which represents 30% of our capacity,” says chief executive, Benyamin Ismail.
He adds that the airline is considering using 236-seater A321s for medium-haul thin routes as this would “better match demand than the 377-seater A330”. The A330s will continue to serve routes longer than six hours.
“Despite these very challenging circumstances we wish to provide assurance that efforts are in place to counter the impact of the current situation.”