AirAsia X slows expansion plans

AirAsia X will decelerate its fleet expansion plans for the next three years.

Having experienced a slowdown in demand, the long-haul low-cost carrier confirmed that it will now take delivery of just 15 new aircraft between 2015 and 2017, down from the 24 previously scheduled.

The company’s main Malaysian unit will not take delivery of any new aircraft in 2015, with the six deliveries planned for next year going to AirAsia X’s Thai and Indonesian units.

AirAsia X will take delivery of 15 new aircraft between 2015 and 2017
AirAsia X will take delivery of 15 new aircraft between 2015 and 2017

“The growth strategy for 2015 will shift to a consolidation phase, where no new aircraft capacity to be allocated to core routes in Malaysia’s network in 2015,” confirmed Azran Osman-Rani, CEO of AirAsia X. “2015 will see a drop in the number of flights to Australia, while North Asia and other regions will see an increase in number of flights.

“A majority of the six aircraft deliveries will be allocated to associates in Thailand and Indonesia, which are generating positive cash flow and have more growth upside,” he added.

In total, six aircraft will now be delivered to the group in 2015, followed by four in 2016 and five in 2017. Previously the airline planned to welcome eight aircraft each year.

In terms of Malaysia, Osman-Rani said the airline’s capacity would be “tactically managed” with frequency reductions during lean seasons”. It has sealed contracts to lease out aircraft that would otherwise go unused during these periods.

“These wet lease aircraft capacity will then be returned back to Malaysia operations during our peak period in the fourth quarter,” he added.

AirAsia X has also arranged a sale-and-leaseback deal for two of its Airbus A330-300 aircraft. The company will generate approximately MYR150 million (US$44.5m) from the two aircraft, which will remain part of AirAsia X’s fleet.

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