AirAsia X expects profitable 2009

TOULOUSE (France): Long-haul budget carrier AirAsia X Sdn Bhd, which has well over RM300 million cash in hand, is set to turn in profits next year, says its chief executive officer Azran Osman-Rani.

"Probably within three to four months from operating our new planes, we will be profitable. With new planes, more passengers will fly," Azran said.

"Most important is cash flow and this is how we convince our financiers. We have been cash positive since April 2008," he said on board AirAsia X's brand new Airbus A330 aircraft on its ferry (first) flight from Toulouse to Kuala Lumpur (KL) recently.

On October 31, AirAsia X took delivery of its first new A330-300 costing US$200 million (RM720 million), which is for its long-haul operation, linking KL with destinations in Australia, North Asia, the Middle East and Europe, complementing the existing AirAsia network.

Launched in January 2007, the affiliate of low-cost carrier AirAsia Bhd earlier this year placed an order for 25 Airbus A330 aircraft.

Powered by Rolls Royce Trent 700 engines, the carrier's new A330 offers accommodation for 383 passengers in a two-class layout, with 355 seats in economy and 28 in the airline's new XL premium class.

Azran said the airline was looking at local and foreign funds to finance the purchase of its 25 A330 planes, estimated at US$5 billion (RM18 billion). So far, financing for the first few planes had been secured.

In addition to its positive cash flow, he said, branding helped the long-haul airline to seek funds in markets which were already badly hit by the credit crunch.

"When we presented to financial institutions in August, we were very fortunate because financiers in Europe had confidence in our brand. We had AirAsia," he said.

"End of August I was still in London. I was trying to convince the financiers. Normally with aircraft financing, you have to settle everything at least six weeks before delivery. We settled everything three and a half hours before take-off," he said.

"October 2008 will always be remembered when the (stock) market crashed. The timing couldn't have been worse. Nobody was supposed to lend. Nature of banks is that they only make money when they lend at higher rates. If you (banks) don't lend, you don't make money."

Despite reports of a global decline in passenger traffic, he said the carrier was still experiencing a strong forward bookings from November to March.

Azran said the second A330 will be delivered in mid-December, followed by three each in 2009 and 2010. The remaining planes are slotted for delivery up to 2013.

"With three planes next year, we can add five new destinations. We hope to fly to Japan, Korea, China, India and at least one more somewhere else," he said.

Azran said the carrier was on track to start its new flights to London in March. For its London flights, AirAsia X is in talks with three airports - Stansted, Manchester and East Midlands.

"We have made all applications and everything looks positive. Hope to announce our sales launch in a month's time.

On its marketing efforts, Azran said unlike traditional airlines which had to wait for passengers to plan their holiday destinations, the carrier had to go the extra mile to woo people to travel to places where they never dreamt of going.

"It involves a lot of pull marketing. You've got to pull passengers in. For instance, we have to collaborate more with tourism bodies, concert or sports organisers. We have to scratch our heads to find reasons for people to travel," he said. - Bernama