US Reporter

AirAsia X Grows its Revenue Despite Economic Woes

Despite the state of the economy, AirAsia X has increased its revenue. According to aviation experts, “strong demand” favors the industry’s outlook.

“We’re looking to add 20 more aircraft to the fleet for the first time in a long, long time, even before Covid,” said Tony Fernandes, the CEO of Capital A, the parent company of AirAsia.

“In AirAsia, we have 205 aircraft, and in AirAsia X, we have about 20 aircraft. So getting slots and getting them ready for service has been a big challenge.”

This week, Fernandes gave up his position as CEO of AirAsia. Nevertheless, despite the market’s unfavorable responses, the company persisted and outperformed its expectations in terms of earnings. The low-cost airline AirAsia offered is AirAsia X. At the end of October, shares decreased following the former CEO’s retirement. However, the business still outperformed forecasts by 5%.

“Unfortunately, whatever I do gets blown out of proportion. I went in there [AirAsia X] for a short period … I just went in there to kickstart an airline that would have been heavily restructured and was in hibernation,” Fernandes added.

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AirAsia and Capital A

AirAsia was designated as PN17 by Bursa Malaysia. This indicates that financial difficulties are currently plaguing the business. However, given the most recent report, company management is optimistic that they will soon exit PN17.

“I think we’re coming out of PN17. While I was very against it, I thought it was harsh to put us into PN17. We’ve turned a negative into a positive. My job now is to ensure we deliver profitability, good cash flow growth, have the right funding on all of these, and from where we were. The sky looks really good,” the Capital A CEO added.

The former AirAsia executive now in charge of Capital A said he would concentrate on the bigger picture of the entire company. He claimed he was embarking on a mission to discover Capital A’s true value.

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E-commerce helps the business

“I’ve been through many economic slowdowns, and people will go to the best-value operator,” said Fernandes.

E-commerce expanded as a result of the pandemic, hence, Fernandes concentrates on the company’s e-commerce component as well. He claimed that e-commerce would not go away.

He added that despite the worsening inflation in the US, he is unconcerned. Future service development is something Capital A plans to do. For instance, plans have already been made for Santan, its restaurant brand, and Asia Digital Engineering, its engineering firm. Capital A also plans to expand its consulting division. After reading the report, Fernandes felt confident that AirAsia X would continue to outperform its competitors, given its current offerings and pricing structure.

“Even in logistics, it’s a wonderful time for us to grow. We’ve taken three cargo planes for the first time in our history.”

“It still takes a long time to ship products, even from Kuala Lumpur to Singapore. [At] AirAsia, we do it in a day now. And so we will do point-to-point logistics, change the whole model, and we see a huge opportunity for us,” the CEO added.

Photo Credit: AirAsia

Source: CNBC

Opinions expressed by US Reporter contributors are their own.



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