Flying high: (Seated, from left) Fernandes and Bregier facing the press after the signing ceremony. Looking on are (from left) Datuk Kamarudin Meranun, Cameron, State Secretary of Wales David Jones and Airbus COO (customer) John Leahy.
BROUGHTON, England: AirAsia Group is buying another 100 Airbus planes as it steps up its expansion in the core markets of Malaysia, Thailand and Indonesia and pushes ahead into the new markets of Japan and the Philippines.
The 100 consist of 36 A320s with the current engine option and 64 A320s with the new engine option. The total value of the planes are US$9.4bil. With the latest orders, the low-cost carrier has ordered 475 single aisle aircraft from Airbus, comprising 264 A320 with the new engine option and 211 A320 with the current engine option.
AirAsia group chief executive officer Tan Sri Tony Fernandes described Malaysia, Thailand and Indonesia as its “three gold mines” while the Philippines and Japan have enormous potential growth.
“With these added aircraft, it goes in line with our strategy to further build our already extensive network through new routes and added frequencies and allow AirAsia to maintain its market leadership and dominance, especially in Malaysia and Thailand,” he said yesterday at the signing ceremony held at Airbus' British wing manufacturing plant in Broughton.
The order was announced during a visit by British Prime Minister David Cameron where he witnessed the signing of documents by Fernandes and Airbus president and chief executive officer Fabrice Brgier.
AirAsia said over 100 aircraft had already been delivered to the airline and this additional purchase would see AirAsia's aircraft deliveries continue until 2021. Fernandes said AirAsia remained the most profitable low-cost carrier in Asia.
He said over the past decade, AirAsia witnessed competitors come and go while AirAsia maintained its growth trajectory together with increased margins, load factor and revenue per available seat kilometre.
“The key success is due our focus and discipline in terms of cost and our business model which allows the operations in Malaysia to remain the lowest in terms of cost against other airlines in the world and enables the company to maximise revenues through increase load factors, ancillary income and a stronger balance sheet.
“With this key ingredient, AirAsia remains in position to defend its margins which remain the highest in the industry,” he said.
AirAsia had displayed strong growth, recording net profit of RM157.81mil for its third quarter ended Sept 30, which was 3.6% higher than the RM152.29mil profit a year ago, riding on the higher passenger traffic.
The company posted record revenue of RM1.24bil, up 14.4% from RM1.081bil. Earnings per share were 5.7 sen compared with 5.5 sen previously.
Net operating profit was RM205.04mil, up 18% from RM173.45mil a year ago. AirAsia's cash position remained strong with RM2.2bil in cash and bank balances with net gearing reduced to 1.03 times this quarter (net gearing was reported at 1.10 times in second quater 2012).
FIn line with its growth plans in 2013 through the combination of firm Airbus deliveries and leases, Fernandes said Malaysia would take delivery of 10 aircraft, Thailand eight, Indonesia nine, the Philippines three and Japan four.
On Thailand, Fernandes said the country recorded the fastest growth in terms of passengers and was on course to be as profitable as the Malaysian operations.
“The added aircraft will for sure catapult them to grow its dominance domestically and internationally into new big markets such as China and India. With the recent move to the dedicated low-cost carrier terminal in Don Mueang and AirAsia being the anchor airline in operation, AirAsia sees our growth to catapult many folds in the short term.
“This ties with our vision to secure more secondary in the region in order to support our rapid growth and not be hampered by overcapacity in any main airports,” he said.
As for Indonesia, he said AirAsia was already best in class internationally and with the additional aircraft, it had set on penetrating the vast underserved domestic market, where its population of over 230 million people was a key catalyst to boost revenue.
“As Japan and the Philippines are new in the AirAsia family, our focus is to grow profitably, maintain lower cost and ensure we position ourselves as the No. 1 brand in these markets,” he said.
Meanwhile, Airbus' Brgier described AirAsia as “one of the great success stories of recent years in the airline business.” “The repeated confidence the airline places in the A320 is a clear endorsement of the reliability, efficiency and unbeatable operating economics offered by the world's most modern single aisle product line,” he said.
Brgier said the additional 36 newly-purchased Airbus A320 current engine option would be up to year 2016, with two to be delivered in 2013; four in 2014; 22 in 2015 and eight more in 2016. The remaining 64 Airbus A320 new engine options will be delivered beginning 2017 with eight deliveries; 14 in 2018, 15 in 2019; 14 in 2020 and 13 more in 2021.
Brgier said the deliveries for the existing 200 Airbus A320neos purchased last year would still be from 2016 up to 2026. As part of the purchase agreement, AirAsia will also have the option for another 100 aircraft consisting of 50 Airbus A320 new engine options and 50 A321 new engine options.
AirAsia chief executive officer Aireen Omar said demand had been on a continuous upward trend, from 200,000 passengers when it was launched in 2001 to an estimated 32 million this year. “The new order will facilitate our expansion plans in which AirAsia Malaysia will add connectivity to other parts of Asia as well as increase frequency to existing routes.
Aireen said as part of its continuous cost initiatives, the addition of the Airbus A320neos sharklet wingtips would reduce fuel consumption by about 15% per aircraft per annum.
-thestar online.
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