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| “My goal would be to try to move to 85%” from the current 81% seat-load factor,” Tan Sri Tony Fernandes told Reuters in an interview on the sidelines of the World Economic Forum on East Asia in Manila. Load factor refers to a measure of plane occupancy. |
MANILA: AirAsia Bhd, South-East Asia’s biggest budget airline, aims to increase its load factor to 85% in the next two years, according to its group chief executive officer.
Following years of expansion and franchising, the airline is rationalising its fleet through aircraft sales after a slowdown in Indonesia and delays in its entry into India.
“My goal would be to try to move to 85%” from the current 81% seat-load factor,” Tan Sri Tony Fernandes told Reuters in an interview on the sidelines of the World Economic Forum on East Asia in Manila. Load factor refers to a measure of plane occupancy.
“These next two years, we have the ability to enter up to 85%,” he said, adding that the airline saw growth opportunities in the Philippine, Indian and Japanese markets.
Fernandes also said AirAsia would likely start servicing India in the third quarter after winning an operating permit from a New Delhi court this month.
AirAsia plans to sell 12 planes this year, a move that will bring in around RM500mil in net profit. “Our planes are well sought for,” he said, citing demand from airlines outside Asia.
“Right now, as of today, we’ve got the right number of planes. We’re not selling more.” On Tuesday, AirAsia reported its first-quarter net income rose 33% to RM139.7mil on improved passenger numbers, foreign exchange gains and deferred taxes.
Fernandes said the airline remained “moderately positive” that it would book “strong” earnings growth in the second half of the year and into 2015.
AirAsia saw profit slump by 55% last financial year amid volatile currency moves and stiff competition.
The airline’s Philippine and Indonesian units were seen turning around from losses in the second half as they rationalised routes and cut costs, he added.
AirAsia was also looking at raising investments in its Philippine unit from an initial US$100mil once it gets congressional clearance for acquiring nearly full control of its local partner, said Fernandes. “We’re ready to invest. We’re ready to build,” he said.
Fernandes said AirAsia wanted to add more planes to its current fleet of 16 and mount more routes to boost its presence in the Philippine market, which saw unprecedented consolidation including Cebu Air Inc’s acquisition of Tiger Airway Holdings Ltd’s Manila unit.
AirAsia shares were up 4.49% yesterday, outperforming the FBM KLCI which closed 0.11% lower.
Source: Reuters | 23 May 2014
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