AirAsia Wants To Resume Most Of Its Routes This Year

Despite what he calls the ‘toughest challenge’ of a year, AirAsia boss Tony Fernandes remains optimistic about the year ahead. He said that the airline plans to fly most of its routes by the end of the year, although he admitted that passenger traffic was likely to remain low until 2023.

AirAsia
AirAsia’s boss is confident its route network will be restored by the end of the year. Photo: AirAsia

AirAsia boss looks to better times ahead

The AirAsia Group has had a tumultuous 12 months, with financial issues forcing it to pull back from a number of its subsidiaries. Last October, the group closed its Japanese subsidiary and sold its Indian airline to Tata Sons in late December. AirAsia X, its long-haul arm, has struggled immensely, undertaking a major restructuring in a bid to stem its losses.

Nevertheless, there have been some glimmers of hope among the crises. Malaysia’s opening in December saw record ticket sales for AirAsia, and rapid diversification into non-flight revenue has helped shore up the group’s financials. According to its founder and CEO, 2021 is looking good so far.

AirAsia Malaysia
Fernandes is optimistic about the year ahead. Photo: AirAsia

Speaking on CNBC’s Squawk Box Asia, AirAsia boss Tony Fernandes painted an optimistic picture of the year going forward. He said that, by the end of 2021, AirAsia is expecting to operate a large part of its routes, although he admitted that passenger traffic would likely remain low for a couple of years longer. He commented,

“It’s been the toughest challenge. But I think the outlook’s getting better.

“The most important thing is there’s a huge amount of demand out there and we just have to wait for borders to open and I think we’re one of the first kind of businesses that will recover, from an airline perspective, because we’re very strong in domestic and regional.”

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Looking for capital

AirAsia reported a quarterly loss of 851.8 million Malaysian ringgit ($209 million) in November, its fifth consecutive negative quarter. Fernandes told CNBC that the firm is seeking to raise liquidity of 2.5 billion Malaysian ringgit ($618 million) to see the group through the crisis.

“We are very confident that this capital that we’ll raise will take us well into 2023,” he said, noting that the company’s strong digital business was performing very well. AirAsia remains committed to its significant order book with Airbus, he said, but admitted that there are some deferral negotiations ongoing.

AirAsia A321neo
The group is one of Airbus’ biggest customers. Photo: AirAsia

Overall, the group ended 2020 with one less aircraft than it had in 2019, largely due to the closure of AirAsia Japan as well as a reduction in fleet size at Thai AirAsia. Other arms ended the year with roughly the same number of aircraft as they started it with. The group has more than 360 A320 family aircraft on order, mostly A321neo.

Fernandes previously agreed, in part, with the sentiments of Qantas boss Alan Joyce, in that he expects vaccines will eventually be required in order to travel abroad. However, he said that he doesn’t expect the onus to fall on the airline. Speaking at CAPA Live at the end of last year, he said,

“It’s not up to the airlines to decide. It’s for governments to decide. It’ll be the country that’ll decide if they will allow people to come in if they are not vaccinated.”

The group is currently looking at a share sale to raise $113 million, but will need to seek capital injections from elsewhere too if it is to meet its $618 million goal.

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