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AirAsia X Berhad • Annual Report 2014
region. It cannot be denied that the airline disasters were
so emotionally devastating, they shook us at the core,
making us re-evaluate all our processes and procedures,
especially those related to flight and passenger safety.
Adding to an already severely tested industry, the Ringgit’s
weakening against the US Dollar by a significant 6% during
the financial reporting period created another pressure
point for AirAsia X, as about 60% of our costs are in this
major currency.
GROUP CEO’S STATEMENT
Being no newcomer to adversity, I’m proud to say that
within the tough environment, AirAsia X continued to
leverage on our key strengths – namely our spirit of
innovation and the ability to think out of the box – to
outline a journey forward that will further differentiate
ourselves from our peers. Having chosen to go down the
path less travelled, challenges are part and parcel of our
journey and serve only to further strengthen our resolve
to put our heads together, fine-tune our strategies, and
accelerate our momentum of growth.
A much welcomed respite in our process of consolidation
and recovery has been falling Brent Crude Oil prices, which
even dipped below USD50 per barrel in January 2015 for
the first time in six years. Given that fuel makes up about
50% of our total costs, this development will greatly
enhance our efforts to achieve financial stability and
sustainability.
Malaysia AirAsia X (MAAX)
Malaysia AirAsia X (MAAX) began the year well, reaching
peak capacity growth, as measured by available seat
kilometre (ASK), of 60% year-on-year in the first quarter.
Subsequently, however, demand relative to all the new
capacity added began to slow down as a result of a softer
travel market, and especially in the number of tourist
arrivals into the country.
This led to a quick revision in strategy by the leadership
which essentially looked at optimum capacity management
and initiatives to raise cash to bolster the Company’s
financial position.
MAAX deferred the delivery of aircraft that had been
ordered so that for the whole year, inclusive of deliveries in
the first quarter, the airline’s ASK grew by only 31%. MAAX
also entered into wet lease and charter agreements that
will see excess capacity be redeployed elsewhere during
lean periods. These arrangements have proven their worth,
contributing to a total of 6% of MAAX’s total revenue for
the year.
To further enhance our balance sheet, MAAX executed the
sale-and-leaseback of two finance lease aircraft while also
initiating cost-effective engine-related transactions.
Thailand AirAsia X (TAAX)
I’m particularly pleased with the performance of Thai
AirAsia X (TAAX). It made its debut as our first regional hub
on 22 April 2014 in the midst of political instability in the
country. Two months and a military coup later, its inaugural
flight took off from Don Mueang International Airport in
Thailand to Incheon in South Korea, with a full load. In the
following three months, it continued to consistently fill its
aircraft achieving an impressive average passenger load
factor of 88%. Though having operated less than a year, it
managed to achieve its first ever profit of Baht 20 million
in December 2014.
ADDING TO AN ALREADY SEVERELY TESTED
INDUSTRY, THE RINGGIT’S WEAKENING AGAINST
THE US DOLLAR BY A SIGNIFICANT 6% DURING THE
FINANCIAL REPORTING PERIOD CREATED ANOTHER
PRESSURE POINT FOR AIRASIA X, AS ABOUT 60% OF
OUR COSTS ARE IN THIS MAJOR CURRENCY.
