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AirAsia X Berhad • Annual Report 2014
With these new offerings, we are hopeful of increasing
the average ancillary spend per passenger by 10% year-
on-year.
At the same time, we intend to focus more intently on
driving down even further our unit cost to remain the
lowest unit cost airline in the world. Again, various
strategies have been drawn up to support our target of at
least 10% CASK reduction (in US cents) from 2014.
Although we were not able to leverage on the drop in price
of oil in 2014, the opportunity to do so in 2015 is there
and we intend to make the most of this. Fuel comprises
about 50% of our total expenses, and for every USD10 per
barrel drop in jet fuel price, we stand to save approximately
RM140 million. At present, we have hedged 54% of our jet
fuel at USD88 per barrel, while procuring the rest at spot
prices. As the price changes, we will change our strategy
accordingly.
Adding to fuel savings, we plan to create further synergies
with the AirAsia Group through the merger of operations
while also renegotiating our contracts and charges, and
terminating unprofitable routes – all with the ultimate
objective of reducing our costs.
As there will be no major investment or equity requirement
in 2015, the next few months present an ideal opportunity
to fortify our liquidity. As announced in early 2015, we are
undertaking a rights issue of RM395 million, which will
boost our coffers. At the same time, we will minimise
our cash outflow in every way possible. Eight aircraft to
be delivered in 2015 will be on operating lease, while
we defer the delivery of aircraft in 2016 and 2017 and
refinance some of the older aircraft and engines through
sale-and-leaseback.
A NEW BEGINNING
Seven years ago, when AirAsia X was launched, nobody
thought it would survive. Although AirAsia had already
proved scepticswrong by growing fromstrength to strength,
the challenges of a long-haul low-cost operation are quite
distinct from those of a short-haul low-cost carrier, and to
many these challenges appeared insurmountable.
Today, AirAsia X is still here, and more determined than
ever to stay. We have been through more than our fair
share of rough patches but we have never wavered from
our promise. With true grit and perseverance, the team
has accomplished much that we can be very proud of – a
network of 19 routes to 18 destinations in 8 countries from
our base in Kuala Lumpur, Malaysia – while always keeping
an eye on costs, enabling “everyone to fly longer”. In 2015
and 2016, we will continue to excite the travel community
with new destinations we are currently working on which
will see AirAsia X returning to Europe and, finally, for the
first time, touching the shores of the US.
Our plans for expansion were positively boosted in April
2015, when we received the IATA Operational Safety Audit
(IOSA) certification, which validates our safety standards.
IOSA is recognised by the US Federal Aviation Authority
(FAA), Australia’s Civil Aviation Safety Authority, Transport
Canada and Europe’s Joint Aviation Authority, hence opens
the door to these markets for the Group.
Since joining AirAsia X in January 2015, I have been
impressed by the can-do spirit of our Allstars, the buzz,
energy and enthusiasm that permeate our headquarters.
With guidance from Datuk Kamarudin, and a closer working
relationship in general with AirAsia, I have no doubt that
this dynamism and energy can be channelled into very
positive outcomes. Meanwhile, collaborating with my
counterparts in Thailand and Indonesia, Nadda Buranasiri
and Dendy Kurniawan, we aim to make the AirAsia X brand
a formidable force in the LHLCC space.
Two of our biggest value creators are our people and the
synergies that can be created with the AirAsia Group.
Our people are already Allstars; now, as we enter a new
dawn with a new leadership, we will get to enjoy closer
connections with our sister airline and derive all the
benefits that come with shared knowledge and resources.
I would like to thank Tan Sri Tony, Datuk Kamarudin, our
Chairman Tan Sri Rafidah and the Board of Directors for
their faith in me by appointing me as Acting CEO of AirAsia
X. I would also like to express my genuine admiration for
the team here – for all the hard work they have dedicated
into making AirAsia X the largest and lowest-cost LHLCC in
Asia. My wish now is for all of us to work together to see
that our airline not only lets everyone in Asean fly, but that
it too will fly along with Asean.
ACTING CEO’S STATEMENT
