AirAsia X CEO Update

Transcript

Benjyamin Ismail:The significance of 10 years is, you know, it's very big for us. You know, I think our first route being Gold Coast, you know, I think, you know, an airport that has never had any international presence, it's been great for us. You know, I think for the last 10 years we've grown to 30 aircraft and, you know, with 32— what, 28 destinations, and I think it's great. The significance of 10 years for AirAsia X is, And you know, we've grown I to 30 aircraft and, you know, think with 32— what, 28 destinations, and I think it's great. for the next 10 years, I would think it will be double that. You know, I think, you know, the key focus now is to tell people that long-haul, low-cost works. And I think we're here for the long run. Well, we came from a very low end of— in terms of utilization. In the past few years, we've been increasing utilization in steps. We don't want to be too aggressive in growing too much. So last year, we were just flying about 16 hours. So we had another hour to fly, so we grew a few routes, but as you notice, it's all shorter routes that we're flying. So, you know, I think now we're at the max of 17 hours. So, but what we're trying to do as well is bring some secondhand aircraft to come in to supplement the growth short-term. Well, the A330neo is coming in. I mean, that's something that we're working on, you know. I think, you know, we're just waiting for Airbus and Rolls-Royce to confirm when those delivery dates are coming. So On paper, we're getting that towards year-end next year. But on top of that, we don't want to miss the boat in terms of the growth. So there are situations now that I'm exploring just 2 to 3 secondhand aircraft, ceos, probably 12-year-old aircraft, just to supplement us on the short term for 6 years, and after that we'll return those aircraft. The key thing is, because when we spoke about it 6 months ago, You've got to give lessors a year in advance in terms of coming out of lease. So we're coming towards the end now, so these leases look as though they're going to expire towards July, August. So we're going to look into those times to get this aircraft in because it takes about 2 to 3 months to retrofit. So yeah, at the moment we're on an 18% capacity growth just based on no aircraft growth. Okay. So, which is not bad. So that is looking at flying more shorter flights. I think if you're aware, we're doing Bali as well on the widebody. So we are looking at other routes within the 4-hour or slightly the borderline 4 hours where we know that airport capacity is a constraint. So Bali is an example where I think in terms of the narrowbodies, A320s, there's not enough slots that go in and the loads are very strong. So we managed to get slots for widebodies. So you're looking at flying to Bali? to operate that. So we are operating that as well on AirAsia X. The 4-hour rule is still there, but I mean, for us, we've got to make sure that we don't encroach as well in an AirAsia business model. But I think it has come to the point that markets like Bali has become overcapacity and they need bigger aircraft to bring more passengers. Hong Kong would be a great example. Maldives is a great example where we're doing so well. I mean, loads for AirAsia is like 99%, 97%. us adding it is just adding value to it, you know, but we will not go into markets where, you know, AirAsia's predominantly their market. We will not encroach into that. Yeah, it didn't work. So, you know, basically, I mean, at that time as well, we were through. We didn't do enough to give justice to that route. We didn't do enough marketing and all that. So I think now AirAsia is doing very well in terms of that route. We have perfect timing. We've got airport support in terms of incentives. So we coming in as well as a widebody, I think we'll get the same kind of deal as well, so which is great. But then this is part Point to point. The tag was an issue last time when we did Sri Lanka to Maldives. Well, in the last 6 months, it's all been adding new capacity— not new capacity, adding capacity. We've gone Xi'an to daily, we've gone Hangzhou to daily, we added Beijing and Shanghai double dailies. So these are just adding frequency. Next year, we always start at Wuhan, which is a new route. last year. The only thing that we have for next year potentially based in that 18% capacity is this one China route, which we'll probably announce in February when it comes out, when we get approvals. Is it announced already? Yeah, yeah, well, that's announced. I mean, we're selling tickets already. So for Jeju, it's doing very well. We didn't realize that, you know, with the slowdown of Chinese market, Chinese-Korea relationship, the arrival of tourists has been very, very low. So we've been getting a lot of support from Jeju Tourism and Korea Airports in terms of bringing us in. I also didn't realize that Malaysian tourists is the number 2 largest tourists in Jeju behind China. So now with that, we're number 1, which is great. So flights for December is currently— the first flight is at 94%, which is great. For the month, we're at 74%, which is good. So, and that is a very small market, and I think Jeju is It's a very unique market. They call it the Hawaii of North Asia, so I think it's a very beautiful place. For Jaipur, it's part of our plans to grow India. As you're aware, India is constrained by bilaterals. I wish I can grow Delhi, I wish I can grow Bombay, but it's capped by number of seats capacity given by both countries. So the only states that are not bilaterally constrained are second-tier cities. i.e., Jaipur. So I think Jaipur is an upcoming city, you know, it's part of where India started as a history. So it's a beautiful city and I think that's going to do very well for us. And it's a very unique route as well for Malaysia. We are the first carrier out of Malaysia to Jaipur. There's a lot of other cities as well. Of course, again, we've got to align it with our capacity needs that we have. There's Amritsar that potentially we're looking at, there's Pune that we're looking at, there's Chandigarh that we're looking at, there's Srinagar that we're looking at. A lot of markets. And these markets are not just in the thousands, they are in the millions. So I think it's just whether we're ready and we're ready to go, we'll decide later. For Nagoya, yes, we will go back. Not yet, but I think the good thing is AirAsia Japan has finally started operations last week, 2 weeks ago, which is great. You know, I think for us, once they grow to a scale of 3 to 4 aircraft, they feed domestically, we will come in and complement that operations. So we'll see how that goes. Okinawa is a beautiful city. We're doing one ad hoc charter for a travel agent next month. We'll see how that goes. The flight's full. The demand is great. We may do that as a scheduled flight, but not in my plans next year. I think the key thing about AirAsia is to be to show support to Australia, and I think that one of the key things is to make sure we fly everywhere. But of course, it has to make sense in terms of the P&Ls and the numbers. So, you know, Adelaide is something that it was struggling when we were doing in the past, but I think the key focus now is to ensure that the key routes are making money, which is which we are, you know, Perth, Melbourne, and Sydney. So once we see maturity in those routes, if there's room in terms of excess capacity, I don't mind exploring Adelaide or Canberra. Or even Cairns, so we'll see how that goes. Neo can go to London if it will be at the expense of seats. It's, of course, we have to make a decision whether how many seats we want to put in the aircraft. If you have less seats, then you can fly it. But I think the key thing now is the Neo is to focus on current routes that we fly, which is 6 to 8 hours. Gives the ability to give more fuel efficiency, which is 15%. And even priced lower. So if we do want to go to London with the neo, it will be a one-stop option for us because I think the key point is to fill as many seats as we can into that plane to reduce as much cost as we can on our operations. So the A350 is always talked— is there in the background for us to, whenever we're ready, we can take it. But of course, I think I've told this before, I mean, London is in an overcapacity market. You know, I think it'll be very tough to yield up, and I think we're just coming out of a very, you know, loss-making period many years ago. We're making money now. I think let's just focus on making money on the routes that we know we can be confident of. Thailand is— they were very underutilized because they couldn't grow, so they're ramping up quite a bit. They're going to Osaka double dailies, they're going to Incheon triple dailies. So that's going to happen all within the next few months. IAA as well, they are also sourcing third-party aircraft, so probably one or two and see how they can grow. I think they're looking more towards China and Japan as well, so we'll see how that goes. But I think for IAA X, probably about 2 aircraft, and probably for TAX also another 2. So we'll see, but more of those will be coming towards the second half of next year because we need to source those planes. Thank you.

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