AirAsia X Update

Transcript

Arik De:The market is doing really well for us. I mean, obviously we've expanded a lot of capacity this year. We're double daily into Sydney and Melbourne, expanded to 11 times into Gold Coast, going into third triple flight to Melbourne in the peak, and then Perth is double daily. So, Flights are doing really well, seeing a strong demand not only from outbound Australia, which has been traditionally great for us, but also inbound. We're excited to bring so many people across our network into Australia and also to New Zealand. So it's been doing great. There's more to come. So we're very excited about what the next couple of years are going to entail for us in the Australian and the New Zealand market. So traditionally, our fly-through products have always been focused on destinations where Australians have gone to, right? So the Phukets, the Bangkoks. What we're seeing is really an evolution of that, where we're seeing the secondary cities being a lot more focused. So we're carrying a lot more people to Da Nang in Vietnam, we're carrying a lot more people to Cochin in India, and that's exciting for us as an airline that is the largest in Asia and have a network that goes to so many places. So that network has evolved, so we do carry people, of course, on our fly-through product to the Bangkoks and the Phukets, but we're doing a lot more to Hangzhou in China, to Cochin, and to the secondary cities? All of them are very much in the consideration set. We've been really pleasantly surprised. You know, when you start a long-haul flight, it takes a while for the performance to pick up, but we've been very excited with the early reception we've got both at the New Zealand side as well as in the Gold Coast side. So loads started off and are in the 70s and 80s, a very healthy start, and a very diverse mix of people, you know, locals, between Gold Coast and New Zealand, but also leveraging our network in Kuala Lumpur for beyond. Now, having said that, we have a great network in Kuala Lumpur, and of course, to leverage it to its full potential, we want to provide nonstop service. So we're looking at exploring nonstop New Zealand. At the same time, we think the trans-Tasman sector is underserved. So there are a lot of city pairs that I think are exciting for our network planning team to explore that, that that could see AirAsia X flying between the 2 countries? Australia is a cornerstone of our strategy. It's such a great place. We feel at home. We are an Australian airline, I say sometimes jokingly. So of course, more points in Australia are very much on the target. Adelaide is one of them, so is Brisbane, so is Cairns, and even Canberra and Townsville. They're all cities that I think have exciting potential. We have a huge fleet order and Australia forms a huge part of that growth plan for us. We launched Tehran with a month lead, and I don't think I've ever been that nervous in my life. Loads are consistently over 85%, most flights are around 90%. Actually, we just announced a 4th frequency into Tehran starting from mid-February, and if we keep track on our current projections, I think we're going to be daily sooner than we projected. So it's been a great start, and I'm really excited about Tehran. I'm really excited about Mauritius that starts on October 4th. So Chongqing, we are taking over around October. We're formalizing a lot of the you know work we are doing with the airports in China is around making sure the regulatory authorities are there, making sure the slots are there. So China is you know North Asia will continue to be a and China especially is going to be a huge part of our growth, obviously tempered by how many slots we can get, what approvals we can we can get in the in the in the process. So Chongqing, we just went 11 times to Beijing, 11 times to Shanghai, went to daily product to Chengdu. So it's growth across the board in each and every one of our markets from a long-haul perspective. We are in very advanced stages of obtaining, I would say, FAA approval. Whether it's Honolulu or another port in the US, you will just have to wait and watch. So we're very excited about the US. I think at AirAsia X, we are about evolving our brand, right? And I think Tehran, more than Tehran, Mauritius is a great part of that story, doing something different, bringing in new people to our network. So in the US, where we want to go to as soon as we have FAA approvals, whether it be Honolulu, whether it be another port, we're very, very close. So we should have a decision within this quarter of the year, and then once we have that finalized, you know, we're looking into launching for service by end of— opening for sale by end of the year for early launch into 2017. This year we've gotten four aircraft. Three have come to AirAsia X, and one is based in Thai AirAsia X in Bangkok. We are doing a lot more scheduled flying, so we are moving our fleet from doing any charter work to being on all on schedule. And the third thing I think that's very important to address is our utilization. So we're going to we are targeting a sixteen-hour utilization, sixteen and a half-hour utilization for twenty seven twenty sixteen, which is a significant growth from what we accomplished in twenty fifteen. When you combine those three factors, while physical aircraft allow you growth, the other avenues of the growth and then using the aircraft much more smartly. So when you combine those 3 things, that's the growth story we have. 2017, we're relooking at our fleet. Our next group of aircraft come in 2018, but we're looking at it and saying, do we need to early anything up given the positive momentum we have as an organization? Thailand and Bangkok are natural destinations inbound and outbound. So we're very happy with what Thai AirAsia X has accomplished. They launched Bangkok. I think we stunned a lot of people by announcing Muscat in Oman, and Australia is definitely on their radar. But you know, there's much more Thailand. From Thailand, we could launch services into into Russia. I mean, Moscow is a great potential destination, and potentially further into Europe. It's closer to Europe from Bangkok than from us in KL. So there's quite a different few different things being thought of, and then obviously. Based on when regulatory approvals come in to expand capacity into China, into Japan as well. So the Indonesian operation for us is twofold. So first is getting sure that our charters focus on what the market wants. So that's primarily driven by North Asia, China and Japan of the world, but also as a brand, you know, recognizing how do we go forward in Bali and what does Bali fit into our network with our mega hub in Kuala Lumpur and our emerging hub in Bangkok. So all of those 3 things are being considered at the same time. But North Asia remains a big focus for our group, Bali, especially in Bali as well. So I think the first neo we are targeting for starting in 2018, what it does is it allows us the ability to go nonstop without a penalty into parts of Europe. We can do it today, we could do it 2 ways. We could do it as a one-stop option, or we could do it with a little bit of a restriction on the amount of people we can carry. But I'm a firm believer that eventually we should be in all our markets nonstop, and the NEOs allow us to go into Europe, not only London where everyone thinks we're going to go to first, but other points in Europe that I think it opens up for us and do it profitably. And that's a key buzzword for AirAsia X. We've restored profitability, and all the decisions we are going to make, profitability becomes centrepiece. Any airline in the world needs to keep evolving, and I think any airline, that evolution process, so we have a lot of growth coming in Asia ourselves, in Asia and Australia, and as a group we are opening our 9th AOC, AirAsia Japan, so that remains our focus. Having said that, I think we are as a group much more open-minded in having conversations where 2 cultures can come together and talk with like-minded players. So we are open-minded, but it has to be for the right fit and the right reason at the right time. So it's something we are, you know, we keep on looking at, and maybe we'll surprise people out there.

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