AirAsia Berhad Deferment of delivery of Eight A320 from the year 2011 to 2014 and 2015
29-OCT-2009 AirAsia Berhad (“AirAsia” or “the Company”) wishes to announce that it had on the 28th October, 2009 signed an amendment agreement (“Amendment Agreement”) with Airbus S.A.S (“Airbus”) for the revision of the delivery dates of eight (8) Airbus A320 aircraft originally scheduled for delivery in 2011 to the year 2014 and 2015.
1. Salient terms of the Amendment Agreement
(a) Under a Purchase Agreement (of 11th March 2005) and a number of amendment agreements entered into between Airbus and AirAsia (collectively "the Purchase Agreement"), AirAsia has agreed to a firm order of 175 Airbus A320 aircraft which schedule of delivery runs from December 2005 to October 2014.
(b) Under the Amendment Agreement the parties have agreed to revise the original delivery schedule of eight (8) aircraft in 2011 ("2011 Aircraft") to the year 2014 and 2015 as follows:
|
Original Scheduled Delivery Months |
Revised Scheduled Delivery Months |
|
February 2011 |
September 2014 |
|
April 2011 |
October 2014 |
|
June 2011 |
November 2014 |
|
September 2011 |
November 2014 |
|
November 2011 |
December 2014 |
|
November 2011 |
December 2014 |
|
December 2011 |
March 2015 |
|
December 2011 |
October 2015 |
(c) With the above deferments, the original delivery of 23 aircraft in 2011 shall be reduced to 15 aircraft.
(d) The original number of deliveries in 2014 will also be increased from 18 aircraft to 24 aircraft whereas, in 2015 the Company will take delivery of 2 aircraft as opposed to nil from before.
(e) No penalties are payable by AirAsia in revising the delivery schedule of the 2011 Aircraft.
2. Rationale
The rationale for the deferral of the 2011 Aircraft is similar to the rationale for the deferral of the 2010 Aircraft in August 2009 in that AirAsia foresees infrastructural constraints with the current airport facilities.
Until the new Low Cost Carrier Terminal is constructed, the present infrastructure at the low cost terminal is not able to accommodate AirAsia's fleet expansion in the number of aircraft originally scheduled to be delivered in 2010 and 2011.
The rationale to further scale down on the delivery of aircraft in 2011 is to enable AirAsia to optimize its fleet and avoid the costs associated with leaving idle or underutilized aircraft due to infrastructural limitations - avoiding having to incur depreciation, interest expense and other costs without earning revenue.
3. Directors' and major shareholders' interests
No directors and/or major shareholders of AirAsia and/or persons connected with them have any interest, whether directly or indirectly, in the Amendment Agreement.
4. Directors' opinion
The Board having considered all the relevant factors in respect of the Agreement is of the opinion that entering into the Amendment Agreement is in the best interest of the Company.
5. Financial effect of the Amendment Agreement
The Amendment Agreement is not expected to have any material impact on the financial position of AirAsia for this current financial year but will impinge on the rate of revenue growth in the ensuing years to a limited extent.
6. Approval required
AirAsia does not require the approval of its shareholders or any authorities to enter into the Amendment Agreement.
7. Document available for inspection
The Amendment Agreement is available for inspection at the registered office of the Company at 25-5, Block H, Jalan PJU 1/37, Dataran Prima, 47301 Petaling
Jaya, Selangor Darul Ehsan, Malaysia during normal business days from Mondays to Fridays (except public holidays) for a period of 3 months from the date of this announcement.