KUALA LUMPUR: Long-haul budget carrier AirAsia X Sdn Bhd will lease six Airbus A330-300s from International Lease Finance Corp (ILFC) for RM1.6bil (US$500mil) as it expands its Asia Pacific network.
In a signing ceremony yesterday, AirAsia X signed a letter of letter of intent with ILFC for the lease which would be for 10 years with delivery scheduled between 2013 and 2014.
The aircraft are the same model as those that AirAsia X purchased directly from Airbus, with Rolls Royce Trent 700 engines and a maximum take-off weight of 233 tonnes. ILFC, the world's largest independent aircraft lessor measured by number of owned aircraft, has a portfolio consisting over 1,000 owned or managed aircraft.
Welcome onboard: AirAsia X co-founder and director Tan Sri Tony Fernandes (left) and International Lease Finance Corp CEO Henri Courpron after a signing ceremony to lease six Airbus A330-300 worth RM1.6bil for the long-haul budget carrier’s Asia-Pacific network.
Chief executive officer Azran Osman-Rani said the six aircraft would be the same model as those that AirAsia X purchased directly from Airbus. “If we were to order (the planes) directly from Airbus, we'll have to wait until 2017 to get them,” he said, adding that the six aircraft was in addition to the 20 planes of same model it ordered from Airbus.
Azran said AirAsia X intended to deploy the additional capacity to strengthen its position in Australia, China, Taiwan, South Korea and Japan.
He added that the leased aircraft would enable more frequencies to existing routes and increase more routes within the existing countries as there are so much of growth to be tapped.
AirAsia X currently has 11 planes of which nine are A330s and twoA340s. In 2013, the carrier is expected to take delivery of three aircraft from Airbus and four from ILFC under the leasing agreement. Subsequently, in 2014, AirAsia X will receive five planes from Airbus and another two from ILFC.
With all the deliveries in place, AirAsia X is expected to have a total of 35 fleet in 2017. It will subsequently drop the two A340s.
“Our commitment to have a standardised, young and fuel-efficient fleet optimises our resources and provides better value,” Azran said.
The additional planes was expected to increase its capacity by 66%, AirAsia X co-founder and director Tan Sri Tony Fernandes said.
He said the partnership with ILFC would further complement the AirAsia group's long-term vision of developing its presence in key markets in Asia and strengthen the connectivity between long-haul and short-haul low-cost network.
“We recorded 2.5 million passengers last year and with the leased aircraft that will provide about 66% capacity, we foresee to carry seven million passengers in 2014,” Azran said, adding that it would have no problem filling up the additional capacity. Its average load factor for the first half of this year is 84%.
Commenting on AirAsia X's listing, Fernandes said the plan was “progressing” without disclosing details. “Internally, we are ready to list but when we press that button, there are many factors outside but it's imminent.”
Additionally, he said AirAsia Bhd was not eyeing any acquisition at the moment after its purchase in Indonesia's Batavia Air. “I am generally not a believer of acquisition. I believe in organic growth. But if opportunities arise, then we will look at it, but it is not our main way of growing business,” Fernandes said.
Meanwhile, Fernandes said the group was not worried about increase in oil prices it as it would hurt other players more than AirAsia.
“Oil is not something we lose too much sleep about as whatever the price is AirAsia has delivered a very good margin due to its good model. And as the model matures, then you have a lot more extra revenue, strong ancillary income model that comes through.
“Oil price shouldn't be something to be distracted. It should be seen as the competitive advantage,” Fernandes said.
Asked whether AirAsia X may resume European flights, he said “no” and was glad the carrier had pulled out. “Every airline that's going to Europe is struggling mainly because of big elephants there, Etihad, Qatar and Emirates airlines. So, it's tough for us to have low fares and make money,” he said.
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