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AirAsia X plans to realign routes from Australia to N Asia, India

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AirAsia X’s plans to realign routes from Australia to its other more profitable key markets in North Asia and India. This should allow the company to sustain more consistent quarterly earnings going forward. The company’s plans to add capacity and replicate routes from its associates in Thailand and Indonesia to markets in North Asia should also allow the company to optimise its route network, and provide greater economies of scale while sustaining its low-cost structure.
The company is expected to grow seat capacity at its Malaysian operations by 20% in 2018, and would be taking delivery of six aircraft this year, bringing its total fleet across its AirAsia X network to 36 aircraft. In terms of deployment, three aircraft would be added to Malaysia and similarly in Thailand. Indonesia would still only operate with two aircraft this year. Over the next five years, management is of the view that they could grow its fleet to 100 aircraft.
While the company is comfortable with operating both Airbus and Boeing aircraft, they believe that the availability of second-hand Airbus 330s in the market should allow them to continue negotiating for more competitive leasing rates going forward.
We understand that the company has secured a deferment from Malaysia Airports Holdings Bhd (“Neutral”; TP: RM9.30) and the Malaysian Aviation Commission (Mavcom) in not paying the equalising passenger service charge (PSC) at klia2 that was previously expected to be implemented in February 2018.

 

Australia's high airport taxes and other fees is making it harder for Airasia X to get good yields on their routes....

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We understand that the company has secured a deferment from Malaysia Airports Holdings Bhd (“Neutral”; TP: RM9.30) and the Malaysian Aviation Commission (Mavcom) in not paying the equalising passenger service charge (PSC) at klia2 that was previously expected to be implemented in February 2018.

Totally off topic, but very significant :)

So it's all business as usual again then ......

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