AirAsia resumed its scheduled domestic flights today in Malaysia and will be followed by Thailand (1 May 2020), the Philippines (16 May 2020), and Indonesia (7 May 2020), subject to approval from the authorities. Strict health controls and social distancing protocol are in place, in compliance with the regulations. The resumption of services will initially be for key selected domestic routes, which will increase gradually to include international destinations around the region, once the situation improves and governments lift borders and travel restrictions.
AirAsia Malaysia suspended all international and domestic flights on 28 March 2020.
Executive Chairman of AirAsia Group, Datuk Kamarudin Meranun said: “Flexibility remains the key to our business model. Our strong foundation coupled with robust relationships with suppliers and partners have enabled us to return to service stronger amid these unprecedented challenging times. We do not intend to take any new aircraft deliveries this year with the target to end 2020 with 242 aircraft, a net reduction of 1 aircraft from last year. We are relooking at our orderbook with Airbus. The decision to sell and lease our aircraft in late 2018, has provided us greater flexibility to scale back growth than owning aircraft today. We were also able to lock in the best price for those aircraft at prime market conditions while eliminating the residual risk of owning aircraft.
“We have also restructured a major portion of the fuel hedges with our supportive counterparties and are still in process of restructuring the remaining exposure. This will help deal with the excess of hedged volume against expected fuel consumption post-COVID-19 and reduce the hedging losses if fuel price remains at today’s prices. Further measures in managing and containing cost include both the management and senior employees of AirAsia Group volunteering a salary sacrifice, re-negotiating contracts and deferring all non-essential expenditures.
“We expect all these initiatives to result in at least a 30% cost reduction YoY in 2020.”
Commenting of the service resumption, Kamarudin said: “AirAsia works actively with all relevant regulators, local governments, civil aviation and health authorities, and adheres to guidance from the World Health Organisation (WHO) and International Civil Aviation Organisation (ICAO) to ensure the highest standards of compliance and conformance are in place for every single flight we operate in our network. We will require guests to wear a mask and practise universally recommended protective precautionary measures including social distancing and observing high personal hygiene. All our aircraft, which are fitted with hospital-standard High Efficiency Particulate Air (HEPA) filters, will also be sent for a thorough disinfection every night stop.”