All AirAsia ASEAN airlines expected to be profitable in 2019

    AirAsia Group outlined (27-Feb-2019) its strategy for 2019 as follows:

    • The group is confident that all AirAsia carriers in ASEAN will be profitable;
    • The carrier reported a “strong trend” in passenger traffic and load factor in 1Q2019 and is targeting group load factor of 85% for FY2019:
      • Malaysia AirAsia: 86%;
      • Indonesia AirAsia: 85%;
      • Philippines AirAsia: 91%;
      • Thai AirAsia: 90%;
      • AirAsia India: 87%;
    • Fuel:
      • 52% of Brent hedged at USD63.41 per barrel for FY2019;
      • If Brent increases to USD80 per barrel, the unhedged portion of fuel costs could increase by MYR368 million (USD90.3 million);
      • 40% hedged at USD59.89 per barrel for FY2020 and 4% at USD59.23 per barrel for FY2021;
    • Ancillary revenue:
      • RedCargo generated MYR206 million (USD50.6 million) in FY2018 and will “double up” in FY2019 as the carrier seeks to support e-commerce initiatives in ASEAN;
      • The carrier aims to up sell ancillaries and ‘Ourshop’ by all six airlines through data, machine learning and artificial intelligence;
    • Cost cutting initiatives:
      • 10% headcount rationalisation;
      • Closure of call centres by Jun-2019 due to automation.