AirAsia X said Monday it will take delivery of two new aircraft next year, which could be deployed in North Asia and China, and its new route to India is likely to help boost passenger load factor as the long-haul unit of Malaysian budget carrier AirAsia seeks to expand network in Asia.
AirAsia X is expected to receive up to four new aircraft a year beginning 2019 as it ramps up capacity after receiving two new planes by end of 2018, Chief Executive Benyamin Ismail said at a news conference.
“Next year, we will introduce two new India routes in the second half, as well as new routes to Japan and China,” he said.
His comments come after the company said earlier today that it will start flying from Kuala Lumpur four-times a week from Feb. 5 to Jaipur, a popular tourist destination in the western Indian state of Rajasthan. The airline, which now flies to only to New Delhi, also aims to expand services into second and third-tier cities in the vast South Asian country.
The airline is targeting an 80% load factor for the new Kuala Lumpur-Jaipur flight, said Benyamin. In 2017, AirAsia X carried 340,000 passengers into India, a 34% increase from 2016, he said.
“India is a very important market to us,” AirAsia X Group Chief Executive Kamarudin Meranun said at the same event. “We will continue to expand our services to key Indian cities including the second and third tier cities especially those that lack good connectivity.”
The thrust to expand in India follows the carrier’s stated aim to further penetrate North Asia including lucrative routes in Japan, South Korea and China as it cuts its Australia exposure.
AirAsia X, which operates a fleet of 30 aircraft, has been looking to rationalize its Australian operations that contributed more than a third of its revenue. However, the airline faced a market plagued by overcapacity amid stiff competition on select routes, which weighed on its last year’s earnings.
AirAsia X Group has placed orders for 66 A330neo planes to be delivered until 2027. Together with major shareholder AirAsia, the airline group has placed a firm order for close to 600 aircraft with Airbus, making it one of the largest Airbus operators in the world.
“The company has guided earlier that the focus (growth) area would be North Asia,” said Public Investment Bank’s analyst Nur Farah Syifaa’ Mohamad Fu’ad. “North Asia should be more profitable as compared to other routes,” she said.
