Indonesia AirAsia X to stop operating scheduled services in January

posted on 22nd November 2018 by Justin Burns
Indonesia AirAsia X to stop operating scheduled services in January

Indonesia AirAsia X will stop operating scheduled operations in January and will run as a non-scheduled commercial airline, it has announced in its third quarter (Q3) financial results ending 30 September 2018.

The airline only currently operates a seven-times weekly service between Bali’s Denpasar International Airport and Tokyo’s Narita International Airport using an Airbus A330 which will be suspended in January.

AirAsia X group chief executive officer, Nadda Buranasiri said: “With the challenging operational environment in Indonesia, primarily due to the series of natural disasters that occurred in proximity to Bali, the Company is underway to evaluate the available options for our Indonesian associate to ensure sustainability of the Company with the last schedule flight from Bali to Narita will end in January 2019.”

“Moving forward, AirAsia X Indonesia will operate on a non-scheduled commercial airline basis,” he said.

Air Asia X said in its Q3 financial results that like many other airlines, increasing fuel prices affected figures while the provision for “doubtful debt” in relation to the Indonesian associate also weighed on the finances.

During the quarter, the company recorded a revenue of RM 1,077.4 million ($256 million), down by four per cent year-on-year (YOY) as compared to RM1,124.5 million in the same period last year.

The decrease in revenue was on the back of decreased scheduled flight revenue following a five per cent drop in average base fare to RM473 per passenger in Q318, due to introduction of new routes and capacity building on established routes .

The company posted net operating loss of RM205.2 million in Q3 as compared to losses of RM60.2 million in the same period of 2017.  This was mainly attributed by increase in average fuel price from $65 per barrel in Q3 2017 to $91 per barrel in Q3 2018.

In Q3, the number of passengers carried increased one per cent YOY to 1,511,625 passengers and the passenger load improved by one percentage point to 80 per cent.

Buranasiri said: “The Company recognises that the current operating environment is challenging, however, we strongly believe that our business model is strong and robust enough to weather these challenges.”

As for the future he said: “We see that the demand to fly is soaring as the Company’s forward bookings for the fourth quarter and 2019 are ahead of last year’s records.

“Going into the coming quarters, we also expect our operational cost excluding fuel to be even lower as our cost saving initiatives start to bear fruit.”

He added: “Most importantly, we believe that our business model is robust and strong. The Group intends to stay focused on its strategy in securing routes with high yield and traffic, and strengthening market dominance in core markets as we have full confidence that this will deliver sustainable returns in the long term.”