AirAsia X Q2 results show recovery strategy is firmly on track

An AirAsia X Airbus A340 approaching to land.
Albion, CC BY-SA 3.0, via Wikimedia Commons

AirAsia X Berhad has disclosed its financial performance for the second quarter of 2023 (2Q23), which concluded on June 30, 2023.

The company’s financials have taken a significant leap, with an outstanding net profit of RM5.5 million for the quarter, showcasing a remarkable turnaround from a net loss of RM652.5 million during the same period last year.

Operational Revival


During the 2Q23, AirAsia X soared to new heights by registering an impressive revenue of RM512.9 million, marking a staggering fourfold increase compared to the previous year. This surge in revenue can be attributed to the successful recovery of the company’s scheduled flight operations.

A key factor driving this recovery was the reactivation of a substantial portion of the company’s aircraft fleet. As of June 30, 2023, AirAsia X had 11 aircraft in operation, a stark contrast to the mere five aircraft during the corresponding period the previous year.

This revival in the fleet’s operational capacity has been instrumental in achieving a noteworthy recovery rate of over 50%, an achievement that stands out given the reduced number of operational aircraft compared to the pre-pandemic levels of 2019.

An AirAsia Malaysia Airbus on an approach to land.
km30192002, CC BY 2.0, via Wikimedia Commons

Capacity Expansion and Passenger Uptick


The remarkable financial turnaround is closely tied to the significant increase in seat capacity during 2Q23. The company experienced a staggering surge, with seat capacity growing over 26 times year-on-year to a remarkable 818,422 seats flown.

The enhanced seat capacity resulted from the successful reactivation of additional aircraft and the optimization of the airline’s network.

This expansion was further exemplified by the impressive passenger traffic growth, with a surge of 70 times in the number of passengers carried compared to the same quarter the previous year.

This surge in passengers translated to a healthy Passenger Load Factor (PLF) of 76%, a remarkable 47 percentage points higher than the PLF reported during the corresponding quarter in 2022.

An AirAsia X Airbus in flight.
Mehdi Nazarinia (GFDL 1.2 or GFDL 1.2 ), via Wikimedia Commons

Network Recovery


AirAsia X’s commitment to network recovery is evident in its strategic initiatives to expand services. The company introduced new flight routes during 2Q23, including flights to Bangkok, Beijing, and the Gold Coast.

In addition, AirAsia X augmented its frequency on key routes such as Sydney, Auckland, Melbourne, and Osaka, catering to the surging demand in these sectors.

Notably, the number of sectors flown expanded by more than 27 times, from 81 sectors to an impressive 2,234 sectors by the end of June 2023.

With a sharp focus on the Chinese market, the company anticipates a gradual recovery in passenger traffic from China. The company’s optimism about the potential of this market is well-founded, as AirAsia X has already set plans in motion to expand its operations to various routes in China.

The strategic alignment of the company’s operations with the evolving demand patterns in the region positions it favorably for future growth.

Operational Efficiency


In terms of costs, AirAsia X has successfully normalized its Cost per Available Seat Kilometres (CASK) to 11.75 sen in 2Q23, indicating effective cost management compared to the previous year.

While CASK has increased compared to the preceding quarter, this rise can be attributed to higher maintenance costs resulting from increased utilization-driven maintenance expenses.

The company’s Revenue per Available Seat Kilometres (RASK) was recorded at 14.61 sen, reflecting an average base fare rationalized to RM533.

This adjustment in base fare was influenced by increased ASK capacity, as well as the seasonal fluctuations characteristic of the second quarter.

Associates’ Performance


AirAsia X’s associates, particularly AirAsia X Thailand (TAAX), have demonstrated substantial growth and recovery. TAAX reported a fivefold increase in revenue, reaching RM351.9 million compared to the same period last year.

This remarkable progress was coupled with a strong recovery rate of over 90% from the levels seen in 2019. Despite an unrealized foreign exchange loss, TAAX managed to achieve a net operating profit of RM33.5 million in 2Q23.

The airline’s operational metrics were robust, with a 28-fold increase in passengers carried and a 44-fold increase in ASK capacity, reflecting the successful ramp-up of TAAX’s scheduled flight operations.

AirAsiaX CEO insights


Benyamin Ismail, CEO of AirAsia X, emphasized the company’s growth strategy and its focus on enhancing network capacity in line with evolving demand.

He highlighted the company’s progress in reinstating services and increasing flight frequencies, resulting in a substantial growth of destinations and weekly flights.

As more aircraft are expected to join the operational fleet, AirAsia X’s growth trajectory is set to continue.

The company’s optimism about the Chinese market is backed by plans to triple flight frequency to China by the end of the year.

Promising Future Outlook


AirAsia X’s future outlook is marked by ambitious plans to expand its fleet by adding one more aircraft, bringing the total count to 18. The company’s collaboration with business partners to ensure timely aircraft reactivation underscores its commitment to network expansion.

Commercially, AirAsia X is striving to innovate its product offerings across revenue segments. The ancillary revenue segment, in particular, has shown promise, with ancillary revenue per passenger reaching RM236 in 2Q23.

This success is attributed to strategic initiatives aimed at enhancing pricing strategies, introducing new products, and optimizing the sales channel through airasia.com.

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