Malaysia’s AirAsia X defers A330neo deliveries as virus pressures frail funds

KUALA LUMPUR/SYDNEY (Reuters) – Malaysian long-haul price range airline AirAsia X (AIRX.KL) mentioned it’ll defer supply of 78 Airbus SE (AIR.PA) A330neo planes and contemplate different modifications to scale back its fleet, because the coronavirus outbreak provides strain on the loss-making provider.

FILE PHOTO: An AirAsia Airbus A320-200 aircraft is pictured at Kuala Lumpur Worldwide Airport in Sepang, Malaysia, July 22, 2019. REUTERS/Lim Huey Teng

AirAsia X mentioned late on Thursday it would promote two A330s that might fetch as much as $100 million and return 5 others to lessors early, including it was already in negotiations with lessors a couple of focused 30% minimize in lease charges.

The airline cancelled 600 flights for March, in line with an investor presentation printed after it reported a better quarterly internet loss. AirAsia X flagged decrease ahead bookings and strain on fares within the presentation.

The virus has deepened the challenges dealing with the airline and sister provider AirAsia Group Bhd (AIRA.KL), whose Chief Government Tony Fernandes and Chairman Kamarudin Meranun have each stepped apart for not less than two months amid investigations right into a corruption scandal. Airbus was alleged to have paid a $50 million bribe for aircraft orders.

Brendan Sobie, a Singapore-based unbiased aviation analyst, mentioned AirAsia X was extremely uncovered to China and different markets in North Asia considerably impacted by the coronavirus however the provider was additionally in a weak monetary place previous to the disaster.

AirAsia X shares fell by 5% on Friday to a file low after it posted a internet lack of 95.eight million ringgit ($22.62 million) within the quarter ended Dec. 31, rising from an 88.1 million ringgit loss a 12 months in the past.

Flights to and from mainland China accounted for about 30% of AirAsia X’s capability earlier than the outbreak of the virus. It has a fleet of 24 A330 planes.

The provider final August reached a revised cope with Airbus to take 78 A330neos and 30 long-range A321XLR narrowbodies, down from earlier plans for 100 A330neos. AirAsia X is Airbus’ largest buyer for the A330neo, a extra gas environment friendly model of the older A330 mannequin.

AirAsia X mentioned supply of the A330neos can be deferred and it will transfer towards a dual-fleet technique with A321s set to switch its A330s on routes of 4 to 6 hours when demand recovers.

“We consider superior plane know-how has modified enterprise dynamics as we will now fly slim physique plane longer,” AirAsia X Malaysia CEO Benyamin Ismail mentioned in a press release.

An AirAsia X spokeswoman mentioned the airline was evaluating market situations and had but to verify the period of the A330neo supply deferrals. An Airbus spokesman mentioned the producer doesn’t touch upon supply schedules for particular person airways.

($1 = 4.2350 ringgit)

Reporting by Liz Lee in Kuala Lumpur and Jamie Freed in Sydney; Modifying by Jane Wardell and Muralikumar Anantharaman

Our Requirements:The Thomson Reuters Belief Ideas.

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