Tuesday, November 04, 2008

AirAsia X hopeful of getting loans for new aircraft

Long-haul budget airline AirAsia X Sdn Bhd is confident of getting bank loans to finance the purchase of its remaining Airbus A330 fleet despite the current turbulence hitting the airline industry.

Chief executive Azran Osman Rani said AirAsia X was hopeful of getting loans for the remaining “20-plus” Airbus A330 it ordered after managing to get loans for the first few aircraft.

The carrier had ordered 25 Airbus A330 planes, which costs about US$200mil each.

“The negotiation (for the loans) for the first few aircraft was intense because the foreign bank was more cautious but fortunately, we were able to the clinch the deal due to the lender’s confidence in the AirAsia brand,” Azran said after the celebration of AirAsia X’s first anniversary yesterday.

“For the remaining planes, we are in talks with foreign as well as local banks, including CIMB Bank Bhd, RHB Bank Bhd and Bank Kerjasama Rakyat Malaysia Bhd.”

AirAsia X's first Airbus A330 was delievered on Nov 1.

AirAsia X took delivery on Saturday of the first of the 25 Airbus A330 it ordered and promptly launched an inaugural flight on the Airbus A330 between Kuala Lumpur and Perth, Australia, the very next day.

But the flight encountered a six-hour delay due to a computer glitch in the plane’s cockpit.

Another aircraft is scheduled for delivery in December and three more in 2009. All the Airbus A330 aircraft it ordered are scheduled to be delivered by 2013.

AirAsia X’s current debt-to-equity ratio is over three times, which, according to Azran, is acceptable in the airline sector.

The carrier has not hedged its positions in foreign currencies and jet fuel, he said, pointing out that 50% of the group revenue was in foreign currencies.

However, it was planning to lock in jet fuel supplies as the current price was attractive, he added.

On its expansion plan, Azran said AirAsia X would continue to grow its routes and aircraft fleet despite the economic slowdown.

“When others (airlines) retreat, it is a good time for us to expand because we can grow at a faster rate by taking over their routes and cancelled aircraft,” he said, adding that AirAsia X planned to expand into Europe, China and India soon.

Launched in November 2007, AirAsia X has flown over 200,000 people and operated flights to Gold Coast and Perth, both in Australia, and Hangzhou, China.

Its next inaugural flight would be to Melbourne, Australia, on Nov 12 and to Britain on March 9 next year.

Source : STAR
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