AirAsia X evaluates the Airbus A321neo LR.

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August 31, 2018
A321neo LR AirAsia X
The A321neo LR in flight test. Photo: Airbus.

Long-haul low-cost operator AirAsia X is evaluating Airbus’ long-range version of the  A321neo as it moves to target more destinations within a range of seven hours.

Powered by CFM International’s LAEP-1A engines, the A321neo LR,  is due to enter service in the fourth quarter of 2018 and is designed to carry up to 240 passengers 4000 nautical miles.

AirAsia X Bhd confirmed Thursday it was evaluating “the potential introduction” of the 321neo LR for developing routes as it announced the group had moved into the red with a second-quarter net loss of RM57.5m, down from an RM47.4 net profit a year ago.

The group’s net operating loss deepened to $RM99.3 million from a loss of RM16 million in the equivalent quarter of 2017.

Revenue for the quarter rose 2 percent to RM1.05 billion as a 13 percent year-on-year boost in passengers outpaced a 6 percent increase in capacity to boost the load factor.

Officials blamed the fall in profitability on a range of factors including softer demand during Malaysia’s general election and the rise of fuel prices during a traditionally lean quarter.

READ Indonesia AirAsia passes major safety audit.

AirAsia X co-group chief executive Tony Fernandes said passenger traffic was expected to grow in the coming months but warned costs remained under pressure from higher fuel prices.

“However, the management remains focused on monitoring the other operating expenses to ensure further cost efficiencies to offset higher fuel expenses,’’ he said.

Fernandes said AirAsia X had cut loss-making routes since the start of 2018 and had moved away from single-route countries in favor of big countries with major cities.

He said these represented a bigger potential for the group to build up flight frequencies and higher-yielding “unique” routes.

“We will focus on routes within seven hours range as much as possible with the exception of a few routes such as Honolulu,” he said.

“Apart from the North Asia market, we are thrilled to grow India as one of our core market segments as well.

“ In the last seven months, we have added Jaipur and Amritsar into our fast growing network. Together with Jeju which was launched in December 2017, we have now launched three new routes into countries where we already have existing operations.

“In addition to that, we have removed Iran and (we’re) removing Nepal from our network, as we shift those capacities into North Asia.

“In a rather challenging period for the aviation industry, we view this move will give more cost efficiency to AirAsia X as we already have existing stations in China, South Korea and Japan.”

The group plans to increase its fleet to 36 Airbus A330s by the end of the year with five leased aircraft allocated to its Malaysian operation and one to AirAsia X Thailand.

Fernandes said the recent order A330neos also reaffirmed the commitment and confidence in the AirAsia X business model.

The group announced an order for an additional 34 A330neos at this year’s Farnborough Airshow, bringing the total number ordered to 100.

All of the aircraft are the bigger A330-900 model and deliveries are scheduled to start in the fourth quarter of 2019.

“The Airbus A330neo will give better fuel efficiency with improved flying range,’’ Fernandes said. “We are confident that the aircraft will allow AirAsia X to expand its value-based long-haul model with even lower operating costs.”