Strong travel demand; passenger capacity reaches 90%, AirAsia says ticket prices cannot be reduced

AirAsia CEO Bolingan pointed out to Bloomberg that the post-pandemic era ushered in the global travel market, and strong travel demand meant that it would be difficult for ticket prices to fall back to the level before the outbreak of the epidemic in the short term.

“Although the decline in aircraft fuel prices and the increase in airline flights may benefit travelers next year, ticket prices are unlikely to drop to pre-pandemic levels, supported by strong demand.”

Bolingan also said that today AirAsia's passenger load rate is around 90%, a level never seen before the outbreak of the epidemic.

In response, Bloomberg said that the current strong demand for aviation is supporting AirAsia's ambition to build the world's first low-cost airline to cover global destinations by 2030.

This year, AirAsia added a new route to Almaty (Almaty), Kazakhstan, and also launched a Cambodian subsidiary. Next, AirAsia will launch a flight to Nairobi (Nairobi), the capital of Kenya, in October.

Bolingan also said that AirAsia is also considering opening a subsidiary in Vietnam and has begun discussions.

“However, we will not set up subsidiaries in markets other than Southeast Asia.”

According to Bloomberg, AirAsia's long-haul routes will be serviced by Airbus's A321 aircraft, which can fly farther at an affordable cost.

Bolingan pointed out that AirAsia intends to convert all current orders for 377 aircraft to A321 LR models, while also ordering 50 A321 XLR models.

“This type of aircraft is significantly less expensive to operate, at least 25% to 30% cheaper, because it's a single-aisle narrow-body aircraft, and you don't need to worry about filling up 500 seats; after all, it only has 240 seats.”

At that time, AirAsia founder Tan Sri Tony Fernandes will switch to an advisory role and focus on the non-aviation business of the One Must Investment Group. Bolingan, on the other hand, continued to serve as Chief Executive Officer after AirAsia's integration was completed.

Although Bolingan, 59, has yet to become the new leader of AirAsia, he has been working with Tony Fernandes for over 30 years and has begun planning a succession plan.

“Over the next 5 years, I will pass on my experience and technology to the two Deputy CEOs, Dato' Wu Zhishun and Farouk Kama. After all, I'm not young anymore.”

Furthermore, Bolingham pointed out that when the company is removed from the PN17 list, it will seek to refinance all dollar debts into ringgit debts and seek lower borrowing interest rates.