AirAsia can withstand unfavourable currency movements, rising oil prices

PHNOM PENH: AirAsia believes it is capable of confronting rising fuel prices and the continued unfavourable currency movements, which continue to heighten global challenges.

Capital A Bhd chief executive officer (CEO) Tan Sri Tony Fernandes said his confidence is based on the returned elasticity of the aviation industry post-Covid-19 despite fares rising as much as 25 per cent based on US$110 per barrel jet fuel.

“As far as I am concerned, the only worry I have is a pandemic. Oil prices and currencies, they are all things we can handle.

“What has Covid-19 proven, the most important fact is people like to travel,” he told reporters at AirAsia Cambodia’s inaugural ceremony here.

He said American Express and Visa studies showed that travel is the number one spend.

“Cost and fares go up, (but) demand is still strong. So, I believe we can handle whatever geopolitical throws at us except wars but ASEAN and Asia are peaceful places.

“So, I don’t see those as an issue. Oil and currency are the two variable factors. They are at record highs, (but) I don’t think it is going much higher (either),” he noted.

Following this, he reckons that airfares are going to stay where they are now.

“For now, we are seeing the highest kind of costs for us, be they currency and oil prices. So, I hope in 2025, that it will come down and maybe fares will come down a bit too,” Fernandes said, adding that the situation is expected to improve once central banks begin to cut interest rates.

Asked about a possible price war, he said airlines have learned their lesson that such a situation was only hurting every player.

Therefore, he expects airlines to be more disciplined where fares are concerned.

As for AirAsia Cambodia, he said the airline group is ready for international expansion soon, planning to link routes such as China, India, Singapore and even Vietnam.

“One of the problems… a ‘good’ problem, is the lack of planes.

“We now have 22 destinations in China. That is the beauty AirAsia Cambodia gets straight away,” he said.

AirAsia also flies to 15 destinations in India.

AirAsia Aviation Group CEO Bo Lingam said that under the group’s five-year plan, it will have 25 aircraft supporting AirAsia Cambodia, depending on demand.

The airline is eager to connect the air travel dots in the region after the commencement of its seventh airline, AirAsia Cambodia, marking a significant step forward not just in the country’s aviation landscape but strengthening ASEAN as a vibrant aviation hub.

AirAsia Cambodia will commence its operations tomorrow, following the handover of its Air Operator’s Certificate (AOC) on Tuesday.

With two Airbus A320s initially, the airline will operate from Phnom Penh International Airport and connects travellers to the cities of Siem Reap and Sihanoukville, and beyond through hubs in Kuala Lumpur and Bangkok.

The start of the new airline represents an important milestone for the AirAsia Group as it recently announced its “ONE Airline” strategy.

AirAsia Cambodia CEO Vissoth Nam in his speech said the airline is proud to chart a new milestone not only for the airline industry in the region but for the country today.

As a group, AirAsia serves a total of six routes into Cambodia from Kuala Lumpur and Bangkok, carrying 1.3 million guests into the kingdom historically. – Bernama