AAX keeps faith in its model
Stephanie Jacob | 09 Nov 2018 00:30
When AirAsia X Bhd (AAX) first took flight 11 years ago, the big debate was the viability of the long-haul low-cost model. Over a decade later, the model remains firmly at the centre of debate even as its popularity soared (see P.10).

The airline’s development and performance over the last 11 years encapsulate why. After its most recent two financial years booked in net profits, there is a possibility that AAX might slip back into the red on the back of high oil prices in FY18.

Investors will remember that it was not that long ago that the airline was swimming in the red. In July 2013, AAX listed on the main market of Bursa Malaysia and for that year it posted a net loss. FY14 brought no relief as the airline slipped further into the red.

In January 2015, a new management team led by AirAsia Group co-founder Datuk Kamarudin Meranun took over, with Benyamin Ismail as acting CEO (he was confirmed as CEO later that year). The new team’s mandate was to push the airline back to profitability.

It succeeded in narrowing the loss in FY15 and then brought the airline back into positive territory in FY16 and FY17. However, Benyamin acknowledges that oil prices have given AAX a beating and admits there is a possibility of a loss this year.

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