FOX ON FRIDAY

 

Fox On Friday: Air Asia – not so good.

*A report on this topic in our Travel Business Analyst newsletter contains some important additional information and analysis.

 

When it was launched, AAG (the Air Asia Group) voiced its moral superiority over other airlines with its transparency – certainly concerning operating results. But that was when its operating totals were good. Now some are bad, out go the morals.

 

In fact, AAG is worse than other companies, such as Cathay and Singapore, which are perhaps more bound by disclosure requirements in their stockmarkets. Air Asia seems to be able to publish what it wants, and the Kuala Lumpur stockmarket authorities say nothing. I guess they might not be quite sure which operating figures are important to know.

 

AAG has managed to report Q4 and all-2015 operating results for Air Asia X giving only seat factors and percentage change in capacity. In addition, it describes the 83% seat factor for AAX as “healthy”. That level would worry us sick; we believe AAX needs high-80s if not above-90%.

 

AAG gives no data for Thai AAX, and traffic for Indonesia AAX is added to the AA total – because it lists IAAX as operating flights for IAA! However, that does not stop AAG from commenting on IAAX, in AAX reports, as though it were separate from IAA.

 

AAX has also switched flights from Kuala Lumpur to Colombo and Chongqing from A330s to A320s. Wait a minute. Isn’t AAX a medium- and long-haul airline? Also, according to its published records, AAX does not have any A320s in its fleet. Also, why cannot AA operate such shorthaul routes? Is AAX running into an existential problem?

 

Meanwhile, AAG’s 2nd attempt in the Japan market looks unlikely to start this spring – even though that was originally summer 2015. However, when it starts, this Nagoya-based attempt should succeed.

 

Selected counts, seat sales only.

-Total +9.0%.

 

-Falls for Indonesia division (-16.9%, and -21.6% if IAAX not included) and AAX (-14.6%; for Malaysia division only; no data released for Thailand AAX).

 

-India good (+324%) because new operation and 4Qs in 2015 compared with 3Qs in 2014.

 

-Original Malaysia division still doing well – +9.6%.

 

-Thai also doing well. It is now 61% the size of the Malaysia division. It was 66% in 2010 but then fell to as low as 48% with some bad years for Thailand over 2010-14.

 

 

The Fox

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