With more countries starting to implement mass immunization programs against eth Covid-19 disease, there is a gradual improvement in the outlook for the global aviation industry, said Tony Fernandes, CEO of AirAsia.
According to Fernandes, while the airline, one of the largest low budget airlines of Asia, expects to restart operations within “a large part” of its routes by the end of 2021, AirAsia however does not see the return of passenger capacity back to the levels before the pandemic until 2023.
“It’s been the toughest challenge,” he said in an interview to a new channel. “But I think the outlook’s getting better,” he added.
“The most important thing is there’s a huge amount of demand out there and we just have to wait for borders to open and I think we’re one of the first kind of businesses that will recover, from an airline perspective, because we’re very strong in domestic and regional,” he said.
The global travel and tourism sector has virtually been crippled by the novel coronavirus pandemic which has resulted in many airlines to seek out modes of survival with measures such as mass layoffs, cancellation of orders, referring some of the existing fleet and cutting down on routes.
Globally, airlines would suffer a net loss of $118.5 billion for 2020 and an expected net loss of $38.7 billion in 2021, according to an estimate made in December by the International Air Transport Association (IATA).
The pandemic has also hit AirAsia very hard. A fifth straight quarterly loss between July and September was reported by the company and is currently trying to raise more funds by issuing loans and investors. The airline has set a target to raising up to 2.5 billion Malaysian ringgit ($618 million) for the whole group, Fernandes said. According to Fernandes, the digital business and the logistics unit of AirAsia are included in this as these two business units are performing well.
“We’re a little bit behind schedule than we wanted to be but the amount’s exactly where we want to be. We are very confident that this capital that we’ll raise will take us well into 2023,” he said. He added that the3 the company will emerge from the pandemic as one with a better cost structure, a strong digital business and good demand for the airline.
So far this year, the stocks of AirAsia are down almost 22 per cent.
Talks are being held with the European plane maker Airbus and AirAsia in order to ensure that the long term order book of the company remains, Fernandes also said. “We’re going to have to defer some of it to a later date,” he said, adding, “We don’t want to change that for short-term decisions.”
Since switching over from the United States airplane maker Boeing to Airbus years ago, AirAsia has been among the largest customers of the European company. A total of more than 660 Airbus jets including planes yet to be delivered, has been ordered with Airbus by AirAsia, said reports.
(Adapted from CNBC.com)