AirAsia’s Fernandes skeptical about deliveries any time soon

AirAsia Group chief executive Tony Fernandes is skeptical about the possibility of airlines taking new aircraft given the coronavirus epidemic’s impact on growth.

During an interview on Bloomberg TV, Fernandes was asked about his orders with Airbus.

“We have a large order book with Airbus…we have an interesting relationship with Airbus,” he says.

“It’s hard to be talking about new aircraft right now when demand is what it is, but we’ll have to see. No airline is talking about growth right now. It’s about hunkering down, being positive, and bouncing back when the lockdowns come out and we begin to beat this virus, which will eventually happen.”

Cirium fleets data shows that AirAsia and AirAsia X have 480 orders with Airbus including 348 A320neos and 78 A330neos. Its estimate is that 14 aircraft are due for delivery to the two airlines in 2020, and 29 in 2021.

Both airlines are grounded amid the coronavirus crisis.

“I’m optimistic business will come back, but growth won’t come back for a while,” he says. “I can’t see many airlines taking new planes for growth for a while, and this is something we are discussing with Airbus at the moment.”

In February, AirAsia X disclosed that it was seeking to defer deliveries of the A330neo. The long-haul, low-cost carrier represents 28% of the type’s total order book.

Fernandes also dismissed the prospect of a merger with Malaysia Airlines. He believes that AirAsia has sufficient cash to see it through most of 2020, but that it is talking to the Malaysian government about a credit facility.

“Liquidity is available in Malaysia, Thailand, etc. so we’ll draw down on those lines, but we have enough cash to last us quite a while for a moment,” he says.

“It’s tough, but we’ve buttoned down. Locked down costs. Closed down operations for month. Lots of ideas to get going again. It will be an uphill slog, but we remain optimistic.”


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