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AirAsia X Seeks to Boost Cargo Amid Dearth of Passengers

Plan comes as carrier restructures its business with passenger flights grounded since the start of the coronavirus pandemic in March 2020


AirAsia
The tail of an AirAsia X plane is seen at the Garuda Maintenance Facility AeroAsia in Tangerang, Indonesia. Photo: Reuters.

 

Malaysia’s AirAsia X (AAX) has signed a partnership deal with French logistics firm Geodis, aiming to develop cargo capacity and generating revenue while passenger flights remain grounded.

The airline, the long-haul affiliate of budget carrier AirAsia Group, said the agreement would run for an initial period of six months from January 20, with further extensions to be contemplated.

The cargo plan comes as the carrier restructures its business with passenger flights grounded since the start of the coronavirus pandemic in March 2020 as Malaysia’s borders remain closed to international tourism.

Under the agreement, AAX would provide regular dedicated scheduled cargo flights between Kuala Lumpur and Hong Kong, Chennai, Shanghai and Sydney.

Chief executive Benyamin Ismail said the airline intends to capitalise on air cargo rates that have risen as while passenger planes remain grounded.

He said cargo accounted for 7% of the airline’s total revenue before the pandemic, but expects freight to contribute at least 40% of total revenue.

“Furthermore, passenger revenue will offset any drop in cargo rates when we start normal scheduled flights again,” Ismail said.

 

  • Reuters, with additional editing by George Russell

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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