The honeymoon is over at AirAsia X – the long-haul brand of AirAsia. CEO Azran Osman Rani ‘resigned’ from the loss-making carrier on Friday, replaced by Datuk Kamarudin Meranun, who has been charged with turning the struggling airline airline around.
One of his first tasks will be to oversee a USD109m rights issue to strengthen AirAsia X’s balance sheet, under pressure from incessant losses by the carrier.
AirAsia X has targetted the Australian, Chinese and Japanese markets – a strategy that has backfired.
Its most recent result, for the three months to Sept 30, 2014, was its worst since listing in mid-2013: a net loss of 210.9 million ringgit.
Given Azran Osman Rani’s departure, it’s a reasonable bet that AirAsia X’s December quarter will be no better.
According to Yahoo, “Its shares have dived 48% since its IPO in July 2013, while the Malaysian benchmark stock index KLSE has risen 0.7% over the same period.”
The Australian market has been a particular struggle.
The Sydney Morning Herald reported last November that, in Australia alone, AirAsia X lost 278.5 million ringgit (AUD96 million) before tax in the first nine months of 2014.
Last November AirAsia X said it would cut an unspecified number of flights to Australia from its Kuala Lumpur hub in 2015.
“Capacity allocation in 2015 will see a drop in the number of flights to Australia, while North Asia and other regions will see an increase in [the] number of flights,” the airline said at the time.
It was also reported the carrier will cut back on aircraft deliveries and redirect most of its new planes to affiliates in Indonesia and Thailand.
Meanwhile, the Australian Competition and Consumer Commission has been urged by a local consumer rights organisation to investigate AirAsia X for misleading and deceptive conduct.
The issue is that the airline sold flights between Melbourne and Bali for which it had not gained regulatory approval.
Customers were texted the news that the launch flight was cancelled on Christmas Day, less than 24 hours before departure on Boxing Day.