AirAsia, the region’s largest low-cost carrier, has said that despite surging fuel prices it will not scale back growth plans and will press ahead with an ambitious route expansion programme.
“We will continue to put on new routes. As long as we can make a profit from our operations, we will not hold back our growth plans,” said chief executive Tony Fernandes.
“I am taking a contrarian view. There is a limit to how much I can cut costs. If I cut my routes, where is my growth going to come from? In our case, we still can make money from our routes,” he said.
Airlines including Virgin Blue, Qantas Airways and US Airways have cut back their growth plans and axed loss-making routes to weather spiralling fuel prices. AirAsia recently launched three new routes – one to Kuantan in central Pahang state, Malaysia and to Haikou (China) and to Hong Kong.
“By year-end we will fly to south India, new destinations in India and mount more flights to Singapore,” the aviation tycoon said.
Mr Fernandes also said the carrier’s new A320 Airbus jets were more efficient.
“Our operational costs have come down due to the Airbus’s better fuel burn,” he said.
The Kuala Lumpur-based carrier’s fuel bill represents 50 per cent of total operational costs.
Mr Fernandes said the carrier had frozen the hiring of new staff who are not related to fleet growth, but that it would not reschedule the delivery of the A320 Airbus aircraft.
The carrier received about 67 A320s and is phasing out its old Boeing 737s.