Lower Fuel Prices Save RM646 Million for AirAsia

18th Aug 2015

Weakening crude oil prices will be the biggest factor in AirAsia’s expected RM646 million cost savings for the next year, this Malaysian airline company predicts.

Chief executive officer of AirAsia Tony Fernandes had this to say:

Sixty per cent of the AirAsia fleet is hedged. Oil is a very big component of our costs and that has tumbled. No hedge next year.

AirAsia Hedging at $80 per Barrel

Right now, AirAsia’s hedging level is $80 per barrel. This is 50 per cent over the market price.

Fernandes told the reporters at the launch of a new in-flight menu, dubbed “Santan” the following:

From the financial point, the currency devaluation is nothing compared to the oil devaluation. [The devaluation of] oil has a much bigger impact for us. The currency situation that we’re in is actually an opportunity for us. We see the opportunity to attract more people, we don’t see a slowdown.

Fernandes, who was also there to promote the new on-board purchase and pre-book menus of AirAsia and AirAsia X flights, also explained how the later of the two carriers benefited from ringgit weakening. According to Fernandes, the long-haul, low-cost affiliate carrier (AirAsia X) earns most of its income from non-Malaysian customers, especially from Japan, Korea and Australia.

Pre-Book Meals to Save up to 20% Compared to On Board Ordering

If they pre-book their meals, AirAsia and AirAsia X passengers can save up to 20 per cent when compared to getting their desired meals on the plane itself.

Adding to that, guests will also be able to add a desert for only RM7, if they choose the “maximize your meal” option.

AirAsia has also guaranteed it will have preordered meal available when the passenger boards the plane and is in the air.

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