KUALA LUMPUR – AirAsia Bhd foresees US$160 million in cost savings next year from weakening crude oil prices as the group’s hedging tenure ends in 2015.
“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,” said Group Chief Executive Officer Tan Sri Tony Fernandes.
Currently, the group’s hedging level is about US$80 per barrel, which is about 50 per cent higher than the market price.
“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 (in foreign exchange terms).
“The currency situation that we’re in is actually an opportunity for us. We see the opportunity to attract more people (to fly), we don’t see a slowdown (in our business),” he told reporters after the launch of a new in-flight menu concept themed ‘Santan’ and the introduction of on-board purchase and pre-book menus on AiAsia and AirAsia X flights.
He said AirAsia X has benefited the most from the weakening of the local currency as the long-haul, low-cost affiliate carrier of AirAsia has a lot of income from foreign passengers, including Australians, Japanese and Koreans.
AirAsia and AirAsia X guests are encouraged to pre-book their meals to save up to 20 per cent as compared to purchasing their meals on board, with a guarantee that their preferred meals are available.
Guests can also add a sweet ending to their meal with the ‘maximise your meal’ option for only RM7. – BERNAMA