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Post-pandemic airfares to remain high amid travel surge

Image: Sam Fong/The Edge

Despite a slight relief due to declining jet fuel prices and increased flight capacity, airfares are expected to remain high in the post-pandemic travel surge and are unlikely to revert to pre-pandemic levels soon. AirAsia Aviation’s CEO Bo Lingam spoke on the changes in travelling patterns post-pandemic in an interview.

“[The aircraft] load factor is around 90%, this was unheard of pre-Covid.”

The aviation sector has undergone significant changes following the pandemic, with pent-up travel demand driving ticket prices higher than inflation rates in many regions. Concurrently, supply chain issues, such as aircraft delivery delays and unexpected engine maintenance, have hampered airlines’ abilities to expand flight offerings.

AirAsia aims to leverage this robust demand to create the world’s first low-cost carrier network by 2030, centred on its Southeast Asian hubs. This year, the airline added flights to Almaty, Kazakhstan, and launched operations with its Cambodian unit. The next milestone is the commencement of flights to Nairobi, Kenya, in October.

Future long-distance routes will be served by Airbus SE’s new long-range A321 models, which offer cost-effective operations. Lingam mentioned plans to convert the airline’s entire 377-plane orderbook to A321 LR models and has also placed a separate order for 50 XLR models.

“The cost of operating the aircraft is much cheaper, at least 25% to 30% cheaper because it’s single aisle and you don’t need to worry about filling up 500 seats, as opposed to 240 seats.”

Lingam also assured that there would be no changes in AirAsia’s management following founder Tony Fernandes’ move to an advisory role post-merger, as Fernandes shifts his focus to non-aviation businesses under Capital A Bhd.

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Although Lingam has yet to start his new role, he is already planning for his succession, aiming to transfer his expertise to his deputy CEOs, Chester Voo and Farouk Kamal, over the next five years.

Additionally, Lingam reiterated AirAsia’s commitment to expanding its network and fleet with more efficient aircraft while underlining strategies to maintain competitive airfares despite rising operational costs. This effort is part of AirAsia’s efforts to capitalise on strong travel demands to supplement their growth ambitions, reported Bangkok Post.

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