PETALING JAYA: AirAsia Bhd (AAB) and AirAsia X Bhd (AAX) have signed a profit sharing agreement in connection with the transfer of AAB’s two existing slots (equivalent of 14 times weekly) of its Kuala Lumpur-Singapore route to AAX.
In an exchange filing, AirAsia Group Bhd said AAX will share 50% of the net operating profit of the route with AAB on a monthly basis throughout the term of the agreement, which is for the duration of one year effective Nov 10.
“The agreement may be renewed for another one year by mutual agreement in writing by both AAX and AAB.”
“The transaction will provide an opportunity for AAB to heighten the fly-thru market which has remained stagnant since 2017 and benefit from the additional capacity which doubles up to AAB’s current capacity,” it said.
Currently AAX is only carrying 1% of the total industry fly-thru passengers into SIngapore from China, India, Japan and Korea, due to lack of capacity and very strong demand on point to point where there are not enough seats left for fly-thru passengers.
In a separate filing, AAX said that based on the one year projected forecast, the transaction will generate an estimated amount of RM2.42 million in profit, taking into account operational costs and other costs.
“The transaction will introduce a strategic growth for AAX in a slot constrained airport and maximise the company’s aircraft utilisation, and in the meantime to generate revenue which can minimize the existing sunk cost,” it said.
AAX further stated that the allocated aircraft time for KUL-SIN-KUL schedule is between 8 am to 4 pm, which leaves planes on the ground.
“The transaction will therefore be able to utilise small pockets of unutilised aircraft time and generate additional revenue with the capacity of 377 seats per aircraft. Therefore, the commencement of this new route between Kuala Lumpur and Singapore will increase: average aircraft utilisation by 0.2 hours; and connectivity to Singapore based on its route performance and network planning independent of AAB,” it said in its filing.
