AirAsia X will operate dedicated cargo flights for GEODIS

(Jan 26, 2022)
AirAsia X (AAX) has signed an agreement with GEODIS to operate dedicated scheduled cargo flights between Kuala Lumpur and Hong Kong, Chennai, Shanghai and Sydney.

The agreement, which came into effect on January 20, 2022, is expected to run for an initial period of six months, with further extensions to be reviewed on a rolling basis.

With an extensive presence in Asia-Pacific, the partnership with GEODIS will not only complement the existing AAX network, but will also drive additional air freight traffic in a number of markets in which both companies operate.

Through its hub and spoke model, including the ability to switch transport modes at the Kuala Lumpur facility, the network also benefits from GEODIS’ extensive road network to ensure that cargo for its flights to Singapore, Malaysia , Thailand and Vietnam can be transported throughout Southeast Asia.

Thai AirAsia X A330 reg: HS-XTD. Photo by Steven Howard from TravelNewsAsia.com

“It is more critical than ever to complement integrated transport networks with strategic routes that offer customers a high degree of efficiency, personalization and flexibility. Especially given the increasingly complex supply chain landscape that has affected the logistics expectations and needs of industries at all levels,” said Onno Boots, President and Managing Director, Asia-Pacific, GEODIS. “These new intra-APAC air routes represent our continued commitment to providing customers with highly reliable, innovative and cost-effective solutions tailored to the real needs of their business, enabling them to fully optimize the rise of e-commerce and chart their long – growth of the business over time. We look forward to working in partnership with AirAsia X to strengthen its logistics footprint.”

The partnership is the first in a long series that AirAsia is expected to finalize in the coming months. These come on top of significant short-term cargo charters concluded in recent months and represent a rapid financial turnaround after a comprehensive and successful restructuring of the airline.

Benyamin Ismail, CEO of AirAsia X Malaysia, said, “Air freight rates will continue to remain robust as long as aircraft remain grounded. We intend to capitalize on this opportunity for as long as it lasts. Freight revenues represented 4% of our total revenues before COVID-19. This has been our lifeline for the past two years. We expect our cargo operations in the future to contribute at least 40% to 50% of our total revenue. Importantly, we are now fully protected to take advantage of the huge increase in air travel demand. Additionally, passenger revenue will offset any drop in freight rates when we resume regular scheduled flights. We are extremely excited about this new opportunity with GEODIS. We have been operating ad-hoc charter services for them for the past few months, but this new arrangement provides greater certainty over the use of our aircraft and better revenue visibility.


Securities:

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