AirAsia to maintain growth plans despite spike in fuel price

– AirAsia, the region’s largest low-cost carrier, said Sunday that despite surging fuel prices it will not scale back growth plans and will press ahead with an ambitious route expansion program.

“We will continue to put on new routes. As long as we can make a profit from our operations, we will not hold back our growth plans,” chief executive officer Tony Fernandes told AFP.
“I am taking a contrarian view. There is a limit to how much I can cut costs. If I cut my routes, where is my growth going to come from? In our case, we still can make money from our routes,” he said.

The carrier has to date received about 67 A320s and is phasing out its old Boeing 737s. It has agreed to buy a total of 175 aircraft. Each A320 aircraft carries a catalogue price of 60 million dollars.

Fernandes remained upbeat about the carrier’s performance amid economic uncertainties due to escalating food and fuel prices worldwide.

“We are seeing a slight increase in passenger volume. Our business is still good. I expect our revenue to be better than budgeted in 2008,” he said.

Asia Times