KUALA LUMPUR (July 28): AirAsia X Bhd, which will fly four times a week from Kuala Lumpur to Sapporo, Japan starting Oct 1, 2015, is banking on new routes to help it improve its revenue and turn itself around in the second half of this year, said its acting chief executive officer Benyamin Ismail.

The low-cost, long-haul affiliate of AirAsia Bhd plans to next launch its first US flights to Hawaii in November, to fill a gap left by the axing of routes to Nagoya, Narita and Adelaide this year.

Benyamin said AirAsia X targets to carry close to 100,000 passengers on the Kuala Lumpur-Sapporo route in the first year of operations. The new route is in addition to its existing flights to Osaka and Tokyo.

"To make sure that we achieve good profitability (on the route), we have to make sure that we achieve 75% to 80% (of average load factor),” Benyamin told a press conference to announce its new flights from Kuala Lumpur to Sapporo today.

As part of its restructuring plan, the loss-making airline is dropping some of its unprofitable flights and slowing its aircraft deliveries.

“We will cut routes that are not performing and where the market is already oversupplied,” Ismail said.

“But that doesn’t stop us from investing into new routes. The message to the team is to look at routes that we think are profitable,” he added.

In May, the airline reported its sixth consecutive quarterly loss since 4QFY13 on higher foreign exchange (forex) loss on borrowings which more than tripled to RM89.2 million in the first quarter ended March 31, 2015 (1QFY15) due to the weakening ringgit.

Benyamin acknowledged that the weakening ringgit has increased its operating cost. “But a lot of our revenue is also in foreign currencies (and) so, it equalises it.”

He explained that about 45% of its revenue is in Australian dollar, which the US dollar accounts for about 20% and ringgit about 30% of the group’s revenue. “We don’t see the impact as how people see it is.”

After helming AirAsia X for six months, Benyamin said his aims are to turn around the airline and bring back confidence of its investors.

“Second half [of the year] is when you will see our numbers get better. The tough part is in the past (where) we had irrational competition that impacted our profit,” he added.

AirAsia X’s share price has fallen by 63% to 20 sen today from 54.3 sen on Jan 2, 2015. It closed 2.44% lower at 20 sen, for a market capitalisation of RM829.63 million.

Commenting on the slump of its share price, Benyamin said: “I am not sure when we will go back to IPO price (of RM1.25), but that is my target.”

Benyamin said AirAsia X is also facing problems at klia2 due to sinking soil conditions affecting the airport's apron and taxiway.

“We are working very hard (with Malaysia Airports Holdings Bhd) to ensure this is solved in the quickest possible time,” he added.