AirAsia X (AAX) has signed new air logistics partnership with global transport and logistics provider Geodis, providing additional cargo capacity and boosting revenue during the downtime in commercial flying.
This agreement is set to run for six months commencing from 20 January with further extensions to be contemplated. Under the agreement, AAX will provide regular dedicated scheduled cargo flights between Kuala Lumpur and Hong Kong, Chennai, Shanghai and Sydney.
With an extensive footprint in Asia Pacific, the partnership with Geodis will not only complement the existing AAX network but will also stimulate additional air-cargo traffic in a number of markets that they both operate in.
Through its hub and spoke model, including the ability to switch transport modes at the Kuala Lumpur facility, the network also benefits from Geodis’ expansive road network to ensure that cargo from its flights to Singapore, Malaysia, Thailand, and Vietnam can be transported across the whole of Southeast Asia. With highly integrated, multimodal transport solutions, Geodis aims to help more customers circumvent disruptions that have negatively affected both air and sea cargo flows historically.
This partnership is the first of many that will be finalised in coming months. These augment the significant short term cargo charters completed in recent months and represent a rapid financial turnaround post a comprehensive restructuring of the airline.
AirAsia X Malaysia CEO Benyamin Ismail said air cargo rates will continue to remain robust as long as planes remain grounded.
“We intend to capitalise on this opportunity for as long as it lasts. Cargo revenues were 4 percent of our total revenues pre-Covid. It has been our lifeline over the past two years. We expect that our cargo operations moving forward will contribute at least 40 to 50 percent of our total revenue. Importantly we are now perfectly hedged to take advantage of the huge surge in air transport demand. Furthermore, passenger revenue will offset any drop-in cargo rates when we start normal scheduled flights again.
“We have operated ad hoc charter services for Geodis in recent months but this new arrangement provides better certainty on utilisation of our planes and better visibility of earnings.”
Geodis president and CEO for Asia Pacific Onno Boots said it is more crucial now than ever to supplement integrated transport networks with strategic routes that offer customers a high degree of efficiency, personalisation, and flexibility. Especially given the increasingly complex supply chain landscape that has affected the logistical expectations and needs of industries across the board.
“These new intra-Apac flight routes represent our sustained commitment in bringing customers highly reliable, innovative, and cost-effective solutions that are tailored to what their business truly needs, allowing them to fully optimise the e-commerce boom and chart their long-term business growth.”