Malaysia's AirAsia X targets Asia cargo market in deal with logistics firm

FILE PHOTO: Acting AirAsia X CEO Benyamin Ismail poses for photographs at his office in Sepang, outside Kuala Lumpur February 25, 2015. REUTERS/Olivia Harris

KUALA LUMPUR (Reuters) - Malaysia’s AirAsia X Bhd (AAX) has signed a partnership deal with French logistics firm Geodis, aiming to develop cargo capacity and generate revenue while passenger flights remain grounded due to coronavirus travel curbs, the airline said in a statement on Wednesday.

AAX, the long-haul affliate of budget carrier AirAsia Group, said the agreement will run for an initial period of six months commencing Jan. 20, with further extensions to be contemplated.

The cargo plan comes as the carrier restructures its business with passenger flights grounded since the start of the coronavirus pandemic in March 2020 as Malaysia’s borders remain closed to international tourism. [nL1N2T10QR]

Under the agreement, AAX will provide regular dedicated scheduled cargo flights between Kuala Lumpur and Hong Kong, Chennai, Shanghai and Sydney, it said.

Chief executive Benyamin Ismail said the airline intends to capitalise on air cargo rates that have risen as while passenger planes remain grounded.

He said cargo accounted for 4% of the airline’s total revenue before the COVID-19 pandemic, but he expects the cargo operations to contribute at least 40-50% of total revenue moving forward.

“Furthermore, passenger revenue will offset any drop in cargo rates when we start normal scheduled flights again,” he said.

( This story corrects sixth paragraph to say cargo accounted for 4%, not 7%, of revenue before pandemic).

Reporting by Liz Lee; Editing by Kenneth Maxwell