AirAsia X extends ULD contract with Unitpool for 5 more years

18 December 2009

Kuala Lumpur- Low-cost long-haul airline AirAsia X today signed a five-year extension of agreement with Swiss asset management company Unitpool to support the airline's ambitious cargo growth plans.

With the extension of this agreement, Unitpool will provide for AirAsia X unit load devices (ULDs), which are needed, to support the airline's fast growing cargo operations, until 2014. ULD is a standardized cargo container for air, land and sea transportation. Unitpool guarantees the prompt delivery of ULDs as and when required by the airline in any new destination it flies to. The airline, an affiliate of low-cost short-haul carrier AirAsia, is fast expanding its route network.

The agreement is expected to help AirAsia X meet its projected target of MYR 50 million in cargo revenue in 2010, a more than 60% increase from the MYR 30 million revenue it expects to achieve in 2009.

"Extending our relationship with Unitpool assures us that our needs concerning the procurement, repair and positioning of ULDs are met. It allows us to push forward our growth strategy and to give more attention to the marketing of our passenger seats and cargo space. It also frees AirAsia X from taking the build-up risk of acquiring large numbers of ULDs - based merely on anticipation - before they are actually required," said Sathis Manoharen, Regional Head of Cargo of AirAsia X.

Meanwhile, Unitpool CEO David Harman said, "We are absolutely delighted to grow our relationship with AirAsia X, which is expanding operations and has huge plans for its cargo business. We are excited about our continued participation in its growth and success. The extended agreement allows us to follow through on plans to add Kuala Lumpur International Airport to the growing network of airports with a Unitpool-dedicated presence."

AirAsia X identifies cargo as a major revenue-generating channel. It is optimizing the potential of its otherwise empty belly space to bring in cash by offering cargo services at rates considerably lower than its competitors' and by tapping AirAsia's extensive network and flight frequencies to reach more destinations and achieve faster delivery time.

The airline is increasingly finding new ways of increasing revenue apart from growing passenger volume. AirAsia X is strengthening cargo operations in part to protect its bottom line against the negative impacts of the economic downturn and a possible surge in fuel prices.

AirAsia X began working with Unitpool in April 2007 and has increasingly used the latter's services as the airline grew from one route and one aircraft to its current nine routes and fleet of five Airbus A330s and two A340s.

The Journal of Commerce