Annual Report 2020

5 BUSINESS REVIEW AIRLINES International border closures forced a shift in focus among our AOCs towards domestic operations in all of our key markets. Although these too have been impacted by various periods of lockdown, we still flew a total of 335 days during the year, and experienced solid pent-up demand for certain routes, as well as growing demand for new destinations. This led to the launch of 32 new routes Group-wide, mainly to second and third-tier cities. Nevertheless, route rationalisation was imperative, leading to a drop in total capacity during the year to 29%* of that in 2019. Cost containment was crucial and saw AirAsia undertake various measures to further streamline our operations. We engaged intensively with and received support from lessors, suppliers and partners for deferrals. We have restructured our fuel hedging position and expect minimal mark-to-market in 2021. We have also right-sized our human resources, redeploying some Allstars to growing segments in airasia digital while cutting salaries across the board. As a result, we managed to reduce our fixed costs by 52%* compared to 2019. Meanwhile, various digital initiatives are being implemented to bring further operational savings and grow new revenue streams. Cessation of our operations in Japan and reduced equity in India were also partly motivated by the need to reduce our cash burn; the other defining reason being a decision to concentrate our resources in Asean, our home ground where the brand is strongest. In line with this strategy, we are looking to further expand and have made positive advances in Indochina, with the possibility of a new AOC in Singapore and other Asean destinations on the radar. We did not take in any aircraft delivery during the year. Instead, we managed to offload one aircraft, resulting in our fleet size decreasing from 149 to 148*. SAFETY IN A TIME OF PANDEMIC Prioritising safety above all else, AirAsia implemented all the recommendations and guidelines released by civil aviation and health authorities, including the International Civil Aviation Organization (ICAO) and World Health Organization (WHO). We also maintained strict adherence to travel regulations imposed by the local governments of countries we serve. Safety measures put in place include the following: Aircraft cleaning • Aircraft undergo two-hour deep-cleaning at every night stop, in addition to regular disinfection by professional cleaning teams in accordance with Airbus' Aircraft Maintenance Manual (AMM). Pre-flight • Temperature checks on guests are conducted at different points, including boarding gates. Cabin crew undergo temperature checks before and after every shift. • Face masks must be worn by guests, and hand sanitisers are available at various points in the airport. • Seat signage and floor markers at queuing areas ensure social distancing. • Guests are encouraged to use contactless check-in kiosks (available at all operating airports across Malaysia, Thailand, Indonesia, the Philippines and Japan) and payments (at airports in Malaysia and the Philippines) as well as the Passenger Reconciliation System (PRS) in Malaysia. • Guests can also identify and verify relevant medical documentation they need and scan these into their mobiles before arriving at the airport using Scan2Fly, which is our version of a digital passport. • Aircraft cabins are disinfected with industry-approved aerosols before departure. • Pre-flight briefings on safety and hygiene are conducted for cabin crew to ensure we consistently follow the most up-to- date advice from the relevant health and safety authorities. * These figures refer to the Consolidated Group, ie AirAsia Malaysia, AirAsia Indonesia, AirAsia Philippines and other subsidiaries. We have been presenting consolidated financial reporting for AAGB in accordance with MFRS 10 since 1 January 2017. 73 ANNUAL REPORT 2020