UPDATED: GEODIS adds APAC flights to AirDirect network, enters partnership with AirAsiaX

(Updates with news of AirAsia X deal) AirAsia X (AAX) and GEODIS announced a major new air logistics partnership to provide  additional cargo capacity and boosting revenue during the downtime in commercial flying. The agreement is set to run for an initial period of six months commencing from 20 January 2022 and may be extended. 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 complement the existing AAX network and stimulate additional air-cargo traffic in a number of markets that they both operate in, the companies said. 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 are able to be transported across the whole of Southeast Asia. With highly integrated, multimodal transport solutions, GEODIS aims to help more customers to circumvent disruptions that have negatively affected both air and sea cargo flows historically. This innovative 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 successful restructuring of the airline. CEO of AirAsia X Malaysia, 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 four per cent 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 per cent 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 are tremendously excited with this new opportunity with GEODIS. We have operated ad hoc charter services for them in recent months but this new arrangement provides better certainty on utilisation of our planes and better visibility of earnings.” Onno Boots, President and Chief Executive Officer, Asia Pacific, GEODIS 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. We look forward to working in partnership with AirAsia X to strengthen its logistics footprint.” Earlier, GEODIS said that in response to surging demand for air cargo capacity in the region, GEODIS has expanded its AirDirect network with three more intra-Asia Pacific (APAC) flight routes. With a newly established hub in Kuala Lumpur, the logistics operator will dovetail the air services with its Road Network linking destinations throughout Southeast Asia. The multi-modal expansion builds on its strong momentum in creating diverse transportation options for customising supply chain solutions for its customers. The expanded flight network, which bridges Hong Kong, Chennai, Sydney, and Shanghai to Kuala Lumpur, can carry an additional 320 tonnes of cargo weekly. This will significantly ease the strain on the supply chains, which saw load factors and yields reach historic highs in 2021 when cargo capacity struggled to meet the surge in e-commerce transactions. With demand for airfreight forecast to increase, particularly amid ongoing delays and flight cancellations across Southeast Asia following the impact of the Omicron variant, GEODIS believes its extended AirDirect schedules will become a pivotal component in ensuring seamless, reliable, and efficient air transport services in the region. The new flights will enable consolidated shipments across Asia including goods from key manufacturing sites in China, Malaysia, and Vietnam to transit via the Kuala Lumpur hub allowing all three of GEODIS’ key services – AIRFLEX, AIRFAST, AIRSAVE – to be offered to customers, presenting options that balance transit time against cost, according to customers’ individual needs. For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Kay Rolland at [email protected]