AirAsia X Berhad

Climate Impact & Sustainability Data (2019, 2022, 2023)

Reporting Period: 2019

Environmental Metrics

Total Carbon Emissions:1,997,551 tCO2e

Water Consumption:64,133 m3

Carbon Intensity:71 grams of CO2 per RPK

ESG Focus Areas

Health and safety
Technology and innovation
Human capital development
Operational eco-efficiency
Corporate citizenship

Environmental Achievements

Saved a total of 2,404,478kg of fuel across flight operations in 2019 through various fuel-saving initiatives.
Charted a GHG Intensity Ratio of 71 grams per RPK in 2019, below the global average.
Recycled 30,050kg of waste from RedQ, marking a 70% increase compared to 2018.

Social Achievements

Conducted various community programs, visiting old folks' homes, orphanages, and hospitals to spread cheer and provide assistance.
Introduced Workday Learning, a digital learning management system, providing personalized learning opportunities for employees.
Provided 1,200 Allstars with LinkedIn Licenses to access LinkedIn Learning programs.

Governance Achievements

Continued to improve the quality of disclosures to address the rising demand from the investment community for more detailed and specific information.
Maintained a robust risk management and internal control system.
Implemented Oracle’s Enterprise Resource Planning (ERP) Cloud in both Malaysian and Thai operations.

Climate Goals & Targets

Long-term Goals:

Achieve carbon neutral growth from 2020 onwards

Medium-term Goals:

Reduce emissions by 50% in 2050 from 2005 levels
Reduce water usage by 10% in offices
Reduce inflight food wastage by 20% by 2020

Short-term Goals:

Ensure zero carbon emissions growth from international flights from 2021 onwards

Environmental Challenges

Global economic slowdown dampened demand for travel, particularly in the long-haul sector.
Increased competition in Malaysia and Thailand drove down prices.
Weak Ringgit against the US Dollar and increase in fuel price squeezed margins in Malaysia.
Changes in accounting practices for leases under MFRS16.

Mitigation Strategies

Continued to build dominance in key markets of North Asia and Australia, launching seven new routes.
Renegotiated lease arrangements and optimised flight operations with fuel-saving mechanisms.
Merged AirAsia X Thailand’s engineering department with AirAsia Thailand’s for better negotiation clout.
Intensified efforts to save costs on various fronts, focusing on renegotiating lease contracts and optimising flight and engineering operations.

Supply Chain Management

Responsible Procurement

Ensure 100% sustainably and ethically sourced goods & services

Climate-Related Risks & Opportunities

Awards & Recognition

Gold - Integrated Presentation (Airline/Airport management)
Gold - Cover Design (Airline/Airport management)
Silver - Interior Design (Airline/ Airport management)
Silver - Photography (Airline/ Airport management)
Silver - Typography (Airline/ Airport management)
Silver - Non-Traditional Annual Report (Airlines)
Silver - Infographics (Airlines)
Silver - Photography (Airlines)

Reporting Period: 2022

Environmental Metrics

Total Carbon Emissions:282,081 tonnes/year

ESG Focus Areas

Health and Safety
Technology and Innovation
Welfare and Wellbeing
Operational Eco-Efficiency
Decarbonising operations
Sustainable aviation fuel strategy

Environmental Achievements

Reduced CO2 emissions to 282,081 tonnes as of 31 December 2022 (from 459,555 tonnes in 2020/2021)
Implemented One engine Taxi- arrival (OeT- a) and One engine Taxi-Departure (OeT-D) to save fuel
Implemented Electronic Flight Bag (EFB) applications, saving up to 8.25kg of fuel per sector
Implemented aircraft registration specific IDLE factor to optimise fuel consumption during descent

Social Achievements

Redbeat Academy provided training to 675 Allstars in soft skills, digital and technology, and leadership
Critical Incidents and Stress Management (CISM) team provided peer support services to Allstars
Brought back 39 pilots and 146 cabin crew to active duty as of 31 December 2022

Governance Achievements

Successfully completed Debt Restructuring Scheme and Share Capital Reduction and Share Consolidation
Appointed two new Independent Directors with expertise in corporate governance and digital technology, and familiarity with ESG reporting standards (GRI, TCFD, RSPO, GPSNR, and SBTi)

Climate Goals & Targets

Short-term Goals:

Operationalize all aircraft in the fleet by 2024

Environmental Challenges

COVID-19 pandemic impact on international travel demand
Intense competition in the market
Fuel price fluctuations
Reputational damage
System outages
Value chain disruptions
Cyber threats
Safety threats
Financial risks (fuel prices, currency exchange rates, interest rates)
Compliance risks
Sustainability risks

Mitigation Strategies

Debt restructuring
Network rationalisation, focusing on profitable routes
Leaner cost structure
Fleet optimisation
Hedging strategies for fuel price volatility
Natural hedges for foreign currency risk
Robust Safety Management System
Dedicated information security team and ISO/IEC 27001 compliance
Business continuity plans
High level of engagement with regulators
Data governance framework
Anti-Bribery and Anti-Corruption Policy
Compliance with CORSIA

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, TCFD, RSPO, GPSNR, SBTi

Certifications: IOSA

Reporting Period: 2023

Environmental Metrics

Total Carbon Emissions:1,161,281 tCO2e

Scope 1 Emissions:960,280 tCO2e

Scope 2 Emissions:206 tCO2e

Scope 3 Emissions:200,795 tCO2e

Total Energy Consumption:13.1 million GJ

Water Consumption:1,304 m3

Waste Generated:27.01 tons

Carbon Intensity:61.3 gCO2/ASK and 78.3 gCO2/RPK

ESG Focus Areas

Economic
Environmental
Social

Environmental Achievements

Carbon intensity (gCO2/ASK) decreased by 32% from 89.9 in 2022 to 61.3 in 2023
Carbon intensity (gCO2/RPK) decreased by 34% from 118.1 in 2022 to 78.3 in 2023
5 fuel-saving initiatives implemented, resulting in 1,708 tonnes of fuel saved and 5,395 tonnes of CO2 emissions avoided

Social Achievements

Lost Time Incident rate decreased by 95% from 20.08 in 2022 to 1.01 in 2023
Percentage of women in the workforce increased by 4% from 44% in 2022 to 48% in 2023
Zero work-related fatalities

Governance Achievements

Successfully emerged from PN17 classification in November 2023
Established Sustainability Steering Committee and Sustainability Working Group
Expanded the mandate of the Risk Management Committee to include oversight on ESG risk management and sustainability-related matters

Climate Goals & Targets

Long-term Goals:

Achieve net zero emissions by 2050

Medium-term Goals:

Induct Airbus A330neo aircraft by 2026 and Airbus A321XLR by 2028

Short-term Goals:

Reactivate the remaining two aircraft by the first half of 2024

Environmental Challenges

Supply chain disruptions due to the longer-than-expected recovery period
Manpower and resource constraints among business partners and vendors
High price of SAF and limited production capacity

Mitigation Strategies

Methodical approach to reintroducing aircraft back into service
Focus on routes with proven demands and favourable yields
Exploring opportunities for the utilisation of SAF
Introducing carbon offsetting into AirAsia X’s operations

Supply Chain Management

Responsible Procurement

Prioritising local suppliers that meet ESG standards
Supplier Code of Conduct

Climate-Related Risks & Opportunities

Transition Risks

Evolving climate regulations and SAF mandates

Opportunities

Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards, TCFD, UN SDGs, FTSE4Good Bursa Malaysia

Certifications: IOSA Certification by IATA, 7 Stars Safety Rating by Airline Ratings

Third-party Assurance: Company’s Internal Audit Department

UN Sustainable Development Goals

Alignment with UN SDGs is detailed in the report

Awards & Recognition

7 Stars Safety Rating by Airline Ratings